Merger Of The Also Rans: Rhapsody Buys Napster

from the too-late dept

With so much attention paid to the new generation of music subscription offerings, Spotify, Rdio and Mog, it appears that the last generation, Napster and Rhapsody, decided the best course of action was to join forces in bitterness at the fact no one mentions either of them any more. The two companies have gone through a variety of different owners over the past decade or so, with Rhapsody being spun out from RealNetworks last year, and Napster being under the Best Buy umbrella for a while -- where almost nothing was done to build up the service. I recognize that the two companies may be annoyed that no one cares about them any more, but I really can't see either establishing enough of a presence to get back into the conversation.

Filed Under: mergers, music, subscription
Companies: best buy, napster, rhapsody

What Would Happen If Napster's Co-Founder Owned Warner Music?

from the questions,-questions dept

An interesting possible scenario arose last week, when it was reported that Sean Parker (recently fictionally immortalized by Justin Timberlake in the movie The Social Network), who was a co-founder of Napster with Shawn Fanning, is considering a bid for Warner Music Group, which has been fishing around for a buyer. Of course, Parker's money mostly comes from Facebook (and I assume, some from Plaxo), rather than Napster. And if there is a bid, it appears Parker would just be one of a few investors involved. But it certainly raises questions about what kind of impact there might be. Would Parker actually look at business models that really embraced file sharing? Or would he view things differently? It certainly would be interesting to watch...

Filed Under: ownership, sean parker
Companies: facebook, napster, warner music group

Lars Ulrich: Underestimated File Sharing.. But Proud We Sued

from the yeah,-ok dept

Jari Winberg points us to a big Billboard story about Metallica that has some quotes by the band about this whole internet thing. You recall, of course, that Metallica became the poster-child for anti-internet activity, when it became the first to sue Napster, back in 2000. Since then, the band has often tried to rehabilitate its online image, and has even done a few creative online things -- but still has trouble shaking the anti-fan image it put forth with the lawsuits.

In the interview with Billboard, Lars Ulrich, who was the band member who led the charge against Napster, first talks about "The awesomeness of the Internet" in that you've got "the whole world at your fingertips" and how great it would have been for him as a child (until the older version of himself would have sued him for listening to music... but I digress). That leads to the obvious question from Billboard about Napster, where Ulrich notes that he fully expects his obituary to mention Napster in the opening paragraph and then says the following:

"That's something I have to accept, and I accept it," he says. "But it's not something that plays a big part in my life in 2010. I'm proud of the fact that we stood up for what we believed in and took a stance. Were we caught off-guard? Absolutely. Were there some gross underestimation of what this thing was? Yeah. But it came from the same impulsive spirit that drives everything else this band does."

I keep trying to parse that, but I'm not sure what it's actually saying. He's proud that they sued... but it was an underestimation? An underestimation of what? That they'd be able to sue file sharing out of existence? If that's the case, then why be proud of suing and hurting the band's reputation?

Earlier this year, we pointed out that Metallica is a band that makes the vast majority of its money from touring -- over $20 million, versus about $1.5 million from album sales -- and suggested that the band's attack on Napster seems really short-sighted when you consider that. They were fighting over the scraps -- when embracing the fans likely would have resulted in much greater live and merchandise sales. In fact, the band's manager is asked how the band is dealing with lower album sales, and he notes that it's no big deal because of all the other revenue sources:

"It won't change anything else we do," he says. "I'm trying not to be cocky about it, but for Metallica, at their level, the kinds of things you might think about to replace income are minor compared to what you make playing tours and selling merch. We're just finishing 225 shows worldwide [in support of "Death Magnetic"], and these are massive shows. We can play anywhere. What else do we need to do, really? If we sell fewer records, so be it. Of course I'd rather sell more, but I can't do anything about the size of the market, and neither can they."

Yeah, well, if you hadn't pissed off all those fans, you could have actually increased the size of the market willing to attend concerts and buy stuff... but... whatever.

Filed Under: file sharing, interent, lars ulrich, metallica
Companies: napster

Why Have So Many Companies Settled Over Ridiculous Patent For 'Online Music Distribution'?

from the cheaper-to-settle dept

A company going by the name Sharing Sound LLC, which of course does not appear to do anything, got hold of some exceptionally broad and absolutely ridiculous patents on "distributing musical products by a website over the internet" (6,247,130 and 6,233,682). Go ahead and read the claims on both of those, and realize they were filed in 2000, well after online sales of digital goods was available (I should know, I worked for a company focused on selling software online through nearly identical means described in the patents -- in 1998).

Earlier this year, however, Sharing Sound sued a whole bunch of companies over these patents. Included was Apple, Microsoft, Napster, Rhapsody, BDE (Kazaa), Sony, Sony/Ericsson, Amazon, Netflix, Wal-Mart, Barnes & Noble and Gamestop. Late last week, the news came out that Apple had settled and paid up. Along with that, people noted that most of the other companies had already settled.

I defy anyone to explain how this patent is a valid patent. The folks at M-CAM broke down a whole bunch of prior art when the lawsuits were first filed. Anyone who was anywhere near the online web store world for digital content would look through the (very, very, very simple) claims in the patent and just laugh. There's no "invention" there at all. It's a joke.

So why did so many companies settle? The easy guess is that the settlement terms were simply less than going through with the lawsuit. Lawsuits are expensive, even over totally bogus patents. So it's often just easier and cheaper to pay up. Of course, now that gives Sharing Sound more ammo to say "look at all these big companies who settled" when they continue to go after lots of other companies. This is a perfect example of how bad patents still "win" lawsuits.

Filed Under: music distribution, patents
Companies: amazon, apple, barnes & noble, gamespot, microsoft, napster, netflix, rhapsody, sharing sound, sony, wal-mart

How The Pentagon's Reaction To Wikileaks Is Like The RIAA's Reaction To Napster

from the and-it'll-work-just-as-well dept

Earlier, we wrote about the Pentagon's ridiculous and counterproductive attacks on Wikileaks, noting that it was the exact wrong approach to take. In writing that, I probably should have made the connection to some other, similarly short-sighted "attacks" on something one legacy group felt was a threat, but which actually was probably an opportunity -- and in attacking it, that legacy group only served to (1) draw more attention to it and (2) create even more, harder to work with, clones. I'm talking, of course, about the RIAA and its reaction to Napster.

While I didn't think of it, Raffi Khatchadourian did, and wrote a brilliant blog post for the New Yorker making the comparison (that's why he writes for The New Yorker, and I do not). Khatchadourian is actually responding to the equally ridiculous suggestion from former Bush speechwriter Marc Thiessen, that the US should use the military to hunt Julian Assange down and bring him to justice and shut down Wikileaks, which Thiessen calls a "criminal syndicate" (say what?!?). Khatchadourian makes the connection:

Thiessen's argument calls to mind the music industry's effort to shut down Napster--a Web site where recorded music could be traded and downloaded without regard to copyright--in the nineteen-nineties, in that it loses sight of the broader technological and cultural revolution that the Internet has brought to the exchange of information. In 2001, after a lengthy legal battle, the Recording Industry Association of America succeeded in forcing Napster offline, only to watch Napster's services move to a number of other Web sites that were structured in a more decentralized way (pdf)--making the piracy of music even more diffuse and difficult to prosecute. Only recently has the industry grudgingly been adapting to file-sharing rather than fruitlessly seeking to eliminate it, and one can now find music executives who even speak of Napster as a lost opportunity for their industry.

Shutting WikiLeaks down--assuming that this is even possible--would only lead to copycat sites devised by innovators who would make their services even more difficult to curtail. A better approach for the Defense Department might be to consider WikiLeaks a competitor rather than a threat, and to recognize that the spirit of transparency that motivates Assange and his volunteers is shared by a far wider community of people who use the Internet.

Indeed. This is the same thing we've pointed out that the RIAA did with Napster -- losing a huge opportunity and instead driving such efforts totally underground. We've also chided the RIAA and others in the past for not recognizing that file sharing was "competition," and responding appropriately -- and it's a good point with Wikileaks and the Pentagon, even if it might not seem obvious at first. Khatchadourian points out that the analogy works when you realize that the "equivalent" to Wikileaks for the Pentagon is the Freedom of Information Act and the Mandatory Declassification Review -- but both are "slow and inconsistent." Wikileaks, on the other hand is much more efficient (just like Napster vs. the RIAA). He then notes how much of the attention Wikileaks has garnered could have been avoided if the Pentagon had actually embraced transparency and more efficiency:

It's worth recalling the first WikiLeaks project to garner major international attention: a video, shot from an Apache helicopter in 2007, in Iraq, that documented American soldiers killing up to eighteen people. For years, Reuters sought to obtain that video through FOIA because two of its staff members were among the victims. Had the military released this footage to the wire service, and made whatever minor redactions were necessary to protect its operations, there would never have been a film titled "Collateral Murder"--the name of WikiLeaks's package for the video--because there would have been nothing to leak. Even after Assange had published the footage, and even though the events documented in it had been previously revealed in detail by a Washington Post reporter, the military (at least, as of July) has still not officially released it.

In other words, the way to deal with such a competitor is to out innovate them. That certainly sounds familiar.

There's a reason Wikileaks exists, and it's not because it's a criminal syndicate, but because the folks behind it believe that there are serious problems in the way certain types of secrets are used to abuse power. So it represents a more efficient (if blunt) way of solving that. The same is true of the RIAA and Napster (and its descendants). The folks behind file sharing programs felt there were serious problems and inefficiencies with how industry gatekeepers used their gatekeeper role for abuse, rather than in the best interests of the market.

It won't happen (it never does), but Khatchadourian is spot on in noting that the Pentagon really should be recognizing that it's traveling down the same mistaken path as the RIAA, rather than just copying the same types of moves.

Filed Under: competition, pentagon, wikileaks
Companies: napster, riaa

BPI Admits It Screwed Up Over Napster... But Why Should We Trust It Now?

from the leaves-that-part-out dept

It seems like it's become the "in thing" in the recording industry these days to "admit" that suing Napster, rather than working out a deal, was a "mistake" ten years ago. Of course, plenty of folks were telling them this at the time, but we were brushed aside as wackos who just wanted free stuff. The latest to make this claim is BPI's Geoff Taylor, who says he "regrets" that the industry didn't move faster to embrace online music. But, of course, Taylor and others still don't get it. They still want ISPs to police users. They still claim that piracy is a legal problem, and they still seem to get the facts wrong. Taylor claims: "There is simply no getting around the fact that billions of illegal free downloads of music every year in the UK mean that significantly less money is coming into the music ecosystem."

Except... that's not true at all. As a recent Harvard study showed, the amount of money going into the "music ecosystem" has grown -- tremendously. The only thing that's dropping is the sale of plastic discs.

In the meantime, considering BPI and others were so incredibly wrong 10 years ago, and they're only willing to admit it now, why is it that they think everyone should trust them now -- and that those of us who were actually right 10 years ago should still be brushed off as wackos who just want stuff for free? Perhaps it's time to start actually listening to those who have been pointing out new ways to embrace what consumers want to do with music in order to make more money. Otherwise, we'll be seeing the same thing in another 10 years, about how BPI's Geoff Taylor (or whoever replaces him) made a mistake trying to shut down The Pirate Bay.

Filed Under: copyright, geoff taylor, music, uk
Companies: bpi, napster

Yet Another Journalism Professor Gets Nearly Every Fact Wrong In Saying Google Needs To Pay

from the facts?-who-needs-them? dept

With all the journalists declaring that Google needs to pay newspapers, it's amazing how often their arguments are based on simply incorrect statements -- the sort of thing that is the real problem newspapers face. When they make an argument based on entirely incorrect information, no one trust them. For example, reader David Muir points us to Joel Brinkley's article in the San Francisco Chronicle, where he compares the newspaper industry to the recording industry and gets nearly everything wrong. Brinkley is a former NY Times' reporter and a journalism professor at Stanford. This is the sort of person who shouldn't fall prey to getting stories backwards, but he does. First, he claims that Google is using newspapers content "without compensation."

This is wrong. Google is indexing and linking to newspaper content. They're providing a service to those newspapers, by sending them more traffic. If those newspapers don't want that service, it's quite easy to opt-out. The fact that very few do so suggests they do, in fact, value that service, and thus they feel they are getting compensated.

Then, amusingly, he compares the newspaper business to the recording industry, suggesting Google is like what Napster was a decade ago -- and questions where would the recording industry be if it hadn't shut down Napster. Rather than talk to an unbiased party, he goes straight to the RIAA, who of course talks up what a wonderful victory Napster was, and says, without having shut down Napster: "We would be in a world with thousands of pirates."

Um. I hate to break it to both Brinkley and the RIAA... but we're in a world with millions of (what they falsely define as) "pirates." In fact, I'd imagine that the recording industry would actually consider it a real victory if there were only "thousands." But does Brinkley point this out? Does he note that the legal effort to shut down Napster not only failed to stop "piracy," but actually helped advertise it, make it more prevalent, and drive it further underground to sites and communities that were much more difficult to work with?

Of course not. Because why would a super journalist like Brinkley bother with reality in making his case?

Also, it's worth pointing out that the situation with Napster was also entirely different in that it didn't involve the musicians/labels putting the content up themselves, and didn't involve Napster offering up an easy tool for them to remove that content. When it comes to newspapers and Google, both things are true.

This is the sort of stuff anyone familiar with what they were talking about would know. But Brinkley is a journalism expert, so why should he bother to understand what he's talking about before writing an entire column on it?

He then goes on to (falsely) claim that "without newspaper journalism, the nation would have little original journalism left" extrapolating out (incorrectly) the idea that because most journalism originates from newspapers today, it must continue to do so in the future. We're already seeing that's false, as new operations spring up to take over where newspapers are faltering (such as in putting forth bogus opinion pieces comparing Google to Napster).

Then (because he's not done being wrong yet), Brinkley tries (and fails) to respond to the "information wants to be free" line (which he falsely states "information should be free" -- the distinction is important, but Brinkley doesn't bother to even notice) by saying:

Wouldn't that be nice. Wouldn't it be nice if metropolitan newspapers didn't have to pay millions of dollars a year for their reporting staffs? Wouldn't it be nice if Keller's paper didn't have to pay $2 million a year to maintain its Baghdad bureau? Newspapers provide an expensive product. They deserve to be paid for it.

We've debunked this argument probably 50 times in the last year alone, but since Brinkley apparently doesn't do any research, let's debunk it one more time. No one is saying that because information is offered to consumers for free that it means that you don't make money or you don't pay your reporting staff. Brinkley is setting up a bogus strawman (the sort of thing reporters shouldn't do). What they are saying is that they need to come up with better business models (which we've pointed out do exist) that leverage (rather than deny) the basic economics of content, and do so in a way that makes a more valuable product.

Brinkley, of course, never bothers to explain how to make the product any more valuable (hint: it's not by writing columns that are entirely based on incorrect statements) or why people would want to pay for such rubbish. He just insists they "deserve to be paid for it." But if Brinkley's writing is an example of the type of quality found in papers today, is it any wonder people don't find it worth paying for?

Filed Under: copyright, joel brinkley, journalism, newspapers, recording industry
Companies: google, napster

Napster's Next Chapter: Merged Into Best Buy

from the yawn dept

Napster, which now has almost nothing other than its brand to connect it to the revolutionary music sharing service Shawn Fanning launched nearly a decade ago, is about to undergo its latest shift, as Best Buy has bought what remains of Napster for $127 million, representing a hefty premium on the already pretty weak valuation of the company. Ever since Roxio bought Napster -- and renamed itself Napster -- the company has tried to position its music subscription offering as a huge success, but there's been little evidence to back that up. Now selling off to Best Buy for such a low price pretty much confirms that there wasn't much there.

Filed Under: downloadable music, mergers, subscription services
Companies: best buy, napster

Collapse of Music DRM Continues; DRM Customers Still Screwed

from the we're-shocked dept

Support for DRM in the recording industry is in freefall. On Tuesday, Napster released a new version of its music store offering 6 million DRM-free tracks. Napster is a relative latecomer to this party, joining Apple, Amazon, and Wal-Mart, all of whom have had at least some DRM-free, major-label music available for about a year. One difference, though, is that Napster is coming out of the chute with support from all four major labels and thousands of smaller labels as well. At this point, any music store that doesn't offer DRM-free tracks is going to look like a real laggard. This story wasn't too surprising given the way things have been going over the last year. But even less surprising is the fact that customers who were foolish enough to purchase DRMed content from previous versions of Napster are stuck with their decision. They don't get to update their content to MP3 format, and while Napster has decided to continue running its "license servers" for now, it's only a matter of time before Napster decides running those servers is more trouble than it's worth and shuts them off, cutting customers off from their music libraries entirely.

Filed Under: downloads, drm, mp3s
Companies: napster

House Approves Bill To Require Universities To Offer Students Music Services

from the mandatory-Napster? dept

Late last year, we wrote about a bill that would put pressure on universities to put in place an official approved music subscription service or risk losing federal financial aid support for students. This is a bizarre piece of legislation, as it effectively props up Napster and RealNetworks by basically requiring universities to sign up for such a service, even if they don't want to. Despite widespread criticism of the bill, the House has now approved it, even leaving out a promised amendment promising that failure to obey wouldn't threaten financial aid. Supporters of the bill claim that it wouldn't actually be used to cut off financial aid, but if that's the case, why include it in this bill at all? It would basically be a requirement without any repercussions for ignoring. At the same time, no one has clearly explained why universities should be required to sign up for a private music subscription offering. What possible public policy reason could there be for such a thing?

Filed Under: congress, copyright, file sharing, music subscriptions, universities
Companies: napster, realnetworks