Deciding the fate of Napster -- How the song-sharing network transformed the music industry

By Noah Robischon
Updated December 22, 2000 at 05:00 AM EST

For much of Y2K it seemed like Napster, that cyborg sent from the future to kill CDs, could not be terminated. It escaped a devastating court order, outsmarted its rivals, and survived a freakish growth spurt — only to be crushed by…a hug. Or so it seemed in October, when Napster’s 20-year-old prodigy Shawn Fanning locked shoulders and announced a pact with Thomas Middelhoff, chairman-CEO of one of the world’s largest recording companies, Bertelsmann. The question was inevitable: Had old media knuckled under to the robo-relentlessness of the digital age, or was it the other way around?

The fate of the hugely popular Napster service, which lets 44 million users (and counting) swap songs over the Internet for free, is still being decided in the courts. But the last time a ruling threatened to erase Napster in July, it only boosted the company’s forward momentum. Millions of people bum-rushed the servers trying to stuff their free music collections before the shutdown, creating a digital-era traffic jam 50 times the size of the one on the way to Woodstock in 1969. The stress test showed the technological weaknesses of imitators like Gnutella, which buckled under the pressure, and rallied the masses against inflated CD prices — hardly the result the Recording Industry Association of America was expecting.

If Napster is aiding mass copyright infringement, it isn’t showing yet: Album sales are up 4.8 percent. The newest release from Limp Bizkit, a band so MP3-friendly that they headlined a summer tour sponsored by Napster, enjoyed first-week sales better than any other rock record in history. True, plenty of songsters have sided with Metallica drummer and anti-Napster crusader Lars Ulrich, but others are beginning to see digital file trading less as piracy than promotion. Radiohead webcast an advance version of Kid A that was widely duped, and Offspring tried to distribute their latest disc directly onto Napster — until the band’s corporate overseers at Sony stepped in.

Actually, those music-biz bosses are the very people Fanning and CEO Hank Barry are trying to appease by teaming with Bertelsmann. The plan is to reinvent Napster as a pay service that compensates artists — ideally, without alienating the free-music loyalists. But even if it is ultimately crushed under the legal machinery, you can bet that a new cyborg — dot-pop’s Terminator 2 — is already in the works.