The Court further dismissed any claims made by Napster, Inc. of potential fair uses of the Napster service – sampling of music, space-shifting of music and the authorized distribution of new artists work. According to the Court, the Napster service allowed its users to obtain permanent copies of songs that they would have otherwise had to purchase and carried with it the potential for "viral distribution to millions of people. " It is interesting to note that the Court distinguished Sony v.
Universal City Studios from the present case on the basis that time-shifting in Sony v. Universal City Studios of televised broadcasts allowed its viewers to watch a work that the copyright owner had made available to the home viewer free of charge, whist the recording companies in the Napster case almost always charged for consumers use of their music and is therefore an infringement of the copyright for the Napster service to make music available in such a manner to its users.
It is said there that the premise for the distinction between the Napster case and Sony v. Universal City Studios is interesting because this reasoning is premised on a notion that copyright law is meant to protect the copyright owner against the development of a new technology when that technology offers consumers use of the work that the copyright owner would have ordinarily charged for.
It is submitted here that the flaw of this reasoning stems from a presumption that the existing business model employed by the copyright owner is impenetrable by new technologies offering another way of enjoying the copyrighted work. The opportunity offered by the Napster service that allowed consumers of music to share music files that they have through a medium as permeating as the Internet is, arguably, merely an extensive network that allow people to enjoy and share their favorite music and is not different from two friends exchanging music that they enjoy.
The only difference here between the two scenarios, is that the service provided by Napster is threateningly frightening to the sound recordings industry as it penetrated into an aspect of the sound recordings industry's structure, which was fundamental -its business model that bases the delivery of its music to its consumer in a controlled and prepackaged manner.
The Court's decision to stretch copyright law to prevent the use of copyrighted works in the manner used by users of Napster brings copyright law into a new dimension, where the law is now used to prevent the development of new markets, limit consumer choice as to the use of the work and prevent the displacement of sales in the present industry by the introduction of a new technology that changes the existing mechanism and workings of the industry. The process of technological change that is vital to the development and growth to any industry was therefore curtailed by the decision in A.
M. Records, Inc. v. Napster, Inc. Judge Patel, in delivering the decision of the Court to grant an injunction against Napster to discontinue its services, was of the opinion that "the business interests of an infringer does not trump a right holder's entitlement to copyright protection" and in dismissing the fact that the decision would destroy Napster's user base and make its service technologically infeasible, had effectively tilted the direction of technological development backward. Being of the opinion that the destruction of Napster, Inc.
by the injunction was speculative compared to the massive damage caused by the unauthorized downloading and uploading of the plaintiff's copyrighted works, it is submitted that, Judge Patel had allowed the sound recordings industry to determine the course of technological development at the expense of cultural, technological and industrial development. As content becomes increasingly controlled today than it ever was before, the use of copyright law has extended beyond the reason for its being.
This point suffices to say that the application of copyright law to control the use of content affectively stifles the commercialization of creative works, affects business environment and prevents the development of culture and new technologies. The character of the sound recordings industry, while creating the setting for technological change to occur, also cause the sound recordings industry to lose control of the business model to which it is accustomed to and upon which its revenues have been traditionally generated.
As the structure of the industry is so susceptible to technological change, the accumulation of technologies that the Internet introduces brings about a shift that is so fundamental to the industry that it may be said that the "perennial gale of creative destruction" that Joseph Schumpeter, an economist, who throughout his life emphasized the "central role of technical progress in understanding the dynamics of capitalist growth," spoke about, to describe a technological event that permanently alters an economic system by sweeping away "old industries producing old products," has occurred in the sound recordings industry.
While it may appear that the industry is losing control of its creative content as a result of these new technologies, it is submitted that it is really a change in the structure of the industry, which is occurring with the rapid development of Internet and digital technologies. This being the case, the paper now turns to the inappropriateness of copyright law to deal with industrial changes that in reality alter the very manner in which the industry functions.
Pursuing remedies in copyright law to address the loss of control over sound recordings as a result of the new technologies in the market place misses the opportunities technological change brings to the industry and stretches a law that was never intended to deal with the changes that the industry is now undergoing. Conclusion
The question, therefore, to be asked with the development of the Internet and the ability to distribute music online is not whether online and digital distribution will impact the storefront business model that is the predominant model for the present industrial structure of the sound recordings industry, because it invariably will. Rather the more pertinent questions to ask are where the real uncertainties lie – with the business models that are developing and will develop to distribute music online.
What sort of business model will successfully and effectively distribute music online? What are the legal and technological factors that will shape the future of online music distribution? How quickly will music proliferate and be legally and profitably sold over the Internet? The sound recordings industry is poised at a position where changes are inevitable and it is hoped that this chapter of this dissertation has proven that the very structure of the industry opens itself up to a technology such as the Internet to change the very fundamentals of its workings.
The relationships within the industry, the nature of music as an art form and cultural embodiment of societal free choice and the various assumptions made by the industry about consumer preference, artists behavior and form of music to be developed make the industry ripe for changes that are bound to happen upon the introduction of a technology that offers a breakaway from traditional and outmoded practices. Recognition by the industry of these factors allows it to shift and develop in tandem with the opportunities presented by the Internet.
The immediate industrial reaction to technological change by asserting stronger and greater control over their copyrighted works has a detrimental effect on the development and growth of the industry. Contrary to the belief that greater control of copyrighted works is necessary to prevent the breakdown of the creative content industries with the advent of the Internet and digital technologies, this chapter submits that the ability of businesses to survive and thrive is to a greater extent dependent on the business' ability to adjust to the changing technological environment.
A business' ability to survive and thrive in a changing technological environment is largely dependent on its ability to be flexible and readjust to new technologies, its ability to revise its method of distribution of copyrighted works to the consumer and its ability to continuously produce creative works that appeal to the consumer in new and different ways.
As the survival and growth of the sound recording industry is dependent on a flexible and adaptable business model, the role that copyright law has to play in ensuring that the industries have a continuous control over existing business models as new technologies emerge in the marketplace is a limited one. As the industries undergo fundamental changes in their industrial structures, the reliance on copyright law to broaden rights and prevent new uses of copyrighted materials has the effect of preventing the growth and development of the industries as a whole.
It is submitted that the general growth of the motion pictures and sound recordings industries is dependent of the industries' responses to new technologies and the development of new business models that will allow the industries to successfully commercialize their works through the Internet and digital technologies.