Needless to say, for anybody reasonably knowledgeable about the downloading community, the notion that a sea change away from piracy had occurred earlier this year would seem highly implausible.  However, maybe Sweden was an isolated example, and the (likely) spread of such “graduated response” laws would ultimately lead to the first real downturn in file-trading since the heydays of Napster.  Sadly for the Economist and the entertainment industries, new evidence also came out on Friday that demonstrates just how misguided and premature any claims of victory over piracy really are. Enigmax at Torrentfreak cites a new report from Swedish Internet backbone Netnod, that shows there was indeed a very large dip in Internet usage overall in Sweden in April, as much as 30%.  Whether or not that decrease can be ascribed entirely to the change in law regarding downloading cannot be proven, but in any case, the latest figures show that the drop in Internet usage was wholly short-lived.  By the end of October, Swedish Internet traffic was completely back  to pre-April levels, and in fact, may well be even higher.  Has the initial scare over the harsher laws receded to the point that they are now being ignored?  On the other hand, seasonal effects have been noticed in file-sharing before, with decreases in summer months and increases in the fall corresponding with the return of young people to schools and universities, and that could be in play here as well.  In any case, if recording industry executives were about to start celebrating their long wished-for end to mass copyright infringement, they should put the champagne back on ice for the time being.

Recently, we wrote about the 10th Anniversary of the launch of Napster. Among the things we’ve discussed in the article were how the legacy of Napster was essentially the popularization of the whole concept of file-sharing in the general public. Eric Klein, a co-host of “Living Room” on California’s KPFA radio station decided to interview us on the subject, briefly covering topics such as the legacy of file-sharing left by Napster as well as freedom of expression, privacy rights related to file-sharing and political stances.

The interview is available toward the end of this podcast formatted version embedded below, or the edited version here. We would like to thank KPFA’s Eric Klein for the interview opportunity.

Contact information for both of us:

Drew Wilson: drew@zeropaid.com

Jared Moya: jared@zeropaid.com

What would it mean if files couldn’t be freely distributed online? For one, the whole idea of sharing viral video’s on a site like YouTube would be completely gone. You couldn’t listen to music via the internet, so naturally, music sites couldn’t exist and, arguably, there wouldn’t be much evidence to suggest that taking your music to the internet and selling them would be viable. Of course, pictures ranging from personal scrapbooks all the way to the often silly lolcats couldn’t happen. Then there’s the web itself since they are little more than HTML pages, javascript pages and PHP pages to name a few distributed freely via servers. Of course, what about email? They’re little more than text files with the ability to attach files to begin with, so e-mail would be out of the question – the same would apply to chat in general. Ultimately speaking, the internet would cease to exist without the idea of sharing data freely. So really, one could safely argue that file-sharing is loosely based on the whole concept of how the internet works.

Still, for over 10 years, file-sharing has spearheaded a debate that pitted companies against their own customers. The idea of file-sharing, for a time, was largely an underground movement – hardly known to the average person. Files were transferred through bulletin boards and chatrooms, but since internet connections at the time were dominantly 56k modems, the only things that could be transferred were video games and software (as some at the time hovered around the 1.4MB mark to fit onto a floppy disc) as well as pictures and books. Of course, it was only a matter of time before this phenomenon of file-sharing reached a larger audience and few would argue against the idea that Napster did just that.

If the Wikipedia entry is anything to go by, on June of 1999, Shawn Fanning and Sean Parker released the original Napster – eventually, word spread quickly about the idea of free music. Thousands, then tens of thousands, and, obviously, the numbers just kept growing. Napster was, by no means, perfect. BitTorrent users today would very likely scoff at such a system in this day and age. Download speeds of around 4.5kb/s, having the file download cancelled or simply getting disconnected at 99% by the uploader, forcing the user to re-download the whole file again, entire file-paths exposed to the rest of the network and having the whole system centralized on a server. Not exactly the most robust system by todays standards. Still, at the time, the novelty of sharing one’s own music collection for the first time attracting people in droves and it was something that have sparked similar networks ever since – even before it’s shutdown in July of 2001.

While people flocked to the network like it was the next invention that saw moving pictures on a large screen, the concept also eventually attracted the copyright industry’s sights and their lawyers. In a famous picture captured in words, Metallica’s drummer, Lars Ulrich, showed up with boxes of legal documents as he helped famously sue the network into oblivion under the concept of copyright infringement.

Of course, what Napster also did was force the industry to rethink in general. Many noted that the industry had a choice – either embrace the new technology which had since attracted millions and monetize file-sharing before people flocked to other networks which had since sprung up, or declare all out war against their own customer. The industry ultimately chose the latter – a decision that countless experts have since labelled as one of the biggest mistakes the industry could have ever made. Creating the term “intellectual property” so as to counter the argument that nothing physical is “stolen” online, the copyright industry lobbied congress to pass the four letter legislation that would haunt the internet and innovation itself ever since – the DMCA.

Meanwhile, the now displaced users simply flocked to other networks like Gnutella, eDonkey2000 and FastTrack. Ultimately, FastTrack initially scored the biggest round of new users. While there was a limit to how high the quality of music was, the service known as KaZaA did offer a way to connect to a more decentralized network. Unfortunately, it also became the symbol of how the copyright war heated up between copyright industry lawyers and the consumers where it was individuals that had their IP addresses subpoenad and threatened with hundreds of thousands of dollars in damages if they don’t settle out of court. It was all in the name of an “educational” campaign, something that the copyright industry in the United States still holds today.

While the network suffered file pollution and users moved on to other networks and the subject kept getting more and more complicated as the years went by, what of the remnants of Napster? In 2002, the company in charge of the original Napster was forced to sell off their assets as they declared bankruptcy. The original programmer since went on to open Snocap – a company that was also sold in more recent years to iMeem and his other company, Rupture, was sold to Electronic Arts (source). It seems as though the icon and the concept behind Napster was all that was left.

Napster was later changed to what had since become known as Napster 2.0. While there is some brand power behind Napster, the use of DRM in a way that saw music files get deleted the moment the user stopped paying the subscription had since arguably crippled Napster as a business in general. Lately, Napster has been trying to figure out how to keep the business alive with music subscriptions forcing the company into a point where staying in business has become a battle in and of itself while still trying to appease major record labels.

Of course, it’s legacy of what it has done to the internet is far greater than what any one company executive could hope to achieve. Several file-sharing networks have since sprung up. When Napster is brought up, it’s not too hard for the term “whack-a-mole” to be brought up on the subject of lawsuits or shutting down services. For a time, Kazaa and the FastTrack network filled the void left behind by Napster. Unfortunately, the party would only last so long as the copyright industry used several companies to track down IP addresses and sue individual users – tactics that many have since labelled as bully tactics or shakedown tactics. Meanwhile, other hired companies would take advantage of a weak URN hashing system that paved the way to file pollution (as well as fake/dummy files) Whack.

Since then, stronger hashing systems would be created like the systems seen on Gnutella and Gnutella2 networks as well as eDonkey2000. That left the industry deciding to go after the creators of the programs. Since then, the eDonkey2000 file-sharing client, Grokster and Bearshare clients. Whack.

Developers such as the developer of eMule had an open source client. So, targeting the developer would do little good as many developers have proven their enthusiasm to developing the code further through “Mods”. The industry had also targeted the eDonkey2000 network, the network that eMule connects to. Several high profile servers such as Big Bang, Donkey Servers and RazerBack 2.0 had been taken down. The response was to create the Kad network which is a serverless network as well as introduce protocol obfuscation to prevent ISPs from throttling or blocking ED2K traffic.

Meanwhile, BitTorrent also solved the problem of a centralized network being vulnerable to being shut down. The use of web “trackers” were introduced for developers wishing to create their own BitTorrent website. The industry has since gone after many like SuprNova and successfully shut down a number of BitTorrent tracker sites. Whack.

Developers since opted for the use of “Private” websites where users need an invite to gain access to the tracker. The industry responded by shutting down the then high profile BitTorrent website “EliteTorrents”. Whack.

The response was to not host anything in the United States, but the industry did manage to shut down OiNK in England and, more recently, SnowTigers. While a whack on two more individual sites, hundreds, if not thousands more still exist including the public site The Pirate Bay which is currently undergoing an appeal process through Swedish courts.

Throughout this long 10 year history of file-sharing, Napster’s legacy left quite a lot for internet users. An ongoing debate about copyright laws as well as a neat piece of technology that allows for unique forms of expression that appears to be more commonplace these days. One argument is persisting that seems to be closely tied with the resilience of file-sharing – is this war on file-sharing being a futile one. A question that has its roots in the question the industry faced that started it all – is it better to monetize or is it better to fight the technological changes of modern time? That question was recently raised by UK ISP TalkTalk when it suggested that the war on file-sharing is a futile one.

Artists, throughout file-sharing history, have found the technology to be an intriguing way to promote their music (Benefit, for one, rapped about Napster freeing the music for instance). Some might argue that TV executives have found it an interesting way to promote TV shows and create hype over an upcoming TV series by intentionally leaking a low quality pilot episode onto it. Companies such as Canada’s CBC have used file-sharing to promote the TV show ‘Canada’s Great Prime Minister’. Open Source software developers saw file-sharing as a means to save bandwidth so they can release their projects to the public at low cost. Entrepreneurs such as Kevin Rose used file-sharing to promote their vidcast, DiggNation to thousands of fans to help bolster the now famous site, Digg.com. File-sharing site admins such as the owners of the eMule website as well as MiniNova have set up distribution systems for people who want to spread content legally ’shareable’ (with the help of GLP and the Creative Commons License)

Still, this side of the file-sharing tends to get lost with repeated rhetoric from the copyright industry that have suggested, some times more blatantly then others, that all file-sharing deals with pirated content. They’ve gone so far as to commission studies where they either cherry picked from, hidden or influenced the outcome to show a one-sided view on the topic. It’s those kinds of studies that have lately been heavily criticized for not being verifiable outside of numbers being “plucked from the sky”. The copyright industry have gone to influence policy making – even going as far as to helping to create a system of policy making on an international level to try and influence politics – that being the WIPO internet treaties which the industry, through heavily lobbies policy makers, pressure other countries to pass laws that would legally control file-sharing. More recently, ACTA has surfaced as well as an additional push to reform copyright laws that bend to the industry’s desires.

While the first push to create an international law was also to put in copyright management systems throughout the world such as DRM and TPMs, the more recent push through ACTA seems to be aimed squarely on the ISPs themselves – a target that seemed to be harder to go after in the first place. There have been sightings of such laws when the EU was pressured to put in a so-called “Three strikes” law for copyright infringement. While it never made it into the telecoms package, it did make it’s way into law in France and South Korea. Still, ISPs, to this day, are being pressured to fight internet file-sharing directly by the copyright industry and potentially indirectly through censorship tactics brought on by the government – the idea saw potential realization in Germany twice – more recently when German book publishers wanted to add RapidShare to German ISP blacklists. If targeting ISPs fail – which it no doubt will thanks to encryption, protocol obfuscations and anonimizing software to name a few – the likelihood of finding a new target is unlikely to surface. This falls back onto the same argument many have said for years – the war on file-sharing will fail miserably and accepting it is a better idea than fighting change.

Some have argued that the industry never even tried to monetize file-sharing. The reality is that the industry did reluctantly try by agreeing to almost all non-viable alternatives to file-sharing. Businesses were pressured into using DRM which ultimately crippled and bankrupted a number of music services. The only major survivor in the DRM push was iTunes, but even iTunes have distanced themselves from their DRM model.

All in all, it’s quite a legacy Napster offered in terms of giving a broader audience the file-sharing concept. 10 years later, we’ve seen an industry seeing their lawsuit campaign fail miserably (if it was to educate and stop file-sharing, it’s failed as file-sharing continues to this day) and running out of options as file-sharing has grown more sophisticated. DRM, TPM, lawsuits, laws, lobbying, skewed statistics and propaganda, international obligations, hacking, bankrupting, shutting down websites, busting release groups, forcing servers offline, blocking, throttling, filtering and file pollution – all failed or are about to fail. A portion of the copyright industry, the music label industry where the focus has been for quite some time, also faces something else – competition from the movie and gaming industry. At least in Britain, we know this to be a huge issue for the music industry. 10 years later and the copyright industry has wound up inflicting heavy wounds on itself while trying to fight a fundamental change in technology. 10 years later, file-sharing still has an arsenal to fend off the copyright industry. What’s left of the copyright industry? One last shot that will more than likely fail by controlling the ISPs and it will be a costly last ditch effort given that the ISPs are, at minimum, a multi-billion dollar industry.

What will we see from here? Who knows, but we do know that privacy and file-sharing are debates that are beginning to merge more and if the industry attempts to use blacklists for their own personal gains, it will still be a failed attempt to stop file-sharing given the wide open networks that still persist to exist to this day. You can’t blacklist every individual anonymous person.

While whatever is left of the actual Napster is starting to fade away, the fundamentally shifting concept lives on in a huge way to this day. Maybe someday in the near future, the war will finally end, but in the mean time, people are still sharing files to this day whether everyone wants them to or not.

Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

Napster, the proverbial godfather of music downloads, and whom, incidentally, is nearing its 10th anniversary, is trying to reinvent itself once again by bundling a service that combines streaming with MP3s.

For $5 p/mo (available to US customers only) customers get unlimited on-demand music streaming along with 5 drm-free MP3 downloads. For essentially the same price as 5 tracks from Apple’s iTunes you get the same PLUS the ability to play full-length tracks when and where you want.

The move is surely aimed at challenging iTunes because all music downloaded from Napster (free or otherwise) is now iPod compatible. It even takes a not so subtle jab at the music download service by noting that others only offer “30-second clips and fewer songs.”

For some the service may make sense being that there exists no free artist/track on-demand streaming service. Pandora and Last.fm are fine, but some want to listen to a particular song where and when they want, and $5 bucks a month may not be too much to ask, especially if you get 5 free music downloads free and clear – the same cost as they’d be on iTunes minus full-length track streaming,

Napster will still retain the Napster To Go portable subscription for $15 p/mo, which relies on Windows DRM devices, and whereby download songs “expire” whenever you stop paying the monthly fee.

jared@zeropaid.com

Napster has had quite a run with the media and Napster 2.0 seemed to make the headlines on a fairly regular basis with it’s supposedly revolutionary business model of a subscription service for an unlimited archive of music encoded with Digital Rights Management. Things were going well for the company back in 2005 with backing of the major record labels and an influx of subscribers willing to buy in.

While the company capitalized on their gains with glamorous press releases and places in major news outlets over their successes and gains, their losses were kept rather quiet – typical for a company that relies on image to help with their business. Even government laws forcing Universities to use services like Napster wasn’t anywhere near enough to keep the company afloat which since experienced a decline of 95% on the stock exchange.

With an ever shrinking subscription rate fuelled by an increase in price for subscriptions, the company fell on to comparatively hard times. It was so much so that the company was forced to find ways to sell the company late last month.

In spite of a dismal outlook for the company at this point, Best Buy justifies this move to acquire the company saying that Napster had a 15% increase in profits. From the press release

Best Buy believes that Napster has one of the most comprehensive and easy-to-use music offerings in the industry, including streaming music, music subscriptions, the ability to purchase individual tracks, albums and mobile offers. Napster has approximately 140 employees, with its headquarters in Los Angeles. At this time, Best Buy does not plan to relocate Napster’s headquarters or to make significant changes in personnel.

“This transaction offers Best Buy a recognized platform for enhancing our capabilities in the digital media space and building new, recurring relationships with customers,” said Brian Dunn, President and COO of Best Buy. “Over time we hope to strengthen our offerings to consumers, who we believe will increasingly seek devices and solutions that enable them to access their content wherever, whenever and however they want.”

Best Buy intends to use Napster’s capabilities and digital subscriber base to reach new customers with an enhanced experience for exploring and selecting music and other digital entertainment products over an increasing array of devices. Best Buy believes the combined capabilities of the two companies will allow it to build stronger relationships with customers, expand the number of subscribers, and capture recurring revenue by offering ongoing value over a mobile digital platform.

“We believe Napster brings us excellent capabilities in the mobility space, as well as international operations and an established team of technology experts,” said Dave Morrish, Executive Vice President – Connected Digital Solutions of Best Buy. “We can foresee Napster acting as a platform for accelerating our growth in the emerging industry of digital entertainment, beyond music subscriptions. We’re very excited to add these capabilities to leverage our existing relationships with the labels, the studios, and the hardware providers. We believe Napster will be an outstanding addition to our already robust portfolio of partners and offerings in the digital music space.”

Interestingly enough, Napster called on UBS Investment Bank to help with the selling of the company – a bank that has recently suffered a $5 Billion loss as a result of the collapsing US financial sector prior to government intervention coincidently enough.

If Napster proves to be a bad investment for best Buy, it wouldn’t be the first time. Companies have invested in software companies based on file-sharing technology before that seemed like a great idea at the time and, in turn, become unhappy with their investment when the product fails to return a profit. One of the most famous examples was eBay acquiring Skype three years ago. “Don’t call it a bust just yet,” the article from last year, while assessing how good of an investment it really was, reads, “but it’s fair to say eBay executives aren’t thrilled with what they’re getting out of Skype, which the auction king bought for $2.6 billion two years ago.”

Additionally, if Napster does, indeed, crash for the retail giant, it wouldn’t be the first online music service to crash. Yahoo! had a music service, but when the internet giant failed to get sufficient profits, the company ended up contemplating the idea of pulling their servers offline. Microsoft thought it could make a successful music service online through MSN, but was forced to shut the service down in 2006. While far from a complete list, these are just two DRM based music services that had great outlooks that ended badly.

When Napster 2.0 came into existence, many observers saw the DRM (Digital Rights Management) based model as a backwards business model that would ultimately fail (as shown in the above examples). While the company may be on it’s last leg currently, many of the sceptics of the model may be smiling over the fact that, from the looks of things, they may very well be right at the moment for Napster as well.

One of the major issues people took aim against the Napster model was the fact that the moment you stopped paying for the music subscription is the moment all of the music downloaded disappeared. Even though Napster was the first file-sharing network to attract mainstream attention due to its novelty back in 2001, the novelty of using the network after the shut down seems to have worn off even for many die-hard Napster fans. This case could very well be the latest example of the dangers of treating music fans like criminals.

It is starting to look like Napster may once again become a symbol in the copyright debates. A report out of the LA Business Journal points to Napster’s current struggle to stay afloat in the business world. According to the report, Napster executives are now open to the idea of selling off the company. From the report:

The Los Angeles-based company has retained UBS Investment Bank as an advisor, according to Bloomberg.

In a letter mailed to shareholders on Friday, Napster stated that the insurgent shareholders have not laid out plans to improve fortunes at the beleaguered music download company and urged them to re-elect the board incumbents.

The three disgruntled shareholders, who own about 1.5 percent of the company’s stock, applied in June for election to the company’s board and were rejected. They have said they plan to seek election again at the annual shareholders meeting on Sept. 18.

Napster’s shares closed up 1 cent to 1.34 on the Nasdaq. Since reaching a high of $25.29 in April 2002, the company’s shares have declined 95 percent.

Napster became the symbol of the initial growth of file-sharing and became front and center when Lars Ulrich of Metallica sued for copyright infringement. Ultimately, Napster was shut down at around 2001.

Perhaps one of the other biggest signs of the struggle for the company besides a 95% drop in share value since 2004 was a report just a day before that Napster confirmed it woudl be getting out of the campus music service business altogether. As P2P-Blog notes, the move is as different as night and day compared to when Napster executives hailed the idea of subsidized campus music subscriptions as “groundbreaking”.

Janko Roettgers of P2P-blog also points to a report from earlier this month which shows the companies subscribers leaving in droves. Even dropping DRM (Digital rights Management) is proving to not be enough to save the company after raising subscription rates to $12.95 a month.

For numerous observers, this may just be another point to prove the case that DRM is not a good tool for a business model. Many have seen the business model from the start and immediately thought that the business model would fail – and the way things are going, they could have been right from the very beginning. Some may even go so far as to point to Napster as a symbol of the defeat of DRM in this day and age partially because it’s a big name going under with a model that involved DRM for quite some time.

Others may suggest that the possible second demise of Napster is pointing to the much wider major record labels business model as one that is currently undergoing complete collapse because of the internet era and just another sign that they have to figure out how to stop treating customers like criminals and just plain get along with them for a change.

On an international level, many countries have been heavily pressured to put copyright reform front and center which typically includes anti-circumvention measures. Canada has been one of those countries where the argument is that without anti-circumvention laws, there would be no laws to help a digital music market place. It’s not too much of a stretch to point to Napster and say that Napster had all the laws they could hope to have to help the digital music market-place flourish with laws such as the Digital Millennium Copyright Act and it’s still struggling to stay alive as a business.

In any event, it seems as though there is even more evidence that you can’t really force people to become customers, even if legislation is in place and lawsuits are flying. As Cory Doctorow once remarked about the current major record labels business model:

Customers are getting music online for free, so here’s the plan:

1. Sue all the people that are downloading music for free
2. ?????
3. Everyone goes back to the music store to buy music legitimately

The university will turn to Ruckus Network Inc. this fall to allow all enrolled students at its 24 campuses to legally listen to the nearly 3 million songs available through the service. Penn State’s ties to Napster will be severed in May.

The Napster partnership was the first of its kind when it was announced in November 2003. Students got legal access to streaming music and limited downloads through the Napster 2.0 service and could permanently download a copy for a compact disc or portable device for 99 cents a song.

The idea largely was to curb music piracy on campuses.

Starting April 29, 2007, consumers can sign up for Circuit City + Napster at www.circuitcity.com/napster and gain unlimited access to millions of songs on their PCs and portable digital music players for $14.95 per month.

In addition to regular unlimited digital music access that Naptser offers, “Circuit City + Napster” allows users to purchase individual tracks at 99-cents each. Pre-paid download cards can also be purchased in- store or online in bundles of 15, 25 or 60 tracks.

“Our goal with music and movies is to excite and inspire our customers to fully enjoy their portable and in-home electronics, and we’re thrilled to enter this strategic relationship with Napster,” said Irynne V. MacKay, Circuit City’s senior vice president and general merchandise manager for entertainment. “Circuit City + Napster will offer our customers a new avenue to find, share and delight in music. Increasingly, consumers are turning to the digital environment for entertainment and this new service will give our customers easy access to the content they want, when and how they choose to enjoy it.”

“We are delighted to create this new alliance with Circuit City which is one of the top destinations in the U.S. to learn about exciting, new digital entertainment products,” said Chris Gorog, chairman & CEO of Napster. “Circuit City’s strength both in consumer electronics and as a music retailer should be an ideal environment to introduce Napster’s industry leading music subscription service.”

Now I’m not sure that being able to buy music tracks at 99-cents each will make the monthly subscription service any more desirable than iTunes for after all, once you quit the service all the music not purchased to download becomes unplayable. Why not just spend that $15 bucks each month to buy tracks off iTunes or elsewhere?

Considering the decline in CD sales, and the fact that consumers are increasingly turning to digital music, its a no-brainer that Circuit City would look to the future but, again where’s the value when compared to iTunes, especially it means shelling out $15 bucks a month for music you are essentially renting?

digg_url = ‘http://digg.com/music/Circuit_City_partners_up_with_Napster_to_create_Circuit_City_Napster’;

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Eric Nicoli, EMI’s chief executive, said he was "pleased" by the settlement but declined to disclose its terms. Bertelsmann did not admit liability, and declined to comment further.

The agreement follows a settlement that Universal Music, the largest record company, struck with Bertelsmann for $60m in September. That settlement coincided with Universal’s acquisition of Bertelsmann’s music publishing arm for $2.1bn.

In December, Universal and EMI reached a tentative settlement with Hummer Winblad, a San Francisco venture capital firm that invested $13m in Napster in 2000.

Beterlsmann is still facing possible litigation from Warner Music, which has reserved the right to sue, as well as a group of music publishers.

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SOULXTC: “walkin’ the streets of P2P”

undersound will be spatially distributed at individual stations and throughout the wider tube network. I can add music to the system at upload points in the ticket halls , and I can download tracks on the platforms. Architectural configuration of the stations affects my experience of contributing and downloading music as the proximal nature of the interaction with these situated points require s myself and other undersound users to congregate at certain locations within the station for the purpose of interacting with the system.

Each track in the undersound system will be tagged with its place of origin (the station where it was uploaded) and this information is visible as the track is being played. This may trigger memories and musings around my personal relationship to that place. Is there also a correlation between the flow of people around the tube network and the flow of music tracks around the undersound network? What might a sense of place for these digital artefacts be? Do they care about geographical location too or might their sense of place revolve around the quality and type of network and the technological devices they pass through?