Fordham University senior Dave Teufel is a music fanatic. He constantly plays music, using his computer as a stereo in his off-campus apartment. In just the last year, he has collected thousands of songs through Napster, the file-sharing program that allows Netizens to send and receive music files in MP3 format to and from other people's hard drives. Of course, a big part of Napster's appeal is price. Holding a stack of CDs in one hand, and pointing to his computer with the other, Teufel explains, "This is about $250 worth of records, and there are about 20 songs among these CDs that I like. On Napster I can get them all for free, and I'll get about 100 times as many songs that I like. So just compare the two; which one are you going to choose?"
While Napster's quality isn't always perfect, the site's enormous selection of music is easy to navigate and open round the clock. An estimated 200 billion files have been downloaded from the service since it started up in the beginning of 1999, a fact that hasn't gone unnoticed in the highly competitive and formerly insulated music world. In response to the online assault, record companies joined together to sue Napster. The 9th U.S. Circuit Court of Appeals ruled Napster was guilty of copyright infringement.
Still, Napster is very much up and running, albeit with a court-mandated filtering system and an uncertain future. But what Napster has done is spawn copycats. And these services are much more difficult to shut down because, unlike Napster, they allow people to download music without going through a centralized server. These developments have left record labels with little choice but to jump into the fray.
Sony has already taken the plunge and tried to commercialize music on the Net. For $1.49, Sony lets Web users download songs from its site and from a number of record store sites. Within the last month, other major labels have started racing to deliver music for money online. So far there are two business models emerging. MTVi (MTV Interactive) is planning to charge per download from their Web site. Both MusicNet and Duet plan to offer a service that will be like cable TV -- enabling consumers to get a set amount of music for a set price.
But questions remain. Since the average person spends $60 dollars a year on CD purchases, it's unclear how many people will pay more for a subscription service, or whether the MTVi pay-to-play model might work better. And nobody has determined how copyright holders will be compensated under a subscription model.
The biggest question of all is whether record labels will convince the Dave Teufels of the world to pay for what they are already getting for free. Says Teufel, "I could buy a lot of this music, but I download it instead because ... it's not worth it to me to pay $15 for a CD."