All language subtitles for Downloaded.2013.1080p.WEBRip.x264.AAC5.1-MBR

I released an early beta version.

During the summer
and it spread quickly.

By word of mouth.

Napster users
can download musical selections.

In - in mp3 format.

Mp3 is what's called a variable
loss compression algorithm.

Here's how it works.

Napster and
downloading distribution.

Is the biggest excitement.

Since disco,
rap and the Beatles.

Its like new radio.

The majority of usage
of the mp3 format, um,

is for unauthorized.

Yeah, I would like a cd player,

but I can't spend $16 on a cd.

Napster is an evil, evil,
evil, evil place to go.

Standing by live in San mateo
with more details on this story.

This last fall semester wore on.

Hundreds quickly
turned to millions.

With the program spreading.

Across college campuses
like wildfire.

I have never seen the industry.

Under siege like this.

In the 30 years
I've been in this business.

It's very important
that the Internet.

Go the legitimate route
instead of becoming.

A haven for pirates.

You don't think
this is stealing?

Not at all.

'Cause you're just getting
a few songs.

That you find interesting.

The "n" word you know, appeared.

And we had to defend ourselves.

Whether we like it or not,

napster has changed everything.

And the record companies
are sadly behind the curve.

At it's peak,

nearly 60 million people
used the site.

To swap music files
from each other's computers.

For free.

The whole Internet
could be re-architected.

By napster-like technology.

Now sure
is the tip of the iceberg.

I think you're talking about
the proverbial finger.

In the dyke.

Fuck napster!

30 years ago,
the San Francisco symphony.

Released it's music on ips.

Then came cassettes.

And now of course, cds.

But in the very near future,

you may be able
to download their music.

From the Internet.

We met over the Internet
and we knew each other.

For like three or four years
or something.

Before we ever met in person.

Mm-hmm. We met the first time
as a result of napster.

Shawn flew down
from Boston to Virginia.

To meet with some investors.

That I set up
a meeting with.

The doorbell rang, I was
nervous for a brief second.

Kind of like going on a,
like a first date.

Uh, with someone
you're starting a company with.

And uh, and the door opened,
it was fanning.

He looked at me
and he said,

'you look exactly
like I thought you'd look'.

And I said, 'you look exactly.

Like I thought you'd look'.

And he said, 'okay great,

let's go over the presentation.

So we jumped into the power-point.

And went through all the slides,

and then got in
my parents' minivan.

And my dad drove us
to our first investor pitch.

I take issue
with people who say,

'ah, the moment I saw it,

I knew it was gonna be
fucking huge.

And take over the universe'.

They're all lying.
There's no possible way.

No one had that
conceptualization.

In the beginning.

I don't even believe
fanning did.

You're saying that people.

Are gonna download a client,

put a client on their computers.

And they're going to
allow stuff on their hard drive.

To be shared.

Most of the development
of the web,

up until napster,

was basically about.

Information storage
and information retrieval.

It wasn't about connecting
people to people.

We're gonna, like,
download stuff.

From each other?

Like, I was like,

nobody's gonna open up
their hard drive like that.

Nobody's gonna allow.

Their bandwidth to be used.

This sort of comes
onto my radar.

And it's really interesting.

No one is going to share an mp3.

That, that was my quote.

No one's gonna share an mp3.

And...
Boy was I wrong.

I was so wrong.

Our system has been bilked,

this time sharing system
for, for about.

Six months now. Its been
working and in that time,

we've gone from
getting one console.

To getting about
six working now.

With six more due
the rest of spring.

What is Internet anyway?

Internet is uh,

that massive computer network.

The one that's becoming
really big now.

It's a
giant computer network.

Made up, made up of uh,
started it from...

Oh I thought
you were gonna tell us.

What this was?

It's like a computer billboard.

It's not, it's not a,

it's, it's
a computer billboard,

but it's nation-wide
and it's it's several uh,

universities and everything
all joined together...

And others can access it?

And it's
getting bigger and bigger.

All the time.

I wrote a piece back in 1990,

that, that it would
shortly be the case that, that.

Everybody under 20,

at that point, would become
native to a place.

Where everybody over 20
at that point,

would always be an immigrant.

So I was a young teenager
and I ran,

I was running a uh,
running a bbs,

which was um, somewhat
sophomorically titled,

'realm of darkness'.

But online in the bbs era, meant.

Connected to potentially one,

maybe a hundred other people.

Maximum.

And that, that's what was
so profoundly different.

About the explosion
of the Internet.

Was that it was one network.

So suddenly,
you could be connected.

To everyone.

There are now,
a very large number of people.

That are online,
that are young.

And you know, they have
a completely different sense.

Of how the world works.

And what power is and what,

what authority ought to be.

I mean it's a profound shift.

It's the difference between
vertical authority, you know,

God-given physically
enforceable authority.

And horizontal authority.

I've joked in the past,
and fanning and I would be like,

where did you guys meet?

And we were,
we were part of the, you know,

fanning and I were part
of the same underground network.

Of elite cyber criminals.

And it, it's basically true.

We met through irc,

um, as we both got drawn
into irc,

we became more and more
addicted to it.

And more and more
fascinated by it.

Which made us fight much harder.

To retain access to it and then,

you know, over time,

it became our lives.
It took over our lives.

You're talking about
revolutionizing.

The way we use computers.

And how we use the Internet.

Oh absolutely. Absolute...
I mean it, this is, this is the,

what's most interesting
about it,

is you're interacting
with peers.

You're exchanging information
with you know,

the person down the street.

And we're just beginning?

Oh, absolutely.

Sean fanning's one of
the smartest people

I've ever met.

He was teaching himself
how to program.

And he saw this really simple
way to find music.

That he could listen to
on the Internet.

Here was a guy with no clout,
no connections,

19 years old and he really changed
the way we think about the Internet.

It's hard to explain
where things were at back then.

I mean I was 18,
I didn't really,

I hadn't really seen
much of the world.

You know, I didn't really...

Um, I think it was,
I mean the best way to say it.

Is it kind of came from
a very pure place.

I was excited
'cause he was my first.

So I thought, you know,

I really did think
he was gonna conquer the world.

Everybody does
with their first kid, right?

I was born in brockton and uh...

Didn't have
the most stable family.

Uh, you know,
they made their best effort,

but I grew up with a step-dad.

And we ended up
in foster care a couple times.

Brockton was just a, uh,
brockton was just no good.

But uh, huh, yeah.

I mean, I don't want to,

I don't want to
talk to much about like.

Money situation,
but like you know,

we, we grew up.

Like, not too well off you know.

And my mom and dad,
there's five kids.

And my dad was
a delivery driver, you know.

And they did the best
they could, but...

That's when, he got into sports
when we moved down to the cape.

Being into sports,
I think it got his mind.

Um, so that life
was a little easier for him.

I think music helped him too,
like sports.

Every time he was
on the computer,

he had the radio there.

See what I mean, like he was
always listening to music.

So uh, there's really no
surprise there.

That he-he-he ended up,

in, you know,
thinking of something.

That made sense to him.

As far as um,

the music and
the computer combined.

I was fortunate to have an Uncle.

Who was into technology.

And gave me my first computer.

There's a,
there's a lot of insecurity.

That comes around being.

Uh, dependent on others.

You know, to get by
and so as a kid,

it sort of influenced.

My social uh,
confidence at school.

We moved around a lot.

Um, there was also kind of a,

I didn't feel as connected
to my family, intellectually.

And so, um, I didn't really have.

Many others at school either
on that front.

So I was sort of,
feeling a little bit uh, lost.

And displaced at times.

Going online and finding people.

Who had the same interests.

Or I could learn from
and where there was no,

your reputation
was your own.

It was not about like,
you know the,

how well off
your family was,

or how well
you dressed.

Um, or how well you spoke
or body language.

It was about the merit
of what you were saying.

And I think that...

For me, was just intoxicating.

In the early days of the web,
you know.

The first time I ever saw music.

That was down-loadable.

Was a song that I put up
on my homepage.

On campus Internet.
It was an mp2 file.

I guess that would
have been '93,

around that time.

And there were very few
people out there.

Because you're changing
it into another file format.

Or have a special card
to play it.

For anyone who had been
downloading stuff.

It was such
a colossal pain in the ass.

It's not funny.

Uh, even for technical people,

it was uh, a process.

And, and a constant,

like trying to get
bits and pieces of files.

And reconnect them all together.

And that was kind of
a pain in the ass.

You know, 1998,
was when it really felt like.

Okay, this is real.

This is the way I'm going
to listen to music.

It became clear
that the computer.

Was going to be the place.

That we would store our music.

Then you started looking
for tools to get the music.

Into the computer,
tools to play it back,

tools to manage it.

I remember the first mp3
I ever downloaded.

I remember the first time
I ever, you know...

Basically, ever played
a track from the Internet.

And I remember just thinking,

even though
it's just information.

It's just audio, there's such
a crazy amount of emotion.

The fact that you could.

Kind of share emotion
over the Internet,

was so, it was really wild
to think that...

Something so important to you,

you could just trade so freely.

So I think it was um...

You know, it's,
it's hard to quantify.

How important it was.

I was a freshman.

At northeastern university
in Boston.

One of my roommates
was into mp3s.

Yeah, he would skip class
and sit home.

And download music
and he was always complaining.

About how unreliable
the technology was.

Where was his,
what were his favorite bands?

I don't know. He listened to
a lot of really weird stuff.

I had very incompatible
tastes with him.

But, um...

Like every roommate in college.

Yeah, which, it, that's why
it was a struggle.

I didn't want to make it
any easier.

For him to find that music.

But no and he, you know,
he was complaining a lot.

And that sort of signaled
me that.

There was a potential uh,
there's a problem.

That could be solved
and I just looked into it.

And um, came up
with the solution,

which ultimately.

Became napster.

It felt like, you know,
this way of sharing media.

Between people.

Could be used
for sharing anything.

We started with music,
but it made sense.

That it could work
for anything else.

It also felt like...

This whole model for
sharing media.

Was superior to like,

going and buying an album.

Being able to uh, both... um...

Buy tracks as singles.

Or share them with your friends.

And find stuff
your friends like,

uh, and then being able to uh,
you know...

Basically, to have access
to the entire universe.

Of recorded music.

Where independent creators.

Could publish directly.

It just seemed from every,
in every way,

it seemed like a better system.

So, I would spend
a weekend working on it.

You know, every time
I had to go back to school,

I'd kind of drag myself back.

Two days would become
three days.

I'd miss a day of classes,

I'd miss two days of classes.

It was just becoming
more and more difficult.

For me to get myself
back to school.

With any enthusiasm.

My cousin was actually
driving me back to school.

And when I got there,
I thought about it.

And finally realized.

Just what a sense
of relief I had.

When I thought about the idea of
just, just leaving.

And that was the last time
I really ever came close.

To the campus.
Didn't pick up any of my stuff.

Didn't tell my, my roommates.

Just, just went back
and I remember just feeling.

So excited.

He came in and he was just like,

I need to talk to you guys,
it's really important.

And I go, okay,
Shawn and so he came in.

And uh, he says, uh...

You're not going to be
happy about this.

And he was looking at me
and I'm like what?

And he was like, '
I'm gonna drop out of school'.

And I said, 'oh no!'

why would you do that?

And he's, you don't understand.

I have this idea,
I have to go with it now.

I have to do it now.
It's now or never.

I feel like this is
the time for me to do it.

And I don't think
you'll be disappointed.

I actually spent time working.

In hole, Massachusetts,
which is about 45 minutes

South of Boston.

Um, just, this
converted restaurant.

Like three desks in the place.

I just sat there
and worked on it.

Ummm...

For a few months
until it was actually.

Building a user base.

I remember I got to go up
and hang out with him.

And he'd be like pizza
was everywhere, and...

He was just jamming out
to led zeppelin.

He'd like sleep at the office,
on the floor.

He'd like, he never
left his computer, you know.

Its not hyperbole,
it was an actual closet.

I think he might have some pride.

Or just want something more,
but for me,

it was, I was having so much fun
building it,

I just didn't care.

You know, I get occasionally.

A little bit uncomfortable
when people would show up.

And you'd be crawling out of,
you know,

your sleeping bag.

So fanning had written
his version one.

And being not
professionally trained,

uh, not trained at all...

Uh, and just, just having
his ideas and ah,

here's a computer
and this wonder for learning.

And for for absorbing, uh,

we'll just go and try
and make it work.

And it didn't work. Like every,
everyone's first hello world program.

His was file sharing stuff.

Didn't work,
so listen to the group for help.

And I was there.

At the start was
pretty much myself.

And a lot of people online
that were helping out.

Just to make it work.

Helping fix problems,
stuff like that.

He sort of asked, hey, how,

this thing keeps crashing.
What do you think?

But unlike anyone else,

he wouldn't let us
see the source code.

I was like, oh really?

Well that sounds
like it's probably.

A... a buffer overrun or an
unchecked battery condition.

Or something like that.

And show, show us the code
and we'll fix it for you.

And he was like, no.

Okay. This was kind of cool
because.

It came out as a challenge.

It's like,
I'm not going to tell you,

but I'm going to keep soliciting
for help.

So, we're all hackers.
This is what we do.

We, you know,

establish commercial vendor x.

Does not want to share
anything with us.

Yet, we are going
to find a way in.

Just the idea that
we were gonna build.

The first decentralized
file system.

I think the patent, actually,
the napster patent.

Uses this terminology.

You talk about a
distributed file system.

Since 1998.

We've been discussing it
with various different people.

In our community
and we've been told.

By a lot of, you know,
pretty experienced.

Technical minds.

That the technical challenge
associated.

With a decentralized file system.

Was actually too difficult.

It was believed
that this wouldn't scale.

He would load up this app
and it would basically.

Connect to one of our servers.

And ask for a napster server.

That would be accessible.

In like the lowest
possible load.

Allowing you to search the uh...

File names to find,
you know, what, whatever.

You know, noncommercial
uh, legal, legal music...

Uh, was available.

But you would basically
have a, a chance.

To kind of search all,
some of all those files.

That were out there, that once
you've decided you wanted one,

it would actually, um,
facilitate the connection,

would happen directly to that,
'that um, that source.

It's funny that a lot of the
file sharing technologies.

Are stressed when people
talk about napster.

But as I said, I mean
Sean and I met through irc,

which is like a chat community,
you know,

a chat based community.
And that's a huge part.

Of like why
we created it as well.

You know,
just wanted to create a way.

To meet people through music.

Sometimes that's overlooked
and yeah,

I think that you know,
what we're providing.

Is just a way
for people to share.

Their personal material
and meet people.

With similar interests
and communicate with them.

That's exactly how people
discover music.

In the first place. You know,

you find out about music
from your friends.

Who maybe listen.

To something similar
to what you listen to.

And they turn you on to
something completely new.

You go out and buy the cd.

That's how people
experience music.

And that's a big part
of the experience.

But this was the first time
I know of,

in mainstream history,

where people had a social life
online.

And then after napster went down
a few years later,

started hearing
about friendster.

MySpace and then of course,
Facebook and all that.

But, but um, everyone
just thinks of it.

As being the file sharing
technology,

but I really think
that it was the seed.

Of that stuff too.

We were basically, you know,

trying to create a platform.

That would allow music
to be shared.

More widely uh,

on a larger scale
than ever before.

That would um...

That would galvanize
enormous excitement.

Would, it would re-energize,

re-energize the conversation
about music.

And, and ultimately
that would lead.

To a golden age of music.

We knew it was a long way off.

From all the music
being available digitally.

I mean you opened up napster
and there it was.

Its difficult to
describe to people.

Who weren't experiencing
at that time,

how much material
was suddenly available.

I mean there has
never been a time.

Before or since that you could,
you could get.

As many different things online.

And experiences,
many different kinds of music.

And of course,
what people forget is,

what was interesting was not
that they could get.

The latest Madonna album
for free.

It's that they could get
all different versions.

Of recordings of
particular music.

From all the way back
to the beginning of recording.

Available in
this library-like forum.

The vast majority of which,

was not accessible
commercially at all.

And you know,
I just felt like this was,

this was one of the
great moments.

In human history.

And I still do.

But of course, uh, great moments
in human history.

Usually have uh...

An opposition.

And it is exactly
uh, proportional.

To their greatness.

So it was in LA,
it was the four seasons hotel.

It was all of the
top label heads.

And a lot of them knew
that we'd filed a lawsuit.

Against this kind of
rogue website,

but not too many of them
were paying attention.

To what it was.

So I set up a computer
and I said,

'okay, you know,
Tommy what's your, you know,

give me your latest single,
or Michelle,

what's your latest single,
you know.

Richard, give me
your latest single.

Literally, it, we played
like stump the napster.

And it was,

it was quite a sight.

All the heads
of all these record labels.

Freaking out.

That a lot of pre-releases even,

were, were on there.

Um, I would say,

that was a pretty big
aha moment.

We saw the clicks of the numbers.

And that's what they
were downloading.

At that particular time.

That was shocking.

Not that it wasn't
happening before,

and not that we were naive.

But we actually saw it.

And that was startling.

For all of us that were
at that meeting that day.

If some day soon
you can store.

Your whole music collection.

On your hard drive,
instead of your shelves,

what's going to happen
to record stores?

I thought that the way
that people got music.

For the last 50 years worked.

You went to the record shop,
you bought a record,

you took it home
and you played it.

You loved it.

You went and seen the guys live,

everybody lived
happily ever after.

There are no record stores
anymore.

Or hardly any, you know.

Amoeba on the west coast.

And there's a few,
a few in england.

But it's gone.

I mean I, I never thought
I'd live to see that.

Great stores like tower music
are gone.

This business seems
like it survives.

On a lot of older albums
and reselling of that,

so, this one, we definitely saw.

New cds and new albums not
being bought as much,

but the bigger stores,
it totally destroyed them.

'Cause no one wanted to go
to the store anymore.

They can just get it
on their computer.

Or punch in whatever
thing they want.

I mean even iTunes now.

Is destroying
the music industry.

'Cause of that, people can buy
the song they want.

And listen to it for one time
and that's it.

It is now the number one record
in America...

The fifties
was a singles business.

The sixties, mid-sixties
is when the albums really.

Started to be important.

And before that...

A, a hit single, to an artist
was free promotion.

They did, it wasn't, it wasn't.

A source of revenue.

The source of revenue
came from the fact that.

If they had a hit, the could get.

A couple of thousand dollars
a night, more.

Good morning, this is Ron Lundy,

how you doing
on a Friday morning.

In the greatest city
in the world.

Little manischewitz.

From my perspective, uh,

I believe that the point
of labels is to,

in a sense,

act as a filter.

In that regard, if Blue note
had signed an artist,

you would feel,
well that was an artist.

Worth listening to.

Because it was on Blue note.

And they made great records.

All these major labels,

the ones that existed
and the ones that still exist,

were started as
phonograph companies.

Rca Victor was.

The Victor talking machine
company.

Emi was the gramophone company.

Columbia was
the Columbia phonograph company.

And then when rock-n-roll
and ips.

Spurred the sales of vinyl,
they figured.

They didn't need
to make furniture anymore.

Which was what they referred
to it as.

Technology's been
very beneficial.

To the record companies.

Before.

78s, when 78s
became 33 and a thirds,

you could sell
all your music again.

When they became cds,

you could sell all
your music again.

When the cd was first initiated,

it was a true boom
at that particular point.

The eighties were
a very, very fertile period.

For giant music sales.

Not as much as when
we got to the nineties,

which it was commonplace.

To sell 10 or
15 or 20 million albums.

You know, the record companies,
in the '80s.

Had sort of uh, eliminated
their technology departments.

Their engineers,
and pretty much seeded it.

To the electronics industry.

All of a sudden, technology.

And how music was
gonna be recorded.

Went somewhere else.

It was sorta,
kinda the beginning.

Of the corporatization
more of America.

A&m was getting acquired,
island was getting acquired.

A lot of the great labels.

That were independently owned
were falling away.

And getting put
into the landscape.

Of the corporations.

Once you had cds came out,

where then in a digital world.

Where the copy is as good
as the master.

And it's amazing.

That they didn't recognize.

That there was going to be
a huge change.

I think it came back
and hit them with a,

with a wallop, you know.

Um, with the Internet.

The mp3, digital music
for the quick download.

Is probably the
most substantive change.

In music since maybe
the advent of digitalized music.

Or the compact disc,
or maybe even the ip.

It has changed everything.

Music is nothing but.

Algorithmic processes right now.

Every time you encode it,

you put it through an algorithm,

you put an envelope around it,

you zip it up, and that's it.

This is the first time
technology.

Actually attacked
the existing system.

And started to take it away.

The music industry
was fairly constrained.

For you know, 75 to, you know,

maybe even 100 years
in terms of like,

how music was
found, sourced, developed,

created, distributed,
marketed, promoted.

Uh, and it was a fairly
locked you know,

paradigm and uh,
napster created an Avenue.

For consumers to step
out of that.

Which was superior
in almost every way.

Um, you know, it offered,
you know,

greater convenience, obviously.

A much improved price,
choice, you know.

All of these things really
conspired to you know uh,

produce an amazing
consumer experience.

Welcome to valley
of the dollars.

The valley and
the entire bay area, in fact,

are at the center
of a revolution...

This was the you know, uh,
height of the bubble.

Uh, in the valley, you know,

uh, in, in the bay area
and in San Francisco,

um, there was a euphoric amount
of optimism.

Anywhere that you went,
um, people were happy.

Because everybody thought.

That they were
gonna be filthy rich.

Whether they were
involved in a startup.

Or not, um, it, there was,
it was a magical time.

You thought
you would be filthy rich.

I actually never did.

Oh come on.

Uh, I actually never did,
but anyway...

Okay, sorry. It's your story.

So basically, you, you know...

You would, you would uh,

that really wrecked everything.

Sorry.

You can start over.

Yeah, let me start over.

So uh...

Did you pass around fliers
at, on campus, or...?

No, it was completely
word of mouth, it was...

I think we spread it initially
through irc,

which is Internet relay chat.

Its basically
a network of people.

Who just sort of congregate.

Around different ideas and.

We started
a little napster community.

And they just
sort of spread the idea.

It started spreading
through you know,

college, you know,
universities and,

the first point at which
it started to really take.

Was, there was
a, an article published.

It was one of these
Internet news sites,

it might have been zd net.

And you know they touched.

On the legal issues,
but we weren't sued at the time,

we were still
working in Massachusetts.

And uh,
that spurred a huge response.

Of downloads.

Before that, it was, getting
a good response.

And it was spreading somewhat,

but um, that kind of
kicked off the whole.

You know, period of insanity.

With the,
the business side of it,

we eventually took money.

From John fanning's friend,
yosiamo.

Sean Parker and I moved out
to northern California.

You know, we uh,
hired some people.

And it became a company.

At the beginning,

it was just like
Parker and Shawn.

And he surrounded himself.

With a bunch of friends
from cape.

And they were
all good at computers.

And they're just all you know,
it was just like.

Basically having
a bunch of teenagers.

In one place.

It was pretty cool.

The first time that I typed
a search term into napster.

And saw the results came back,

I think it was
the rolling stones.

Uh, and I kind of pushed back
from the desk.

And I was just like, whoa,
like what just happened?

Back in '99, over dial up,

shitty browsers,

web pages taking
seconds to load,

here was
a fucking fast ap.

That's what took me
from typing to submit,

to phhht!

What happened after that?

Web pages were not doing
that at that time.

And you talk about
my attraction to it and,

and moving from Chicago
to the bay area,

kind of on a dime
because you know,

of what I saw in the technology,

I think you could probably,
to a man,

go through the early people
that were there.

And they were drawn to it,

almost like a tractor being...

Because it was
this emotionally true thing.

So distracted, you had to leave.

Right, whatever you
were doing right there,

you just left. I mean a
lot of early employees were,

it's like, you did, undid
what and what and what?

And changed all these things,
in your life and...

We lived together in San mateo
in a small apartment at first.

Like I said, he was bringing.

When they first got out there,
they didn't have like.

Apartment stuff, so
it was just kind of like.

An Irish flop house,
you know.

Like a bunch of people
sleeping on, you know,

blow up mattresses
and things like that.

And you know.

Fanning and Parker
were both trying.

To explain to me
what napster was.

I never used it,
never downloaded.

And at the time,

there were about

30 to 40 thousand
registered users,

so it wasn't that big.

After asking
a million questions,

and, and hearing
from both of them...

Music will be ubiquitous.

You know, you'll be able
to get it on your cell phone,

you'll be able to get
it on your stereo,

you'll be able to get it on.

Whatever the device
of the future is.

And you'll be able to,

I think people are willing
to pay for convenience.

I had the 'aha' moment.

And I knew
at that moment, that...

It was gonna be.
It was gonna be huge.

There was no doubt in my mind.

And it was a matter of...

Could we...

And-and-and then I started.

To change the language
I was using.

Could we, keep the servers up?

Could, could we
make this thing scale?

The area where we were
in desperate need of help,

which was making
the servers scale,

to support all the people
who wanted to use it.

Was his weak spot
as well,

so he and Jordan worked
pretty closely together.

What I remember most
about that time.

Is sleeping under our desks.

The loud music.

It was all about making small,
incremental wins.

With the code and
with the technology.

It was...

It was a rocky few months.

But every time
we had a little win,

it was a big party.

The night Ali and I figured out.

Some seriously awesome stuff,

uh, one of the capacity
limits we had.

Was the ability to index.

More than a million files
per server.

So four to eight thousand users.

Could go on the server,

uh, before the operating system,

which was linux, at the time,

would drop to it's knees.

It was an amazing night
because we got it working.

It was probably on the tail end.

Of one of our
two to three day stints.

Our, our binges,
and maybe, it was,

it must have been
after midnight.

And Ali and I
were just thrilled.

We put on shades,
he put on his hat backwards.

And, and I was,
I got up on the table.

And I'm like ooh-ooh-ooh
and he was like.

This is this amazing
celebratory moment.

And there was one picture
in particular,

where we labeled it
one million files!

Yeah, we had those kinds
of moments all the time.

By, I would say,
by December of '99,

we, we kind of nailed it.

By then there was a bunch of
really technical stuff.

That we did, that caused it to
be able to scale.

And it was just a matter
of adding as many machines.

As we could at that point.

Just in terms of
the amount of awareness.

And exposure that the work.

We were associated with um,
gained was meteoric.

So in like a
four or five month span,

it went from
30,000 registered users.

To over 20 million.

Total users count now,

I think we just recently
passed 20 million users.

Aol has 23 million.

Even as it really blew up,
I know on the,

on the engineering side.

We're watching
these numbers go up,

the simultaneous users
go up and up and up.

And then there's more and more
press coverage.

But it's still a small company.

In a bank building and uh,
I think some people.

Had a better
understanding of kind of,

the significance of what
was going on than others,

but day to day it was very hard
to comprehend.

It was one of the first times
in history.

Where you had this sort of
pure youth revolution.

Young, inexperienced, relatively
unsophisticated, but smart kids.

Could create something
entirely out of nowhere.

And revolutionize
an industry that they frankly,

knew nothing about.

And had
no relationships in.

And this all happened,
this you know,

I, I think probably
six months passed,

uh, before we ever.

Had a conversation.

With anyone.

In the, from the music industry.

And it wasn't, it wasn't
because we didn't want.

To have a conversation
with anyone.

In the music industry,
we just didn't know anyone.

In the music industry.

That there are so many wins
with digital distribution.

That ultimately, you know,
once we have.

The opportunity
to work with artists.

And work with the labels.

To discuss, you know,
what models are viable.

And what are not,
we can come to a conclusion.

And find a good model
that works.

There was this,
this moment in time.

When you had someone
like Shawn fanning.

Who had the idea,
um, was smart enough.

To build it, but didn't know
enough about the industry.

To know that it was
just an impossibility.

Right, just not something
that was ever gonna fly.

Um, but then at a time
when you could get.

Tens of millions of dollars
in venture capital,

to back something
which is clearly.

Copyright infringement.

Right? That was
the amazing thing.

You know, I remember
being in irc with Shawn.

Once upon a time and
him telling me, you know,

we're raising
70 million dollars.

And my response to him,

I couldn't type it fast enough,

was don't take the money.

You don't have a business.

You know, this is,
you cannot build a business.

On copyright infringement.

Napster was operating
in a legal gray area.

And this very
important law, the dmca,

which was an amendment
to the copyright act,

set up a series of safe harbors.

For uh, different technology
providers and.

Telecommunication providers.

To immunize them
against lawsuits.

From the content industry.

I believed pretty firmly,

and still believe to this day,

had it, had, had napster
been fully legislated.

At that moment,
that we would have qualified.

For I think it was safe harbor,

I want to sway
it was safe harbor d,

which provided protection
for indexes.

Like yahoo and alta vista.

From the very beginning uh,

like anyone who
looked at napster,

you were concerned
about the rights issues.

And I knew Jeff berg at icm.

Which at the time
was one of the biggest agencies.

In Hollywood.

And I called up and said,
hey Jeff,

there's an awesome company
up here,

it's quite disruptive.

Can you go gather up.

Some of the music lawyers?

So we went down
and had this meeting.

I remember mo ostin was there,
or mo ostin's lawyer.

And a couple of other people.

So we ran in there
and said, hey,

we need to come
to an agreement here.

It should be easy because.

You're not going
to stop technology.

Um, and tell us
what you want us to do.

We want to cooperate.

And um, and guess what?

Nobody really cooperated.
And it never got resolved.

It's still not resolved,
it's 12 years later.

And that's pretty pathetic.

Ultimately, we were gonna
have to figure out.

A revenue model.

And when, by the time
we started talking.

To the labels,
we were more than happy.

To turn the whole thing over
to the labels.

And basically,
become their digital music.

Distribution service.

We always wanted that.

I recall we contacted them.

And started having conversations.

And we had serious conversations.

In about September.

Of 1999.

Explaining that there
was a problem here.

And they needed licenses,
but it would, it would be.

Great for them to be talking
with the companies.

About licenses
and so on and so forth.

And when it became clear
that they were just.

Stringing us along
and they really had no.

Intention of actually
negotiating licenses,

we filed a lawsuit in December.

We're being charged
with con-con...

Contributory...

Contributory and vicarious
infringement,

or something to that effect.

Basically saying that
since you know about it,

you guys should be held liable.

They're claiming that we did,

but we can't really
discuss anything...

And yeah, did we know?
Yeah, we knew.

But...

We also knew that...

This thing called
the Internet existed.

And it was new.

And as it evolved,

these things were
going to start to happen.

And things were gonna
have to change.

And the way in which
the world worked.

Was gonna have to change.

And we were just
the catalysts in that.

When Indiana university
banned napster,

student Chad paulsen
put up a website in protest.

Within weeks, over
13,000 students.

Had joined paulsen
in his effort to free napster.

It's not really necessarily
napster itself,

it's the software and the
ideals behind the program.

It's like going to a rock
concert, you know, just.

Listen to a new bands,

listen to up and coming music.

And Indiana university
is just shutting it down.

I u and many universities
nation-wide,

maintain that they
banned napster.

Because it put an
enormous strain.

On their Internet connection.

What's up man,
I'm with mtv news.

I was wondering if you had
any mp3s on your computer?

So uh, how many mp3s
do you have on your computer?

About 600.

Maybe like a hundred
or something.

Uh, six or seven thousand.

Come again?

Six or seven thousand.

- For real?
- Yeah.

How many mp3s
you have on your computer?

Uh, probably like 300.

For real,
where'd you get them from?

Uh, truthfully, most of them
from napster.

Are you a pirate?

Well, I don't know.
My roommate does the whole.

Computer thing.
Margaret are you a pirate?

What we had was basically
a nuts and bolts capacity issue.

Our Internet connection
to the outside world.

Was being taken up nearly 61%
by users of napsters.

On, napster on campus.

So, we had to
decrease that significantly,

or we had to ban it.

It very much felt like
now everyone was coming.

To grips with the fact
that this is something that.

They're going to
have to deal with.

I think at first,
they were trying to...

You know, they were really
trying to be like no.

This is just not
going to happen.

But now it's obviously so big,
it's out of their control.

For the first time,
the audience has gotten.

To the technology
before the industry.

Before the music business.

Why are
the record companies afraid?

The record companies are afraid.

Because they'll be
forced to share.

File sharing and this
whole new notion of people.

Getting music through the
Internet, the downloadable.

Distribution, to me,
I look at it as the new radio.

I mean we care very much
about artists.

And so we think that there
is a solution to there's,

you know, a way that the
technology can be adapted.

To-to-to benefit you know,
all of the, the parties.

Involved. The artists,
the industry and the users.

We think right now,
it's definitely a viable system.

For all three and we think it,
you know, it can be.

Modified and can be improved
to be, you know,

even more valuable.

You know, there were these,
these iconic artists.

Who we'd grown up idolizing.

Some of whom wanted to kill us.

And some of whom,
thought we were the, the answer.

I'm all for technology.

And it's interesting,
the exchange of music,

but the way that it's set up.

Right now,
it's theft,

basically. Pure and simple.

I'm bootleg proof, you dig.

I, I got people that you know,
go around the world.

You know,
smashing on stuff like that.

You heard about
the I love you virus?

My peoples have something
to do with that.

I mean I can just do that to them
if I have to maybe.

I think this aspect
of technology.

Is really gonna bring uh,
a lot of different angles of.

Life and commerciality
out of to the corporate world.

And give it back
to the individual.

Just give the fans the music.

You know what I'm saying?

Uh, the Internet is
just a way for you to just...

Go right into it and
you give it to the fans.

It's great, isn't it?

Isn't that good? Isn't it?

Napster is, is bull.

Is that that Internet site?

That's where there's the, the...

Trading of music.

We don't, we don't really know
enough about that,

so we can't really,
not really into computers.

It's bringing true democracy.

Back into the music business.

And it's changed,
it's forcing the artists.

To change the way
that we relate to the consumer.

A musician goes out there
and works hard.

And pays their dues.
Why would you expect them.

To work for free.

There's no doubt, uh, in my mind.

That the, the future
of music is free.

To stop fans from
trading music on the Internet.

Even if it's not through
a company or a website,

fans are gonna trade
music on their own.

There's no stopping it.

You know, that,
this revolution is,

is already taking place.

It's now, this is now
and we accept it and we get it.

And we're gonna grow with it.

And it's just another
addition to technology.

And I'm a technology freak.

What do you say
to the artists that are so,

you know, just so loving
it the, the new guy,

the, like
the Fred dursts of the world,

who just they think it's
the greatest thing for music?

Um, well
he's a moron to start with.

Okay, alright.

What more needs to be said
about that?

Nothing else, I guess.

We get a lot of bands who,
who send us email.

And say, you know,
we've been, we put our music.

Up on napster, we,
we started sharing it and now.

You know, we, we see a hundred
other people that.

Have it, they're listening to it
and eventually.

That translates into more people
at their shows,

selling more cds.

There were so many
success stories,

dispatch was a great one
because they were,

you know, a band and
they were touring.

And their cds weren't for sale.

And some of these places
they were playing.

For the first time.

I think the first time I
ever yeah, the name napster.

Was backstage
after a college gig.

Where we'd played
Boston and New York

I bet for five or six years.

Just over and
over and over again.

Had finally built up
our fan base.

To like 500 people a night.

Or 700 people a night
and then we flew a red eye.

To play a college gig
in California.

Halloween gig, or something.

Had never been west, ever.

And then there were
more fans there.

And they knew all the lyrics.

- It was...
- Yeah.

And there was no, no radio.

And no press and no one knew
except everyone.

Yeah, it's kind of like uh,
instant distribution.

You know, without the,
without the big wigs on top.

Figuring out it's like this.

But it's not like
we don't like big wigs,

'cause I've seen
you wear big wigs.

I'm wearing
a big wig at the moment.

Its a huge wig.

So for an independent band,

with no uh, ties to any
label.

To get to that scale just by
free sharing,

it was pretty clear
that it was um,

pretty powerful and they
were really open about.

The gratitude for that.

Napster was absolutely the,
the most well known.

And most chatted-about
company.

In the tech world by far.

It was pretty cool
working at napster.

Like if you showed up, you were
kind of the star of the party.

All you need was a napster
you know, sticker.

And you were probably
gonna either get.

A free drink or, or get laid.

Uh, one of the two,
so it was actually.

A pretty awesome time
to be associated

Ron has a party
on a Friday night.

We learned that day.

That hummer winblad
had invested.

We had a large gathering.

For our limited partners in.

The angel investor ip funds.

You had Warren buffet,
Dana carvey,

mark andriessen,

schwarzenneger's,
schwarzenneger's hummer.

Schwarzenneger's hummer.

You had Shawn fanning,
Sean Parker

Larry and sergey of Google fame.

Not then, but now, Google fame.

And uh, I can remember
you know, how, how taken.

The Google guys were
by the napster guys,

so to speak.
And I can remember thinking.

You know, good luck
with that search engine thing.

I hope that works out for you.

They actually said
at one point like uh,

something to the effect of
how they were envious of.

The napster brand
and how it's so cool.

And I'm like, but you guys
are you know, doing great.

And they said, 'no,
but it's nothing like napster.

And I'm thinking,
in my head like uh,

you have no idea.

You have no idea.

We actually didn't imagine that,
that what they would.

Do was total shutdown.

We figured, like we as naive
technology guys.

Went this is really cool.

So the music business.

Is gonna try to find some sort
of business model.

Around this, right?

Wow, downloading music
for free is awesome!

What the hell is that?

I don't know, let me check.

Freeze, f-b-I!

Down on the ground!
Down on the ground!

Hands, let me see those hands!

My initial resistance
to the new services.

Created on line was based
on the debate.

Having been framed
in terms of piracy.

Being labeled as such
by the record companies,

it understandably sent
a ripple effect of panic.

Throughout the
artistic community.

They thought we just
had some big hard drive.

Full of music.

And we were just you know,
pirating everything.

Like as if we'd gone and

as if we'd sat there
and put cds and.

Ripped them for months and months
and months and months and then.

Lo and behold,
we had the entire library of all.

Recorded music and
we were giving it away.

Our users are exchanging
content um, and we.

We at napster
never come in contact.

With any of the music
that people are, are,

are distributing.
So...

And not only that,
but we're also fully compliant.

The digital millennium
copyright act,

which requires us to
remove infringement links.

When recording to us.

We were used to piracy,

but there was a quick remedy.

The r-I, double a.

Recording industry
association of America.

Would get in touch with the FBI,
they'd do a raid,

they'd take it and then
four blocks later,

they'd go set up again.

So we dealt with, with piracy.

But it was piracy
in the hundreds.

Or the thousands.

It wasn't piracy in the millions.

And tens of millions
and ultimately, billions.

That's scary.

This is a company
that is building a business.

You know, they've got
venture capital money.

They're out on wall street,
looking for financing.

This isn't, you know,
just a, a sweet, young guy,

who's looking for some fun
in his college dorm room.

They're building a business.

By facilitating the stealing
of artists' music.

A lot of the uncertainty,
I think uh, the, I'm sure,

plenty of lawyers and others,
all kind of put the,

the industry in a place
where it felt like.

It needed some protection
or some control,

to at least exert control
long enough to figure out.

What to make of this and
play it safe and I think.

Unfortunately,
that led to the missing.

Of really big opportunity.

I can get that the labels
were afraid,

it was so new, it was so fast,

that, and, and they
have control issues.

With legal agreements
and this thing.

Was like a hacker.

It was, you,

there are no nation
state boundaries.

On the Internet.

Right? You can't,

laws don't really apply to them.

Unless you can find them.

For me, it was not about
piracy and consumers.

Stealing
intellectual property right.

For me, it was like
how great must music be.

That these people
are coming together.

And sharing
their taste of music.

And the press about
napster was controversial.

And misleading.

It was all about control, power.

And how can we protect
our existing.

Business model.

I think napster
had 60 million customers.

Uh, or people you know,
which were...

Getting their music
through napster.

And uh, that seemed
like an incredible opportunity.

But because the major eight
record labels were.

Unable to come to any terms
with them,

they essentially burned it,
burned it down.

I think like any,
anything in the world,

those big innovations
rarely come from.

The big companies that are
already dominating.

That game. Because it's not
in their interest.

To completely reinvent
what they're doing there,

so they become actually,
very complacent.

The music business is a great,
great example.

Of, of that.
Of just complacency being.

A total uh, death sentence.

The five global heads
of the companies at the time.

Most likely, couldn't agree.

That today was Wednesday.

And for different reasons.
People had different ideas.

People had different visions.

And no one was used to this.

And the word ambush
happened a lot of times.

In the conversations that
we had with everybody.

The record business
was kind of ambushed.

However we want to look at it.

And you gotta deal
with an ambush.

You dealt with pearl harbor,

you gotta deal with it, right?

There was no awareness.

That something like
this was coming.

Uh, even though uh,
a lot of the technology.

Of the Internet is
actually based on.

Peer to peer functionality.

It had never been
used in this way.

This was something
entirely different.

This was all the
content in one place.

It was an amazing experience
and everything was up there.

Everything.

But things change.

And you gotta change with it.

And to stick your feet
in the mud when the world.

Is tearing by you
like a bullet train,

is just laughable.

And you get real old, real fast.

And you got into the,
kind of the, the bin.

In about one, one year,

you're like yesterday's news.

'Cause you didn't keep up.

Some of those labels
got caught out there.

Some of the artists got
caught out there.

'Cause they have an
older school look.

At the music industry.

From the moment that
Hank came in,

he was looking at making
deals and he did.

Everything but turn
cartwheels on

Hollywood boulevard in
order to get them.

I think it was, you know,

we will not negotiate
with terrorists.

You know and I think, you know,
that's literally.

How they perceived napster.

And I think you know,
in most things,

um, you know, you need a hero.

And before you can find you
know, that hero,

you need to clearly
identify the villain.

And we were that.

All of a sudden, one day

I got a call from cliff
Bernstein saying,

they're playing I disappear.

On 30 radio stations.

I go, how can that be possible?

We haven't even finished it yet?

And then we sort of, you know,
looked into it.

And traced it back to some
company called napster.

And we were like, huh?

It went straight downhill from
there, boys and girls.

The moment, the
quintessential moment.

Where I knew it was
out of control.

Was uh, when metallica
delivered napster.

User names for us to block.

The heavy metal band, metallica.

Has been most vocal in it's
opposition to napster.

And drummer, Lars ulrich.

Even plans on delivering a
truckload of paper.

To the company, listing people.

Who use it's software to share
unauthorized mp3s.

Thus, kicking off
metallica's much-hyped,

monsters of miniae filled
legal battles tour.

We could, we couldn't
believe how, you know,

what, what, how,
how crazy this was.

You know, metallica was
coming to our office.

To deliver boxes full of,

I think it was like 260,000
names of infringing users.

Who were violating
metallica's copyright.

Uh, they could have put it,

on, on a old three and a half
inch floppy disc.

But no, nope.

They printed them all out
on paper and not,

what metallica has done is harvest
user names from the Internet.

And from the napster site. Now
anybody can get that.

It doesn't necessary uh,
correlate to uh,

to actual legal names of
napster users.

They simply downloaded anyone.

Who has a metallica
song available.

On the napster site.

There you go.

Now, once again,

we're not going after these
people specifically.

What we're merely doing,
is giving napster.

The information that
they thought.

That we couldn't gather.

Which is basically, real people.

Downloading metallica
master songs.

Not bootleg live recordings.

What will they do?

I think maybe if we could get
the napster people out there,

they could take that question.

Do not go anywhere near the
front of the office.

Because it's gonna be, you know,

and uh, we were like
opening the windows,

trying to look out to see
what was going on.

Finally, Shawn and Sean are
like, this is done.

And fanning and I
decided at one point,

just prior to Lars arriving,

that we would sneak out the back
door of the office.

And run across the
street and watch.

Just watch this whole spectacle.

And we were like just laughing,
hysterically.

There's a podium set up
on the sidewalk.

I mean 25 Mikes from
news organizations.

To get the pearls of wisdom.

And views of Lars ulrich,

who then takes a few questions,
but you know,

he's got to actually deliver
the names and so,

there we are, uh, Bonnie and
Clyde, in the elevator,

uh, where if you had a shot of
it, the doors closed.

And it's Howard king
and Lars ulrich.

And a couple other thugs.

And the doors closed and Lars
turns to us and says,

'hey guys, nothing personal'.

At which point, the door was
open to be like,

well why didn't we talk to
each other about this?

I'm sure it's not the
end of the story,

well I think he probably assumed.

That he'd walk into a dark,
expansive room.

And you'd be, you know, sitting
in a chair with like.

A, a cat. Do you know
what I mean?

With like TV
monitors in the back.

And I mean the reality
was you know,

that this was a really low rent,
shitty office building.

With a bunch of kids
running around in it.

And I'm sure he was blown away.

But I will tell you that a
few minutes ago,

when I dropped off all the names
that they asked for.

Uh, I met two really nice
guys up there uh,

I put a human face to this
whole thing napster.

And we had a very civil, very
cordial conversation.

For ten, 15 minutes. They
said their side,

I said my side.

And it's sort of like the
ultimate thing.

In just American society, agree,
disagree.

Coming from two different
points of view.

But you know, what, to me,
napster keep trying to do,

is try to sort of you know,
drag it out.

And make it about
metallica and their fans.

Or make it you know, why didn't
Lars call us personally?

Come on, you know, like let's
stop bullshitting.

Each other here.

I think it's about the
most unhip thing.

That I've seen a big
rock star do.

I would imagine a Celine
Dion or something.

Might be the first one out
there, but uh, but nobody,

uh, nobody that uses napster,

I don't think there's
probably any

Celine Dion songs being shared.

So that's probably uh,

that's probably where it's at.

There's one picture of this guy,
uh,

with a metallica t-shirt and,

and standing right next to a guy.

With an aftra t-shirt.

It's like this is,

this is oh my God, this is
out of control.

This is the vortex of this.

Crazy tornado
hurricane that we're,

we're in the center of.

The center of the debate.

Do you agree with these guys?

Uh, depends on which guys
you're talking about,

I agree with metallica.

That's cool.

And you know, it's true, for
some reason metallica.

Had decided that they
were going to be.

The lightening rod for all
these other artists,

who were like, you know,
not quite sure.

What they thought of the thing.

Um, and, but they were.

You know, they were angry.

Like metal was supposed to
be about like being.

Renegade and being like,
anti-establishment.

And-and-and, you know,
sticking it to the man.

So it was kind of ironic
that this metal band.

Was suing us.

It was like metal and
like gangsta rap.

Like the two least likely
people to go after us.

Were the ones who were suing us.

Napster is stealing from us.
Straight up.

And I'm gonna fight them
to the death.

Any time things go to
capital hill,

you know that the, the shit's
really hit the fan.

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
it's 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,

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...

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.

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 it's 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.

Oh, these people
need to be is...

Isolated and that noise.

Is gonna bother these
other noise.

Who the fuck are you assholes?

Do you have any idea what
creativity is about?

That was a fucking
super buzzkill.

Uh, and, and you know, we,
we won a few like.

Minor battles, but the war
was completely lost.

I had the advantage.

And uh, Sean Parker didn't
enjoy this luxury.

But I had the advantage of
kind of being able to.

Kind of stick my head
in the sand,

in terms of being able to just
work on the product.

So, I had this attitude of if
things got crazy,

or people seem to be
acting irrationally,

or uh, if we were nervous, I
could just work harder.

On the product. Write more code,

put my head down.

So that got me through a
lot of the time.

First of all, what is your,
what is your name.

And what do you do here?

I'm Shawn fanning. I uh,
started the, the company.

And I'm currently an
engineer at napster.

How 'bout you?

I'm Sean Parker, I am also
a founder and um,

I do a variety of things.

Working with the
legal team to uh,

business related strategy.

Do you have a nickname,
like napster?

Um, no.

Shawn fanning and I, we
literally went from being.

High school kids leading
relatively normal.

Mundane lives.

To...

12 months later, nearly
bringing one of the largest.

Us industries to it's knees.

And basically fighting what is
uh, in terms of potential.

Assessed damages, the largest
corporate lawsuit.

In the history of the world.

The music swapping website,
napster,

which for almost a year now,
has provided.

Millions of music
fans World-Wide.

With an
unprecedented opportunity.

To copy and trade music
on the Internet,

was dealt a serious
blow on Wednesday,

when federal court judge
Marilyn patel issued.

A temporary injunction
against napster, pending.

The outcome of a trial,
which will ultimately.

Determine the future of
the software.

An Internet community to help
music fans find mp3s,

I didn't' think it would be
embroiled in a legal battle.

But we are. And as you know,

the recording industry
has filed a suit.

To shut napster down.

To shut you down.

Today there as an important.

Hearing in court.

And the judge ruled against us.

Hank Barry, napster ceo,

is here to tell you what
happened today.

On the 27th of July,
we all gathered.

In judge patel's courtroom.

And uh, we had a hearing and it
was supposed to be.

Something relatively low key,
you know...

It was a hearing on a
preliminary injunction.

Motion that the labels, uh,
were moving.

And uh, the judge
came in and uh,

right from the outset
didn't look good.

Uh, this is a preliminary
injunction uh, it's been.

Entered without the basis of any
evidentiary hearing.

We asked for an
evidentiary hearing.

We asked to have an
opportunity to come in,

cross-examine their witnesses,
to have this.

Decided not on the basis of uh,
15 minutes for me.

And 15 minutes for Dan
Johnson argument.

But on the basis of
actual evidence.

We asked to have this
decided at trial.

Um, the court decided to do
it on the basis.

The court decided to do it.

David boies was a lot of hype.
He had just won.

The Microsoft thing and had
had that big aetna.

Thing that he had won etcetera,
etcetera.

So it was like, we got
the big name.

But, fundamentally, he did
not understand k.

What was going on.

At a technical level.

So the legal arguments he was
making didn't fit with.

What was actually going on.

And it was a complete and
utter disaster.

I felt like we had
developed a better.

Understanding of the
impact of the tmca.

And all the complexity
around trying to make.

The case work. To watch it be
handled the way it was.

With patel. It was actually
very disheartening.

And then you know, Shawn's email
came out.

Uh, there were these early
memos that were.

Discovered, where um, I made
reference to the fact.

That we were well aware.

Of the fact that our users
were pirating music.

Uh, and given that our users
were pirating music,

it might be, it might behoove us.

To protect their anonymity.

So that our users weren't sued.

And the documents that
judge patel relied on.

Is the following...

Users will understand that they
are improving their.

Experience by providing
information about their.

To name or address or other
sensitive data.

That might endanger them.

Especially since they
are exchanging.

Pirated music.

That is the
co-founder of napster.

Writing what the system is
intended to do.

And it is exactly what the
system has done.

And this was uh, at a time
when uh, when we.

Believed that what
we were doing,

basically, just
facilitating relationships.

Between users so that they
could share music,

was totally legal under the dmc.

It was like essentially a
brainstorming document.

Where I used the word piracy. Which was
a, which was a taboo word at napster.

You're not allowed to talk about
piracy, only allowed.

To talk about sharing.

The focus then became the email.

When in fact, there were all
these other issues.

So Sean became the scapegoat.

I, I was sort of on this
forced vacation...

In north Carolina the, the
lawsuit was happening.

On the other side of the world,

I was sitting in this beach
house and I got the call.

From Alicia, who was
Hank's assistant.

And uh, and was writing the
litigation and she said.

She said Sean it
doesn't look good.

And your memo is up on it,
it's blown up in a,

you know, 4000 point type on a
huge screen, in the.

Courtroom. And uh, you know,
they're calling you.

A music pirate and they're
calling us all music pirates.

And the judge doesn't like it.

They needed a nail. They found
the nail and they.

Put it straight into that
coffin and that was it.

Now, it was easy for the
business guys to say, 'look.

This guy not only
doesn't add any value.

In our opinion, but he also
wrote this email.

And it's all his fault.

There wasn't a whole lot I
could do about it.

It, it sort of, it sort of
was what it was.

The company needed to
make a clean break.

From it's past and try
to move forward.

Um, and so I sort of realized.

That that was the end.

So I had this one
meeting with Hank,

he walked me through uh, walked
me through, then I.

And that was it.

I vividly remember the
conversation of him.

Asking me to come to his aid
and help him preserve.

His role in the company.

And after we talked for a while.

About what that would be
I just told him that I.

Thought he was lucky.

To be able to get out of this
thing and go work.

On something else.

Um, because it had felt like,

you know, it had been uh,
nothing like the first.

You know, the first phase that
we had gone through.

And enjoyed.

I don't know uh, if that
really contributed to it.

That email. But I do know.

That it had a huge effect.

On the judge's perception
of our intent.

We are pleased with the
court's decision.

We think the decision
will pave the way.

For the future of online music.

This once again
establishes that the rules.

Of the road are the same online
as they are offline.

And sends a strong
message to others.

That they cannot build a
business based on other's.

Copyrighted works
without permission.

Have you heard from metallica?

I have not. But I'm sure that
they are very pleased.

And I'm sure that they and Dr.
Dre take great comfort.

In the court's decision today.

'Cause until napster gets
it's day in court.

If this injunction is not
stayed it will obviously.

Have a very severe effect on
napster service.

So you will seek a stay?
Then obviously?

I still find it difficult,
certainly a bit shocking.

Uh, some things
happened this week.

That I was certainly not
expecting to have.

To deal with.

Napster fights for survival.

Front page of CNN.

This is horrible.

The ninth circuit issued an order, it
was only like two sentences and it said...

This is a case of
first impression,

it's the first time we've ever
seen a case like this.

And we're gonna stay
the enforcement.

'Til such time as we, the
ninth circuit,

have had a chance to
look at the case.

Lawyers representing napster.

And the recording industry.

Squared off before a
three judge panel.

At the ninth circuit
court of appeals.

In San Francisco.

And what the supreme court
was saying is you.

Can't take a snapshot and say,

how is it being used today?

What you've gotta ask is what is
what is it capable.

Of being used for?

Because otherwise, you're gonna
deprive the public.

Of something that can be used.

For non-infringing uses.

They designed it to be a
pirate system.

No, they designed it
for fair use.

Samples?
No, no sir.

Oh they designed it for
concert work.

That the authors really.

Don't care about a copyright.

Even though they have it out on
a, on a, on a recording.

That's what they tell us.

- No that isn't...
- I've read their brief.

That may be what they tell
you now, your honor,

but they tell you...

Anything on mp3 file goes
through the napster system.

Or does it go user to user
on a direct basis?

It doesn't go through the
napster system...

You know, their hand,
their fingerprints,

you can't find them on those
things, can you?

The fingerprints you can't find.

Because napster
doesn't want you to.

They don't touch them. They never
have anything to do with it.

My fellow in New Jersey, and
my fellow in Guam.

Will have a direct connection.

On the Internet, right?

And that's how the music
is transmitted.

It is transmitted on the
Internet and we are not.

Trying to stop the Internet,
certainly.

That hearing ended about a
half an hour ago,

here in San Francisco. No
ruling from the court.

Is expected at lest for
another month,

but after that ruling
does come down,

many observers believe
that the final word.

On napster will
eventually and ultimately.

End up coming from the us
supreme court.

I worked on several
presidential campaigns.

And I would say that the
pressure that Shawn.

And Hank had on them
was just as much.

As it would be on a
presidential candidate.

With the difference being.

That they weren't asking for it.
Either one of them.

Ladies and gentlemen, this is
very exciting day.

An element of this alliance
is that napster.

Today, for napster,
for bertelsmann.

Will develop something like
services.

Middelhoff was a very
genuine guy.

He had great energy and he
really believed in it.

And was trying to do
the right thing.

Took a big risk in getting
involved, especially given.

The relationship that
bertelsmen had with bmg.

That being said, it was
incredibly complex deal.

It was a ton of money.

None of them really,
none of them.

Did get the conviction or let me
say, did learn that.

The business model and
still existing.

Business model of the
music industry,

isn't working anymore.

Yeah, and I think this was
clear in 2000, 2001,

when you saw how people
did use napster.

I think this would have
changed the world.

Much more than Facebook
is doing today.

Just the fact that this huge
German media conglomerate.

Was coming in and gonna be
throwing some money.

That I might be working for
a few more months.

So I felt okay about that.

I think that that,

that mindset was the
company's mindset.

They were weird, it was
a survival game.

At that point. It was just, it,
it seemed wrong.

Everything seemed wrong.

There was a line crossed where
they were no longer.

Actually trying to make
a cool product.

We were just trying to survive.

Whatever it was, we were just
trying to find a way.

To survive.

We developed a new
business model.

For membership based service.

Going forward in the future.

And uh, we give money to napster.

To develop that model, to
implement it, and then.

We're gonna join them
and we all hope,

and we're gonna work
jointly on this,

to make that happen as
soon as possible.

That's why Shawn has to get
back to California.

To get his cap on and start
decoding again.

Couldn't you preclude a search
under certain song.

Names and if you can do that.

Doesn't that suggest that
your efforts to stop.

The trading of copyrighted
music is disingenuous?

No, because we have not
been able, ever,

to work anything out with
the plaintiffs.

They simply refuse to talk,
refuse to cooperate.

In any effort to solve
this problem.

No, because, because
you're never going to.

Come up with a search that's
gonna satisfy them.

We had an entire row of
computers dedicated to.

Temps who just sat there, coming
up with variations.

On artists names, that
needed to be blocked.

So Madonna was one and you know,

so it was basically this
whack the mole game.

Blockage is bad.

Motherfucking alias names
like limp hash-brown,

in suck, flu fighters,
pappa crotch,

dick see chicks and
crotch box 20.

When the effort went from you
know, trying to make.

It a successful service and make
the product better,

to trying to uh, play this
game of whack a mole,

it was kind of you know,
foreshadowing.

Of a, what was to come.

Hopefully be able to show
to them that we do.

Support napster and we do
believe in a cause.

And that basically, the
music's out there.

I mean they can't erase all
the mp3s that I have.

And all the mp3s that tons of
millions and millions of people...

Dedicated online music fans
maybe planning to.

Spend a hard day's night at
their computers.

Downloading free songs.

Through the popular
napster website.

A San Francisco federal court
made it clear today.

The times they are a changing

it's been a somber week.

For fans of copyright
infringement.

As a federal court judge ordered.

Popular file sharing service,
napster,

to remove millions of
songs that are owned.

By the major record labels.

Record companies fought
tooth and nail.

Over the issue and the
court's agreed.

It's the record companies
who hold the patent.

On cheating musicians
out of money.

American intellectual property.

Is our nation's
greatest trade asset.

We cannot stand idly by as
our nation's assets.

Are in jeopardy or dismissed.

By those who would use them for
their own enrichment.

That's why today's decision.

Is so especially important.

Now, napster can take a nap.

I'd like to add a word or
two about the future.

Of napster.

We've been developing a napster
service that offers.

To members of the community.

And importantly, makes
payments to artists.

I'm focused on building
this better service.

And I still hope to have it
in place this year.

The new technologies we
are developing.

Are amazing.

I hope that by further review,
or by agreement.

We can find a way to share them
with the community.

I would also like to
thank everyone.

For being so supportive.

Napster works because
people who love music,

share and participate.

Many people have said it
would never work.

We've heard that we
couldn't survive before,

when we had 700,000 members.

And when we had 17
million members.

Today we have more than 50
million members.

To keep this community growing.

If we work together, I know
this will succeed.

Thanks.

The tipping point for my romance was
uh, after we were injuncted and then.

Reinstated and then reinjuncted.

That was it. It was like
being broken up,

uh, with, with your favorite
girlfriend uh, and.

And getting heartbroken and
then her coming back.

To you and, and your heart
just like okay,

maybe I can look past the wound.

And, and nope, we reject you
again and I'm out.

It's like, ahhh, this sucks.

That was the point at which huh,
I realized.

That...

The cool of what we had done.

Was pretty much over.

You know, ritter left
because of all this.

And Parker was shown the door
and Shawn fanning.

Slowly became detached.

He...

He would just sit at his desk
and strum his guitar.

And if you went up to him, to
ask him a question.

Or to talk to him.

He would just keep
strumming his guitar.

And he'd look at you, he'd
look at you with like,

some curiosity as if
you're like an alien.

But he would just keep
strumming his guitar.

And...

I think that, that was his way
of dealing with this.

That sort of pivotal,
pivotal sort of moment,

where uh, it looked like things
weren't going well.

Fanning was...

On the cover of
time magazine.

Sort of, which is, in
American culture,

like the peak of public
recognition.

And it all felt, it felt sort
of, it all felt sort of false.

I think fanning probably
felt the same way.

It's like he was going
through the motions.

And doing what he had to do...

Doing a huge amount of press.
But you could tell.

That, that the company was
coming unglued.

Well, what's interesting is,
can I just start,

I'm so sorry, man, okay.

Well what's interesting is that,
that's not going to change.

We're going to maintain uh,
napster uh,

in it's current form, what can
I start over again?

I'm sorry. I keep
mixing up my words.

Oh, those days in San mateo,

that was our youth.

We had a lot of energy,
we were excited,

we were like a little kid
running around.

And then we became teenagers.

And-and-and then the
lawsuit happened and we.

Started going into adulthood.

And we get these adult
figures coming in.

And we start to get older
and by the time.

By the time it had gotten
close to the end.

It was like, we're old,
we're fragile.

It's the end of days, so we're
just letting the time.

Pass. That's what it was like.

And I can remember right up
until the day that

I was fired, thinking,
there must be a shot.

There must, there's just no way.

All this can just go away.

Uh, and then I
remember being out.

The other end of the company
and still talking.

To the folks that were there.

And you'd keep hearing about,
you know,

the next bertelsmann loan,
the next label deal,

discussions, the next and,
and you know,

and once you're removed from it,
you're just like oh,

like this is not gonna happen.

Uh, but still, maybe
they're right and.

Uh, I don't, that, that, it's
amazing to me now.

How there was not a
chance in hell.

That any agreement was
gonna be come to.

There was a very long, slow
decline of napster at the end.

And ultimately getting shut down.

When the filtering
was ineffective.

Because the technology
wasn't there yet.

Um, 98 point something percent,

wasn't good enough.

I called Ali aydar and I said,

'you know, we need to turn off.

The file sharing here.

We never talked about this,
but can you do it?

And he said, 'yeah,
I can do it.

And he left the room.

And he came back in a
couple hours and said,

'I turned everything off, but
it's still working.

And it found, and we found
out that there were.

A bunch of open nap
servers out there,

that were not controlled
by the company.

That other people
had implemented.

And were around the world,
so the, the.

Software client was
still working,

but we, the company had
nothing to do with it.

Today, napster filed
for bankruptcy.

Oh man, we, we had
to have raised.

North of a hundred
million dollars.

So and that, I don't
think any of us know.

Where that went.

This was such a common
question from people.

Which was sort of, how do
you make money.

And investment vs.
Actually making money.

From service, but you know,
the idea is that.

We're not gonna
generate any revenue.

Until we can actually
pay artists.

And it's hard to actually think
of a startup that's.

Ever raised that amount of money.

That went away as quickly.

Like, usually if you raise a
hundred million dollars,

in a startup, like you got
about five years.

Of, of runway.

Like you've got a ton of runway.

The thing is 80 million of it
came from bertelsmann.

Thirty million probably went
back to bertelsmann.

Using all their other services,
right?

Yeah. But then the b was 15.

We gave a million dollars to Dr.
Dre.

Another million dollars
to metallica.

I have no, I mean
it's just crazy.

This is mind boggling dude.

I mean in, in any
investment calculation,

you say the paying capital let's
say, 115 million dollars.

And then the company did so
badly that it went to zero.

And so the money lost, was
115 million dollars.

But wait, there's more. In
napster's case,

you have to now tally the
settlement dollars.

That will float out
of bertelsmann.

And everyone else and hummer.

You're talking about a 500
million dollar sink hole.

Perhaps more that
went on for years.

After the asset was sold out of
chapter 7 bankruptcy.

We went to the uh...

Good job.

Yeah, so thanks...

Wow, man.

I promised, I
promised I wouldn't,

but yeah, uh, and that's
Shawn's fault,

for the record.

- Uh, no.
- That's kind of crazy.

But we went to, we took
this awkward drive.

Like a year, I think...

We thought about going to
the supreme court,

we got advice from the lawyers.

That the timing wasn't right.

That we should wait until
there was more decision.

In the trial.

Do you regret that?

I regret it now, yeah.

I would have liked to taken it

I would like to have
had a jury trial.

You know, we never had
a jury trial.

Is the effective shut down
of napster.

And what that's going to
do is give birth.

To a thousand of napster spawn.

And these children.

Are going to be much
better bred.

So once the record companies.

Went after napster, did that end.

This kind of illegal
music sharing?

This pirated music sharing
on the Internet?

Actually, not at all. There's
a theory out there.

That piracy will be eradicated.

And no one will ever
share a music file.

But that's really a
pipe dream for

really
getting everything.

Getting the Internet
under control.

What was seen from piracy,

is that after napster.

People went to other music
sharing software.

Such as limewire, or morpheus,
gnutella or music city.

Things like that.

A bomb went off and nobody knew.

What the hell was happening.

The cat wasn't going
back in the bag.

I don't care how many
people we sued.

I don't care how effective or
ineffective the riaa.

Were, was with certain
aspects of it.

It wasn't going back.

People are gonna still
download for free.

It's free! It's free.

It's wrong, but it's free.

If there is an under-net of
piracy, that's something.

That our industry has always
had to live with.

The idea is to keep
commercial pirates out.

Of the marketplace, so that
legitimate commerce.

They were saying was it's just a
matter of copyright is gonna be fixed.

And maintained by, by
some combination of.

Enforcement and education.

And I said, well this
sounds a lot like.

The war on drugs, guys, I mean,
I don't think.

This is gonna work.

That certainly didn't.

File sharing services allow for
the illegal downloading.

Of copyrighted works,
which can get you.

Into trouble in a hurry.

Many parents may be
surprised to learn.

Those consequences can
include lawsuits.

With penalties and
legal fees costing.

Thousands of dollars.

Downloading or sharing music
without permission.

Is not okay.

I don't think people are
stealing music.

I think the record
companies are not.

Adjusting.

To technology.

But rather than adjust.

And figure out how to work
with it and use it,

they fought it.

And they started to sue
their customers.

And everything. And I, I think
that alienated them.

From both the public
and the artists.

Can you explain again,
what,

if anything, you're doing
to catch thieves?

Well, we have tried to be, uh,
and I think,

have succeeded in being
as responsible.

In this space toward
individual users.

As anyone could hope to expect.

From the music industry.

We have historically been um,
very uh, tolerant of.

Of downloaders, but
very aggressive.

Against the uploaders.

We have tried to be focused on
distribution sites.

With significant
amounts of music.

I don't think this is about
punishing individuals.

Well, they did. They sued over
18 thousand regular.

Old normal people and uh,
average settlement size.

Was about $4000 dollars.

From people who could
hardly afford $4000.

So I don't think that
was a good move.

Particularly from a public
relations perspective.

You don't get your
market to like you.

By suing the shit out of them.

I mean what they've done is to,
is to turn an entire.

Generation of kids into
electronic Hezbollah.

Who hate them for
ideological reasons.

I mean I know a lot of
people that, that won't.

Buy music, period.

Because they don't want to
enrich those people.

And they didn't have to
have it like that.

Good hard working people all of
a sudden got laid off.

As major music industries,
entire floors were turning

I remember, you know,
people who'd been.

Working so hard, doing
such great work,

there's no longer a need
for them because.

The market shrinking
because these people.

Kind of caved in on
their own greed.

Their bosses, their CEOs, their
rock star a&r people.

All of a sudden, realized
they'd been shoveling.

A bunch of mediocre crap to
a bunch of people.

Who they devalued.

But now the people
have a choice.

They can cherry pick
the records.

They now can not have to take
it from you for $22.

They can now spend three bucks
on the three songs.

That got made into videos.

And everything came loose.

Well it's the perfect storm,
again.

It's three sides really,

when you really think about it.

Free is a pretty big component.

The corporatization of
America and the world.

In creative companies.

Right?

And the downsizing of
the structure.

Of the music companies.

The whole crux of the argument,
I guess, is.

That there's great things.

About modern technology, music
and there's things that's shit.

And there's great things
about the past,

some of the past stories.

Had to go because the
people demanded it.

Therein lies the problem.

I think uh, we dropped
the ball you know,

but I-I-I don't see why.

We can't read you know,
recapture it to some degree.

But uh, it'll it'll never be like it
was, when we controlled everything.

Napster ended up,
unfortunately in the strip.

They process and
when uh, people like Steve jobs,

they were so smart and business
smart, that they said.

Where is talent okay, we hire
the napster people.

ITunes in the us has an
84% market share.

Last month for all legally
downloaded music.

I don't think you can point to
any digital music.

Service that exists now that
doesn't uh, tip it's hat.

In some way to napster.

And I, I can tell you
that you know.

With the first version of iTunes
that was released,

had shocking similarity to the
ui that napster was using.

And I don't think that
was accidental.

When we finally, we made
money at napster.

So, I mean that we, I was left
with pretty significant.

Legal debt. Um, which was you
know, to the extent.

That napster was like
napster university.

Was actually not that
different from.

The college debt that most kids
would have at that age.

Sort of comparable uh, in scale.

Uh, so, but I had this,
this legal debt.

And fanning wasn't that
much better off.

After napster was shut down,

Shawn fanning and I co-founded.

A company called snocap.

Which was Shawn's
attempt to rectify.

The rights issues.

Having been a bit disillusioned.

With how the case had gone.

And the way that the
conversation.

And debate had operated at such
a superficial level

I jumped on this idea of
wanting to create.

An independent
copyright database.

Where any rights holder,
independent or otherwise.

Could register their work.

And the idea was that.

Everything that was unclaimed,

would be freely sharable.

Until somebody came in and
said this is mine.

To try to work back
towards a world.

Where all this
interesting diverse music.

Would be available.

And it was nice and it made
sense in my head,

but the actual act.

Of trying to get
everyone to buy into.

As an intermediary was an
incredibly challenging.

What happened was there was a
lot of excitement.

And, and there was a lot of
interest in snocap.

Until Steve jobs came up
with his deals.

And the iTunes store. Not
because snocap.

Wasn't a great idea, but
because the industry was.

Not prepared. They
felt much safer.

With one retailer.

And once that happened,

you could just see the air go
out of the tires.

It was, actually, that was one
of the hardest times for me.

I had just, and then you know,
I, I just uh,

'cause I enjoyed it and uh,
eventually started a,

you know, a company, but it
took uh, gaming and.

Sold it to ea.

I'm very fond of both of them,
personally.

And...

I think Shawn fanning...

Is coming through it
reasonably well.

I- I-I-I think Sean Parker is
having a difficult time.

In ways that you know,
I would too.

I mean it's, first of all, he
was, he was crushed.

And then he came up with
something else.

That was great, which was plaxo,

and it never had the opportunity.

To demonstrate that greatness.

And he was crushed again.

And then he attached
himself to Facebook.

And has made an absurd
amount of money.

He actually came up with,
I think,

some of the most important ideas.

That drove the
success of Facebook.

I mean while he was living
in my apartment.

I, I was there. I
watched it happen.

He's genuinely
trying to reinvent.

The music business.

With spotify.

It seems incredibly archaic that
we've' come this far.

And we finally started to
figure out that there's.

Models like spotify, models
like iTunes that,

that work, that are
beginning to restore.

Growth to this industry.

And, and even as all of this is
starting to click,

you still have these
reactionary lawmakers.

Who think they can legislate.

The problem away.

That's somehow gonna
solve piracy.

I mean haven't they
learned anything.

From watching the
last ten years.

Of peer-to-peer distribution>

it's not connected to any
particular ip address.

It's totally decentralized.

I think of what we've seen
in the last decade.

Is that this war, which has
basically criminalized a.

Whole generation is uh,
culture's Vietnam.

Uh, it's been a
complete disaster.

It has not achieved
it's objectives.

Which should be to pay artists,
uh.

The only people that have
gotten paid in this war.

Who've been waging the
ever-expanding.

Legal actions against people.

Using culture the way
technology seems.

To encourage them to use it.

There's always this idea
that the format.

And the style of the way
people access culture.

Is gonna destroy an industry,
you know.

So people tend to get like
psychologically.

Bugged out, you know,
completely not.

Being aware that the
change underneath.

Their feet is the way we live.

Alright, here we go.

♪ In the squares of the city

we live in a very new world.

You know, technology in the
last ten years,

has turned the world
on it's head.

Art and artists are going to
start revolutions.

We've already seen it in
the year of 2011.

Art and artists are going to
change governments.

They're going to change the
direction of rivers.

And it's gonna be done
through flash mobs,

file sharing.

People vous le vous-ing
half-way across the world.

In a microsecond on their
hand-held device.

Trading music, trading files.

This front of
information in music.

It makes, it makes me hopeful.

And it makes me sleep
well at night.

In that, the more the
music flows,

the more the information flows,

the more wiki keeps
leak leaking,

the more governments are going
to be hard pressed.

To be more transparent.

The main thing here is for
people to recognize.

That what we're
doing is creating.

The foundations of the future.

In a very fundamental way.

I mean we are building the
future that we all.

Might want or might not want.

Depending on our current
vested interest.

And I think that it takes a
really crummy ancestor.

To want to maintain his
current business model.

At the expense of his
descendants' ability.

To understand the
world around them.

And if you really want
to figure out.

Which side you're on here, ask
yourself you know,

what's gonna make you a
better ancestor?

The journey was like a, was
like a theme park ride.

Or something. It was like
pirates of the Caribbean.

People just like you know,

weird scary people
popping up at you.

And you're kind of moving
through this thing.

You're not really in control.

We're in like a you know, a
little, little, you know, car.

At the top of a giant hill
and we got all the.

Momentum and inertia
at the start.

And the rest of it is just
trying to survive.

The downhill, you know,
slope and...

The drunk skiing or the
pirates of the Caribbean.

Um...

I don't know, if we found a
good analogy for that.

Experience, I'd be impressed.

Um, it sort of a...

I get to be Johnny depp.

Alright.

Who are you?

- I don't know.
- Who else was in that movie?

You know, I had something I
really wanted to say.

I just fucked that all up.

No, but... I don't even know
if it was important.

If I'd known what it was
actually gonna take.

To solve those problems back
then, I probably.

Never would have done it.

It took, it took that naiveté,

that maybe these were
problems we were capable.

Of solving at that time.

To even, even you know,

get up in the morning
and go to work.

You're born into the world
thinking that you are uh,

you know, you're entering an
industry that people.

Understand. Or you're
entering a world.

That's been seen before.

And seldom do you,

do you, do you sort of wake up
to the realization.

That you're, you're the uh, um.

That you're the, the explorer.

In most cases you assume.

That um, there is some history.

To what you're doing and that
uh, especially when.

When you're that age, and you,
and you find yourself.

In an, in an, in a new
industry that's new to you.

You assume there must be
someone out there,

who has the answers.

And then you wake up and realize.

The answers are being written.

You know you, you are
the precedent.

The idea itself is out there.
People understand it,

people enjoy it. And so to me,
I mean that was.

Absolutely worth all of the, the
trouble along the way.

I think um, you know I think
the technology itself.

Is pretty powerful and people
have shown that they love it.

And so um, I think you know, it
will always exist.

Regardless of how it evolves
or how it changes.