Word: napsterized
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...Napster's predicament is a case of the law working too well. Usually, technology and business race ahead to new frontiers, while the rules necessary to constrain behavior in these areas struggle to catch up. In the 19th century, vagabonds and fools flocked west seeking their fortune, and in some places, like mining towns, they built a virtually lawless society. Only later, when sheriffs and judges arrived, did these areas begin to achieve a degree of civilization. In the 1980s, Wall Street invented new financial instruments like junk bonds and mortgage-backed bonds, only to abuse these Byzantine new securities...
...Napster prevailed, we could have avoided this wretched mess. With the illicit but compelling market power of its 50 million users, Napster might have muscled agreements with the other record labels similar to its Bertelsmann pact. Still tiny relative to the rest of the recording industry, Napster would slowly but surely have been transformed into a profitable way to distribute music while benefiting artists, labels, consumers and Napster itself. All this would have been possible, if only the law had worked just a little bit slower. Yet thanks to our speedy and efficient legal system, it's now highly doubtful...
There's no real solution to this problem, either. Napster was founded on a legal loophole, the premise being that the company would avoid culpability by not hosing music files on its own servers. Its legal argument was based on the 1984 Betamax case, in which movie studios sued Sony because they feared VCR's would lead to piracy. The judge in that case, evincing an understanding of technology more sophisticated than Judge Patel's, ruled in favor of Sony because Sony's customers, not the company itself, were the ones violating copyright. Judge Patel, in contrast, feels that Napster...
Turning to Napster, 50 million registered users proved that online music distribution was a feasible opportunity. Still, the chaotic interim period simply did not last long enough. The recording industry sued Napster within a year of its founding, and with the Patel ruling now on the books, the door has officially been closed on the lawless period of Internet music distribution. No one knows if Napster's model could even produce a viable business, as Napster has been a free service since Day 1, and now with the law firmly against Napster, we may never know...
Going forward, we can now reasonably expect the worst-case scenario for digital music. As I suggested in November while entertaining the possibility of Napster's defeat, the record labels, able to work together only to squash a common enemy, will now fracture and pursue Internet music distribution separately. To download their favorite tracks, consumers will now have to register and pay at more than one music site, to say nothing of figuring out which site hosts the music they're after...