Music stars, reps clash in Congress over Napster

A cross section of music stars, executives and analysts testified Tuesday before Congress

In this story: Piracy good for the artists? Who's dragging whose feet? RELATED STORIES, SITES

By Richard Stenger
CNN

WASHINGTON (CNN) -- Pop stars, record label and digital industry executives and users of the beleaguered Internet song-sharing service Napster crammed a congressional hearing Tuesday to help chart the future of online music entertainment.

Music legends Don Henley and Alanis Morrisette urged more online freedoms that strengthen ties between artists and fans rather than enrich the coffers of giant record labels.

Industry leaders countered that services like Napster that promote the illegal distribution of copyrighted material hurt everyone, artists, record companies and consumers alike.

NAPSTER Find out how Napster works   IN-DEPTH Napster: Stealing or Sharing?

Henley, member of the 1970s supergroup the Eagles, took exception to the view that the Recording Industry Association of America (RIAA) represented the best interests of all artists in the Napster ruckus.

Prompted by an RIAA lawsuit, a U.S. judge ordered Napster on March 5 to block the free exchange of copyrighted music. Henley said Napster could work within a legal framework with some improvements and that most users were willing to pay a fee.

"Lawsuits should not be used to destroy a viable and independent distribution system. The solution lies in the marketplace and not the courtroom," Henley told members of the Senate Judiciary Committee hearing.

Piracy good for the artists?

Morrisette, a multi-platinum singer/songwriter sensation from Canada, spoke of increasing divisions between artists and the RIAA, "especially in the digital age."

"For the majority of artists, this so-called piracy worked in the artists' favor," she said, by spurring interest in ticket and merchandise sales.

"It's not about piracy. It's about opportunity," countered Hilary Rosen, president of RIAA. "Napster was exciting. But giving away someone else's music without their permission is yesterday's news.

Senate Judiciary Committee Chairman Orrin Hatch proposed Congress possibly rewriting the tax code to ensure that Internet subscription services are fair to all copyright holders

"The story now is the music industry's efforts to alert fans and consumers to the huge amounts of legitimately licensed music that is currently available online."

Dick Parsons, co-chief operating officer of AOL Time Warner, parent company of Warner Records and CNN.com, elaborated on a deal announced Monday in which record label heavyweights planned to license their music to online audio software provider RealNetworks.

AOL Time Warner, Bertelsmann AG, EMI Group and RealNetworks said the joint music subscription service will combine downloadable and streaming music across multiple distribution networks.

MusicNet is a "breakthrough" platform for online music distribution that will guarantee copyright protections, Parsons said.

But Hank Barry, interim CEO of Napster, said major labels have made similar promises of a comprehensive subscription service for more than a year with little to show. Napster could serve in such a capacity, provided the industry was willing, he said.

"I have tried for the last nine months to make an agreement under which Napster can get a license from the record companies and the music publishers," Barry said.

Only Bertelsmann AG among the major labels has agreed to such a deal.

Who's dragging whose feet?

RIAA's Rosen said it was Napster, not the industry, which was dragging its feet.

"They have $50 million from one of my companies and they still don't have a legitimate service," she said.

The Senate is considering whether to regulate the burgeoning practice of online music distribution. Napster, the most popular service, claims 60 million people use the service.

The brainchild of 20-year-old college dropout Shawn Fanning, Napster permits music enthusiasts to share MP3 song files at no cost on the Internet.

Record companies and musical acts like the heavy metal band Metallica filed suit against Napster, claiming it had done little to prevent the free distribution of their work.

The San Mateo, California-based company developed electronic filters to restrict access to copyrighted music, but users have sidestepped them through numerous methods, including misspelling the names of artists or their songs.

"I hope we have the wisdom to choose the road that embraces creativity and meets needs of artist and consumer," said Sen. Orrin Hatch, a Utah Republican who chairs the committee.

"We've opened a Pandora's box, but I think it's not all that bad we opened it," said fellow committee member Sen. Patrick Leahy, a Vermont Democrat and self-professed Morrisette fan.

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Napster
RealNetworks
Recording Industry Association of America

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