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5 April 2013
Is there life after Napster? And does anyone care anymore? The press, both music and mainstream, has covered every twist and turn in the litigation. So much so that readers could be forgiven for feeling that the story of a young man who developed a software application which allows individuals to swap music files for free should now be left to rest in peace. But the case, and more importantly the issues it raises, are very much alive.
On the case itself, a further day in court was due on 20 April. The Recording Industry Association of America (RIAA) is complaining that the blocking technology employed by Napster is not effective and the service's users remain able to swap too many infringing files. Napster contends that it is doing all it can and has been hampered by the record companies' failure to supply the data required to enable effective filtering.
But the dispute has become political and has attracted the attention of Capitol Hill. Napster has sought to rally a consumer movement in support of file swapping. Earlier last week, it participated in hearings before the Senate Judiciary Committee, arguing in favour of a compulsory licence scheme for the online delivery of music. Not surprisingly, this was resisted by the RIAA and other entertainment industry bodies seeking to regain control over this potentially lucrative market and the terms upon which it is exploited.
However, there remains some irony in the position taken by the RIAA. Late last year, one of its leading members, Universal Music Group, was the subject of an action by the National Music Publishers' Association (NMPA) and others for failing to license and/or pay for the underlying publishing rights involved in music it was making available for downloading via Farmclub.com. And as a result of the NMPA and the RIAA being unable to settle their differences on how to approach this issue, they have referred the matter to the US Copyright Office. The RIAA is arguing in favour of a compulsory licence from the publishers because of the difficulties that would otherwise be posed by a service provider having to undertake the individual negotiations required to secure sufficient content to offer an attractive service.
Outside the courtrooms and political lobbies, the real battle is about to commence as the various media companies seek to convert the tens of millions of users used to accessing music for free into fee-paying subscribers, and to then capture a share of that market.
Many companies have recognised that they will need to work together if they are to have any hope of compiling sufficient content to be of interest to consumers. The last few weeks have seen an almost indecent rash of announcements, including Sony and Vivendi Universal's announcement of Duet, and AOL Time Warner, EMI, Bertelsmann and RealNetworks' announcement of MusicNet. Some have questioned the timing of such announcements, bearing in mind the political debate raging. But what will be most interesting to watch is how these rival companies work together and to what extent they will be able to go it alone, or whether they will need to call upon the experience of the new media companies. Already the signs are that they will need the assistance, as MTVi and RioPort claim the support of all of the major record companies to the forthcoming launch of their download service via MTV.com and VH1.com; and Sony and Vivendi Universal announce an alliance with Yahoo! to ensure prime online promotion of the Duet service.
Last but not least, what of the artists? Until now there has been relatively little financial incentive to justify the artists becoming involved in the online battle, but if the majors succeed in their ambitions, this will change. Significant issues will need to be addressed regarding how the artists should be specifically compensated for the exploitation of their creative works. As Don Henley and Alanis Morisette highlighted as last week's senate hearings, their interests are not always the same as those of their record companies.
Tara Donovan is a technology media and telecoms partner at Denton Wilde Sapte