Requiem for IUMA
By Michael Swaine
On February 12 of this year, Napster ran out of luck. A three-member panel of judges from the 9th U.S. Circuit Court of Appeals in San Francisco effectively endorsed the earlier judgment against Napster, ruling that "Napster may be held liable for contributory copyright infringement...to the extent that Napster knows of specific infringing files." But the moment a record company tells Napster about an infringing file, Napster knows of it, and must remove it—so the judges were apparently putting an end to Napster's free song-swapping.
That was the score, but it was played in very different styles by the various voices that quickly joined in. No free Web-based music exchange service will survive in the long term, was the tune from music publisher Bertelsmann AG.
Then Senator Orrin Hatch (R-UT) weighed in, urging the recording industry to work on a compromise. But makers of digital music devices were rapidly distancing themselves from Napster, emphasizing their machines' ability to take photographs, manage appointments, record voice—anything but store music files.
Shares in RealNetworks, MP3.com, Liquid Audio, and EMusic.com jumped higher in reaction to the court's decision. Investors anticipated that major record labels would be more open to licensing music to Napster's competitors.
And now Napster itself is valiantly attempting to morph into a profitable, law-abiding music service. This could be a huge opportunity to create a "subscription-based music service that caters to consumer preferences," as Amit Asaravala observed in his March 2001 "Home Page" column.
