Napster Business Model Revealed!

Fanning unveils failed Napster business model!

April 1, 2002, Boston — A poorly publicized press conference was held today in the Library of Northeastern University in Boston, Massachusetts, by Shawn Fanning, founder and software genius behind Napster, until recently the worlds preferred music swapping service. Ink 19 happened to catch it (Somehow, they discovered I still had Mellor’s Modern Chemistry and Zora Neil Huston’s Dust on the Tracks checked out. How they found this, I’ll never know, as I was never actually enrolled at NE.) Only myself and a few dispirited writers for some local college papers attended, indicating how far Mr. Fanning has fallen from the media’s eye.

While Napster ruled the college campuses of Y2K, a few thoughtful people wondered, “How is song swapping supposed to make any money for Napster?” Good thoughts indeed, as it never took advertising, gave away its product, and didn’t even sell your e-mail to South African porn sites. Steadfast refusals to discuss business strategy were deftly deflected by Napster founder Shawn Fanning until today’s conference. Here is a slightly condensed transcript of the talk:

“Fellow Music lovers. I’ve called you here today to discuss some of the business causes that drove Napster, supplied us with financing, and made us the premier music sharing service in the world. Court decisions have now rendered Napster as dead as OS/2, and before I fade into total digital oblivion, I’d like to share the motivation for Napster and what we hoped to do economically by allowing anyone with a telephone line and a CD collection to open it to the world.

“Many people have speculated on how we intended to make money. While some details will likely remain hidden forever, today I’d like to clarify what we were up to, and it’s very simple: Vengeance.

“Yes, vengeance. Although I wrote the code as an exercise in Windows programming, Napster as a corporation was financed and promoted by a group of established musical artists who felt that that had been treated unfairly by the recording industry, but had still managed to tour, record, and sell records successfully despite the impediments and outright theft by the major record labels. Having achieved some degree of independent financial security, they now sought to extract revenge on the very executives that had stole royalties, inflated tour expenses, and yes, even questioned the need for three-dimensional pop outs in their album covers.

“Napster represented a unique new technology that represented one of the few true synergies that resulted from the digital revolution. While many mega-mergers were based on cross-marketing cheap movies, video games, and T-shirts, only the convergence of CD burners, large hard drives, high speed interconnections, and a highly efficient compression method allowed the artist who support us to treat the major record companies as they themselves had been treated. To paraphrase Joe Walsh, one of our silent partners, ‘Account for THIS royalty, MCA!’

“While I’m not at liberty to list all the generous musicians who supported us, a few have graciously allowed themselves to be reveled — Neil Young, and Graham Parker, Lou Reed, and Keith Emerson. As Mr. Reed told me recently, ‘This was so much more satisfying than making RCA release Metal Machine Music.’ I heartily concur!

“As in all life’s endeavors, sometimes things get out of hand, or don’t head exactly where you thought they might. That certainly happened to us, and the extreme growth projections for services like ours seem to have made some communications companies over extend themselves, and the results haven’t always been pretty. When Napster stopped operations, a lot of demand for home broadband services seemed to have evaporated. Of course, our intention was only to shaft the likes of Columbia and Sony, not Nortel or Global Crossing, but, hey, stuff happens! Sorry about the collateral damage, folks, but that’s show business!

“Napster was a blast, and nothing that has happened has left me with any regret. As some of you know, I’m a bit of an amateur lawyer at heart, and the court proceedings were as much fun as I ever had with my clothes on. My personal plans are unclear right now, but after I spend a few weeks mowing lawns and flipping a few burgers, some new ventures are on my horizons. You haven’t heard the last of Shawn Fanning yet!

“Now, I know both of you in the audience have questions, but right now, on advice of counsel, I can’t really say anything beyond what I’ve already said. Just keep your eyes open, and watch for me on ZDnet news.

“Thank you, and have a pleasant Internet experience.”

With this, Mr. Fanning smiled, picked up his papers, and rezzed out. It was moving.

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