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Sonic Boom: Napster, P2P and the Battle for the Future of Music

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Many of those involved in the creation of the Web had lofty, socially ambitious goals that involved making it as easy as possible to share information, and many expected to foster a leap in human knowledge and culture that could usher in another Renaissance. “The Web,” Tim Berners-Lee wrote, “was designed as an instrument to prevent misunderstandings.” The system that he designed encouraged the free spread of what would later be called “content,” and he was not alone in feeling inspired by beliefs that were strongly optimistic, even verging on utopian.

“The whole spread of the Web happened not because of a decision and a mandate from any specific authority, but because a whole bunch of people across the ’Net picked it up and brought up Web clients and servers,” Berners-Lee wrote in an essay about the overlapping goals of the Web and Unitarian religion. “The actual explosion (#litres_trial_promo) of creativity, and the coming into being of the Web was the result of thousands of individuals playing a small part. In the first couple of years, often this was not for a direct financial gain, but because they had an inkling that it was the right way to go, and a gleam of an exciting future.”

The Web was at first slow and buggy, especially for home users, but the excitement of a multimedia network was catchy, and what can only be described as a mass migration of work and culture online began. Because the impact of the Web was so profound and widespread, many metaphors were tossed around in an attempt to describe and assess its impact. Comparisons to Gutenberg’s development of the printing press, highways, and casbahs all reflected the particular viewpoints of the describers, most of whom were in awe of the potential. After all, a lot had been done with tools as simple as e-mail, mailing lists, and bulletin boards. It was just those kinds of tools, together with the tape recorder, that had been the secret behind the success of the Grateful Dead.

The first online mailing list ever dedicated to a single group (originating at the Stanford Artificial Intelligence Lab) was dedicated to the Dead. “It was appropriate that it was about the Grateful Dead,” explained Steve Silberman, probably the most articulate expert on the band, “because the Grateful Dead was one of the first groups to develop a truly mobile community of fans, who would follow the band from venue to venue on every tour. The way that the Dead played music was inextricably related to the fact that they developed a mobile community of fans.”

Silberman believed that the experiences of the band and its fans carry insight about the nature of musical communities when they meet the power of electronic networking. The Grateful Dead changed their set lists every night, and they changed the way they played each song every night. That modus operandi inspired Stanley Owsley, an LSD chemist and visionary sound engineer, to suggest to the band, sometime around 1968, that they should record every show to amass a vault of recordings.

As the band began recording live performances, fans followed suit with their own recordings. The Dead gave a free concert on Haight Street in San Francisco in 1968, and a reel-to-reel tape of that show was recorded by one Steve Brown. That tape ended up being copied and passed around by soldiers in Vietnam, after Brown took it with him when he went over for a tour of duty. It became a “coveted” item among the Deadheads who were fighting, said Silberman, who has written an encyclopedia on The Dead, Skeleton Key.

As the network of traders grew, they initially relied on exchanging business cards at shows to stay in touch. Then, as the personal computer surged in popularity, Deadheads were among the largest cultural groups of early adopters, mostly due to the incredible usefulness of bulletin board systems or BBSs, dial-in computer networks that not only let you trade gossip and tapes, but also let you make friends with—and stay in daily contact with—members of the Dead inner circle. At the top of the BBS list was famed California electronic community the WELL, started by Stewart Brand, the Whole Earth Catalog publisher and Merry Prankster. Being on the WELL gave you a huge logistical advantage if you were a Deadhead in the late ’80s and early ’90s, said Silberman, because it allowed privileged access to those who could secure coveted tickets and make early announcements about tour dates. The WELL also offered Internet access, so that fans could use some online repositories that had begun to sprout up.

“Even before MP3s became big there were people who were creating FTP directories with everything from digitized photos and art, to set lists, to the entire career of the band in electronic form, complete with electronic documents,” Silberman explained. “Now there are these very deep directories that are passed secretly by e-mail, where 500 Dead shows have been digitized, either song by song or set by set.” The addresses to these treasure troves are closely guarded, for fear of being swamped by downloaders and overloading the servers.

“The interesting thing about Garcia saying ‘When we’re through with [the music], it’s theirs’ was that it created this model for building the value of intellectual property by giving it away,” Silberman said.

By letting fans do whatever they wanted with taped concert music, the Dead made their music more valuable because people wanted more of it, and furthermore, they wanted to be there when that magic was being made: “The tapes cast an event quality over what would otherwise be perceived as just another show. Each tape was as good as an album, so it was like being invited to hear a new album being created 150 nights a year. What really created the Deadhead community was the ability to trade tapes, and once the online world came around, it was the perfect way to do it.”

Flash forward to the late ’90s and things were not looking so rosy for the Dead. After Jerry Garcia died (and became one of the first celebrities to receive a spontaneous wave of scores of personal and private Web pages offered in memorial), the band’s income was sharply cut. “They’re in a very difficult position now, because they were an animal that was kept alive by touring,” said Silberman. “When Jerry died, the touring income went from enough to make them one of the top-grossing bands in America, to very little, because the Phil and Friends shows and the other shows turned out not to be as much of a draw. They laid everybody off.” At the beginning of 2001, there were fewer than a dozen people in the Dead office, down from sixty or so.

Another legacy that the Grateful Dead community contributed to the online world was their lyricist, John Perry Barlow. Barlow, a former Wyoming rancher and sometime mentor of John F. Kennedy, Jr., was one of the more outspoken figures on the media and lecture circuit that developed around the Internet early in the ’90s. In 1990 Barlow cofounded a nonprofit Internet advocacy group called the Electronic Frontier Foundation to combat the enacting of what he considered unfair and uninformed laws to regulate the Internet. Although Barlow’s self-promotion and mildly affected cowboy/hippie/ladies’ man persona earned him some rolled eyes wherever he spoke, audiences soon found out that there was a lot going on behind the swagger and the scarf. In speeches and essays, Barlow would articulate clever metaphors, such as the use of the word “frontier” to illustrate the online experience, combining terms from science fiction with the concerns of American revolutionaries to profoundly shape the expectations of growing legions of Internet users. He borrowed author William Gibson’s term “cyberspace” and applied it directly to current Internet activity, setting Net experience apart as a separate place, which he would sometimes describe to the uninitiated as like “the place you are when you’re on the telephone.”

An essay of Barlow’s, “The Economy of Ideas,” was widely circulated and eventually published in Wired in early 1994. In it, Barlow voiced a response to growing concerns about “intellectual property.” These concerns set the tone for many who read the essay, and examined today, they are impressively accurate.

If our property (#litres_trial_promo) can be infinitely reproduced and instantaneously distributed all over the planet without cost, without our knowledge, without its even leaving our possession, how can we protect it? How are we going to get paid for the work we do with our minds? And, if we can’t get paid, what will assure the continued creation and distribution of such work?

Since we don’t have a solution to what is a profoundly new kind of challenge, and are apparently unable to delay the galloping digitization of everything not obstinately physical, we are sailing into the future on a sinking ship.

This vessel, the accumulated canon of copyright and patent law, was developed to convey forms and methods of expression entirely different from the vaporous cargo it is now being asked to carry. It is leaking as much from within as without.

Legal efforts to keep the old boat floating are taking three forms: a frenzy of deck chair rearrangement, stern warnings to the passengers that if she goes down, they will face harsh criminal penalties, and serene, glassy-eyed denial.

Intellectual property law cannot be patched, retrofitted, or expanded to contain the gasses of digitized expression any more than real estate law might be revised to cover the allocation of broadcasting spectrum. (Which, in fact, rather resembles what is being attempted here.) We will need to develop an entirely new set of methods as befits this entirely new set of circumstances.

Barlow also asserted that “The greatest constraint on future liberties may come not from government but from corporate legal departments laboring to protect by force what can no longer be protected by practical efficiency or general social consent.”

John Barlow’s sentiments ring all too true today.

Chapter 2 NEW WORLD ORDER (#ulink_3377d68b-0a3a-5098-abc1-98e0bfbf6781)

The record industry is typically divided into the major labels and the independents. The former are bastions of wealth and prestige that have the capital to dominate the markets, from the airwaves to the chain stores, and control the networks of physical distribution. Smaller labels, while not enjoying those advantages, can be more focused and nimble, building on customer loyalty and brand recognition. Because they operate on a different scale, independents are free to take chances on artists and records that might never sell 200,000 units, the number needed for a major-label release to be considered successful. Independent labels range from fairly established players such as Epitaph, which often sells millions of copies of individual records from punk bands and free-spirited artists like Tom Waits, to some kid spending all his money to release his inspirations on the world from his basement. The “majors”—also commonly referred to as the “big five”—are Sony Music, Universal, EMI, Warner Brothers, and BMG (Bertelsmann Music Group). Together they account for more than $14 billion in yearly revenue in the U.S. market alone. The business-wide trend of corporate mergers is in full effect with these companies. The big five increasingly own many other smaller labels, some of which were once very powerful in their own right, and many of which retain a degree of autonomy. Geffen, Atlantic, and Virgin records, for instance, have been brought under the greater umbrellas of Universal, Warner, and EMI, respectively. The commonly used “indie label” moniker is a little tricky: while many independent labels are shoestring operations run out of someone’s basement, often hooked into a larger distributor, others, formerly of the basement type, have been bought out and absorbed by majors, or have made some kind of distribution deal with one of them, and are thus not quite so independent.

As the record companies have become integrated within the folds of the multinational corporations that own them, in most cases business as usual has supplanted the more unsavory aura of organized crime that was earlier associated with the industry and that Fredric Dannen documented memorably in the book Hit Men (1991). The affectation has remained, and some, like Ice-T, insist that the business tactics haven’t changed that much. “Independent promoters” who function as out-sourced bribegivers to get a song played on the radio are still used, for instance. But mostly, the old-school shakedown has been replaced with “Roman legions” of lawyers (such as those that Seagram chief Edward Bronfman Jr. threatened to unleash against the foes of copyright) and very well paid Washington lobbyists, working hard to shape laws that suit the powerful entertainment industry.

Among the majors there are strongly perceived mutual interests in many areas. The Recording Industry Association of America, or RIAA, is the trade association for the major (and many independent) labels’ activities in the United States. Its main activities are the monitoring of sales to award “gold” and “platinum” record status; keeping an eye out for music bootleggers and encouraging the police to enforce laws against them; and lobbying the government to enact laws that are favorable to the industry.

The relationship of other rights bodies within the industry are relatively complex and are a fossil record that points to the past century of industry history, which was fraught with litigation and power grabs. Broadcast Music Incorporated (BMI), the American Society of Composers, Authors and Publishers (ASCAP), and SESAC (which was once the Society of European Stage Authors and Composers, but is now simply the acronym) all license music performances, such as playing a song over the radio or in a restaurant. The royalties from these performances go to the songwriters, who are not necessarily the band playing the tune. The Harry Fox Agency, a division of the National Music Publishers’ Association, oversees publishing rights to the music itself, as opposed to performances of that music. These are known as “mechanical rights.” That the lengthily negotiated pacts among artists, publishers, and labels is so hard for all parties to navigate has meant that the options presented by the fast and furious world of the Net have been met with near paralysis.

From an early stage, there were people at the labels who experimented with computers. If their vision of how technology and music might meet was sometimes less inspiring than those of outsiders, it was, at least, rooted in experience. One such executive was Ted Cohen, a music biz player who became infected with the excitement of new technology.

Cohen started out at the Boston office of Warner Brothers in 1972, and he worked his way up through local promotion to artist development. By 1977 he was asked to move to Burbank to work on career development with artists such as Van Halen, Fleetwood Mac, Talking Heads, George Benson, Sex Pistols, and the Ramones. His job had all the glamorous highs and absurd lows that have become a part of the music business stereotype. Cohen would go from one week with a brand new band, driving around in a station wagon, to three months with the Who in a private plane complete with a bedroom and a shower. He dated one of the Who’s flight attendants, going out for every date in a different city. Although Cohen loved the music and much of the business, after several years the personalities began to take their toll on him.

“In 1984 I went to the Beverly Center with the guys from King Crimson and saw the movie Spinal Tap,” Cohen recounted. The next day he quit his job. “That movie was my life: on the road, dealing with dumb English bands.” But by then, a seed planted earlier had begun to sprout.

In 1982, while still at Warner, Cohen had been invited to join a committee alongside vice president Stan Cornyn to talk about the intersection between technology and music. Cohen found that Cornyn, who had a solid reputation throughout many parts of the industry, “was a futurist and was into imagining what the next cool thing would be.” They met to discuss ways to combine the Warner-owned (then highly successful) video game company Atari with music. They imagined discs of concerts with an assortment of bells and whistles, like guitars that changed sound with a mouse click. The committee lasted a year, until Atari got into trouble financially and was sold. But Cornyn and Cohen both still had the bug.

In 1986, Cornyn was running The Music Group, “the first interactive music label,” cofunded by media and technology giant Philips, and was developing a CD-ROM and the CD-i format that would play on your television set. The latter format was abandoned once it was realized that the image quality on computer screens was much lower than required for television. Cohen joined up to work on the CD-ROM format, and in 1992, he worked on the genre-defining CD-ROM for New World Order by Todd Rundgren, along with unreleased prototypes for Sting and David Bowie. Cornyn experimented successfully with enhanced CDs for other bands, including The Cranberries, but after ten years The Music Group had burned through a considerable stack of cash and it was pretty clear that the format was not feasible for a mass market. In December 1996, the company shut its doors. But there was an upside: much of the research that went into fitting rock videos into music CDs proved to be valuable as Web technology developed and proliferated.

By that time, the Web was already more popular than any of the projects the labels were funding themselves. Although the music business seemed as if it would contain the perfect companies to push forth and establish outposts on the new electronic frontier, most quarters of the record industry were less than sanguine about such prospects. Moving to the Web required a much greater conceptual leap for labels than did enhanced CDs, which were sold along with standard CDs and therefore required no change in the distribution model. The online world seemed geeky, unproven, and, as The Music Group showed, you could easily lose your shirt with the stuff. But technology just kept rolling on.

In 1987, in the sleepy but prosperous Southern town of Erlangen, Germany, the Institut Integrierte Schaltungen, a part of research giant Fraunhofer, joined forces with the University of Erlangan, under Professor Dieter Seitzer, to craft an algorithm that could be used to shrink video files to a manageable size for use with multimedia. The 1980s were a long way from the modern era of cheap, fast computer processors and high-storage capacities. In order to make digital pictures play, researchers found they had to do something with the enormous media files. A “codec,” short for “compression/decompression algorithm,” is what was used to do the job, by smartly stripping away as much data as possible from a given file, while scientifically working to keep sound and video quality as high as possible. The Institut, and scientists such as Karlheinz Brandeburg, finally settled on the code for the audio part of their task. After the code was submitted and approved by the International Standards Organization, it became known as ISO-MPEG Audio Layer–3.

The MP3 (as the name has been commonly shortened) encoding method got its power from using perceptual, or “psychoacoustic,” models that accounted for what listeners actually notice when they hear music or other sounds. Although the formula was crafted and ready to be used, it lay waiting for some kids to find it and shake things up.

While Patterson and Lord were discovering the joys of the Internet as a way of exposing The Ugly Mugs and other unsigned bands, and Cohen was developing enhanced CDs, Jim Griffin, chief technology officer at Geffen Records, was trying to build a bridge between the music industry and the Web. Griffin had moved into the world of music technology from a background in journalism. As a reporter at the Lexington Herald-Leader in Kentucky, he developed an interest in the ways that the computer was transforming the newspaper business. This interest led him to accept a job in Washington, D.C., tracking and advising newspaper clients on the ways of new media.

Griffin was eventually hired by Geffen because he was deemed a thought-leader who could assess and explain technological options. Griffin first gained credibility by convincing the company not to release enhanced CDs. After that, when he proposed ways for Geffen to experiment with Internet promotion, company executives were willing to do so, after some initial debate. Aerosmith’s unreleased “Head First” was the cut of choice. It was a giant leap for label-kind, and ironically it may have been a small step in the industry’s losing some of its control: a quick search of Napster shows that “Head First” is still floating around online today. The release was a controversial move, especially when Geffen’s owner, Universal, caught wind of it.

“The parent company was not pleased,” said Griffin. “They knew that this sort of thing was the future, but I think their goal was to slow it down, as opposed to speed it up, and here we were speeding it up.” Griffin was attempting to straddle the thin line that separated the corporate innovators from the anti-establishment.

David Weekly was on the other side of the divide that separated labels and fans. With deeply set eyes, a neat haircut, and an engaging, almost overly enunciated diction, Weekly was attending Stanford University to study computer science. It had been back at his father’s office in his hometown, Boston, well before college, that Weekly first witnessed the power of the Web. In 1994, his father, a software engineer, fired up a beta version of the early Mosaic browser. Although Weekly says he was at first “unimpressed” with the infant Web, after spending a half hour downloading some “cheesy-sounding” Hungarian folk music, he became excited by the notion of online distribution. His father concluded “someone’s going to make a lot of money figuring out how to compress all this stuff.” Even though he was struck by the potential, Weekly didn’t act on this encounter until after he graduated high school and arrived in Palo Alto.

Compared to the big-city excitement of Boston, the almost archetypal suburban sprawl of Palo Alto held few charms to engage the inquisitive Weekly. Despite being in the middle of the world’s hottest spot for computer development, he found Palo Alto “not very accommodating to the college student.” The town consisted mainly of “nice expensive restaurants, and nice expensive shops. There really weren’t too many places an under twenty-one student could hang out.” To fight the boredom, Weekly began to compose “various tunes, rhythms, jams” using software tools, a hobby he had begun in his last years at high school. After Weekly offered to share some of his compositions with a college friend, the friend suggested that he check out MP3s. Weekly had never heard of the format, but from his first download, he was bowled over by the possibilities that online music allowed.

“I’m not sure I could ever look at my computer the same way again,” Weekly said. “It was now my stereo.” The only thing lacking, he noticed, was somewhere reliable to find music of interest. Most of the online traders at that point relied on slow, fly-by-night FTP sites, so the work of actually tracking down music online, which usually involved finding scores of abandoned sites, made the process as maddening as it was exciting. Legitimate sites like Lord’s IUMA, which offered mostly unheard-of songs by undiscovered groups, did little to alleviate Weekly’s hunger for more popular music.

Having access to plenty of Stanford’s bandwidth, a workable computer, and ample networking skills, Weekly decided that he would host his own site and offer choice pieces from his own music collection, along with perks such as reviews, a chat room, tech advice, and pointers to music software. Soon downloads from his small, and relatively weak, computer grew so popular that they accounted for 80 percent of the university’s outgoing Internet traffic. As visitors poured in to download “Freshman” by Verve Pipe or “Jump Around” by Boston’s House of Pain, suddenly Weekly was one of the rising MP3 scene’s most visible figures.

While Weekly had no plans to build a company or even a career on downloadable music, his promotion of free MP3s hit a cultural nerve. Though he knew “just enough to wreak a little havoc,” his site foreshadowed later developments in file sharing and served as a bridge from IUMA to Napster.

Weekly’s experiment ended nearly as soon as it started. One day in 1997 Weekly got two calls from Stanford authorities. The first was from Residential Networking, wondering what on earth was responsible for hogging over 80 percent of Stanford’s outgoing traffic. Then Network Security called, fresh from having spoken with a not-very-amused Geffen Records, which was upset that its songs were being served. Weekly’s site was immediately shut down, the music stripped away. Still, the popularity of his site confirmed that a hunger existed for digital music, whether because it was free, convenient, or fit in with the general mania for all things Web.

On a farewell visit to his site’s chat room, Weekly found it occupied solely by the vice president of technology from Geffen. Weekly noted his e-mail address, and his name, Jim Griffin. After Weekly sent an impassioned e-mail defending MP3’s potential, Griffin responded that he agreed and offered Weekly his phone number.

Griffin, charming and somewhat professorial, seemed at that point to be one of the few people working in the music industry who fully understood the potential of online music, and if he was charged with the onerous task of defending copyrights, his authority was tempered by a human side. He saw the need to smooth the ugliness that could develop if the industry continued to over-protect and over-sue, and he had great insight into how Internet technologies were developing and converging. Ironically, he often had to work as the enforcer at Geffen, sending letters to sites that were posting copyrighted material, such as an enormous number of Nirvana tribute sites. Griffin asked for that task because he “didn’t want the first point of contact [for fan sites] to be cops and lawyers.” For Weekly, a college freshman, to hook up with the vice president of an important record company was an amazing introduction into a new world, at a pivotal time when he was taken seriously by all.

Griffin had developed relationships, both socially and technologically, with most of the developing players in online music—including Weekly, Lord, Beastie Boys’ Webmaster Ian Rogers, and honchos like David Geffen. He was doing his best to forge some kind of common ground between the record industry and the technological visionaries, as well as any fans who were just trying to make sense of everything. Griffin was a frequent guest on chat sites, trying to explain Geffen’s policies and promote its artists online. Given Griffin’s penchant for networking, it’s no surprise that one of the movers whom he and Weekly began brainstorming with was Michael Robertson, the clean-cut young entrepreneur from San Diego who had just launched MP3.com.

Chapter 3 A CULTURE OF MUTATION: THE RISING INFRASTRUCTURE (#ulink_e2d9828c-7185-511d-b0d1-5fee6d77777c)

Music is a thread tightly woven within the fabric of its time. While social forces play a huge and celebrated role in its history, an equally rich story lurks beneath the developments of the electric guitar, the microphone, the distortion pedal, and the recording studio—each has played an impressive role in shaping the sounds of our culture. Music is rooted in the interaction of humans, their artifacts, and the world in which they all meet. Whether through musical scores, trumpets, electric guitars, or drum machines, technology is always present—even fundamental. By the time the recording and playback processes play their parts, and the particular medium in which a work is heard lends its context, the end result is sound that has been soaked in technology its entire length.

A shift towards synthesizers, sampling, and digital production studios means that in many cases songs nowadays are created that exist from beginning to end as purely digital code. The switch to online digital distribution fits in perfectly with these developments, just as occupations as diverse as journalist, stocktrader, and office manager have found themselves less concerned with physical objects and more concerned with playing roles within a larger datascape of networked computers. Almost all recent commercially released music has been digitally recorded, or at the very least, mastered. To go to the trouble of actually pressing a song’s data onto a CD, when there are faster, more efficient ways of distributing the ones and zeroes, is increasingly anachronistic.

Even the software that plays online music, today’s digitally built versions of yesterday’s hi-fi, benefits from the change to networked distribution. A fundamental advantage of software over hardware when it comes to music tools like MP3 players is that even if you want to make a big update, you don’t have to remold, recast, or physically reconstruct your product. Buggy software is often released in not-ready-for-primetime incarnations, while developers work to upgrade it, in hopes that users will suggest repairs or, in the case of open-source software users, actually make needed repairs themselves. If a team of programmers builds a music player that doesn’t have a volume control, they don’t have to scrap the program and write a new one, but simply add on as they go. Totally at odds with old-fashioned notions of materials and scarcity, once one copy is made, all others can be copied for next to nothing, and improvements spread easily, anywhere in the world.

This freedom is what drives the amazing speed and ferocious adoption rate of the software distributed on Internet. As the entertainment industry becomes increasingly high-tech, through distribution as well as production, all indications are that the pace of innovation and mutation will accelerate, at least until monopolies develop. As high-speed Net connections and powerful computers became the norm, what was true for software became true for mass media. The costs of distributing one copy of a song on the Net and 50 million of them are practically the same. The industry was slow to get its mind around this radical notion, so at odds with the fundamental economic concept of scarcity. The history of online music companies has made one thing clear: those that took advantage of the Net’s most radical effects had the greatest impact. A slow and steady path that merely updated old-style marketing of scarce, expensive products meant very slow rates of consumer adoption and disappointing growth for the field. Those companies that ignored the rules—and maybe even the rule of law—succeeded in creating a mass movement.
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