Can Music on the Net Go Legit?

A federal appeals court’s decision Monday that Napster, the popular online music-swapping service, indeed violated copyrights is an expectable victory for record companies. But Napster has amply demonstrated to the record industry that the Internet can be a powerful, popular distribution channel for music; the challenge remains to make the Internet inhabitable for both recording artists and their fans.

As The Times reported Monday, the highly concentrated recording industry--five labels control some 90% of popular music recordings--appears much more interested in tightening its control of the Internet as a distribution channel than in making music widely available at affordable prices. The record companies may succeed in putting Napster out of business, but other similar systems already in operation--including Gnutella and FreeNet--will attract Napster’s huge audience. The systems will have to be litigated out of existence one by one--and Internet swapping sites might then go offshore.

Napster, which made its name by allowing fans to freely swap music among their computers, now is trying to become legitimate. It already has a deal with Bertelsmann, the German owner of the BMG label, to offer its releases on a subscription basis. But to attract an audience, it and its online brethren must be able to offer access to the widest possible selection on reasonable terms without playing favorites. Instead, the labels have been imposing conditions on the online music companies that are so restrictive and expensive that they make it impossible for providers to stay in business.

The appeals court ruling will be a pyrrhic victory for the recording industry if it leads only to eliminating Napster. Far better for the labels to harness the market power of the Internet and help their artists with fair, affordable licensing agreements.