A Post Mortem on Napster

[Dave Farber <dave () farber net>]

A Post Mortem on Napster

April 27, 2003
By MATT RICHTEL 




 

IN the Internet boom, Shawn Fanning became a symbol of an
era. Mr. Fanning, the wunderkind hacker, was just a college
student when he devised Napster, which enraged the
recording industry by letting tens of millions of people
download music free over the Internet. It quickly made him
synonymous with the Internet youth movement.

But in "All the Rave: The Rise and Fall of Shawn Fanning's
Napster" (Crown, $25), Mr. Fanning comes across as
relatively mature compared with investors and managers
whose greed and delusions of grandeur are blamed for
hastening the company's demise, if not causing it.

Generally, the book, by Joseph Menn, provides a
well-documented history of one of the most celebrated
collapses of the Internet. But it goes far deeper, giving
an inside account of the creation of Napster, the battle
for its control and the maneuvering by big Silicon Valley
names to try to turn music piracy into gold.

The issue is particularly acute because the Bush
administration this month sided with the recording industry
in its court battle to force Napster's surviving rivals to
disclose the identities of subscribers who may be illegally
trading copyrighted material online.

The book suggests that much of the blame for Napster's
struggles lies at the feet of Mr. Fanning's uncle, John
Fanning. Portrayed as a mercurial entrepreneur who had
unrealistic expectations for Napster's value, he initially
held a 70 percent stake in the company. The book argues
convincingly that - in an effort to retain his board seat -
he used a controlling position to scuttle deals that would
have brought Napster powerful backing, enriched its early
investors and potentially turned it into a legitimate
business. 

Conversely, the book sympathetically portrays Shawn Fanning
as relatively thoughtful and cerebral and swept up by
forces bigger then himself. It reports that he would
admonish older managers at Napster for bickering among
themselves. But Mr. Menn at times seems overly taken with
Shawn Fanning as a good - if not innocuous - guy, glossing
over his role in creating software of dubious legality.

Others in management are portrayed as vastly overestimating
Napster's value and underestimating its legal troubles.
(Napster was ultimately driven from business after being
sued by the recording industry for abetting copyright
infringement.) But managers are portrayed as ignoring the
consistent decline in Napster's potential and fortunes -
and, in turn, as failing to find potentially viable
solutions. 

The book includes a great deal of compelling reporting and
many insightful anecdotes. It shows how Napster made
behind-the-scenes payments to some musicians to promote the
service, even as many recording artists were condemning
Napster as leading to the theft of their intellectual
property. It also gives a fascinating account of how some
of Silicon Valley's top venture capital firms, including
Kleiner Perkins Caufield & Byers, came close to backing
Napster. 

The book does not satisfactorily answer whether Napster
might have collapsed even without poor decision-making by
management and investors. It also underestimates the
recording industry's determination to stop Napster.

Another question is how willing readers will be to revisit
the Napster debacle. The story provides a great inside
chronicle but doesn't convincingly underscore how Napster
represented a microcosm of the technology boom or offer
broader lessons about the Internet gold rush.??


http://www.nytimes.com/2003/04/27/business/yourmoney/27ADDE.html?ex=10524353
97&ei=1&en=aa6b631f063a7fa4



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