SPENCER MICHELS: Violinist Jay Rosen -- a performing and recording musician who has played with groups as diverse as the Hollywood Bowl Orchestra and the Rolling Stones -- says his livelihood and that of thousands of artists is threatened by a new Internet technology that is changing the music business. A substantial portion of Rosen's income comes from royalties on records and CDs he has made. Now --many of those recordings are available for free on the Internet
JAY ROSEN: I have a skill set that deserves to be properly compensated for and, what's happening here is the dissemination of a copyrighted product -- and the dissemination of that product for free ultimately could prevent me from earning a living entirely as a working musician.
SPENCER MICHELS: The new and controversial technology that is threatening Rosen's livelihood is much in evidence in college dorms -- like this one at San Francisco State University -- where students are downloading music from the Internet, for free.
STUDENT: Music is like an art form. Why should I have to pay money to, like, view art?
SPENCER MICHELS: Using computer programs with names like Napster and Audio Galaxy, students Justin Cram and Greg Kunit have access to millions of songs.
(MUSIC IN BACKGROUND)
SPENCER MICHELS: Music fans have converted those songs from CDs into computer files called MP3s which can be sent over the Internet and then played, either on a computer or on a portable player similar to a Walkman. Napster -- the most famous of the sites -- allows one computer user to pluck music files from another computer, with no loss in quality. It has proved so popular that some colleges --including San Francisco State -- have banned it because it was clogging the Internet lines.
GREG KUNIT, Student: What Napster did was make things so easy that literally all we'd have to do is just type in the name of a song, and up would come a list of where we could download it from. Just double click, and it would start downloading; it was that simple. And they banned Napster here, so we can't do that, so it's a lot more difficult for us to go out and find music.
SPENCER MICHELS: The way I understand it, you've figured that there are a lot of ways to get music, not just Napster?
GREG KUNIT: There are ways - it's still not perfect - but there are ways you can sort of scoot around the edges.
SPENCER MICHELS: At this point, Napster gives away its technology for free -- hoping to become so popular it can eventually make money from deals with other Web sites and advertisers. It appeals to people like Cram and Kunit, who say they can't afford the 10 to 25 bucks that most CDs cost; they say they want to sample on the Internet before they visit the record store.
But sampling is only a part of what Napster and the other sites are all about. Some of them portend even greater disruption for the recording industry. In a small San Francisco apartment, two computer programmers --Gene Kan and Spencer Kimball -- are working on improving Gnutella -- a Web site like Napster, but much more extensive.
Gnutella can facilitate the free exchange of not just music files -- but movies, slides and documents. But unlike Napster, it is not a company, it's just a technology that exists on the 'net; there is no way to shut it all down. Gnutella is one of perhaps 15 sites that have shocked the recording industry, and are threatening to change music distribution forever.
GENE KAN: The fact that this technology is out there means that they either adapt or they die.
SPENCER KIMBALL: It really is the wave of the future. You know, you want a song; it just instantly happens. You don't have to go to the store anymore; you don't have to shell out as much money where you buy a whole album that has tracks you don't like in it.
GENE KAN: Everybody is going to be using MP3s. CDs are on their way out.
SPENCER MICHELS: Early on, Gnutella was owned by America Online -- which shut it down it shortly after AOL announced it was merging with Time Warner. But the program lives on in cyberspace, with no owner. Kimball and Kan volunteer their work, because they believe in the technology. They envision a future where rock stars would do the same.
SPENCER KIMBALL: Your rock stars don't make millions of dollars anymore. You know essentially the put the music out because they love to put it out, and they make a decent amount of money, but they don't make millions.
GENE KAN: I'll tell you - it wouldn't be a crying shame if music became entirely free. That's how music was until earlier this century.
SPENCER MICHELS: That's utter nonsense, says violinist Jay Rosen.
JAY ROSEN: There's a sense amongst a lot of the young people that do this that it's their God-given right to take this software that they've created and put it up on the Internet and let anybody, any kid in school, take whatever they want for free and for whatever reason they have. And that's interesting because I think that sense of us against the system has always been there. Well, the system now is me and working musicians who I work for...
SPENCER MICHELS: Many big name recording artists like Bonnie Raitt at first hoped the Internet would benefit them in their continual battle with recording companies. Raitt is among a stable of stars managed by Ron Stone, who has organized a group called Artists Against Piracy.
RON STONE: We're kind of stuck in this plantation system with the record companies. And they're the only games in town. And we looked at the Internet as an opportunity to extricate ourselves from this situation and deal directly with our audience. And now it's not an option because the option now is we can have the relatively bad contractual arrangement with one of the majors, or we could have our property taken for free. These are very bad choices.
SPENCER MICHELS: The question of free Internet music became a national issue when the popular heavy-metal band Metallica filed suit --as did the recording industry -- charging California-based Napster with copyright infringement and racketeering, for facilitating the stealing of its music.
The band demanded that more than 300,000 Napster users, that it had identified as downloading Metallica's songs, be blocked from the system, which Napster did. But a lot of less well-known artists disagree with Metallica. This is "Souls of Mischief", part of Hieroglyphics -- a hip hop group from Oakland, California.
The group resents attempts to curb music distribution online, where it hopes fans "will" listen to its music. Through its Web site, Hieroglyphics is promoting its concerts, plus selling tapes, CDs, singles, and an array of clothing. Tajai Massey is a lead singer and organizer of the group, which once had a major record contract --but no more.
TAJAI MASSEY: It didn't translate into us making money because just the way everything was structured, the label usually takes anywhere from 85 to 95% of the profits, so that leaves the artist really messed up.
SPENCER MICHELS: So you go to the Internet?
TAJAI MASSEY: To me, it just basically is access and access to markets that we'd never be able to touch. And now we have offers to do shows in South Africa.
SPENCER MICHELS: Unlike some other artists, Tajai Massey does not consider every download of his work "stealing."
TAJAI MASSEY: Bootleggers are going to bootleg your CD regardless. Dishonest people are going to be dishonest. But on the same token, you got to look at it like some kid in Brazil who may not know who you are may stumble across your music, like it, and go purchase it. And to me that's a lot, a larger benefit than that same kid maybe stealing, you know, one song off the Internet or even your albums.
SPENCER MICHELS: That's not what the recording companies say. So far, their primary response -- like Metallica's --has been to sue Napster and MP3.com. The Recording Industry Association of America and its president, Hillary Rosen, have successfully lobbied Congress for years to strengthen copyright laws. And they are using those laws against Napster.
HILLARY ROSEN, President & CEO, Recording Industry Assoc. of America: This is a company that is building a business. You know, they've got venture capital money. They're out on Wall Street looking for financing. This isn't, you know, just a sweet young guy that's looking for some fun in his college dorm room. They are building a business by facilitating the stealing of artists' music.
SPENCER MICHELS: Napster -- in the midst of several lawsuits -- declined an interview, but has stated it is providing an Internet service that is legal and that it steals nothing. Its legal battles have become hot news, just as the technology and its creator -- Shawn Fanning -- have.
A 19-year-old college dropout, Fanning created the program and the company based in San Mateo, California less than a year ago, with the help of venture capital money. Because it is a company -- unlike Gnutella -- Napster can be sued. But lawsuits are not the long-term answer, according to Stanford University Law School professor Margaret Jane Radin, who specializes in technology issues.
MARGARET JANE RADIN: If you're a business, you co-opt the new technology and you run with it and use it to make money for yourself, rather than trying to put your finger in the dike. So ultimately, I think that the lawsuits are a temporizing measure, and they win something in the short run, but in the long run, they have to adapt and develop new business models, which work in the new technology.
SPENCER MICHELS: Artists' manager Ron Stone also foresees a technological answer.
RON STONE: We have to come up with a technological solution that overlays on the Internet and recovers the two million plus titles that are already on the Internet as MP3 files. And I would challenge the tech community to come up with a solution that becomes a turnstile or a tollbooth on the Internet that allows the artists to get compensation for their creations.
SPENCER MICHELS: The thorny issue of who controls distribution of music and other media on the Internet has attracted the attention of Congress.
SPOKESMAN: Thank you for joining the committee today for our hearing to discuss the future of online music distribution models…
SPENCER MICHELS: The House Committee on Small Business heard from rapper Chuck D -- who defends the new technology, and says no one can stop it, once it's on the Internet.
CHUCK D: All of a sudden the audience or the consumer has gotten to the technology first, before the industry. Now the industry is begging government to help them out. It's like the guy who walks to the corner and he has this gigantic bag of M & M's, and he divvies them out - one by one - and -
SPOKESPERSON: Mr. Chairman -
CHUCK D: Well, the bag breaks all of a sudden and there's M & M's all over the corner. It's hard to tell them don't pick that M & M up; don't pick this M & M up; it's like, it's all over the street. (laughter)
SPENCER MICHELS: The RIAA's Rosen doesn't buy it. She says critics like Chuck D who accuse the recording industry of squashing the technology are wrong.
HILARY ROSEN: This is not about trying to stop the technology, or trying to imagine we can shut down the Internet or shut down unauthorized music. This is really about how is legitimate music going to develop online.
RAPPER: Napster, it makes me the master of my desktop. My files are the best crop, downloaded with no rest stop.
SPENCER MICHELS: But who controls that technology is in big dispute. A number of new bands, like Kooken and Hooman, have answered that question in rap, in a contest sponsored by Chuck D -- to celebrate the promise of free music online.
RAPPER: So sue me, you can do me. It goes right through me. You simply don't realize what the music does to me.
SPENCER MICHELS: So far -- record stores report only minimal sales losses, and only in areas near college campuses. But all the players acknowledge that this battle has just begun.
RAPPER: Get your friends and family and everyone say with me: I wouldn't pay for a summer day and I wouldn't pay for an MP3.
RAY SUAREZ: One Internet music lawsuit has just been settled. MP3.com will pay more than $20 million to two major record companies -- Warner and BMG -- to store recorded music on its service. In the Napster lawsuit, the Recording Industry Association has asked a judge to block all major-label music from that site even before the case goes to trial.