Indie Artists and Record Labels
The mavericks with little or no knowledge about business, turned the music industry on its head with their independent records in 70s and 80s. Indie bands started gaining listeners through labels. They were able to reach out to a wider range of listeners and create a place for themselves in the world of music. While pop and rock continued to rule the hearts of listeners, Indie also started getting recognition. As I have discussed in my blog The Evolution of Indie Music, it’s main fan following comprised of people who wanted to listen to something more creative, experimental and original. Indie music got mainstream attention when small bands started performing locally. While the world could think only of international celebrities singing and dancing on radio and TV, it meant so much more to see someone they went to school with, sing for a band, a neighbour’s son play drums or a relative perform live to an audience. The feeling of having personally known them would be overwhelming and attracted personal attention from fans.
As discussed in my blog File Sharing for Indie Artists, initially, it was relatively easy to legally quell and trace the file sharing piracy methods, however, when an undergraduate student at Northeastern University, Shawn Fanning, launched Napster, it made tracing piracy difficult because the system hosted files from millions of individuals. In May of 2000, Hummer Windblad invested $15 million in Napster and assigned it its first professional CEO. Thereafter, Napster pushed expansion at a viral rate, focussing on a business plan to seek continued funding. However, their approach regarding the recording industry became the evidence of their inexperience and youth. Their newfound celebrity status accompanied a mix of overconfidence and intentional oversight. Their business plan, which was a handwritten document formulated in 1999, clearly embodied a hacker mentality, by intending to grow their business to a level where labels would have no choice but to come to an agreement with them. While it hoped to put together deals with majors, it reflected lack of understanding of industry laws. Napster put itself on a direct collision course, with its deals carrying a more sinister undertone and envisioning to effectively eliminate the necessity of record labels by becoming the main avenue for promotion and distribution of music, without being able to successfully address legal issues.
With the help of their lawyer David Boies, who was behind Microsoft’s anti-trust suit, they prepared defence against contributory copyright infringement claims by RIAA. In the first part of the three-part defence, David noted that although it is illegal to profit from copies, consumers were free to share music amongst themselves, citing the Audio Home Recording Act. Second, they presented an analogy between their product and video-cassette recorders, drawn from the Sony v. Universal City Studios case arguing that Napster was not merely a space for piracy and had legitimate uses like promoting purchase of records by making them downloadable for free, which will serve as a sample for consumers and encourage them to buy albums and singles. Their final point was to portray themselves as an Internet Service Provider, this meant not being liable for just holding names of files on their central server.
Unfortunately for Napster, RIAA was well equipped with detailed data and a wealth of legal experience in sales. Napster’s arguments were soon dismissed by Judge Patel, finding them guilty of contributory copyright infringement and record companies were asked to submit a list of song titles to be removed from Napster’s site. The extended appeals process also came to the same decision, leading Napster to shut down in June 2002 and file for bankruptcy. Experts believe that their chances of being allowed to continue operating were zilch unless there was an essentially impossible 100% removal of all copyrighted files from the website.
In my next blog I am going to write about other challenges that RIAA faced due to the existence of other sites using the same kind of technology.
Please share your experiences and I will add them to my future blogs.
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