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FC: WSJ goes cypherpunk: Write code, Napster geeks, igno

------- Forwarded message follows ------- Date sent: Wed, 21 Jun 2000 01:57:39 -0400 To: politech@vorlon.mit.edu From: Declan McCullagh <declan@well.com> Subject: FC: WSJ goes cypherpunk: Write code, Napster geeks, ignore the lawyers Send reply to: declan@well.com

[Also see summary of study on MP3 attached below. --DBM]

The Wall Street Journal Monday, June 19, 2000 REVIEW & OUTLOOK (Editorial)

Napster Agonistes

Once upon a time you didn't have to know about sex until you were, oh, 15 or so, and the sordid intricacies of the political lobbying process could safely remain a mystery until 25 at least.

If 19-year-old Shawn Fanning is any indication, parents of budding software engineers had better sit down early and have a talk about the facts of life. We don't know where Mr. Fanning stands on the birds and the bees, but the speed at which the Washington trade group milieu managed to produce dueling studies about the economic effects of Napster, a piece of software he whipped up last year in his dorm room, made even our heads spin.

One trade group, representing the recording industry, produced a report detailing a sharp tumble in CD sales at record stores near college campuses, where kids have gone crazy downloading music from each other using Napster. Within days, it seemed, came a study by something called the Digital Media Association claiming that people were more likely to spring for a $16 CD if they could sample the music first with a free download from the Web.

It would be silly to spend much time parsing these numbers except to note that overall music industry sales continue to grow nicely. There will always be Luddites trying to throw themselves in the path of something new, but their doomful predictions have been confounded by the willingness of people to consume greater quantities of whatever can be produced and distributed more cheaply.

Music, we suspect, will be no different. When the tape recorder came out, the universe of popular sounds consisted of three genres: top 40, album rock and soul. Nowadays there are several dozen sub-genres of heavy-metal music alone. Somehow the industry adapted to the new economics.

Call us cynical, but we suspect the industry's effort to put Napster out of business with lawsuits has more to do with the fact that Mr. Fanning's company has created and occupied a "space," in new-economy parlance, that the music companies covet for themselves. But the record companies also live in dread of each other stealing a march, so they've agreed for now that the best thing is for them to sing in unison, Napster must die.

This is why Mr. Fanning has yet to become a zillionaire, but his new partners from Silicon Valley's Hummer Winblad are working on it. Changing tack in court, the firm's lawyers are arguing that trading copyrighted music online is perfectly legal as long as kids aren't charging each other money.

If this argument succeeds and Napster looks ripe to stay in business, the next move is to open the bidding. And since the likely bidders include Time Warner AOL, Seagram and Bertelsmann, Mr. Fanning won't end up on the breadline despite cutting short his college career.

This is the real dance, and last week's dueling studies are mere background music. The trade groups hope that their precious factoids will lodge in the semiconscious brain of some Congressman, judge or media face just as he's about to issue a sound bite or cast a vote on Napster's technology. These are just the games that lawyers, lobbyists and other putative grownups play. It doesn't mean anything, kids, so keep writing that software.

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Date: Wed, 21 Jun 2000 10:06:37 +1000 To: newmediaresearch@listbot.com From: Phil Graham <phil.graham@mailbox.uq.edu.au> Subject: Fwd: Norman Lear Center - MP3 Study Release Cc: Declan McCullagh <declan@well.com>,

Date: Tue, 20 Jun 2000 16:44:39 -0700 (PDT) From: latonero <latonero@usc.edu> To: Phil Graham <phil.graham@mailbox.uq.edu.au> Subject: Norman Lear Center - MP3 Study Release FOR IMMEDIATE RELEASE: Contact: Stephen Rivers or Jamie Falkowski Phone 310.395.2993

USC Annenberg's Norman Lear Center Study Shows Music Industry's MP3 Fears May Be Unfounded Los Angeles -- A month after the University of Southern California (USC) banned MP3 downloads from Napster, the Norman Lear Center at the USC Annenberg School for Communication is releasing a survey of the USC student body that reveals there is little evidence that use of MP3 technologies is harmful to either the recording industry or artists. This survey of USC students adds significant empirical data to the national debate surrounding Internet music downloads and music file sharing software. "In recent months there has been much concern about piracy of recorded music on university campuses across the nation, but there has been little research on how students actually consume MP3s," said Mark Latonero, principal researcher of the study. "In fact, the findings of this study on MP3 users contradict many media reports and music industry fears." Key findings in the report demonstrate the following: * MP3 is a major new phenomenon in the university population sampled: 69% of all students surveyed say they download MP3s; of these, 68% use Napster. Seventy percent of MP3 users say they learned about MP3 technology through close social networks of family and/or friends. * Unsurprisingly, there is a strong correlation between MP3 usage and access to faster Internet connections. * MP3 usage among students has not significantly reduced their CD consumption patterns. Most students (63%) who download MP3s say they are still buying the same number of CDs; 10% of MP3 users say they are buying more CDs. What's more, 39% of students who download MP3s say that after listening to recorded music in MP3 format, they often buy CDs containing that music. Students also rated CDs higher than MP3s with respect to sound quality. * Sharing music files is a popular activity, but 68% of students sampled who download MP3s say they have never converted CD music to MP3 format; 70% have never uploaded MP3s to the Internet. * Thirty-three percent of students interviewed say their opinion of Metallica has worsened since the lawsuit. * Fifty-four percent of students surveyed disagree with USCís ban on Napster downloads. * Sixty-nine percent of students surveyed agree that copyright holders should be paid for downloaded MP3s.

* Seventy-six percent of respondents say that society is better off with new technologies such as MP3. "The most widely reported reactions to new digital technologies tend to be at the extremes," said Martin Kaplan, director of the Norman Lear Center and associate dean of the Annenberg School. "This study offers a more sophisticated look at the people who use MP3." In mid-April, USC, Yale, and Indiana University found themselves named in a lawsuit filed against Napster by the band Metallica. While Yale and Indiana banned Napster almost immediately, USC originally held back. A subsequent decision by university officials to restrict downloads from Napster resulted in USC being dropped from the lawsuit. The full report, which provides data on the attitudes, characteristics, and practices of this MP3 user community can be found at the Lear Center's Web site: http://www.entertainment.usc.edu/ The Norman Lear Center is a multidisciplinary research and public policy center exploring implications of the convergence of entertainment, commerce, and society. The impact of new technology on artists and on the ownership of creative content is a principal focus of the Lear Center. #####

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