EMusic.com: We Benefited from Napster

Napster generated interest in digital music and taught users to trade MP3s online.

Ashlee Vance, IDG News Service, San Francisco Bureau

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Kohn amused the forum audience of mostly attorneys from around the globe with a number of witty quips and an interesting look at the effect Napster has had on the electronic music-trading scene.

While Napster's client software allows users to trade music in a noncommercial but highly controversial manner, EMusic charges users for licensed titles on a per-song, per-album, or subscription-based fee. Single songs on the site generally run at about 99 cents, with entire albums costing $8.99. In addition, EMusic offers users a $9.99 subscription service with unlimited downloads of around 125,000 licensed titles.

It would appear that users taking advantage of the unlimited download feature and then scampering over to Napster to offer the songs to hundreds of thousands of users might pose a threat to the success of EMusic. Kohn, however, claims that the popularity of Napster may lead to some surprising gains for vendors trying to turn a profit with MP3s.

"In the long term, Napster has been a tremendous benefit for companies like ours," Kohn said. He stressed that Napster has trained thousands if not millions of users on how to trade MP3s over the Internet. In addition, many people who may never have turned to the Net for music have now checked out all the fuss over Napster and developed a penchant for digital tunes.

"We care, but we don't care as much as the recording industry," Kohn said in reference to people trading unlicensed music online. He feels that if the courts shut Napster down or at least force the site to alter some of its policies, his company will benefit from the fallout of users in search of their musical fix. In particular, Kohn claimed that his Web site offers better quality downloads than rival Napster and that the legality of EMusic's operations ease moral and legal dilemmas for the user.

Napster's Future?

When asked what he thought will happen to Napster down the line, Kohn said he expects the U.S. government may set up some type of "special body" that would oversee many of the issues related to Napster-like technology as well as future developments of copyright concerns.

"I think the court is going to come down somewhere in the middle of all this," he said. Kohn admitted, as Napster argues, that it remains difficult to distinguish those songs that violate copyrights on Napster's site from those that do not. For this reason, Kohn said, a body of experts might help deal with some of the complicated legislation in this area.

He also pointed to some of the problems with encrypting files in order to ensure that a user does not download thousands of songs and then make them available to other users via the Internet. When speaking about Universal Music Group--one of the labels EMusic deals with which requires that its titles be encrypted on the EMusic site--Kohn said, "[Their encryption technology] is very unuser friendly. It is embarrassing."

Willie Brown, San Francisco's flamboyant mayor, also stopped by Monday's event to throw in his two cents about the need for policies surrounding electronic commerce. He expressed some displeasure about how technology can make a user's the whereabouts and activities confusing. "I can't even tell where my employees are now, and it annoys the hell out of me," Brown said.

Brown left the room full of attorneys with a few words relating to the task at hand. "Be creative," he said. "Be as comprehensive as you can, but keep it simple. Know your audience."

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