Music Makers at Wits’ End In Battle With Internet Takers

Stanford freshman Michelle Ortiz was among the first casualties in the war between heavy metal band Metallica and Napster, the controversial Internet music-trading service.

The band recently demanded that Ortiz and about 300,000 other Napster subscribers be immediately booted from the service for violating copyright law. Napster, based in San Mateo, Calif., promptly threw her off.

Fortunately for Ortiz, her injury healed quickly. The 19-year-old, a confirmed “computer novice,” used instructions posted by a fan on Napster’s own message boards, reinstalled the program in a matter of minutes and was back, happily pirating music.

“I’m not really upset because it was so easy to get back on,” said Ortiz, who was off Napster for less than a week. “Everyone I know is back.”

While the public wrangling over Napster continues at a head-banging screech, the reality is that the artists and the music industry are losing the battle.

Ortiz and millions of other Internet users have proved that despite the music industry’s lawsuits, policy initiatives and technical alternatives, it is still ridiculously easy to copy and distribute copyrighted entertainment over the Internet.

Online technologies like Napster signal a fundamental shift in the record industry whose economic foundation is based on recordings that wholesale for about $10. The industry, so intent on fighting Napster, hasn’t found a way to embrace the profit potential of these emerging digital tools.

Dozens of other file-sharing technologies, more robust than Napster and far harder to track, are flourishing on the Net.

Even for Metallica, which has been the most aggressive opponent of the Napster community, the outcome is becoming obvious.

“We let the technology get ahead of the music community and we’re playing catch-up right now. . . . Collectively we’re all at fault,” said Lars Ulrich, drummer for Metallica. “Ideally, the industry needs to unite and fight. But I don’t know how realistic it is to think that kind of unity can ever happen.”

Among the music industry’s numerous blunders, demonizing the online community was a key misstep. The industry’s crusade to block technological innovation has been taken as a declaration of war against young music fans, traditionally its most fervent customers.

Fighting back, computer-savvy kids have united and are turning a business dispute into a holy war.

The industry “made enemies of the wrong group--the kids,” said Frank Rogan, online music network director for GameSpy Industries, a leading online entertainment portal based in Irvine. “Record labels couldn’t imagine that anyone would waste the time and energy to develop technology that ultimately wouldn’t make any money.”

Shawn Fanning did. The 19-year-old student was attending Northeastern University in Boston last year when his dorm-mates started complaining about the difficulties in downloading music off the Net.

Trading music files online had become popular several years ago with the advent of MP3, a compression format used to convert music on CDs into reasonably sized computer files. But finding MP3 files involved using Web-based search engines whose listings were often woefully unreliable, and then trading music files using arcane file transfer protocol commands or by e-mail.

Armed with a computer programming guide from an uncle, Fanning in only a few weeks created a prototype of Napster. The program combines software for swapping files with a powerful search engine that updates its lists continuously.

Napster doesn’t store MP3 files on its own computer servers. Users keep the songs on their own computers and exchange them directly with each other. Napster executives insist that, because of this distinction, they are merely a conduit for sharing files and can’t control users’ behavior.

Instead of embracing such innovations, the Recording Industry Assn. of America, the trade group representing the nation’s five largest music conglomerates, launched a national campaign designed to scare college students away from MP3 piracy and persuade universities to take a stronger stance against those who use campus accounts to swap files.

The RIAA filed lawsuits against students, and was responsible for dozens of kids being either expelled or suspended over the issue of bootlegging music.

What the RIAA has not done is develop a secure method to deliver music on the Internet, something that would make it easier for fans to buy--rather than steal--the music they want.

Instead of recruiting young technologists like Fanning or Justin Frankel, the 21-year-old whose company created Gnutella, a data-swapping program that expands on what Napster started, the companies watched as others set their destiny.

The economic effect of the new technologies on record labels is hard to measure. That’s not true, however, for Charlie Robbins and other owners of independent record stores, particularly those near college campuses.

Robbins, 48, has run music stores in the area around Syracuse University since 1976. His shop, Oliver’s Records, is two blocks from the Syracuse, N.Y., campus and the only record store within walking distance.

Students still flock into the store, eager to browse the stacks and listen to new or imported releases on the shop’s bank of CD players, Robbins said. Since Christmas, however, sales have steadily dwindled.

When Robbins asks students whether they want to buy, their answer is always the same: No thanks, I’ll go download it off Napster.

“In April, for the last three years, we’ve averaged $30,000 to $40,000 in sales for the month,” Robbins said. “This April, we did $3,500. I don’t have any money left to buy records to sell. We’re slowly going out of business, and it’s because of technology like Napster. No one’s doing anything to stop it.”

Metallica, whose band members say they know “next to nothing about technology,” jumped into the fray this month after early versions of the band’s song for the “M:I-2” soundtrack were stolen from the recording studio.

Drummer Ulrich and his attorneys discovered the songs were being broadcast over several radio stations. Deejays tipped the band off to Napster, whose subscribers had digitized Metallica’s entire back catalog.

“I couldn’t believe that other artists were passively watching from the sidelines,” Ulrich said. “Just because the technology lets you take my music doesn’t mean you have the moral right to do it.”

Ulrich and attorney Howard King showed up May 2 at the start-up’s offices and demanded that users found bootlegging the band’s tunes be immediately blocked from the service.

Napster complied. But there was a caveat.

Federal law says that if an Internet service provider gets a complaint about a person allegedly breaking copyright law, the ISP must remove that user from its service. But if the accused person thinks he has been misidentified and submits a counter-complaint, then it’s up to the copyright holder--in this case, Metallica--to decide whether to take legal action.

More than 30,000 people took this latter path, and were handed back their Napster accounts. Though the band insists that these Napster users are lying, Metallica won’t take on the daunting task of following up each of the alleged perjury claims.

“You must be kidding me,” King said. “You can’t seriously expect us to file separate complaints against thousands of people.”

And what about the more than 270,000 folks who were kicked off Napster? Like Ortiz, the Stanford freshman, many of them are back, thanks to the step-by-step directions, showing how to thwart the blockage, that users posted on the Net.

“These have been the most frustrating weeks of my life,” Ulrich said. “Everyone thinks this is about the money. It’s not. I’ve got more money than I could spend in seven lifetimes. The issue is control. We want to control what we create.”

The band continues to pursue its lawsuit against Napster, but Ulrich said he’s already discouraged about the outcome.

“The whole thing has become so outrageous,” he said. “After all that’s happened, I just don’t know if I can keep it up. I just don’t know how much good any of this is going to do.”

Already it has become clear that Metallica’s litigation against Napster, and even the fate of that one small company, is irrelevant. File-trading applications will continue to thrive on the Net, and savvy users already are turning to alternatives.

Outside Napster, the computer technologies that have incurred the most buzz--and will be condemned the most--are Gnutella and FreeNet.

Essentially, the two software programs represent an evolutionary step in how computer networks distribute data. Each lets people search for data files, whether that file is a song, a film, a software program or a spreadsheet. Both systems find the data and return a copy to the person’s computer, without telling the user where the file came from.

On the surface, these programs can be seen as an alternative to basic search engines. Punch in Britney Spears’ name, and dozens of copies of “Oops I Did It Again” are available with a single mouse click.

Digging deeper, experts predict that the technology could launch a new generation of super data-search tools and change the underlying architecture of the Internet itself. Why? It makes it irrelevant where data files are physically stored.

That’s an important distinction from systems like Napster. With no central database acting as a reference point, Gnutella and FreeNet essentially create an endless daisy-chain of computers that would be virtually impossible for the entertainment industry to shut down.

FreeNet, particularly, is designed to protect the anonymity of its users and the path in which the files are distributed. Each file is encrypted and scrambles the key that a person needs to find the file within the computer system.

The result is true invisibility, say technologists.

Pulling together Gnutella and FreeNet are groups of software developers working cooperatively, for no profit, over the Net. Because no single company is pushing these efforts, there is no central point for copyright holders to attack.

Gnutella was created in March by the staff at Frankel’s company, Nullsoft Inc., a subsidiary of America Online. Employees posted the program’s code briefly on the Internet, but AOL deemed the program an “unauthorized freelance project” and yanked the data offline.

Too late. Like a computer virus, it spread everywhere within hours and developers were continuing the effort outside AOL’s control. Dozens of Web sites provide Internet users access to the software and insight about the latest developments.

FreeNet was created by Ian Clarke, a 23-year-old Irish programmer, as a senior thesis project at the University of Edinburgh, Scotland. Since then, a small team of software coders--people who contacted Clarke online when they heard about FreeNet--is fleshing out the program. A test version was posted on the Web in March.

“Napster might fail, but it doesn’t really matter anymore,” Clarke said. “I think the [entertainment] industry has lost fighting what fundamentally is an ideological battle. I’m not going to change what I’m doing. If they want to survive, they are the ones who will need to enter into a new business model. This one, it’s over.”