If there's one thing that Napster seems to believe in, it's sharing. The fast-growing service lets users obtain free MP3 files of popular music, something the record industry calls "copyright infringement" but which Napster describes as fans "sharing" their favorite songs over the Internet.
When Hank Barry, Napster Inc.'s president, testified before Congress earlier this month, he mentioned sharing seven times in his opening statement. Among Barry's sharing-friendly remarks: "Napster ... is a return to the original information-sharing approach of the Internet."
Napster even has a theme song -- in the form of the winning entry in the "Why I Support Napster" songwriting contest it recently promoted on its Web site -- that expresses similar sentiments. Among the lyrics:
"I'm fighting for freedom.
Trade laws? We don't need 'em,
Especially when living
In the Information Age."
But while Napster is eager to help its users share music, there is one kind of sharing it won't tolerate. That's the sharing of anything that belongs to Napster itself. The company may, through its rap anthem, appear to encourage a disdain for "trade laws" where music is concerned, but it readily invokes those same laws when its own property is at stake.
Last month, when the punk-rock band the Offspring started selling T-shirts featuring the Napster logo, for example, Napster promptly sent the group a cease-and-desist order, backing off only after some Web sites commented on the apparent hypocrisy of the move.
More significantly, the company repeatedly has tried to stymie independent software developers working on Napster-compatible software and Web sites. While these programs could benefit the millions of music fans that Napster claims are its only constituency, they might also diminish the commercial potential of Napster itself.
The company has refused to share technical information about its software code, has made changes to its software that have prevented other programs from working with Napster's own and has blocked computers from outside music sites from accessing Napster's database of hundreds of thousands of songs.
The fact that Napster seems to sing a different tune when its own property is involved is just one of the ways the reality of Napster is at odds with its public image. The service's management and ownership structure, for example, is quite different than many users suppose, with Napster's highly publicized teenage founder, Shawn Fanning, playing only a minor role.
Napster's Barry, a former corporate lawyer, insists there is nothing inconsistent about the company's efforts to protect its intellectual property. "We are not an open-source software company," he says. "This is not Gnutella," he adds, referring to the popular free software product that lets users exchange music files. Barry says that while Napster and the music industry disagree about the rights music owners have to put digital music files on the Internet, the company respects copyright laws and wants to find a way to compensate artists for use of their work.
The recording industry, of course, sees Napster's "sharing" as a euphemism for music piracy on a massive scale. Wednesday, industry representatives are scheduled to appear in a San Francisco courtroom in an effort to persuade a federal judge to close Napster down, at least in the service's current, unbridled form.
Arguments are set for the afternoon, but Judge Marilyn Hall Patel isn't expected to issue a ruling right away.
Napster's hopes of transforming its busy Web service into a source of revenue depend on its withstanding the music industry's legal assault. At the same time, however, it is taking an increasing amount of flak from those seeking access to its database or its technology. The result is a public-relations skirmish over whether Napster, which portrays itself as a champion of youth culture and the Web's freewheeling ways, applies a double standard to intellectual property, making it cavalier toward other people's, but hyperprotective of its own.
"At Napster, they jealously guard their own property, yet they complain when the music industry jealously guards its own property," says Adam Powell, chief executive of AngryCoffee, a music-oriented Web site that has had run-ins with the closely held San Mateo, Calif., company.
As a condition of using its software, for example, Napster demands that users agree that they won't "decompile, reverse engineer, or disassemble" the program, which precludes anyone from trying to figure out how it works. The phrase is a standard one at big commercial-software companies such as Microsoft Corp.
What's more, Napster has had occasionally testy relations with the community of outside developers who began gravitating toward Napster as soon as the program started to catch on. They were usually interested in writing add-on software for Napster or developing versions of the company's program that worked on other computer operating systems, such as Linux. Many of these programmers had assumed that Napster, because of the nature of the service and the public stances of young people who founded it, would be sympathetic to their efforts.
Instead, Napster told them, in effect, to get lost.
"You don't know why we implemented the things we did, and [we] can't explain them to you, mainly because it's not public information, simple as that," one Napster developer said in an open letter to outside developers published in January on an online newsgroup. "We can't give you any information because Napster is not some garage organization ... but rather an incorporated company with a development team, marketing team, bizdev team, and an executive management team. Hypothetically speaking, if I were to have a strong desire to give you all the information you needed. ... I couldn't. I do, actually, but that is no longer relevant. It's not mine to give anymore, it's the company's." Some outside Napster developers were surprised by the letter. "Maybe you need to lighten up," one of them wrote in response, telling Napster that its software is "just a way to pirate music, after all."
Some have tried to figure out the workings of Napster's internal protocols on their own. One of them, David Weekly, a Stanford University student, put a version of them on his personal Web site. Soon, he received an electronic message from Napster demanding that he take it down.
Another Napster fan, Chad Boyda, wrote a program called Napigator that allows Napster users to connect not only to the music databases on Napster's own computers, but also to the growing list of "Open Napster" servers that emulate Napster's music-trading service, but which are operated outside the company. Because most Napster users don't know those other computers even exist, programs such as Napigator have the potential for creating competition for Napster. (They also show how Napster-style threats to the music industry will continue even if Napster Inc. is shut down.)
Not long after Napigator was released, the company rewrote the main Napster program in a way that prevented Napigator from working properly. Napster says it is always rewriting its software, and wasn't targeting Napigator. But Boyda is skeptical. "I had to rush out a new version that got it working again," he says.
Napster also demanded that Boyda not include usage information about its servers in his software. Boyda acquiesced and, as a result, a Napigator user can get statistical information about all of the servers listed on Napigator -- such as how many users are logged on and how many MP3 music files they are making available for download -- except for those run by Napster.
Another issue for Napster is whether it really is the fan of new Internet information-sharing technologies that it says it is. For example, in his Senate testimony, Barry tutored senators in the essentials of the "peer-to-peer" file-sharing system that is one of Napster's technical foundations. He also reminded the Senate panel of the many examples "of new technologies struggling to survive as copyright holders argue that these new technologies will impede their ability to be compensated for copyrighted works."
But there is one new Internet sharing technology that Barry didn't mention to the senators, and of which Napster will have no part. These are "bots," or "agents," a kind of software that can quickly search several Web sites and present the findings to a user in a central place. Many enthusiasts see agent software as an essential feature of the emerging Internet, even more so than peer-to-peer file sharing, with programs roaming the Web, on the prowl for the sorts of personalized information or files that an individual user might want.
That was something of the vision of AngryCoffee, a San Francisco music-oriented Web site, which last month used agent software to allow its users to search several music sites at once, including Napster's, when looking for a particular song.
Powell, AngryCoffee's chief executive, said the service would be a boon to music lovers, since with a single request, they could survey the Net's growing number of music-sharing sites and have all the results listed on a single page. But in the process, AngryCoffee's users would never actually encounter Napster's site, since the software would visit it automatically on their behalf. That would mean fewer "eyeballs" would be attracted to the Napster site, diminishing its commercial prospects. Two days after AngryCoffee started its service, Napster blocked its computers from accessing the Napster site.
"Napster is treating its database as its private property," complains Powell. "But it's not Napster's property. It's a list of pirated music."
Napster's Barry says his company, like many big commercial Internet sites, blocks agent software programs because they impede the performance of its computers. eBay Inc. has used similar arguments in battling sites that compile information from multiple auction services. Some Napster engineers, however, say well-designed agent software would be no problem for the company's computers. And Powell says the author of AngryCoffee's agent software was one of the best in the business.
Overall, Barry says there is nothing hypocritical or contradictory in Napster's handling of these matters. "We respect copyrights, but differ with the music industry about their scope," he says. "And we will enforce our copyrights wherever we think we should. It's a perfectly consistent approach."
Napster's hard-nosed approach to protecting its assets may stem from the fact that its real owners aren't a group of young, tech-savvy music fans, but rather a network of seasoned investors whose goal is turning the company into a profitable business.
Napster's public face is often Shawn Fanning, the ex-Northeastern University student who conceived the idea for Napster and who, along with some friends he met over the Internet, helped write the actual program. While Fanning makes a winning posterboy -- the beefy 19-year-old weightlifting buff is rarely photographed without his baseball cap -- his actual role at the company is smaller than most people know, including many Napster employees. He owns less than 10 percent of Napster's stock, according to internal company documents, has no senior-management position and isn't even on its board.
Larger chunks of Napster are held by a roster of older and often extremely wealthy investors, some of them veterans of successful Internet companies. Chief among them is John Fanning, uncle to Shawn, who at one point owned 70 percent of Napster to Shawn's 30 percent. Insiders say that because of subsequent investments, Shawn Fanning's current stake in Napster is about 6 percent, with his uncle, the biggest individual shareholder, having about 12 percent. Napster itself won't discuss the matter.
The senior Fanning, who often introduces himself as "the founder of Napster," is himself an Internet entrepreneur, though none of his projects have had anywhere near the success of his nephew's. In an interview, the senior Fanning said his initial 70 percent stake in Napster was justified by the executive role he played in Napster's early days, and by the money he invested in the company, an amount he says was in the "tens of thousands of dollars."
Several friends of Shawn said that the big size of his uncle's stake is a sore point with the young Fanning, one that he doesn't like to discuss. But Fanning says his nephew, who grew up without a father, was well provided for when Napster was incorporated. "If Shawn weren't my nephew, he wouldn't have got the deal he got," Fanning says. "Usually, for people in that position, it's hard to get 3 percent or 5 percent."
In an interview at Napster's headquarters, Shawn Fanning says he had no quarrel with the size of his uncle's holding. "We worked very closely together," he says.
Other big Napster shareholders include Yosi Amram, an associate of the senior Fanning, who holds about 5 percent of the company on account of a $250,000 investment he made last year. Amram has worked with a number of high-profile companies and is currently chief executive of ValiCert Inc., a Silicon Valley supplier of tools for secure Internet communications. He has also played a key role in Napster's development, serving on its board and orchestrating its move to Silicon Valley from the Boston area, where the Fannings had been based.
Amram also helped Napster raise money from the large pool of wealthy "angel" investors that resides in Silicon Valley, especially those with "dot-com" money. Today, dozens of people in California and even Asia have Napster investments, most of them relatively small. While they stand to profit handsomely from their stake, not everyone wants their links to Napster known; one investor pleaded that his involvement in the company not be revealed, lest the controversy over Napster hurt his other business deals.
