[Salon] [Napster] Come on, Eileen

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From: Adam Rifkin -4K (adam@XeNT.ics.uci.edu)
Date: Mon May 08 2000 - 00:08:58 PDT

Very level-headed interview with the Napster CEO in Salon:


D'oh! I should have known there was some kind of Napster-Firefly
connection! [It occurs to me that what Microsoft did with Firefly is
mockery. How the heck does that bloated piece of sh!!t Passport make
use of anything cool like HOMR/Ringo/Firefly used to be?]

> Come on, Eileen
> by Damien Cave, Salon, May 8, 2000
> Napster CEO Eileen Richardson is walking on sunshine. But with lawsuits
> piling up, is she really dancing on a grave?
> With burgundy-tinted hair, a love of club music and a son whom she tends
> to mention, regardless of the conversation topic, Eileen Richardson
> isn't a typical CEO. But Napster isn't a typical company. Eight months
> ago, it didn't exist; now it's becoming a contender for most rapidly
> adopted software in Internet history.
> It's also one of the most beleaguered. By offering a free, downloadable
> application that lets users temporarily turn their computers into
> servers for the purpose of swapping MP3 files, Napster has attracted
> lawsuits like the Beatles attracted fans. The Recording Industry of
> America filed suit late last year, Dr. Dre tacked on another case last
> month and just last week Metallica drummer Lars Ulrich appeared at the
> company's offices in San Mateo, Calif., to drop off an amendment to the
> band's own lawsuit.
> Richardson has tended to take this all in stride. She was an early
> investor in Napster and became CEO in September, only a few months after
> 19-year-old Northeastern University student Shawn Fanning developed the
> program. After 10 years in the world of venture capital, Richardson
> seems happy to be leading her own band. She has good reason: A new
> version of Napster is in its final-testing phase, the company is hiring
> like mad and artists like Chuck D. and Limp Bizkit have come out in
> Napster's defense. But the company is far from clear of its troubles.
> How is she handling the heat?
> Salon: When I chatted a few weeks ago with some of your employees,
> spirits were high and there was sense that Napster might soon come out
> from under the cloud of all these lawsuits. But since then, a lot has
> happened: Is it tough to maintain employee morale?
> Eileen: No, not at all. As with any start-up, you experience your
> highest highs and your lowest lows -- the whole range of emotions. This
> is no different. Maybe the highs are higher and the lows are lower, but
> it's still that roller coaster and that's what makes it exciting and
> fun. Every employee knew the opportunities that they had here at
> Napster, so I think they all understood that this was going to be a
> roller coaster.
> Salon: But not every start-up gets to see Metallica's drummer hand
> deliver a 60,000-page lawsuit. Are you surprised by how dramatic this
> has all become?
> Eileen: It's not a shock. I guess once I heard that [Lars] Ulrich was
> coming, I was just like, "OK." I think we believe -- certainly I believe --
> that there are better ways of handling it, better ways of getting us
> information, like using the Internet maybe. That would have worked.
> Salon: What do you think Ulrich's stunt says about the band? About their
> opinion of their fans?
> Eileen: It's a bit crazy. It just shows, though, that they're not that
> familiar yet with the Internet as a medium. They're unfamiliar with how
> their fans are using it, and how it could benefit the band in the
> future. And so that's just an education process. I don't know that it's
> any different from what happened with radio when it was a new medium.
> Everyone then was up in arms, "Oh my God, how are people going to get
> paid; it's free and it shouldn't be." We're running into some of those
> same issues here.
> Another analogy is the movie industry. Today, Blockbuster, and the video
> marketplace in general, is an $18 billion marketplace; and movies, the
> box office, is only a $7.4 million marketplace. When the VCR first came
> out, everyone said "Oh my God, nobody's going to see another movie." But
> it never ended up happening because there is a market for going to
> movies and there is also a market for renting them and bringing them
> home. The effect of that was that the movie industry grew by two and a
> half times. And we believe the music industry will grow much larger
> because of us.
> Salon: The Soundscan numbers came out, revealing that record-industry
> profits rose by 8 percent last year.
> Eileen: Again?
> Salon: Yes, again. Do you think Napster contributed to this increase?
> Eileen: I'd say so. The thing that I love about Napster and using the
> Internet to learn about new music is that it can be more interactive. I
> don't have time to sit in front of MTV for two hours and get blasted
> with whatever somebody decided to blast me with. And it's the same with
> radio. It's always been a little frustrating. Whereas online, I can sit
> down and say, "Hey, these are the things I like, give me more." You
> should really check out our new artists page. You just go, "Hey, tell me
> other artists that sound like Celine Dion," and you'll get all these
> artists popping up, with new names of people that sound just like her.
> Salon: Great: the cloning of Celine. Just what the world needs. I'll
> switch gears a bit. Now that Metallica has identified more than 300,000
> Napster users that it says have downloaded the bands' songs and asked
> you to block them from using your service, are you doing anything to
> prevent these people from coming back with a different handle?
> Eileen: Yes. There are systems in place to keep them from coming back.
> Salon: Are these systems up and running?
> Eileen: Yes.
> Salon: Can you tell me how they work?
> Eileen: No. Not right now. We just got them started. But we have things
> in place that are in full compliance with the DMCA [Digital Millennium
> Copyright Act]. That's about all we're saying right now.
> Salon: OK. Then given the work you've put in, not to mention the time
> and money you're spending in defense of Napster, do you feel bitter that
> Napster has become the target, as opposed to Gnutella or Freenet, two
> other forms of file-swapping software?
> Eileen: Well, we're far and away the leader in this space. We're the
> company with the brand; we're the first movers, the inventors if you
> will. It's different. Maybe they target us because they can, right? Who
> are they going to go after at Gnutella [which was created by AOL
> employees without the company's approval]? So I don't think we feel
> bitter, to be honest. Plus, it's never been our goal to be sort of like,
> "Hey, what about them?"
> We're building a business and we're trying to work it out in an amicable
> way. I'm not too worried; I don't think any of us are really all that
> worried about what's going on with any of the other players. We're the
> leaders, we're going to stay the leaders and we're going to be the
> company that's successful. The thing we have going for us is that we are
> a company, where Gnutella isn't. So, any artists who realize that this
> is a medium they can use to their benefit, they'll come and work with us
> because there is somebody to work with.
> I think [Metallica and the recording industry's] actions are based on a
> lack of knowledge, and fear. When you're afraid of something that you
> don't understand, you react, usually with a lawsuit. But over time, and
> we see this absolutely every single day, everybody's learning. We're
> learning about the music industry; they're learning about the Internet.
> I'm confident that we'll get there together. I do realize, having been
> in this business of cutting-edge high tech for so many years, that many,
> many times you sit there and say, "Oh, that's never going to work," or
> "That's too scary." You know, technology's hard. It's hard to
> understand. It's just a process that takes a little time, and that's
> where we're at right now.
> Salon: What about the RIAA lawsuit against MP3.com, specifically the
> recent ruling that MP3.com broke copyright laws by not licensing the
> music in its Beam-It database from recording companies. What do you
> think this means for Napster?
> Eileen: It means nothing to Napster as the cases are completely different.
> Salon: What about the effects of these lawsuits: Have your usership
> numbers gone down since the cases ...
> Eileen: The numbers have not gone down, I can tell you that.
> Salon: So where are you at now?
> Eileen: We're at a lot of users.
> Salon: How many users?
> Eileen: Millions and millions of users.
> Salon: Is that as specific as your going to get?
> Eileen: Yes.
> Salon: OK, what about funding. Has it been hard to go out and raise money?
> Eileen: No, it hasn't been difficult. We have had many, many types of
> investors coming to us: Everything from requests of "Please tell me what
> your NASDAQ symbol is" to "Can I invest in you privately?" on up to very
> large players and venture capitalists. We've certainly received a lot
> more calls about people investing in the company than we did before all
> of this.
> Salon: But have these calls turned into dollars? How much cash do you
> have on hand?
> Eileen: We're not disclosing that; we're a private company -- but we'll
> be fine.
> Salon: Are you using any of those dollars to "educate" people like
> Ulrich? What do you think needs to happen before Napster is considered
> as safe as radio?
> Eileen: Well, the culture at large and the users have spoken. We have
> millions and millions of registered users and we've been around for
> eight months. We're the fastest growing Internet company of all time.
> So the consumers and the culture of America have spoken. This is
> something they very much want to do.
> But we need to be proactive, too. It is going to take time. Right now,
> though, we're working on our new artists program, so that artists can
> learn how to use this new medium to their benefit, and get more fans and
> get in touch with their fans. So part of it is through the Web itself,
> and part of it is through conversations with artists.
> Salon: You're also sponsoring a free Limp Bizkit tour. Are there other
> big-name artists who you've lined up to defend your cause?
> Eileen: There are definitely other artists, certainly the Offspring has
> come out and spoken on our behalf.
> Salon: But are there plans to do anything as public as the Limp Bizkit tour?
> Eileen: Yes. I don't know that it's going to be exactly like the Limp
> Bizkit tour. In fact, it probably won't be, but we just this second
> heard from another huge artist who we'll be working with in the future.
> Salon: Who?
> Eileen: I can't say who it is right now; but soon.
> Salon: Ultimately, where do you think this is all going? Why is Napster
> important and what you like to see it do?
> Eileen: Personally, the reason I came here was because of my involvement
> with Firefly and its collaborative searching technology that enabled you
> in an interactive way to rate musical artists and then learn about new
> musical artists that you otherwise wouldn't have learned about. It's
> something no other medium can do in music. The rest are passive, like
> radio and MTV. I thought that was the most brilliant breakthrough; the
> consumer tool with the most excitement, if you will. That was five years
> ago. But when I saw Napster, I thought, "Oh Lord, this is it. This will
> fulfill my dream."
> So that's one side of it. And the other side is that my very own son is
> a musical artist, as are many, many of my friends. And the thought of
> having them be able to finally have a career based on what they love to
> do, i.e. create and play music, because of this new medium -- it touches
> my very soul.
> That's one of the things that I would hope would happen. The labels can
> keep doing what they're doing; they'll still have their megastars, etc.
> But what about that next [level] of the music industry? The artists that
> may have only 200,000 or 400,000 lifetime fans? The artists that we talk
> to daily that, let's say, have been dropped from record labels, but have
> music [they'd like to distribute]? Giving them the ability to connect
> directly with their fans, well, that's why this is important -- they're
> going to be able to make a living out of this.


I'm stranded all alone at the gas station of love, and I have to use the self-service pump. -- "Weird Al" Yankovic, "One More Minute"

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