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Burden of Proof

Napster: Sharing or Stealing?

Aired May 31, 2000 - 12:30 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(BEGIN VIDEO CLIP)

TOM SILVERMAN, TOMMY BOY RECORDS: If there is no way to control it, movies, books, television, nothing creative has any value anymore. It all, software, it's all up for grabs. And why would anybody be creative them, you know, it becomes a nation of thieves.

CHUCK D, RAPPER: Will I think it will hurt actual sales? Nope. They said the same thing back in 1967 with FM radio. Digital distribution and file sharing is like those asteroids that wiped out all the dinosaurs, and in this case the dinosaurs are the big four: Sony, BMG, Time Warner, and Universal.

BECK, MUSICIAN: I think some artists are going to be destroyed by it, you know, I think it's hard for musicians to put a lot of money in and time and effort into making recordings, and you know, it's a many-sided issue. There is not one way to look at it.

(END VIDEO CLIP)

ROGER COSSACK, CO-HOST: Today on BURDEN OF PROOF: New technology is forging a digital divide in the recording industry. Will sharing copyrighted material over the Internet help or hurt music artists?

ANNOUNCER: This is BURDEN OF PROOF with Roger Cossack and Greta Van Susteren.

COSSACK: Hello and welcome to BURDEN OF PROOF. Greta is off today.

Rock musicians are feuding over new technology available on the Internet. At the heart of the controversy: Napster.com, a Web site where net surfers can swap copyrighted recorded music. Musicians have differing opinions on Napster's effects on the recording industry.

(BEGIN VIDEO CLIP)

LARS ULRICH, METALLICA DRUMMER: When we served them with a lawsuit, they basically held up their hands and smiled innocently and said: Well, we're not doing anything illegal, we're just providing a service. But if you can give us some names and some proof that this is going on, we will be happy to comply with your request. So 10 days later, we have basically given that proof, and so now the ball is in their court, and we'll see what excuse they come up with now.

FRED DURST, LIMP BIZKIT LEAD SINGER: Napster's been an amazing way to market and promote our music and cause massive awareness. And the Internet is here. And anybody trying to fight that, which would be people who have been living by certain standards and practices of the record industry, those are the only people who are scared and threatened.

(END VIDEO CLIP)

COSSACK: And joining us today from Los Angeles is Howard King, attorney for the rock group Metallica. In San Francisco, we're joined by John Perry Barlow, former songwriter for the Grateful Dead and a co-founder of Electronic Frontier Foundation. In New York, Steven Levy, a senior editor for "Newsweek" magazine.

And joining us here in Washington, Emily McCoy (ph), copyright law professor Ralph Oman, and Kim Krulin (ph). And in the back, Jackie Karpel (ph), Lindsey Howard (ph), and Brad Watson (ph).

Steve, let's go right to you. Tell us about this new word Napster, what does it do, and why are people so upset about it?

STEVEN LEVY, "NEWSWEEK": Napster is an Internet program that, very simply, lets users share music with each other. It works very easily. You download the thing into your computer, you type in the name of the song, it could be the number-one song in the nation, or some obscure song, and then you get a list of people, your fellow users who have the song, you just say: Give it to me, you download it in your computer, and then from then on, you could listen to it or people can get it from you. It is the celestial jukebox, you can call it.

COSSACK: Well, what is the problem with it? Why are people so upset? What is wrong with sharing some music?

LEVY: Well, some people, some of the artists and record companies that sell that music are a little upset that people can go get it without paying for it because Napster is very free.

COSSACK: Now what does Napster actually do, does Napster actually provide the music?

LEVY: It's interesting the way it is structured, and it is purely an Internet program, it really leverages on the collective power of the Internet. Napster doesn't have one file within the company. Basically, it just puts people in touch with each other, and has a database to let people find music in each other's hard drives. So what they say is that, hey, we are just putting people in touch with each other. They can share music, and if it happens to be a copyright violation, well, that's something the users should settle amongst themselves.

COSSACK: Well, is in some ways Napster saying, listen, we are no different than the telephone company, we provide the wires, and in the telephone company's way, they say, we provide the wires, what people talk about on the phone or what people plan on the phone is their business. We are not breaking any laws by just having a telephone.

LEVY: Right, I'm sure the lawyers here will have their say. What Napster is essentially claiming is that they are like AOL or the phone company, in that they are common carrier and can't be responsible for what happens once people get in touch with each other.

COSSACK: All right, joining us now is Howard King, Metallica's attorney.

Howard, what about that? Is Napster doing anything wrong by just providing access to people -- for people to get with other people?

HOWARD KING, ATTORNEY FOR METALLICA: Well, according to the case presiding in the first case against Napster brought by the Recording Industry Association, Napster cannot avail itself of that defense. The judge has already ruled that they are not the equivalent of the telephone company or AOL.

COSSACK: Well, why is that?

KING: Well, Napster was created for one essential purpose, and that was to facilitate the trading of copyrighted material without payment to the artist or record companies, period. That's the basis of their formation, and that is, you know, 99 percent of the usage now is the transmission -- the illegal transmission of copyrighted material.

COSSACK: What does Napster say in response to your allegations, that that is -- they are only there to facilitate an illegal act?

KING: Well, they originally, before they were shut down, said they were merely the pipes and had no control of what was going on. Since that's been stricken, I think their remaining defense is: We are not sure that copyright violations are really occurring through our users, which is a ludicrous position.

COSSACK: I am sorry, John, talk to us about why this should be -- there should be access to music over the Internet, and it should be free for all parties?

JOHN PERRY BARLOW, FORMER LYRICIST, GRATEFUL DEAD: Well, speaking as a creative person who has written a lot of songs, and has seen them freely distributed to my advantage, the best thing that can happen for an artist who is good is to have the widespread non- commercial sharing of his or her work. This worked incredibly well for the Grateful Dead, it will work very well for anybody who tries it.

I assume that something is theft, if it is actually being taken from me. But you can't take a song from me. I still have it when you hear it. I have a concern about people making commercial use of other people's material, but what's going on on Napster is not commercial use, and it is not theft. And Napster is clearly a common carrier, I think the judged erred in his ruling, and I think that will be shown to be the case at the next layer. COSSACK: John, don't you worry, in terms of being a creative individual, that a song that you write that you would get royalties on if it was bought in the traditional manner in a CD market, that you won't get those royalties because people aren't going to be buying them.

BARLOW: By the time the record industry has gotten done with me, I don't see very much in the way of royalties. I mean, the artist traditionally sees about five percent, and that's factoring in the ones that are usually successful who see more than that. The average artist who signs with a major label really has to sell an awful lot of units before they ever see a dime.

You know, the record industry is concerned about people ripping off the artist, in fact, they've been ripping off the artists profitably for many, many years, and finally they are getting their comeuppance.

COSSACK: Howard, John makes an argument that says that perhaps that creative people really aren't losing anything, that maybe perhaps your client, which is a major rock group, is losing something, but most people don't lose anything anyway. Does that argument hold up?

KING: Well, it's not a legal argument. It may be a practical argument, and it is a free country. If John wants to license his songs for free for distribution over the Internet more power to him, and if it increases his already great success, that's terrific. But it really should be up to the owner of the material, the person that created the work, to determine whether or not they choose to give it away for free.

COSSACK: All right, let's take a break. When we come back, which laws govern copyrighted material? plus, a closer look at Metallica's lawsuit against Napster.com. Stay with us.

(BEGIN LEGAL BRIEF)

The Greenwich, Connecticut home where 15-year-old Martha Moxley was killed in 1975 will be demolished by its current owners.

Prosecutors and lawyers for Michael Skakel, who is accused in the killing, agree that it is not necessary to preserve the house for juror examination.

(END LEGAL BRIEF)

(COMMERCIAL BREAK)

COSSACK: Good news for our Internet-savvy viewers: You can now watch BURDEN OF PROOF live on the Worldwide Web. Just log on to cnn.com/burden. We now provide a live video feed Monday through Friday at 12:30 p.m. Eastern time. And if you miss that live show, the program is available on the site at any time via video-on-demand. You can also interact with our show and even join our chat room.

(BEGIN VIDEO CLIP) ULRICH: The money that's being lost at the point we're at right now is pennies. We're talking pocket change here. People sit here and talk about the money, and it's not about the money right now. In five years from now if something is not done about this, it'll be real money.

(END VIDEO CLIP)

COSSACK: Heavy-metal rock group Metallica has filed a lawsuit against Napster.com, a Web site in which users can share music over the Internet. Now, Metallica and other bands claim the site allows the unlawful reproduction of intellectual property.

Well, Ralph Oman, tell me, what is the law on this subject? Is Napster in trouble? Can't they provide lines that people can share music?

RALPH OMAN, COPYRIGHT LAW PROFESSOR: I think they ultimately will be in trouble because it's clear that the system is being used for the unauthorized copying of music, and they are directly involved in facilitating that and would be found to be in violation of the copyright law.

The copyright laws go back to the beginning this country. We were the first country to include protection for copyright in our Constitution. The United States music industry is the strongest in the world because of this strong copyright protection. Unless the -- not only the bands and the performers, but also the song writers get their share of the music that's used by the American public, they won't be able to pay the rent and feed the children.

COSSACK: What exactly is the law? What am I allowed to do? If I -- let me give you a hypothetical -- I go and I -- to the CD store -- and I buy a CD and I want to share that music that's on that CD with a friend of mine -- and there's now technology where I can make a copy of that CD and give it to a friend -- am I breaking the law if I do that?

OMAN: Technically, you are. Your friend can come over and enjoy the sounds from your own CD player, and that would be the extent of it. But in terms of copyright law, to make a copy without authorization would be a violation. Of course, they're not looking to seek out the homeowner for these violations, they're looking for the companies that facilitate the operation, and that's why Napster, I think, is in real trouble.

COSSACK: John Perry Barlow, the professor -- Professor Oman says that, in fact, that's a violation of the law by what they're doing, what Napster is doing, and that, in fact, the law is the law. And the reason obviously is the loss of revenue to the artist. How do you answer that?

BARLOW: By that logic, libraries are in violation of the law. He's taking a very strict view of copyright, and one that actually has not formed until quite recently. The idea that intellectual property was property, in fact, is an extremely recent development. Prior to that, it was considered to be an exclusive license to distribute. And that's quite different from a property.

COSSACK: John, isn't the analogy of a library sort of misplaced? No one has said here that I couldn't lend my CD to a friend. And isn't that what a library does? What you're more concerned about is the notion that I'm taking someone that somebody else would have to buy and giving it away.

BARLOW: I think that -- you know, let me go back to something that Howard King said a little bit ago. You know, he agreed that, possibly, as a practical matter, Napster would be good for artists. And I think that's the fundamental claim. I think that we need to go back to the origins of copyright and think about what it was designed to serve. And we are now at a tipping point where the best thing to serve creativity is something that gives a direct relationship between the artist and the audience, which means getting the distributors out of the way.

Right now, the distributors are taking almost all of the money and Napster gives us an opportunity to have a direct relationship with the audience. In my view, we've got to kill the music industry before we can start the musician business and the audience business, which will be much more fruitful to the creator.

COSSACK: Howard, I want to give you a chance to respond to that.

KING: Sure. Well, listen, I think different artists are in a different position. My clients, Metallica and Dr. Dre, are fortunate enough to own their own sound recordings. So they're not really aligned with the record labels, but they happen to have a great deal of control over their music, and it's their choice that they collect money when their music is distributed.

Again, my only point in response to John is, if artists like Chuck D. and Limp Bizkit want to distribute their music for free, for whatever reason, and they own they're music, that's their choice. Then it's not a copyright violation because the owner is consenting. Ninety-nine percent of the music distributed on Napster is distributed without the consent of the owner.

COSSACK: Howard, who's the violator in this situation? Is it really Napster or is it the people that utilize what Napster gives them to be able to utilize -- that is, the people who, you know, exchange the music?

KING: Well, I think from a technical standpoint, it's the actual users who are exchanging the music who are the violators. But under the Copyright Act, there's exactly the same liability for someone who aids or abets a copyright violation. Napster clearly falls into that category.

COSSACK: But why don't you go after the users? I mean, it's technically -- technologically, you could go after the users. You could find out -- in fact, we've seen that you know who some of the users are. Why don't you go after the users?

KING: Well, because you'd be suing 10 million people, perhaps. It's a ridiculous -- it's a ludicrous result when, really, there's only one entity, this corporation, Napster, that is responsible for this. And if you shut down Napster, you've shut down these series of violations. That's the only practical approach and that's why the law provides for suing somebody who contributes to the copyright infringement.

BARLOW: It...

COSSACK: John, go ahead.

BARLOW: What are you going to do about Gnutella and Freenet, both of which are services like Napster that don't have any kind of centralized point of suit? There's nobody there to sue and they can distribute any kind of copyrighted materials.

COSSACK: These are programs in which you can share music and people who are looking into it can't find out who the people are that are sharing the music, isn't that right?

BARLOW: Right.

COSSACK: Howard.

KING: Well, in theory, you can -- through these services, if they really work the way they're -- their claims, you can exchange movies, software, books. I mean, there'll be no reason for anybody to pay for intellectual property. But in answer to the question, through the Napster case we will create the legal precedents that give people the legal power should they choose to pursue other infringers. We're not going to solve the problems of the world through this one case.

COSSACK: All right, let's take a break. Up next, will technology itself help resolve some of the differences in this case, or is there a happy medium? Stay with us.

(BEGIN Q&A)

Q: An Oregon law goes into effect today allowing adoptees to see their original birth certificates. As of 8:00 a.m. yesterday morning, how many requests for birth records have been received?

A: 2,272. Officials say it will take six weeks to process them all.

(END Q&A)

(COMMERCIAL BREAK)

COSSACK: OK, now listen up, the Web site Napster.com uses MP3 technology to enable Internet surfers to download music off the World Wide Web. Now opponents say Napster serves as a marketplace for the illegal exchange of copyrighted materials. Supporters of the site say it aids smaller bands in marketing and promotion.

All right, Steve, I want to go back to you now. And, you know, we've heard the legal end of this, and we've heard the discussion. Is the genie out of the bottle? I mean, is this sort of -- does it make any difference? can we go back and stop this now?

LEVY: No, I think in a few years, certainly within a generation, this whole conversation is going to seem quaint and a little bizarre. The fact is that Napster, by letting people get music via the Internet, is the fastest growing Internet phenomenon we've seen yet. And that's because people want their music that way. And the record companies have to wake up, and I think they will, to the fact that they are no longer in the business of hiring trucks and having big warehouses and shipping CDs around that, you know, cost, you know, a factor of many times what it costs to print these things.

And I think they will embrace this and they realize that there's going to be more music, people are going to get music easier, and that eventually we're going to figure out a way to keep money in artists' pockets. The Metallicas of the world are not going to go broke, and people are going to listen to their music, and they're going to get it on the Internet.

COSSACK: Howard, who wins, Metallica or the Napster in this situation? And I suppose what Steve's saying is that your victories may be quick ones, but in the long run, you know, you're going uphill.

KING: Well, wait a second, my clients completely embrace the concept of MP3s. So it's not -- I agree, music will be distributed digitally and it'll be distributed in a manner in which the artists get paid. It just won't be distributed through Napster because they will be out of business.

COSSACK: Well, what do you -- how do you respond when Steve says: Look, Napster is the fastest growing Internet service out there, and that shows what people want. I mean, isn't that -- doesn't that say that this is -- can't -- something that can't be stopped?

KING: Well, people want something for free, who can blame them? But there will be digital delivery of music that involves a cost: whether it is paid for by advertising, subscription or people paying per download, some system is going to result from this, unless there is a massive change in the laws.

COSSACK: John, what's going to happen there? Is there going to -- is it going to end up where there's just going to be the free interchange of music, and won't that stifle creativity?

BARLOW: Absolutely not, because, as we've seen in the past, when we have new distribution media that make it easier to share, you have an increase in the market. I mean I -- the entertainment industry is very slow to learn, they kept videocassette recorders out of the United States for five years because it was going to kill the music -- the movie business, and now it's the mainstay of the movie business.

COSSACK: All right, John, let me interrupt you one second. Is the law going to change to reflect what the people want in this situation? Let me just ask Ralph that -- Ralph.

OMAN: The Congress recognized the dangers of uncontrolled digital copying in the Internet and passed something called the Digital Millennium Copywrite Act two years ago. And that gives the creators the tools to enforce their rights on the Internet. I think they'll be doing that, they'll be using technology to solve the problems raised by technology. As long as they maintain their control of their works on the Internet, everybody wins. There will be a rich menu of selections for the consumers. The artists and the songwriters will make money, everybody wins and that's what Congress was looking for.

COSSACK: All right, that's all the time we have. If I can just figure this out, this is going to be a great event. Today, thanks to our guests and thank you for watching.

Tonight on CNN's "LARRY KING LIVE," John and Patsy Ramsey will debate Steve Thomas, the former lead detective in the investigation of their daughter's murder. And at 10:00 p.m. Eastern my time, my co- host, Greta Van Susteren, interviews defense attorney Johnnie Cochran about that debate. That's on "CNN NEWSSTAND" tonight.

And we'll be back tomorrow with another edition of BURDEN OF PROOF. We'll see you then.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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