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back to article Sad but true: Napster '99 still smokes Spotify 2012

The Napster of 13 years ago was vastly superior to any legal music service available today, including Spotify, says Sean Parker, a mover and shaker in both companies. And he's right. Napster co-founders Sean Parker and Shawn Fanning were speaking at the SXSW Music Festival and Conference this week. Parker is an investor in …

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Silver badge

"Spotify ... doesn't allow you to keep the song in a portable format" - that's what Audacity* is for.

* other ripping software is available.

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Trollface

Wou know who?

Oh surly we could just call him Lord Voldemort now can't we?

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Anonymous Coward

Damning whom?

"(Which is damning. It was more heroic to pose as the persecuted pirate hero rather than become a successful P2P music entrepreneur.)"

Yes, expecting people fired up enough to scratch their favourite itch the 'net way to stand up and risk getting slaughtered in the rotating knives gallery is of course entirely logical, natural, and not at all a little reality-challenged.

Andrew, this isn't a cogent argument, it's an attempt at rewriting history by framing the actors as something entirely different than what they are. If it damns anything it's the discounting of the effect of massive over-reaction on the over-reacting party's credibility as a rational actor. The p2p bunch had a lot of coding skill but many weren't experienced entrepeneurs. Negotiation as a really small party for licences from a really big party is not easy. When the other party just isn't interested in negotiating, well, it just isn't going to happen. When they've made clear that whatever you do, THEY WILL SMASH, then what?

No, Andrew, in this you're entirely off. You're not merely riling up the commentards here. You're just plain wrong. If you disagree, please show that there was a good possibility of negotiating any reasonable deal with the rights holder conglomerates at that point in time.

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Re: Damning whom?

"Negotiation as a really small party for licences from a really big party is not easy. When the other party just isn't interested in negotiating, well, it just isn't going to happen."

True dat. But it says more about the lack of vision at the Labels than it does about the lack of negotiating nouse at Napster.

The point is - really - if Napster had become legal, a lot of the P2P scene wouldn't have developed to the extent it has today.

Now, think about that. It doesn't just mean that pirate sites would have remained small and marginal. It also means there wouldn't be a push for legislative/technical solutions to the P2P problem.

And it likely means the Labels lost out on a shit load of money. By their own - spurious - calculations, millions of pirate downloads would never have happened. By a more realistic estimate they would still have had a huge cut of a huge new market.

If they Didn't Get It, that's not necessarily Napster's fault.

It's true that trying to start as pirates and then move to a legitimate business model probably didn't help N's case.

But if they'd tried to negotiate from nothing, would they have had any more success?

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Anonymous Coward

Re: Damning whom?

"Which is damning. It was more heroic to pose as the persecuted pirate hero rather than become a successful P2P music entrepreneur."

Orlowski just can't help himself. Until that point, it was a relatively unbiased report. Then he reverted to type...surprise surprise.

As for becoming a successful P2P music entrepreneur, the risk of being financially raped by the music industry (in the same way as they do with their artists and the general public), with the possibility of having their lives potentially ruined by future litigation, really isn't too appealing. That's not too hard to understand is it Orlowski?

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Anonymous Coward

Re: Damning whom?

"If it damns anything it's the discounting of the effect of massive over-reaction on the over-reacting party's credibility as a rational actor."

How does that make any sense?, It's nonsense. Not a literary sense but in an reaction to the literay sense of it's purpose.

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Re: Damning whom?

Yes, Andrew, it is just the filthy pirates that are not talking to the industry that are the problem, not the fact that the music industry has shown time and time again that they're simply not interested in letting _anyone_ get a truly global service out there that can even begin to match now dead 10 year old software.

Or are you seriously suggesting that such an approach would be met with anything other than litigation, blocks and court orders, as we've seen time and time again.

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(Written by Reg staff) Bronze badge

@Brah

You didn't read the article, or read it and didn't understand it.

Go read the 2009 interview with Castle to find out what happened. We could have seen some interesting P2P experiments. The door was open.

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(Written by Reg staff) Bronze badge

Re: Damning whom?

"Anonymous Coward"

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"Napster also had other advantages, including a wider catalogue, thanks to its disregard for licensing. "

And they didn't carve up the world. Anyone, anywhere could play.

Spotify call their service "A world of music " but only if you live in the right part of the world. Canada? No music for you. There is iTunes in Canada but it's missing loads of stuff available in other countries. Amazon MP3? Sorry.

There is no way the control freaks at the labels will allow anything Napster like to exist.

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Flame

" it was that it didn't return any money to the creators"

No. It was that it did not give money to the record companies. The creators have always been a complete irrelevance.

For anyone who ever hears someone repeat that it was the lack of paying the creators that killed it, point out that a creator is someone with a voice who sings or an instrument that they play.

A creator is not someone who steals from the singers and musicians. That is a definition of a music company.

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FAIL

Re: " it was that it didn't return any money to the creators"

"A creator is not someone who steals from the singers and musicians. That is a definition of a music company."

Right. Because record labels have never, ever, done anything other than steal from musicians. Sheesh! Gimme a break!

Middlemen have existed throughout history, usually for good reasons. Record labels provided up-front funding—risking their own damned money—for recording studios and marketing. That last is crucial: an unknown musician has no hope of ever making a living out of music if nobody ever learns of their existence. Hence marketing. Hence concerts (which were originally just glorified adverts for albums. Hence most of them having titles like "The [INSERT ALBUM TITLE HERE] Tour".)

If you're spectacularly brilliant at writing music, then you may—if you're lucky and have a tailwind—break into the industry entirely on your own. That's a lot easier to do today, with social networks, the web and so on. But those are relatively recent technologies and there are still billions of people out there who don't even have hot and cold running water at home, let alone broadband internet access.

You need to get your name out there. You need someone with the skill and contacts to publicise what you do and build up an audience for your work.

And THAT is where the record labels come in. More successful musicians and groups tend to have managers rather than agents, who perform similar roles and leave the label with just the publishing work to do. But even they'll want 10-15% of whatever you, the musician, earn.

Record labels are also the curators. The gatekeepers. They're keeping out the seriously shit stuff—the Rebecca Blacks—and trying to ensure that they offer something of quality. (Or, at least, something people might actually want to part with their own money to hear, which amounts to much the same thing in a capitalist society.)

Some of the more media-savvy musicians may be more than capable of handling their own careers. But that's not true of all. Record labels do serve a purpose.

That purpose is changing, granted, but this notion that record companies "don't do anything" to deserve their slice of the royalties is a strange one. Just as Hollywood doesn't tend to advertise how many of the movies they've funded tanked massively, so the music industry isn't in the business of telling the world how many lemons they've advanced money to in order to pay for them to write their album, pay for an album cover artist, pay for point-of-sale publicity materials, TV and radio spots, distribution of physical media (CDs, concert DVDs, etc.), get them onto radio playlists, all sorts of other marketing drives, not to mention paying for the mastering of the album by an expert...

... only for the album to sell three copies in total—two of them to the artist's own family.

So, yes, you're damned right they take a big chunk. They're risking a shitload of their own damned money. Why shouldn't they get a decent return on their investment when they finally hit pay dirt?

If musicians want to go it entirely on their own and cut out the record labels entirely, nobody's stopping them! Seriously! There's nothing to prevent you sending your tracks directly to Apple, Amazon, etc. (Of course, the iTunes Store and Amazon's own music stores also take a cut...)

And yet... we still hear about artists being signed to recording labels. Clearly there must be some benefit in doing so, or they wouldn't keep doing that.

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FAIL

Re: " it was that it didn't return any money to the creators"

I must respectfully disagree with several points in your post.

The issue here is generally about percentages. You sign to a label; they front you £20k to get an album going (through their preferred and partially owned studio...) and have a smash hit. Great.

Now; they'll be having that £20k back, thanks. So the 40% of royalties you get for each play is null and void until it's paid back the £20k. This is essentially therefore a loan; the interest is their 50% of royalties earned... until you consider that they earn this for the lifetime of the song. 10 years after you've paid them for everything they did for you, they're earning a massive amount of money for no discernible services rendered. That's the issue.

A comparable example: You get a bank loan to buy a complex piece of hardware for your factory. A percentage of the profits created by this machine go to paying off the loan. When the loan is repaid... you continue to pay a percentage of the profits to the company who gave you the loan for the lifetime of the hardware.

In any normal business sphere this would be considered insanity.

My second point: a vastly larger group of musicians make money by playing their instrument live (as a dep, session musician or part of a gigging band) than ever make their money through being signed to a record label. The assertion that the industry is in any way synonymous with widespread awareness or a position in the top 10 is a lie entirely peddled by the record labels themselves because they don't profit from unsigned acts gigging and making money.

third: Record Labels do indeed act as gatekeepers for that top 10 aspect of music, and I think the current state of popular music speaks volumes for exactly how incompetent they are at that job. Bland uninspiring music, X Factor winners, "old classic" music... such as boybands from the 90's, etc. This is neither progressive or representative of music being created or performed around the world right now.

Record Labels are not good for the music industry as a whole. merely for a very small proportion of musicians and themselves.

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Re: " it was that it didn't return any money to the creators"

Well then if it's insanity, go and arrange your own loan of £20K to fund your album release. Or plonk down £20K of your own money. Though 20K wont buy you a lot of advertising so I suspect your arbitrary making up of figures means you don't actually have any significant experience of the music industry and are just suggesting figures, percentages and periods to support your preconception.

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Flame

Re: " it was that it didn't return any money to the creators"

The record company is probably acting more like a VC than a bank, in that they've got a very good chance of not recouping their investment.

I've heard that of every ten records released, six or seven will lose money, two or three will just about break even, and one will make sufficient profits to cover the losses on the other nine. That's not great odds, and whoever's fronting the money wants to make a return.

If you don't like it then there's always the DIY approach. My brother released a couple records independently in the nineties, and, as others have pointed out, the Internet makes things easier.

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Re: " it was that it didn't return any money to the creators"

I have no first hand experience, I grant you.

However, my father was a drummer in a reasonably successful band. If you heard one of their hits (and you are over the age of 30) you would recognise it.

My figures are based upon his experience. It was a 5 man band - he received 10% of the 50% allocated to the band, and the other figures are as best he remembers (he signed with a record company in 1977)

They finally worked off the debt back in about 2004, the albums he played on were 1979 and 1980 - it only took 24 years for him to see a penny of his work.

Feel free to criticize me without any knowledge of my experiences, however.

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Meh

Re: " it was that it didn't return any money to the creators"

The content creators have always been irrelevant because it isn't the content that makes money, its the ability to sell the content. CelebrityTalentDanceFactor is successful because it has enough capital to saturate the advertising market so that for a short period of time, it is the only thing being talked about. Its purely a question of pulling disposable income away from the alternatives, and you do that by massive promotion to drown out the competition.

As far as music goes, creating content is actually quite cheap and for no-names, usually done *before* a label picks them up. Nationwide billboard advertising, talk-show appearances and the 6:03pm play slot on all commercial radio stations is the bit indies can't afford and have difficulty coordinating.

Meh, because music is called "culture" but it is really a short-lived amusement, like a lollipop.

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Re: " it was that it didn't return any money to the creators"

I'm a bit confused. Your father played on albums released in 1979 and 1980 (music from which is still known and recognized today), and finally cleared himself of debt to the music label in 2004? He got no remuneration of any kind from that work from 1979 to 2004? That's way outside the experiences of any musician I have known. I'm sorry but there is something very strange sounding about this.

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Coat

Re: " it was that it didn't return any money to the creators"

That is indeed the case. He did get shafted even compared to his contemporaries but it's not massively uncommon in my experience (I am a performing musician as well, I do it part time, more than a hobby but not a job) and there's a lot of bad blood on the circuit here between the guys I know who have been signed or worked with labels in the past.

As for the historics:

After the 1980 album the band split somewhat acrimoniously (changing the legal status from band ownership to individual ownership), followed by the death of two members in a car crash and a third from a drug overdose - the legal small print was that in such an event the royalties/ownership reverted to the record company, reducing the royalties/payback to 20%. It was mainly that and a promotions budget my father had to threaten legal action to get reduced that caused the situation.

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Anonymous Coward

Pioneers

With anything new, there always has to be someone with vision who does too much too soon and ends in failure, if not shame.

Then, those who come after, essentially follow the same model but find success and get all the iCredit.

Then, history finally reveres the pioneer as a giant of their time and retro-rewrites their life and times into a fantastic and happy story. Shame that part of the cycle tends to happen 150 years too late.

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Yes it does

"Spotify ... doesn't allow you to keep the song in a portable format"

... sure it does, you just have to pay for it. Perfectly reasonable.

Plus, for a few quid a month, you can listen to all the music you want, on your pc or phone. Which is tantamount.

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Headmaster

Re: Yes it does

That'd be "paramount" then. If not, tantamount to what?

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Headmaster

Re: Yes it does

Semanticism Nazi failure, there. It is clear that the writer means being able to listen to any song you want on any portable device is tantamount to being able to carry that song around with you. Paramount would make no sense.

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Anonymous Coward

Re: Yes it does - All the music I want ?

So this means I can listen to rare East-European music from 70s ? Here in Canada ?

Boy, where do I sign for it ?

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(Written by Reg staff) Bronze badge

Re: Yes it does

I presume he's broken the Spotify DRM crypto, thus making it portable.

Otherwise, it isn't in a portable format.

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Anonymous Coward

Soulseek, a venerable clone of Napster, is alive and well but mentioned nowhere in this article. Of course its "catalog" lacks Napster's breadth at 1999.

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WTF?

"Parker pointed out that even in its rudimentary state, Napster had a real-time chat channel built in, enabling file-sharers to communicate"

Maybe I'm just a vinyl spinning luddite, but why does a music subscription service need an IM client? I use Spotify to explore music, not read asinine comments from complete strangers (I've got El Reg for that).

Hell, by Parker's reckoning, my Linn LP12 must be absoutely useless for music, it doesn't even connect to the intertubes!

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It goes further than just being unnecessary to many of us. I was a Premium subscriber to Spotify for about a year (I just wanted the higher quality encodings). I dropped my subscription *because* of Spotify's increased integration with Facebook and Social Networking. I don't want to advertise to the world everything I am listening to and definitely not when. Some of us do not like being forced to live in glass houses.

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Unhappy

The problem is that if some P2P site DID try the business model outlined here, they would never get the licenses necessary from all the music companies... and even if they DID get the licenses, those would be valid only to a very limited section of the world (likely the USA).

Worse yet, they would probably be forced by the terms of said licenses to employ IP blocking ala Hulu to keep people from other countries off their site.

Long story short: the current licensing landscape makes it impossible for ANY kind of legal content service to keep up with illegal P2P in terms of reach, even if it could somehow keep up in terms of available content (which is in itself doubtful).

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This post has been deleted by its author

Law
Pirate

My problem with spotify is...

I've been using premium for a few months and a good selection of artists I listen to don't exist on there. Recent examples are Rammstein and Metallica. It's not even like my tastes are fringe or anything.

Then my biggest gripe.... Playlists I've generated since using the service now have a good number of tracks unavailable.... In under 2 months songs they had and I listened to are no longer available.

Until they sort out their licensing between record companies I'm always going to need my own library. Also, their recommended artists and songs are crap, I have no interest in Rihanna, yet they constantly push her and all the other pop/rap people at me claiming its recommended just for me.

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Control

The article is, in my view, pretty much right if you discount some of the nit picking here. In that:

Most folk, and that includes the majority of 'pirates' agree that the creator should get some fair remuneration[1], and if we think about it, that means those who support them in the form of the record companies also deserve a fair cut of this[2].

But none of the P2P services *ever* had a chance of a legal option as history shows the record labels (and I guess the same applies to movies) are absolutely loathed to give up control over their 'rights'.

They wanted the same sort of ability to dictate who, where, and what price, they always had by virtue of having the physical distribution channels sown up. Well you know what happened there, don't you?

In sort, they blew it. They tried to set up label-specific web sites, but of course nobody gives a monkeys todger about what label their favourite artist is on, so they all failed. They imposed DRM on legitimate sites, even though all it serves in practice is to piss off the *paying* customers, and the result was P2P flourished.

Then (and certainly for a while) the only viable legal site to pop up was iTuens, by virtue of Apple being big enough, and focused enough, to bang their collective heads together and get sufficient sense out of them at last. But I'm not a fan of iTunes either, and it is far from perfect.

You see, the internet has removed virtually all of the cost and boundaries for distribution of digital media, but they hang on to the old regional licensing terms (OK, there may be difficulties in re-negotiating some of that with the artists). They also expect to impose their own pricing model and, in the case of video, still try to foist DRM on consumers.

But now the economics are different, they are no longer having to adjust the price on the basis of "what the customer will pay in market XYZ" because it is not just buy it or leave it, as they now have easy pirating to compete with.

Which is good, and not impossible. Why? Because most folk (as Andrew has reported on in the past several times) *are* willing to pay, but they want it to be easy, and global, and not to piss them off with every new (or old) device they choose to play it on.

When or how will this happen? Buggered if I know :(

[1] yes, the period of copyright is moot, and arguments abound about how much, but in principle its accepted.

[2] stop laughing please, we could imagine a world in which the big record labels were not lawyer-driven entities focused on screwing over artist & consumer, so their cut was morally acceptable. I'm not holding my breath though.

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username and im does not make a social network

the term probably didn't exist in them days but I don't think Napster had even the beggings of social networking. I was a user as were all my friends and we did not even swap user names. there were no facilities to find friends. people were online to dump free music. from everyone. it did not matter who.

I can't envisage wall, events, inbox, circles and all these good social network things getting built upon a p2p network of users with a very keen interest in remaining anonymous and no central storage at all.

its a nice concept. p2p social networking. but that's not what Napster was about.

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Sad but true...

The title "Sad but true" is the name of a Metallica song, the band who lead the legal actions against Napster... Intentionally or not, I found it ironic...

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