Napster, the MP3 online trading service, will lose its legal battle against record companies and recording artists, in the opinion of Rob Glaser, chairman and chief executive officer of RealNetworks.
"It's clear that people are trading materials that third parties have copyrights to," said Glaser when asked about Napster during a press conference here yesterday at the Real Conference. "There are very strong limits to that under fair use and personal use rules."
Glaser, a pioneer in online media, is certain that the limits are set against Napster.
"The laws that describe the rules were written before the internet existed, so it is a matter of interpretation. I suspect that either the laws will be interpreted to prevent things like Napster or new kinds of legislation will come to the market," he said. "The (copy)rights holders could not be more hardcore about these file exchange programs as challenges to their businesses."
The RealNetworks CEO does see added values in a program like Napster.
"There are two things that people like about Napster, one of which is that you can push a button and it's free. But I think there is something else about it. For most popular artists you can find many different versions of a song," he said.
As an example, Glaser talked about the band the Grateful Dead, which allowed people to make "bootleg" recordings of its live concerts, which were known for being heavily improvisational so that the same song could sound much different from one night to the next. The band's fans, called "Deadheads" created a market for the concert tapes.
"They let people make recordings as long as they didn't try to resell those commercially," Glaser said. "As a result there was a huge base of Deadheads that used to trade tapes. For any Grateful Dead fan there are dozens of versions of songs recorded at concerts throughout the years."
The internet has made that much better, Glaser said. "Now for the first time, because of the viral impact of the internet, that same choice is available for people who are serious fans of not just a band like the Grateful Dead, but probably hundreds of bands."
The possibility that Napster could allow different versions of music to be shared that way presents a "real benefit", Glaser said, adding, "however, it will be tricky in the short term to capture that benefit because of the collection of the rights for all these performances".
There are solutions, but complicated ones, that will take a long time to be implemented. A "royalty-bare compulsory licensing regime" is needed, he said,"but that will take quite a number of years. I would hope that this real benefit of something like Napster will be made available."
Other online music services will show up in the meantime, he predicted.
"In terms of people being able to subscribe to the music they like. I think there will be legitimate forms of that at least on an experimental basis within the next 12 months," he said, declining to say if RealNetworks will be one of the companies that experiments.