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Court or Not, ‘MP3 Genie Is Out Of The Bottle’

Atlanta Journal Constitution, 03.07.01
Frances Katz - Staff


The recording industry may have put a tight leash on Napster, but that won't mean the end of digital music downloading from many of the Web site's clones.

Some free download sites, however, are running scared, such as Spinfrenzy.com, which already has voluntarily shut down its site. Users are greeted with a short, friendly note that reads in part:

"Dear users, As you may be aware, there is some uncertainty regarding the fate of file sharing services. The Recording Industry Association of America has requested that we remove Spinfrenzy.com's file sharing feature. Although we respectfully disagree, we are removing this feature until its legal aspects are clarified. The updated Spinfrenzy.com will be up and running shortly."

Another site, Zeropaid.com, "the file sharing Portal," details the Napster news --- and offers a long list of file sharing sites that are still operating.

"The MP3 genie already is out of the bottle," said Doug Isenberg, editor and publisher of GigaLaw.com and an intellectual property and Internet lawyer in Atlanta. The RIAA may succeed in shutting down Napster, "but they would never win the file-swapping war," Isenberg said.

Users have headed to Gnutella and Freenet, software programs that don't have a central server --- and therefore no tangible entity to sue, he said.

"It's a very foolish thing to try to shut down new media," said former record industry executive Strauss Zelnick last week at the Silicon Alley 2001 forum in New York City. "You can't do it, anyway."

Zelnick was chief executive of BMG music, a division of Napster investor Bertelsmann, a German media giant. Zelnick has his own company, focused on finding viable online music business models.

"This is very similar to the attitude the film industry once had about the TV industry," he said. "What makes it competitive is the fact that people like it."

But Zelnick can see both sides. "All the record companies are saying is they want to get paid. They only own the rights to the songs. There's no other way to get paid."

But how much to charge and how to collect it remain sticking points.

"People value physical goods," Zelnick said. "It doesn't make sense, but it's true. People like the touch and feel and looking at the packaging of a CD. The price for digital music will have to be less than prerecorded music, because all you're getting is a song."

Zelnick also is wary of plans by Napster and others to offer a subscription model. "People don't like to pay for free stuff. Paying for a download I understand," but expecting users to pay a monthly fee for the right to download music is a dubious business model, he said.

Finding a business model also is central to the strategy of AOL Time Warner, owner of America Online, the world's largest online service, as well as of Warner Music Group, which owns six major record labels.

In New York last week, Bob Pittman, AOL Time Warner's president and co-chief operating officer, said the company has no immediate intention of going into the digital music business but is more than willing to align with any company that could present a digital music model that could make money and honor copyrights.