Why Record Labels Still Squirm ; Song-Swapping Web Site Faces Shutdown, but Court Case Only Buys Time for Industry to Adapt

By Paul Van Slambrouck, writer of The Christian Science Monitor | The Christian Science Monitor, July 28, 2000 | Go to article overview

Why Record Labels Still Squirm ; Song-Swapping Web Site Faces Shutdown, but Court Case Only Buys Time for Industry to Adapt


Paul Van Slambrouck, writer of The Christian Science Monitor, The Christian Science Monitor


A court ruling this week threatens the Internet's most popular music-sharing site with shutdown at midnight tonight, yet experts say the case is only a wakeup call in a much larger conflict: the entertainment industry's struggle to adapt to the wired digital era.

The Internet has been reshaping American industries in recent years, moving through banking, investing, and retailing, to name a few.

Now, it's entertainment's turn, and there are signs aplenty that the industry's legal victory over Napster Inc. won't end the spread of mouse-click piracy.

"A huge collision is going on," says Shane Ham, a New Economy analyst for the Progressive Policy Institute in Washington. And, he adds, "this collision has not been headed off by this court decision. It is just the first step in a very big battle."

A federal court this week ordered Napster to stop enabling the trading of copyrighted material from the major music labels, including A&M Records, Sony Music Entertainment Inc., BMG Music, and others.

Napster, based in San Mateo, Calif., argued that it does not violate copyrights, because its Web site does not officially distribute music, and its users do so for personal, not commercial, use.

US district Judge Marilyn Hall Patel soundly rejected that argument, and called for the site to clamp down on the practice by midnight tonight. Napster will appeal, and a full trial is set for later. Many wonder if the profitless startup can survive the legal fight.

Whatever Napster's future, though, the threat posed to the entertainment industry by the Internet's ability to copy and distribute artistic material is expanding daily, say analysts.

"Napster is just the first alarm bell," warned Peter Chernin, president of News Corp. and Fox Entertainment, in a speech this week to the Center for National Policy in Washington. "A growing number of powerful programs ... do exactly the same thing in a variety of different media."

The entertainment industry's mushrooming challenge is evident on a number of fronts. In recent days, the Motion Picture Association of America and others have sued Scour.com for doing to movies what Napster has done to music.

While free downloading of movies is far less popular than music at this stage because of the greater downloading capacity it requires, no one doubts that as the bandwidth capacity of computer Internet connections expands, so will the ability to pirate movies.

The digital world is also beginning to rattle the book business. This week, novelist Stephen King leapfrogged the traditional publishing model by taking his latest work directly online.

The software industry, too, feels a growing threat from pirates who crack the codes of popular computer games and make them available for free. …

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