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Subscription Music’s Curious Silence

The Napster ‘hack’ allows music lovers to convert their music streams into music downloads but the issue of stream-capturing is much bigger than a single hacked player, something no one wants to talk about.
February 18, 2005

For Napster, these may be the best of times and the worst of times. The company finally unveiled Napster To Go, which allows subscribers to its streaming music service to put music on select portable digital music players. But not long after the service was introduced, Napster fell victim to a workaround that may threaten the company’s new subscription business model.

Napster now offers two music plans:  Users can pay.99 cents to download a song, or for $9.95 per month, they can get streaming access to over 1,000,000 songs.

The workaround requires the Winamp player, changing its user setting, signing up for Napster’s free 14-day trial period, and then recording the Napster-provided music streams playing through your PC. It’s an updated – and higher quality – version of putting a tape recorder up to your speakers and recording songs off the FM dial.

News of the hack appeared first on various message boards, and was quickly picked up by the Los Angeles Times, which had the dishy dirt of Apple Computer chief executive officer Steve Jobs emailing the news around to record labels, writing “I thought you should know if you haven’t heard about this.”

When informed of the Jobs’ note, Napster’a chief executive officer Chris Gorog allegedly dashed off a response to the record label heads, reassuring them that Napster itself hadn’t been hacked, while pointing out Apple’s fallibility in the digital rights management game as well.

For good measure, Napster’s chief technology officer Bill Pence posted a message on the Napster homepage, writing “[N]either Napster To Go, Napster, nor Windows Media DRM have been hacked.”

The huge stir this workaround has caused, though, is  a bit odd because many legal – and in some cases, free – programs convert streams into MP3 files..

Call it the soft underbelly of the subscription music business model, something none of the major players seems to want to talk about: It’s very easy to turn stream-only services into download plans without changing a thing.

Replay Music, which retails for $50,  will even append song, artist, and album information to the file in the background, with about a 90 percent accuracy rate.

None of the the major streaming services – Napster, Yahoos MusicMatch, RealNetwork’s Rhapsody, or digital music distributor MusicNet – would talk on the record about their company’s position on the various programs.

Their reluctance is understandable. Since programs such as Replay Music operate locally on the users computer – recording whatever is going through a soundcard as opposed to going out and pulling streams directly off of, say, Napster’s servers – there’s little the subscription music services can legally do to stop them.

“I don’t think [streaming services] like us,” says Tom Mayes, chief operating office for Applian Technologies, the parent company of Replay Music. “They get pressured from the [record labels]. The streaming services have sent us letters asking that we don’t use their name [to tout compatibility] on our site.”

To get around this concern on its website, Replay touts its compatibility with “Rh——” and “Music M—-” – shorthand for Rhapsody and MusicMatch

Mayes says he’s also had conversations with one service whose employees confess “they love us. Obviously, they can’t condone us or promote us, but people buy Replay Music and then go out and subscribe” to streaming music plans.

One music service representative admits that the company receives pressure from the record labels to do something about the stream capturing programs, but admits that it’s a tough battle to fight.

“We’re unable to control what users do with the audio once it leaves our service, whether that means recording the sound as it travels from sound card to speakers or placing an old fashioned tape-recorder in front of the speakers to record it as analog sound,” says the anonymous representative.

According to Mayes, Replay operates legally for two reasons: the 1984 Supreme Court decision which made VCRs legal and the 1981 Audio Home Recording Act, which made it legal for consumers to record media for personal use.

The argument: what’s the difference between paying $10 per month for HBO and recording The Sopranos, and paying $10 a month for Napster and recording an album, provided you don’t start burning CDs for all your friends and uploading the material on file sharing services?

“We don’t really know if it’s legal,” says Jonathan Zittrain, faculty co-director for the Berkman Center for Internet & Society at Harvard. “It’s possible that making a copy of something that’s copy protected is fair use. Or it might be viewed as a circumvention device, which would run afoul of the DMCA.”

Zittrain notes that the upcoming Grokster Supreme Court case should help clarify the matter.

Jonathan Lamy, spokesman for the RIAA, wouldn’t comment on Replay specifically, but said “the RIAA remain[s] concerned about any products or services that encourage users to illegally transform broadcasts or webcasts into permanent music libraries.”

Replay’s Mayes says he hasn’t yet been contacted by the RIAA, but worries that phone call might soon be coming.

“Everything is legal until it’s tested, right?” asks Mayes. “Will we ever get tested on that? I hope not. We don’t have deep pockets. The RIAA has deep pockets.”

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