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Like that's, you know, then,

then it actually means something.

It started to be talked about

In all those broader terms.

So it went beyond just

rights and that issue.

It became the, the way that we

Exchange information period.

When those concepts started

to be introduced,

I kind of realized that, there

was no going back

At that point. That was,

This was the future.

There has been an

upheaval of sorts

Concerning how music is copied

over the internet.

What newsweek magazine dubbed,

The noisy war over napster,

Involves more parties and

has much broader

Implications than that

moniker implies.

Just like a carpenter who

crafts a table

Gets to decide whether he wants

to keep it, sell it,

Or give it away,

Shouldn't we have the

same options?

We should decide what

happens to our music

Not a company with no rights

in our recordings,

Which has never invested a

penny in our music

Or anything to do with

its creation.

The choice has been

taken away from us.

I became a royalty artist when

i signed a contract

With columbia records,

With a group called the byrds.

And we recorded um,

15 albums or so,

during that period.

And aside from modest advances

For each of these albums, i

never saw any royalties.

Even though we've had

number one hits

With mr. Tambourine man, and

turn, turn, turn.

I saw nothing but the advance,

which is uh,

Divided five ways. It was only

A few thousand dollars a piece.

And uh, [clears throat]

With the advent of mp3 dot com,

I'm getting 50% of the, the cds

that come out now.

I think it's a wonderful thing.

Thank you, mr. Mcguinn,

that's uh, that's uh,

That's a complaint i've heard

From a number of people.

Uh, mr. Berry...

napster simply

facilitates communication

Among people

interested in music.

It's a return to the original

information sharing

Approach of the internet

And it allows for a depth and a

scale of information.

That is truly revolutionary.

Napster's helping

and not hurting

The recording

industry and artists.

A chorus of studies show

that napster users

Buy more records as a result

of using napster

And that sampling music

before buying,

Is the most important reason

That people use napster.

One of the senate hearings

Had a bunch of key personalities

That were invited.

And hank berry was

there on our side.

And hank's a lawyer,

he's our ceo.

So very thoughtful, you know,

well prepared,

Articulate argument, you know,

Having to be defensive at times,

But at the end of the day,

he's playing fairly.

And then there was, gene

kan from gnutela.

My name is gene kan,

I'm a gnutella developer,

one of many.

I'm not the inventor

of gnutella,

One of the people who

happily talks about it.

And gene's a pretty mild guy

and he's a nice guy.

He's kind of thoughtful, a

little bit introverted

But in this role,

He decided to just

absolutely run with it.

And so he just played the

Crazy anarchist destroy

the system role

I remember being so

entertained by

By all the fallout from that.

Is the holy grail of

distribution channels.

It is the zero marginal cost

distribution channel

Uh, that means that it

cost the same

To transfer one copy of

intellectual property

As it cost to transmit

10,000 copies,

Or one million copies, or

ten million copies.

Old world tactics may

no longer work

On the internet.

This is the new economy.

Can we stem the tide of

new technologies?

Highly unlikely.

So what does the future hold?

Great things if

profiteers adapt.

If intellectual property

profiteers adapt.

There's room only for

the leaders.

The internet is, is

ignanomously

Inhospitable to middlemen

and followers.

Technology moves forward

And leaves the

stragglers behind.

The adopters always win

And the stalwarts

Mechanized farming is a

good example.

You don't see anyone out there

With a horse and

plow these days.

Very intelligent statement,

Except that i don't

think we infringe

When we download

because it's for

Educational and

governmental purposes.

So it's very used.

And since we, since we

define what that is...

[laughter]

You know, we went to the

senate hearings,

Expecting you know, to be sort,

i mean it was sort of

Established as an information

Gathering session, so we

expected it to be us giving

Them lots of information.

And, and trying to explain to

them, how things work.

But surprisingly, they

really understood

And they were very supportive.

You know, they did not want

They understood it was adopted

By you know, 20 million people

and that was really

Powerful to them and so they

were all about trying

To structure things so that it

would be worked out

Between all the people

who had issues.

And um, you know, i, i

suppose that, that maybe

You know, i got my hopes up.

That you know,

Everyone would sort of

understand things

As well as they did.

Prize one, and the webby award

for music goes to...

napster.

[Applause]

The first version of the

product, was pretty much

The same set of features

And it was sort of a very

simple application.

But once we were sued, we

couldn't really do much

With it. So to have

something growing

That quickly, to have so

much attention

And have so many great ideas

And so much passion

Among the team members and

desire to make it.

Make it work, make it last.

To uh, not be able to actually

Change the product and

make it better,

To not be able to really

pursue a lot of the great

Ideas for how to make uh, it

a viable business.

I think it was actually

incredibly frustrating.

You know, there was

all this focus

On the recording industry uh,

and the legal battle

From a business perspective, uh,

but

Almost no focus whatsoever

On the value of the business.

Which was this platform

And its capabilities and

what it could do.

The legal issues

around the product,

And the interface between

the legal team,

Which was becoming an

increasingly large

And influential part

of the company,

And the product and

engineering team,

Which was becoming

increasingly small

And marginalized part

of the company.

Eventually the

lawyers took over.

The first mutiny was when we

moved into that office.

In redwood city.

And it was a giant cubicle farm.

And as soon as jordan

and i saw it,

We looked at each other

And we didn't have to say

anything to each other.

We were like, this is, we,

we knew it was bad.

The layout of the office.

So we'd gone from

having funky desks,

I, i would call door desks,

Like we would

literally buy doors

That have the knob hole there.

That would be where all

your wires went,

To cubicles with walls.

We wanted to all sit

together and, you know

We'd gotten used to that.

And that's how we work.

Management offices were

literally up a floor

Looking down on the floor,

If you can imagine, it used to

be a factory work floor.

Horrible metaphor, you know,

sit in your cubicle

And shut up, right.

And you know, you're expendable.

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