What Might Have Been - A Requiem for Napster

Yep, as every other news blog and tech magazine will write, ten years ago today, the RIAA kicked off its massive lawsuit campaign against Napster. But how many will ask and take a look at what might have been? What would have happened had theRIAA, its members, and its artists embraced Napster?

A friend of mine, who shall remain nameless for disclosure reasons, asked me that over the weekend. What would have happened had Napster not been sued?

My friend is in a unique position to ask and answer this question. For the past 20 years, he's been an artist's middleman. One who connects bands to bands, bands to venues, agents to artists, agents to venues; and so on and so forth. He has a massive music collection in both vinyl and CD along with terabytes of hard drive space dedicated to MP3s,FLACs, and Oggs. He works in the background, and only peaks into the foreground when needed.

When Napster first appeared, he was the first to realize that the game has changed. For almost 80 years, people had bought music in much the same fashion; the album. Whether it was a vinyl record, CD, tape, or 8-track, it was pretty much the same. Sure, there was a singles revolution there for a bit, but the industry adjusted slightly, but the album was still the way of the profit. Listeners bought the vinyl, and then bought the 8-track, and then the tape, and finally the CD. Sure, there were ways to trade and share those recordable tapes andCDs, and due to a handy Congressional mandated tax on them, the RIAA still made its profits years and years after albums first debuted on vinyl; people went out and purchased the CD of the very same album they had on vinyl. Money made times two from the same purchaser.

The re-purchasing system worked year after year after year and after year. And then Napster came along and broke it.

You see, people were already looking for something new and different to do with all these CDs they had. Sure, you had multi-disc changers in home stereos and in cars. You had those funny visor wallets and portable CD players. But people still wanted something different. MP3s and players were just squeaking out into the market, at $400 dollars a player, they weren't cheap. But they were there, and people who did buy them (myself included, the Creative Nomad II), loved them and spread the word. Myself and other's included ripped our entire CD collections onto our computers, and created a never ending randomizedplaylist for our MP3 players; their high cost now justified with this new way of listening and playing and organizing our massive music collections.

And then Napster showed up, and all hell broke loose. We all soon realized that we could share and trade all this music we had amassed over the years, and we could share it around the world! Artists and albums and songs from people as far away as an Antarctic research station were available to anyone else with Napster installed on their system. Discovering new songs and artists caused us to go out and buy the album from the local big box store or the corner record store. We brought the album home, ripped it, and shared it. Millions and millions of people were doing much the same thing. And it was good.

Or was it? In the background, the RIAA threw a fit. This new finagled file sharing, Napster, P2P thing came out of left field for them, and they had no idea what to do with it.

My friend at the time thought the RIAA would embrace Napster. People were buying albums like never before to share with people whom they don't know who had access to music they'd never heard before. Napster was the first true online social network, a WEB 2.0pre-alpha if you will. The potential was enormous for growth, and the RIAA went and squashed it.

One of the biggest points of contention with Napster wasn't the sharing or the claim that money was lost because no one would buy a song they just downloaded. It was because Napster broke down walls and barriers to music. After 80 years, the customer was in charge of what to buy, what to do with it, and when. Napster was not conceived in the halls of theRIAA , and that bruised egos and caused massive jealousy. A 20 year old college kid in a dorm room came up with a whole new distribution system! How preposterous! Napster also broke down theRIAA's specialized region coding and selling system. The ability to sell a slightly different album in Japan, a different one in Russia, and a different one in the US was gone and done with. If someone in the US wanted that Japanese version, they had to shell out big bucks for the import, but because of Napster, that wasn't an issue anymore. You could share your US album exclusive song with someone who had the Japanese album exclusive song. Gone was the import album cash cow.

My friend went on to say some interesting things. First off, Napster allowed bands who never get extra exposure, now get global exposure. He had one local band not only start getting fan mail from Japan, Germany, and South Korea, but they also started filling orders for their CD album all the way across the globe! All the band did was share a few of their songs on Napster, a live recording or 2 from the bars they played at, and they had fans all over. They made more money in 6 months of CD sales then they had in 5 years of playing in all sorts of venues and trying to sell the CD at the door and the local record store. The RIAA was double pissed now because exposing bands to the world used to be their business!

And my friend said that was happening all over. From the smallest bar bands, to the biggest rockstars, even stand-up comedians and coffee shop poets were getting exposure they never had gotten before. All thanks to Napster. All sorts of albums across the spectrum of genres all were on the sales uptick. He told me that record stores he kept in contact with at the time had reported a large uptick in the sales of vinyl records and record players as people figured out how to connect them to their computers and create MP3s. Everyone was buying and everyone was sharing, and then they went out and bought even more and shared some more. It was almost like the RIAA's 80 year album re-purchasing cycle except on a weekly basis.

But the RIAA decided that this was a threat to their album re-purchasing program that had worked so well and had created year over year profits for 80 years, and they decided to squash it flat.

Looking at the current landscape, the RIAA's album sales have gone down, down, and down year over year since they defeated Napster. They hate the current business models of customers buying singles online, streaming music, and creating their own listening experiences. Sure, they're making money through these sales and the further aggressive licensing of musical contents to movies, tv, and video games. Some of their lawsuits have brought them some dough (but at the expense of destroying their public image. But they aren't making the money they made before with CD albums, but they could have.

My friend said they ruined for themselves. Imagine if they embraced Napster and used Napster to supplant what they're doing now; licensing music to all sorts of venues while people still bought albums and shared music across the globe. They'd have more money then they'd ever dream of. And I'm inclined to say he's right.

I remember when the RIAA first got pissed off at Napster. My response was that they were pissed that they didn't come up with the idea of a whole new, fast as lightning, global distribution system. They let pride and ego get in the way. They wanted to tell the consumer what to buy, where to buy, how to buy it, and what was going to be in there when they bought it. In many ways, they got their wish. Digital downloads earlier this year overtook sales of CD albums for the first time (iTunes, Amazon, Rhapsody, Zune, and the various Band and Hero games). That's an important milestone. But they still aren't making the money they used to make on album sales, and they never will.

Think of it as an opportunity missed. Imagine the landscape if Napster had thrived and MySpace and Facebook showed up and we kept sharing our music. The money that could have been made with a licensing deal then? As I said that last sentence to my friend, his eyes lit up and his cell phone and notepad came out. He made a phone call to a band member he knows and said he knows someone at Facebook. There's money in them thar hills, as they once said, and the RIAA missed that landscape completely.