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Closed ears. How the music industry ruined itself.

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In 1999 a website called Napster appeared on the internet. With little in the way of its own content, and certainly no means nor intention of producing or releasing music, it set a ball rolling that in 2013 tumbled most of HMV’s high street stores like pins in a bowling alley. That ball is still in motion.

Napster was the first platform designed for large-scale file sharing. Its unique interface allowed users to search each others’ computers for MP3 files and download the ones they liked. However, the file wasn’t ripped directly from a single host. Instead, the system pulled small pieces of the MP3 from every contributor holding the file – reassembling it when the action was complete.

At first, if it paid any attention at all, the music industry was utterly blasé about the site. Highly profitable and worth many billions of dollars, the business was loaded with self-confidence, hubris and money. Why should it care about a pokey little website,  whose technology it could hardly comprehend? Only Napster didn’t remain pokey or little. Offering kids free music in exchange for nothing more than a little patience, its renown, popularity and user-base spread like a summer bushfire. By the time the entertainment business opened its eyes and ears wide enough to understand the implications, it was almost too late.

This was the tipping point; the moment the record industry had the opportunity to grasp the digital nettle and make this new concept its own. What Time Warner, EMI, Virgin and the rest should have done, was to buy Napster.  This would have made Shawn Fanning, John Fanning and Sean Parker very rich men,  given the music companies an astonishingly new and advanced means of distribution, while simultaneously neutralising any threat from piracy.

Instead, like the clunking corporate beasts they certainly were, they called in the lawyers. Millions of dollars were spent pursuing Napster and its members through umpteen courts. Tales began to emerge of high-school teens receiving notice of aggressive  litigation, for the crime of opening their PCs to the network. In a sample case, a sixteen year old girl from Ohio was prosecuted for making 900 tracks available on Napster. She faced a jail sentence.

In the meantime, Napster’s operators were busily arguing they had breached no copyright laws, as they hadn’t distributed so much as a bar of music. A fair point and a technicality which made a straightforward, rapid judicial ruling highly unlikely.

Then, the whole affair slipped into Spinal Tap territory, as world-eating rock monster Metallica, rather astonishingly, pitched the might of their legal team against any of their fans detected sharing their music. Possibly the least rock and roll move a band has ever made.

After thousands of hours and untold fees, the lawyers won. Napster in the USA, was served with an unswervable diktat and closed. Perhaps it didn’t know, or just didn’t care, but the recording industry had just paid a fortune to initiate its own decline. In a knee-jerk rush to obliterate the very technology which would have carried the business into the new millennia, the suits and their attorneys had squandered their chance, trying desperately to re-bottle a particularly lively genie. Put simply, they invested a packet in an exercise of wholesale denial.

There is nothing so powerful as an idea whose time has come. Napster may have fallen, but inevitably, a dozen replacement peer-to-peer services sprang up to take its place. And because of the rough handling meted out to the original site, their attitude to the establishment was far more antagonistic. Consequently, the possibility that file sharing might be a shot in the arm for the record business, was neutralised. Two parties, with remarkably similar aims (the distribution of popular music to fans) were now sworn enemies. What’s more, the pirates had the upper hand.

Enter a third player to the adversarial arena. Apple had managed to make the MP3 the principal music format in little more than a couple of years, thanks to the rise and rise of the iPod. And just as the music retailers were crowing about their hollow triumph over Napster, iTunes emerged. This was the middle ground. A direct download, paid-for music service (no file sharing) offering a large and growing library at about 70p a track. Totally legal and legitimate, but controlled by a computer company, not a record label. And with no need for a bricks-and-mortar store, this was a further, savage blow to traditional music sales. Throw in Amazon’s dominance of the faltering CD market and the forthcoming advent of Spotify, and it’s easy to picture the former giants of recording and vending, blinking in shock and awe as their might and glory was casually usurped and carried away.

It could have been so very different. Had the big labels spotted the limitless potential in the platform Napster built, embraced it and used their substantial resources to construct bigger, better networks, they may not be the weakened businesses they are today.  Maybe HMV’s shops would have closed anyway. Or perhaps they would have been transformed into vast MP3 libraries and technology centres. Who knows? They’re gone now and there’s more than a faint line between the decision to mount a witch-hunt against file sharers at the century’s turn, and the failure of music’s retail business model at the dawn of 2014.

Clearly, when revolutions arrive, it’s important to be on the right side of history, because there’s only one winner and no option to change your mind.

Magnus Shaw is a copywriter, blogger and consultant

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On Creativepool

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