Original URL: http://www.theregister.co.uk/2010/02/26/castle_five_minute_copyright_napster_history/

Bringing P2P in from the cold

Chris Castle catches up with El Reg

By Andrew Orlowski

Posted in Media, 26th February 2010 12:02 GMT

Interview Attorney Chris Castle has worked for the original Napster ("one of the greatest inventions of the 20th Century"), Snocap and in digital licensing for Sony and A&M. In the first installment of our annual catch-up, he wondered whether Google may have annoyed so many rights holders that it's rethinking its strategy. Here, he talks about how he tried to bring P2P in from the cold at Napster, then Snocap.

Has the rhetoric changed much recently? Ten years ago everybody knew structure of the music business would change - particularly the role of intermediaries. But every day I read somebody say that any copyright intermediary between the artist and the public is evil?

That's a very 1999 view of the world. It's true record companies were the voice of the music industry once. But as more and more artists are owning the copyright to their sound recordings, and are entering this world of taking on more responsibility of distributing their own works, the “Them” is “Us” now.

It's not quite so easy for the self-appointed consumer advocates to trash copyright owners any more, because the world has changed. It was easy for the “consumer” groups to go after the record companies, that is very well-trodden ground for consumer groups accustomed to dealing with exploding cars and asbestos. They tried to apply those same tactics to music because the “advocates” saw a huge audience they could try to attract to their cause and politicize.

Some Internet messiahs tried to do the same from a commercial point of view—remember the “MP.com Manifesto”? If you read that now, it’s quite striking how similar some of these attacks are to that Manifesto. You see remnants of those tired old canards on certain email lists and academic ruminations.

It’s becoming increasingly common for individual artists to own their own works. Artists are waking up to what's being done to them online. I have artist clients who are mystified that Megaupload and Rapidshare are selling their stuff - like in a classic counterfeiter model. These sites take their recordings, sell downloads, keep the money, and don't even think about paying you. Many are conveniently located in countries that don’t care much about IP rights and it is very hard to use legal means to stop them.

This is also, of course, why the so-called “fifth principle” of the FCC’s “Net Neutrality” rules is so absurd — if you can’t “discriminate” between illegal and legal content, what does “nondiscrimination” even mean, and how in the world will an individual artist afford the adjudication necessary to determine whether content is legal or illegal?

This is the job of collectives and intermediaries. Arguing that “Big Music” is somehow anti-consumer is quite a bit different than arguing that “Big Pharma” is anti-consumer. “Big Music” has its flaws, but it actually represents people. ASCAP, BMI, SESAC, MCPS-PRS, SACEM, GEMA—all these organizations represent songwriters. “Big Pharma” represents stockholders, not creators.

Another thing that happens to artists who get further and further into doing it themselves is that they often find themselves spending more and more time with the business of music and less and less time with the music.

It’s each artist’s decision when, if and which intermediaries they want to align themselves with — but if they do, I think that decision should be respected. Otherwise it’s like telling workers they can’t have unions because “Big Labor” is anti-consumer. You don’t see people stealing from Tesco because they object to “Big Labor”. Why should they be able to steal music because they object to Big Music?

Not everyone follows Professor Lessig's every word. At In The City in Manchester one manager was hearing the Pirate arguments for the first time. He couldn't believe someone was standing in front of him advocating copyright reduced to five years.

I think that Dick Augustsson aka Rick Hawkwing (or anyone else) talking a five-year copyright is kind of a joke. We have a five-minute copyright, now. That's how long it takes for something to be burned and put on a P2P network — and you’ll never get it completely off that network. Copyright can be five or 5000 years, it doesn't really matter. The actual term is five minutes.

"'Bollocks' I believe is the word?"

Now that the Pirate Party actually got themselves elected to something, they’re going to be more closely scrutinized. This five-year copyright thing is, if you ask me, a dodge. How do you say in your language? “Bollocks” I believe is the word?

It is a way that they can say that they pay lip service to creators rights and try to engage the discussion on some red herring while the stealing continues. It’s sort of like Lessig saying that he opposes orphan works because it’s unfair to copyright owners, and what would be fair to copyright owners is a five-year copyright term.

You've come out really strongly against the statutory or blanket licence solution to P2P recently. Can you explain?

If you collect an unallocated pool of money that's based on something other than usage of the works involved, you automatically have to make some decisions on how that's divided up. You have to make that decision before you decide what the rate is.

The fundamental arithmetic problem is that on a per-user basis, the EFF plan (for example) has each user paying a fixed rate. An ever increasing number of works then have to fight for that fixed rate. So the more robust the service - the better it is and the broader the usage - then the per-rights holder payment on a per user basis will only decrease as the number of works increases because the thing being shared is a fixed rate.

This is an idea whose time has passed. Napster had a version of this idea back in 1999. The Napster subscription model we proposed identified works, it used fingerprinting, it was a walled garden P2P system. EFF wants a “voluntary/voluntary” plan. I can sum it up in one word: Ponzi.

The only people who make money in the EFF plan as far as I can tell are the people who set it up and whack their 10 per cent off the top (or whatever the percentage is). They don't really care what the creators make. The promoter's share is only going to increase with the number of users. They'll get their 10 per cent no matter what the 90 per cent is. Talk about gatekeepers!

Versions of this story already exist: Snocap, in particular, PRS, ASCAP, BMI, SESAC, Harry Fox, SACEM … So, why start yet another gatekeeper from scratch?

So what was the thinking at Napster? It's called the Big Switch - you'd try and allow legitimate file sharing?

The thinking was at both Napster and Snocap that if you were going to monetize P2P you would have to do it at the client level - trying to do it at the network level is very practical and is very hard to audit and build trustmaking systems.

Snocap had a plugin that monitored through fingerprinting what's in your share folder, and then looked up that track to see if it's in the Snocap registry. If it was, it would return information based on the track and at what price. So some tracks might be blocked; peers wouldn't see tracks that weren't approved for sharing or for sale. It would shroud them. Well, who knows if that would have worked, but trying to sue infringers into legitimacy hasn’t worked either.

In the Napster days there was thought given to a tiered subscription model. Once you threw the “big switch” and changed to subscription, even if Napster lost 90 per cent of its users there would still be two to three million subscribers. That's a nice little group to start a service with. And you'd have got some of the people who left back if the service was compelling.

It was amazing it was all there 10 years ago. And we're still here 10 years later, and we don't have anything like it that's legal.

The technology was sort of there. That software was there, and it was good - I wouldn't do it that differently now. The basic model was just as appropriate then as it is now.

The Snocap mountain

After Napster, you joined Shawn Fanning's next venture Snocap. With Snocap you tried to bring these P2P services like Kazaa in from the cold. What happened? What went wrong?

The labels all agreed to do it and probably would have allowed some unlicensed to pass through Snocap because Snocap was an ever-cleansing system, meaning that it learned about new copyrights all the time. We got very little uptake with P2P operators, though. I honestly don’t think that these people intended to operate a real music service. They seemed far more interested in running a few servers and making some advertising money just to show they could do it.

The EFF all want to paint labels as this monolithic, Luddite group. But they were willing to try, for a short period as an experiment to see what a self-cleansing system looked like.

So there is a solution for illegal file bartering but it doesn't depend on this magic wand approach to making something legal that isn't legal.

There's been talk of one country going it alone and legalising P2P - France almost did.

If one economic actor - particularly in the North - decides to do something like this, they discover they can't. The leakage would be enormous. Yes, the French tried to do this in 2006, but it was just a joke. Every user would have learned French!

These services form where people want to get stuff for free. The approach is - all those users are there. They're reachable. That was the whole point of the Big Switch concept with Napster -  going legal. Let's take advantage of all those people who like us and are connected and are largely music fans - the hacker boy side, the spyware distributors hadn't come into the picure yet yet.

But when we tried to get some P2P people to sign up, "There's no money in it".

Yeah, that's right. There's "no money" in it because you've done everything you can to drive the music business into the ground. You should step up and be the hero that some of these misguided people think you are. And these P2P operators looked like little teenage boys who had suddenly realized they weren't going to drive the car this weekend.

I asked one of them - can you raise your hand and swear to God that there are no bad things on your system? No snuff films, no child pornography? You're providing a way for crazy people to link to each other with little likelihood of being caught. If you don't distance yourself - then someone is going to hang the sign around your neck. And he was scared to death.

They had this crazy idea that they weren't accountable to anybody. They also thought they were going to dictate the price to the record companies. Uh, no. See, what's you're doing is illegal. I-L-L-E-G-A-L.  Snocap was ready to do business with all these guys and help them come into from the cold. |

Did none of them want to co-operate on building a legit P2P?

Wayne Rosso did. He tried really hard. That's late 2005, I guess. But there was an equity bubble going on - the cash was there. Why didn't somebody from outside the record business, an investor, step up? I don't get it.

Snocap had visionary investors. “Visionary investor” is an endangered species in the music business. These days, if a VC is presented with a chance to invest in a real-time data company or a music project, which do you think they will take? Not the music project. Why is that?

It's because there has been such a lack of effort on behalf of governments to extend market rules that are in the physical world into the online world. When the investor is saying it's too risky, he's saying “Where's the market place?" But the contours of the market rules are not enforced.

I'm not a fan of disconnecting anybody - there's other things you can do. But the importance of three strikes (especially Hadopi in France) is that it is the first attempt to establish market boundaries for copyrighted works online.

We already do some technical measures, and have for years. We geoblock some of these West African spam factories - we reroute them through Canada but they come back. So Governments have a serious role, here.

The most basic, fundamental duty of government is to protect citizens from harm – not to mention the human rights protections that artists have in UN treaties and covenants that they have all signed. Until Hadopi, none of them were doing that. ®