RIAA Sues Music Startup Napster for $20 Billion

By Rich Menta- 12/09/99

See links to our most recent Napster stories below -- editor

The Recording Industry Association of America (RIAA) filed suit yesterday against MP3 community software maker Napster for copyright infringment. The suit, filed in US District Court, Northern District of California, has been long threatened by the RIAA who feel the product facilitates the growth of a black market for illegal copies of digital music.

Richard Menta

"We love the idea of using technology to build artist communities, but that's not what Napster is all about," said Cary Sherman, senior executive vice president and general counsel of the RIAA (Recording Industry Association of America). "Napster is about facilitating piracy, and trying to build a business on the backs of artists and copyright owners."

In its suit, the RIAA is seeking damages of $100,000 for each copyright-protected song swapped to date. With over 200,000 songs available presently, that brings the suit to a surrealistic 20 billion dollars.

Napster CEO Eileen Richardson seemed caught off guard by the suit. "This came as a surprise; we've been spending so much time trying to figure out ways to work with the RIAA," said Richardson.

Napster claims its software was developed to save users the time consuming effort of wading through site after site to find a particular artist. Napster warns its users against transmitting copyright material and have actively encouraged unsigned bands to use the technology to increase their exposure.

Also in Napsters defense, they do not host any any content, they simply offer a trading network and do not monitor what files are transacted. This may be a key point as it amounts to shooting the messenger over the message. The RIAA suit against Diamond's Rio player was thrown out of California court earlier this year on roughly the same premise.

But the point of the RIAA's lawsuit is less about damages and more about control. Funded by the major music labels, the RIAA has very deep pockets. Startup companies like Napster, on the other hand, have to count their VC funded pennies. Any form of litigation not only sucks up money, but distracts them from normal business. A win in the courts by Napster could be pyrrhic if the case drags on long enough.

That's why litigation, even just fear of litigaton, becomes an effective tool in regulating smaller upstart companies. It is an effective business technique for established organizations who may have been caught flat-footed by technology changes and now must play catch up. The music industry is certainly not the only industry to use this tool, in fact, in the world of corporate hegemony this is business as usual.

"We're this tiny company caught between two industries: the Net and music industry," Richardson said. She then expressed her desire to settle the matter. "We look forward to working with the RIAA to create laws for the good of artists and music lovers."

Even if the RIAA's suit is successful, shooting the messenger doesn't necessarily solve the problem. MP3 trading has become a huge grass roots effort - the largest this world has yet seen - comprised mostly of teenagers (many too young to vote) swapping files from their own personal websites. If MP3 companies see the RIAA as a schoolyard bully trying to claim the digital music arena as its turf, it's a big school with lots and lots of kids who have their own ideas.

Napster stories:
Napster May Shut Down Monday - 2/11/01
NapsterCharge - 1/30/01
Independent Artists Hit Napster with Class-Action Suit. - 1/20/01
Bertelsmann Beds Napster - 10/31/00
Did Napster Take Radiohead's New Album to Number 1? - 10/23/00
Big Music's Best Tool Against Napster: DVD - 10/06/00
Napster Lives for Another Few Weeks
Oklahoma Student to be Sacrificial Lamb in Napster Wars -9/21/00
Clinton Administration Says Napster Violates the Law! - 09/11/00
Napster User's Banned...By Iranian Artist - 09/04/00
Napster Wins Stay. Stays Alive
- 7/29/00
Court Shuts Napster Down! -7/27/00
RIAA v. NAPSTER in Layman's Terms - 5/22/00
Napster Court Case Begins - 4/1/00

Copyright 1999 MP3 Newswire. All rights reserved.

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