MP3: It's Only Rock and Roll and The Kids Are Alright
Either way, MP3s and file-sharing technology are here to stay. Regardless of the direct effect on CD sales, MP3 distribution makes music fans more informed consumers. In the long run, the music industry could be more responsive to margins of the market, such as ethnic communities, subcultures and political movements. The public can express its preferences rationally only if it enjoys good information and a fair pricing structure. MP3s let consumers taste before they buy and act in concert with like-minded fans. They let music companies react instantly to changes in the marketplace. With better feedback, apparent "trends" like grunge or techno would not surprise companies in the future.
MP3 evangelists might sound like they are under the idealistic spell of Marx or Bakunin. But in fact, the charm of digital-music distribution lies in the thought of capitalist theorists such as Friedrich von Hayek and W. Edwards Deming. The current mainstream music industry is a "planned economy," the sort Hayek railed against. It limits information flow and resists price pressures. And Deming advocated constant change, flexibility, new ideas, flat organizational structures, quick reactions to customer preferences and maximum creativity.
The MP3 phenomenon is a battle for control of the music and information pipelines, not the music itself. But ultimately, Napster is a grand distraction. Venture capitalists, who seem to know no bounds of stupidity, threw millions at Napster last year after a teenager wrote and introduced the software. Then, after gigabytes of bad publicity and a couple of serious lawsuits, more venture capitalists gave an additional $15 million to the revenue-proof company in May. Despite all this cash, Napster was dead on arrival. As Slate's "Moneybox" columnist, Rob Walker, has pointed out with the clarity of the child declaring that the emperor has no clothes, Napster is a stupid business model: It has no way of generating income. It charges nothing for people to use it. It charges nothing for artists to post songs on it. It has no way of metering use. Plus, it's already technologically irrelevant.
Since December, several superior Napster-like services have emerged on the Net. Unlike Napster, these are noncommercial and community-based. They depend on volunteer programmers to fix and improve the open-source systems. And unlike Napster, privacy is pretty much assured--for now. No one has any idea who else is using these services. One of these open-source systems is called Gnutella. Several versions exist, at least one for every common computer platform. Unlike Napster, one needs no password to use it, and it has no registration process. So no one can kick you off if Metallica comes calling. Also unlike Napster, Gnutella lets users share all kinds of files--text, video, photos, software and music. And best of all, there is no one to sue. No one "runs" or "owns" Gnutella. Alas, venture capitalists won't lose a dime on it either.
Gnutella represents a new kind of Internet. But it's really what the old Internet was supposed to be back when Wired magazine and Nicholas Negroponte evangelized about its transformative potential--before Budweiser.com put those frogs on the web. It's free, open, decentralized, uncommercializable, ungovernable and uncensorable.
The rise of MP3 and free, open networks like Gnutella should have been expected. The culture industry invited them. Media companies have hijacked the copyright system and drained it of any sense of public interest. Copyright is an essential state-granted monopoly that works well when balanced. Thanks to the Clinton Administration and its efforts on behalf of media companies to maximize copyright protection, copyright has lost that balance.