Internet music debate plays out on Capitol Hill
Online executives, rock stars testify before Senate Judiciary Committee
WASHINGTON (CNN) --- The debate over digital music copyrights moved to Capitol Hill on Tuesday as online music executives and rock stars testified before a Senate panel on the effect that easily downloadable music is having on the recording industry.
Lars Ulrich, center, member of the rock band Metallica, talks with Napster CEO Hank Barry, right, during a Senate Judiciary Committee hearing on Capitol Hill Tuesday. Metallica is suing Napster for copyright infringement. Roger McGuinn, member of the Byrds, is at left.
"We must protect the rights of the creator, but we cannot in the name of copyright unduly burden consumers and the promising technology the Internet presents to all of us," Senate Judiciary Committee Chairman Orrin Hatch, R-Utah, said as he convened the hearing.
The growing popularity of online music services and utilities such as MP3.com and Napster has caused alarm among record labels and artists, who charge that the sites are havens for music piracy that deprive them of earnings and royalties.
Napster and similar software provides users with a method of searching thousands of other users' computers to share high-quality music recordings stored in the compressed MP3 format.
The Recording Industry Association of America is suing Napster, claiming it allows users to make illegal copies of the copyrighted songs. It is seeking an injunction against the service and damages for lost revenue from thousands of songs it says were pirated through Napster's program.
The RIAA represents major record labels, including Warner Bros., which is owned by Time Warner, the parent company of CNN.com.
Napster is also facing separate lawsuits from artists and bands. The heavy metal band Metallica filed the first federal suit against the company in April, accusing it of copyright infringement and racketeering.
Ulrich: Napster "hijacked" band's music
Lars Ulrich, the band's drummer, told the committee that Metallica took legal action after hearing one of its still-unfinished songs playing on radio stations all over the country.
"Napster hijacked our music without asking," Ulrich testified on Tuesday. "They never sought our permission. Our catalog of music simply became available as free downloads on the Napster system."
Ulrich talks with MP3 Chairman and CEO Michael Robertson on Capitol Hill Tuesday.
Napster contends that because it does not directly provide the copyrighted music, its service is legal and protected by a section of the Digital Millennium Copyright Act. That portion of the two-year-old law loosely says that a company that provides Internet services cannot be held responsible for what passes through those services.
Hatch said that online services are taking advantage of the provision at the expense of the record industry and its artists.
"For the most part, passage of the DMCA has proven to be an achievement settling many complex liability issues up front and allowing the online businesses to grow. It was our hope that it would give creators incentives to make their products available on the Internet ... Sadly, this has not occurred to any great extent," Hatch said.
However, companies are also required by law to bar users if a music copyright holder claims they are infringing by using its services.
"The Napster directory is a list of all the files that members of the community are willing to share ... they do this for no money, expecting nothing in return, on a person-to-person basis," Napster Chief Executive Officer Hank Barry told the committee. "That's it. Napster is an Internet directory service."
Napster: down-loadable music benefits consumers, artists
Napster recently hired lawyer David Boies, formerly the lead attorney for the Justice Department in the Microsoft antitrust case, to represent it in the high-profile lawsuit.
"Napster is helping and not hurting the recording industry and artists," Barry said. "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."
But Ulrich said the distribution of music through Napster is the same as stealing a CD from a record store, since most songwriters depend on the sale of records for their income.
"Every time a Napster enthusiast downloads a song, it takes money from the pockets of all these members of the creative community," he said.
Michael Robertson, chief executive officer of music provider MP3.com Inc., a service that allows users to find, purchase as well as store collections of music online, also testified before the panel. Last month, his company settled copyright infringement disputes with two major record labels.
"Currently, more than 74,000 artists and over 469,000 songs and audio files are posted to our Web site. These numbers continue to grow with an average of over 100 artists and more than 1,000 songs and audio files added daily," he told the committee.
Additionally, MP3.com has recently agreed to pay an undisclosed fee to copyright holders and artists each time that label's CD is registered by a user and another fee each time a user accesses one of its songs, Robertson said.
"Will licensing bodies work in a free market environment to license responsible technologies?" Robertson asked the committee. "Or will they use this opportunity to squeeze competitors and consumers?"
Hatch downloads Metallica music
Roger McGuinn, the co-founder of the rock group The Byrds, voiced support for sites such as MP3.com, telling the committee that during the height of his stardom in the 1960s, record companies offered him modest advances for his songs and few royalties. He said that his fortunes changed after an MP3.com executive heard the folk recordings he made available on his Web site in 1998.
"They offered an unheard-of, non-exclusive recording contract with a royalty rate of 50 percent of the gross sales. I was delighted by this youthful and uncommonly fair approach to the recording industry," McGuinn told the committee.
"I get e-mail from young people under 20 all the time who have discovered the Byrds basically from listening to Byrds tracks on the Internet," he added. "There's a renewed interest in folk music because I've been putting traditional songs on the Internet.
The ease of downloading music via the Internet was demonstrated by Hatch, who downloaded music by the rock group Creed as the hearing got under way. Recent studies estimated that 13 million Americans have downloaded music in a similar manner on their computers.
Hatch himself enjoys writing religious music and has several CD's to his credit. During the hearing his complimented Ulrich for sales of millions of copies of the band's most recent album.
"I was listening to Metallica this morning in my office," said Hatch, drawing laughter for the packed committee room. "Pretty darn good," he added.
This report was written by CNN.com writer Mike Ferullo.