Happy 8th Birthday, Napster

by John Davidson
2 June 2007

Hard to believe, but eight short years ago Napster was launched. The impact of Napster is unsurpassed in popular music; it trumps the arrival of Elvis, the Beatles, the Ramones, the LP record, and probably even the transistor. Napster is to the music industry what the combustion engine is to the horse-drawn carriage, a paradigm shift so powerful that its innocuousness is completely overlooked.

After all, the many discussions that we’ve had on this blog are more about the legalities and economics of the digital music world, tangible elements that warrant and enable fact-based discussion. But the essence of Napster is the essence of capitalism: free will. Obviously, Napster was popular because it delivered music for free, but think back to the rush of adrenaline the first time you went peer-to-peer: your any impulse was likely rewarded, anything you could think of was available, and there was that edge of joy like you were getting away with something. The power of the Internet was finally something real, and it was too good to be true.

The massive amount of choice unleashed by Napster quickly spilled over into the entire music business. Consumers’ desire for choice upended nearly every sector because Napster removed the economic and psychological barriers put up by physical distribution. At first, people just filled up their hard drives, but iPods quickly made digital music portable. Flush with thousands of digital files, society rapidly abandoned the idea of being held to radio playlists, unstocked inventory at music stores, import-only items, and anything that stood in the way of musical desire. Napster wasn’t the solution to the limits of physical distribution or payola; it merely gave us the option to avoid the middle man and expect everything for nothing.

The aftermath of Napster, whose free reign ended in July of 2001, displayed the limits of free will, or, as Noam Chomsky has argued, the limits of capitalism. Everything has a price, even free stuff. Those who control the system—in the case of Napster, all the downloaders and uploaders—control its merits and insulate themselves from financial risk, thereby eliminating a true consensual transaction. In order to mitigate the moral component of file sharing, we not only avoid the unfairness of it all but also its true cost: lower motivation to participate in the system. We end up grossly underestimating the price of choice in this situation.

Granted, Napster makes use of economies of scale via digital distribution, but as I’ve argued previously, the legacy legal conditions cannot simply be ignored. They are indeed part of the cost, and just as Napster failed under the weight of this legacy, so will Apple’s new scheme to sell music without digital rights management (DRM.) That’s because the premise of DRM-free music (no restrictions on the use of purchased music, kind of) doesn’t address the fundamental attraction of the digital nirvana: massive inventory choice. The iTunes Music Store only has one publisher/record label on board right now (EMI), and even that deal doesn’t cover everything that the label owns. Unless the choice is nearly unlimited, people will gravitate towards someplace that will.

Perhaps Apple will be able to make deals with other labels or publishers for DRM-free music, but the odds are very long that the legalities regarding copyright will be resolved for more than 80% of recorded music. There are simply too many artists and lawyers and estates and statutes whose cost to decipher are too great. That remaining 20%, that bit of elusive but profitable part of the Long Tail, is what made Napster so innately revolutionary.

Filed under music industry music technology