Introduction

During my Internship at BMG, one of the five biggest record companies, I found that the Internet was an important factor for the future of the music industry. Not only are record companies struggling with the question how to implement the Internet in their marketing, promotion and distribution strategies, they are also at war with what they call ‘the Internet pirates’ who ‘steal their music’. I found this matter very interesting and thought the relationship between the Internet and the music industry would be a good subject for my thesis. In the months following my internship I was involved as a teacher in an introductory course to the academic study of popular music at the University of Amsterdam . In this course some attention was given to the Internet piracy debate as well. In the literature to this course it was argued that the music industry was making a mistake by saying that every downloaded music file equals a non-sold CD. Often this is illustrated by declines in record sales. The error made in this reasoning is that empirical data shows that the decline in record sales already started before downloading on a large scale was taking place. Moreover, it is argued that the music industry has never been able to come up with figures showing a direct link between sold CD- recordables, MP3 downloads from Napster and declines in sales. Hard evidence in any form is lacking to ground the reasoning of the music industry (Bakker, 2002).

As can be seen from the above illustrations, the matter is very topical and different people have different, sometimes rather strong opinions about the situation. But what are these opinions exactly and how do they relate to each other? What are the implications for the future of the recording industry and applications such as Napster? These are only some of the questions that can be posed in relation to the situation. Since Napster was launched many consumers started using it, for many consumers it was an important new way of consuming music. The success of Internet applications such as Napster is an indication for the importance of new technologies. Existing industries such as the music industry are struggling with the question how to react to this new technology. Clearly, Napster is a new cultural phenomenon that has different meanings for different groups.

In this thesis Napster as a cultural phenomenon is studied. The purpose of this study is to map the different views that are held in society about Napster. This leads to the research question:

What are the views of the different relevant groups in the Netherlands about Napster, what are the differences between these views and what does that mean for similar (future) applications?

This research question can be divided into three different sub-questions. The first of these is the most important one where the other two questions are derived from:

What are the views of the different relevant groups in the Netherlands about Napster?

Central in this question are the views, the meanings created by the different relevant groups. As mentioned above different groups have created different meanings about Napster. This study is an explorative study to the creation of meaning about Napster, the answer to this first question will provide an insight into the different views. The differences between these views are also important because they can provide a better insight into the situation. It is through recognising the differences that people can better understand each other. Therefore, the second question is:

What are the differences between these views?

The kind of differences I refer to are differences in opinion about the new technology, the use of that new technology and the effects of that use. In this study I will distinguish a number of topics based on these three points. It can be argued that the different groups involved have different views on these topics. With this study I intend to find out whether this is the case and if so what the implications of these differences are. This leads to the third question:

What do these differences mean for similar (future) applications?

Before I will point out the social and scientific relevance of this study I will first explain some important restrictions of this study. For practical reasons I have chosen to restrict my study to the Netherlands . Also I have chosen to restrict my analysis to two “different relevant groups”. In my opinion the two most important groups are, on the one hand, the consumers and, on the other, the music industry. The consumers are important because they are the ones who are using the music trading applications such as Napster. The music industry is important because they are the ones who feel threatened by these new applications and try to find ways to deal with it. These two groups are the most important in this situation but there can be thought of a whole range of other groups who also play a part in this. These are for example artists and their agents, journalists, copyright collecting societies like the Dutch Buma/Stemra, trade organisations such as the Dutch NVPI or the American RIAA and retailers. These are all groups who are in a way connected to the problem, they all have got their opinions on the situation and present stories about it. For most groups it would needlessly complicate my study to include them. There is however one group that deserves a special explanation to why it is left out of consideration: the artists, the group that is of course at the core of the music industry. From their point of view record companies are ‘only’ cultural intermediaries; they are but one link in the chain from artists to audience. Especially since the emergence of the Internet, as some artists have shown, new models are possible in which record companies are not a necessary link anymore. The current situation is different however and the music industry is still an important and often irreplaceable link in the chain. It was this group and not the artists themselves who reacted strongly to the emergence of Napster. To keep my study clear and accessible and for other practical reasons such as time and money limitations I only focus on the two most important groups that are involved in the struggle over new technology: the consumers and the music industry.

This in itself leads to some important difficulties. The music industry group can be easily defined and although it exists of many record companies, they are an existing group of companies that can be approached. The consumer group, however, is not an existing group similarly it is not easy to define them or approach them. Most important, there is no such thing as ‘the consumer’. This implicates that one always has to differentiate between consumers. The differentiation that best serves this study is a distinction between consumers who actively use the Internet to download and consume music and consumers who do not use the Internet. Obviously, in this study only the first group, the group that is using the Internet to consume music is included. I have called this group of consumers ‘online active consumers’. Although it would be very interesting to find out why consumers do not make use of the internet to obtain music, this is beyond the scope of my study.

Because ‘different relevant groups’ has been defined as the music industry group and the online active consumers group, the first sub-question can be divided into two separate questions:

What are the views of music industry executives in the Netherlands about Napster?

What are the views of online active consumers in the Netherlands about Napster?

Napster itself is no longer an active application, and it can be argued that for both groups Napster is not an issue anymore. Consumers have found other applications to download music. After the music industry had won the legal fight against Napster they also focused on other applications and launched their own legal services. The reason for me to focus on Napster instead of any other service is threefold. First of all, Napster was the first application that gained popularity on a very large scale, therefore Napster can be seen as the first successful application of a new technology. All of the other file sharing applications actually started as a result of Napster’s popularity. Second, the ‘factual story’ of Napster is no longer in development. It could be argued that I should focus on a different popular application, one that is still in use such as KaZaA. If I would do so, I could be faced with the problem that after writing this thesis it is already outdated by reality since KaZaA is still involved in lawsuits. Most important, the situation other applications like KaZaA are in is not very different from the situation created by Napster: the online active consumers use these applications and the music industry opposes to them.

The relevance of my study is very nicely summarised by the next quote by Roy Shuker (2001, p. 51): “Any new medium of communication or technological form changes the way in which we experience music, and this has implications for how we relate to and consume music”. Given that Napster is part of the new medium we call the Internet and that it enables users to consume music in a different manner, this clearly has implications for all parties involved. As pointed out by Steve Jones (2000, p. 217) the relationship between technology and music is threefold, it involves music production, music distribution and music consumption. In this study the focus is mainly on the second and third point. Since I did leave the artist group out of consideration I was not able to study the possible effects of Napster on the way music is produced. This study does focus on the effects of Napster on the way music is distributed and consumed. What are these effects and how are these changes considered by the recording industry and the online active consumers?

The social relevance of this study lies in that it shows employees in the music industry and consumers what their views are about Napster. This can be useful for both parties: the record companies holds certain beliefs about the users of applications like Napster and their strategies are based upon these beliefs. Similarly, consumers have very firm and sometimes even rather absurd ideas about the way the recording industry works. Although it is a line of business that is traditionally dominated by a small number of companies some consumers hold ‘conspiracy theories’ about the music industry and accuse them of price agreements and monopolistic exploitation. In news coverage often the consumer group and the music industry group are depicted as two opposites that do not understand each other (see for example: Kamer, 2002). In this study both sides will be able to find out what their views on this new technology are and how they should react to this new way of music distribution and consumption.

The scientific relevance is quite clear-cut when one tries to find academic writings about the topic: very little is written about these new applications and technologies and the impact they have on society. My research is an attempt to show that there is a lot to be said and more research on the relationship between the Internet and the music industry is necessary. It is relevant in another way too: in this thesis an attempt will be made to combine a number of academic traditions, namely symbolic interactionism, technology studies and popular music studies. These traditions are related and have some overlaps but I will also try to bring these traditions closer together and in doing so build a theoretical framework from which online musical practices and its implications in the offline social world can be examined. The need for examining this relationship was very nicely put forward by Nina Wakeford: “The relationship between the web and the rest of the social world cannot be presumed, but must be investigated” ( Wakeford, 2000, p. 31). This is exactly what I intend to do in the following chapters.

In chapter one the underlying theoretical assumptions and the way in which my study relates to different academic traditions are explained. In the second chapter I present a history of the music industry, an overview of their activities and a history of the Internet and Napster. These backgrounds give a broader insight into the contexts of both the music industry and the Internet, both have complex histories and it is important to know these histories to understand my results in their broader context

Moreover this chapter is at the basis of the topic list used in the interviews with music industry executives. This topic list is discussed in chapter three where I explain the choices and methods used to gather and analyse my data. The results of my research are divided into three important themes. These are presented in chapter four. In chapter five, the conclusion, my research question is answered using the results. Also explained in this last chapter is how my results relate to the theory and some suggestions for further research are made.

Chapter 1: Theory

The meaning of Napster is central in this study. The purpose of this study is to find out the different meanings that different groups have created about it. What views do consumers have on their use of Napster? What are the views on Napster of people working in the recording industry? How do these views relate to each other and what do they tell about each other? These are all questions I will try to answer in this study. Because these are questions that cannot easily be answered using a quantitative approach, this study follows the more interpretative, qualitative tendency in social science. In this chapter the underlying theoretical assumptions of this study are discussed. Also it is explained how this study relates to the several academic traditions described in this chapter.

In section 1.1 symbolic interactionism is discussed, this theory explains how meaning is created in society. This theory is very important for this study since the creation of meaning is central to my research question. Section 1.2 focuses on an important relationship within my study, the relationship between technology and society. Within technology studies there are two important and contradictory views on this relationship, these are explained in this section. In the last part of this chapter, section 1.3, it is explained how this study contributes to the academic tradition of popular music studies.

1.1. Construction of meaning through interaction

The term symbolic interactionism is constituted out of two terms, symbolic and interaction, these form the most important elements of this theory. Central to symbolic interactionism is the idea that social reality is a pre-interpreted reality produced by people (Wester, 1995, p. 25). This means that there is no such thing as a fixed or a true reality. The social reality in which we live is the outcome of our own creation of meaning. We create our own views about ourselves, about others, about things and ideas. To summarise, we create our own personal meanings of the social world. These meanings help us to interpret and understand the world, to make sense of things, events and people. Meanings also “bridge the gap between the natural, material world and the ‘world’ in which language, thinking and communication takes places - the ‘symbolic’ world” (Du Gay, Hall, Janes, Mackay & Negus, 1997, p. 10).

Of course we are not all-knowing and therefore we are not able to create meaning about reality all by ourselves. From the earliest days of our childhood we learn things from other people, for example from our parents and teachers. We gain knowledge by talking to people, asking questions and getting answers. Our views on reality are based upon the knowledge we get from these interactions. So, we create meaning through interaction. Individuals interact with each other and in doing so they create meanings about the social world.

This creation of meaning is an ongoing process; social reality is constructed by the actors continually (Wester, 1995, p. 10). What is even more important, the conduct of people is based on their applied meaning of objects that together form their social world. As Smith (1998, p. 161) puts it: “…while human beings act upon the natural environment, they also acted within the social environment”. To understand and make sense of the actor’s behaviour, the researcher should try to see things from the actor’s point of view. Following this, Wester points out that in symbolic interactionism the goal of the researcher is to find out the actor’s definition of the situation, his perception and interpretation of reality and how this relates to his behaviour. He also states that in interpretative communication studies the media and media messages are approached as objects that are interpreted and provided with a meaning by its receivers, viewers, listeners and readers (Wester, 1995, pp. 15-26). My aim in this study is to reconstruct the meanings that are applied to Napster by its users and by recording industry executives. Symbolic Interactionism points out that meanings are part of the symbolic world that was shaped through interaction and through interaction this symbolic world is expressed. What is of importance in my study is the use of the technology and how the use of technology is shaped by society. This is discussed in the next section.

1.2. The relationship between technology and society

Napster can be seen as a technology or at least part of the Internet technology, therefore a study about Napster is part of the academic tradition in social science that is known as technology studies. This tradition focuses on the relationship between society and technology, the social meaning of technology.

Before exploring what the general academic views on this relationship are, I will first explain what is meant by the very term technology. MacKenzie and Wajcman (1985, p. 3) explain that the word ‘technology’ at least carries three different layers of meaning. At the most basic level technologies refer to sets of physical objects, for example computers. Secondly, the word technology also refers to human activities. An object is only a technology because it forms part of a set of human activities. A computer for example is simply an object made out of certain material and with a specific shape; it is useless unless someone uses it for a specific purpose. Furthermore, the computer has been designed and assembled, these activities are also involved in the technology. And, thirdly technology refers to what people know as well as what they do, therefore, technology is knowledge. Computers are of no use unless you possess the know-how to make them, use them, and repair them. What becomes clear is that technology has a direct and complicated relationship with society since the mentioned objects, activities and knowledge all form part of our society.

Traditionally there has been a view on the relationship between society and technology that is now defined as technological determinism. Social scientists who have taken on this view in their research … “have tended to concentrate on the ’effects’ of technology, on the ‘impact’ of technological change on society” (MacKenzie & Wajcman, 1985, p. 2). Technological determinists argue that the key factor to social change is technological change. These changes in technology are seen as being formed outside of society. Although the technologists who produce new technology are in fact members of society, their activities are independent of society. They are seen as turning scientific discoveries into new techniques and devices. These are then introduced into society and have (often unpredicted) effects (MacKenzie & Wajcman, 1985, p. 4).

In the last couple of decades many academics have questioned technological determinism and elaborated on the problems that this view on technology holds. There are two main points of criticism to this view. Firstly, this view ignores the social factors that drive scientists and technologists to new discoveries and new technologies. Technological devices are logically developed for a reason. The computer was originally designed in the first world war to make computations for code breaking. Later scientists started to built computers for complex and difficult scientific computations. Secondly, after a technology is developed it does not automatically mean that a society will adopt it and use it for its anticipated purpose. Computers, for example, were first used primarily by scientists and hobbyist. It was not before computer games were developed that the computer became a consumer device. So it is not possible to see technological change as autonomous to society. Bijker and Law (1992, p. 8) explain that “technologies do not provide their own explanation. If there is no internal technical logic that drives innovation, then technologically determinist explanations will not do”.

The criticism on technological determinism has caused a shift in the view on the relationship between technology and society. Recently technology studies more often take on the view that is called the social shaping of technology . This is, in a way, opposite to technological determinism. Instead of looking at the effects in society imposed by new technology, it argues that before a technology can have an effect it needs to be shaped. This view poses the question that is left unanswered and even unasked by technological determinists: what shapes technology? Mackay (1997, p. 268) nicely summarises the answer of the social shaping of technology approach to this question: “Cultures gives rise to technologies and they, in turn, embody key elements of that culture”. Technology is seen as shaped by culture. New computers, for example, are being designed to be energy saving because it is part of our culture to be careful with scarce natural resources and to prevent pollution. This example makes clear what exactly is meant by ‘social’, this depends on various factors: “technology and its shaping has to do with the historical, the economic, the political, and the psychological as well as with the sociological” (Bijker and Law, 1992, p. 5). In society many forces are responsible for the shaping of new technologies. New technologies are often born out of conflict, difference or resistance. Moreover coincidence and chance often play an important role for the invention and acceptance of new technologies.

As said above technologies embody elements of the culture it originates from. Because these technologies are often born out of conflict, the technological artefacts will embody trade-offs and compromises. The focus of the social shaping of technology approach is on three important topics: the first is the process that underlies the development and implementation of new technologies, the second is the network of actors that are involved in this process and the third are the technologies themselves that can be seen as cultural artefacts (Bijker & Law, 1992, Mackay, 1997, du Gay et al., 1997).

In this study I take on this way of looking at technology, that is the social shaping of technology. This approach has a symbolic interactionist view on the creation of meaning about technologies. It is in line with symbolic interactionism for a number of reasons. First of all, technologies are part of the symbolic world. This is nicely illustrated in the following quote, taken from the study of the Sony Walkman by du Gay and his associates:

“The Sony Walkman is not only part of our culture. It has a distinct ‘culture’ of its own. Around the Walkman there has developed a distinctive set of meanings and practices. The very word ‘WALK-MAN’ conjures up an image or an idea – a concept – of the device. We can use the concept to think about it, or use the word (…) as a sign or symbol which we can communicate about to other people in a variety of different contexts (…) It belongs to our culture because we have constructed for it a little world of meaning; and this bringing of the object into meaning is what constitutes it as a cultural artefact” (Du Gay et al., 1997, p. 10).

So, technical artefacts are cultural artefacts that carry meaning and thus, they are part of our symbolic worlds. Furthermore, another important point is that meaning is constructed through cultural practices; it is not simply ‘found’ in things but it is the outcome of power and contest (du Gay et al., 1997, p. 14, Mackay, 1997, p. 271). This is similar to the argument mentioned above that technologies themselves are often the outcome of conflict. This, of course, is no coincidence; not only technologies but also the meanings about technologies are the outcome of interaction. Certain forces in society have more power than others and they use this power to enforce their view on reality. Of course, one cannot speak of true or false meanings. Similarly, it is not my aim to show which group is wrong and which one is right. It is easier to speak of meanings that are widely shared by many people and meanings which are held only by a few people. Moreover these meanings are not fixed but shifting all the time (du Gay et al., 1997). This continuous creation of meaning is central to both symbolic interactionism and the social shaping of technology.

In this study the focus is on a technology (the Napster application on Internet) as a cultural text and I want to find out the meaning about it created by different parties. As said before the music industry and the users of Napster technology hold different meanings about Napster. This is also made clear in the media coverage on this topic. Clearly there is a struggle going on about the use of a technology. This study focuses on both the consumers of the technology and the persons in the recording industry who are often opposed to this application of technology. The choice to look at these two groups is defended by the social shaping of technology approach. Du Gay argues that one cannot fully explain the social meaning of an artefact without looking at it from more than one point of view (du Gay et al., 1997, p. 3). Bijker and Law (1992, p. 10) make an interesting comparison with a game of chess: “…a game of chess cannot, after all, be reduced to the strategies of either one of the players. So is with technologically relevant controversy”. Although this analogy is not fully tenable because one could argue that with a game of chess the rules of the game are known in advance, I think the chess analogy makes clear that in order to fully understand the problem at hand one should look at it from both points of view.

1.3. The study of popular music technology

Finally I want to explain how this study also contributes to the academic study of popular music. Within popular music studies there are a few areas of research, related to overlapping and interacting topics. Various kinds of classifications can be made to describe the diversity of research within popular music studies. This diversity is explained for example by Negus (1996, pp. 2-3): ”…I seek to highlight how cultural identity, historical change, geographical location and political processes have a significant influence on how music is produced, distributed and consumed”. Shuker (2001, p. x) comes with a comparable list of things to consider: “the question of meaning in popular music cannot be read off purely at one level, be it that of the producers, the texts or the audience. It can only be satisfactory answered by considering the nature of the production context, including State cultural policy, the texts and their creators, and the consumers of the music and their spatial location”. Using a classification to describe the diversity within popular music studies also points to the variety of academic disciplines involved in popular music studies. It is truly an interdisciplinary tradition.

What I would like to follow here is a classification, made by René Boomkens, which divides the field into three complementary and sometimes contrasting fields of study. First there is research that focuses on the reception of popular music, to the uses and meanings of popular music by different audiences. Secondly, there is research that focuses on development of the content of music. Not only does this involve a more classical, musicological analysis of music pieces but also research to the development of styles and genres, musical forms and the technical and medial conditions of popular music. Thirdly, there is research that focuses on the shifts in the artistic, cultural and social role and self conception of artists, DJs, producers and the like (Boomkens, 2002, p. 2). Within this classification, my study would fit into the second area of study since it is concerned with the “technical and medial conditions of popular music”. In this study I look at the relationship between popular music and the Internet. Steve Jones (2000, p. 217) argues that the relation between technology and popular music can be divided into three categories: production, consumption and distribution. The study of Napster focuses on the distribution and consumption of music; it is a new medium of distribution and this new medium has implications for the consumption of music. Furthermore, it can be argued that this new technology could also have implications for the production of music but this is left out of consideration here.

In the next chapter I will discuss the history and context of both the music industry and the Internet. These will help to put things into perspective and provide an insight into the conditions that have been important in the development of the music industry and the Internet and what they are today.

Chapter 2: Backgrounds of the music industry and the Internet

In this chapter the history and context of the music industry and the Internet are discussed. Both have complex histories and it is important to know these histories to understand my results in their broader context. The music industry exists for over a century and it has known a very long starting period. During its entire history there have always been struggles over new technologies. Some technologies were developed and transformed for special purposes by the music industry, for example the CD. But, once developed, these technologies were not simply accepted by the music industry or the consumers. Other technologies and media were not immediately adopted or not adopted at all by the music industry, even if they were technically superior. In section 2.1 a history of the music industry is presented. This history shows some interesting analogies with the current struggle over new technology. An overview of the current structure of the music industry is presented in section 2.2. also the difference between majors and independents is further explained. Furthermore, to better understand what it is a record company does, the various activities of a record company are described. Section 2.3 focuses on the Internet and online culture. Although it was initially developed for very different purposes it became a technology that was used by many to obtain music. Clearly, the Internet culture that has emerged has had an impact on the music industry. Finally, in section 2.4 I will discuss the history of Napster.

Before I continue I want to make a short remark about this chapter: since all presentations of history are selections of the most important events from the writer’s point of view so will this be a selection. My selection is based on what is important to know about the music industry and the Internet to see the results of this study in a historical perspective.

2.1. History of the music industry

Providing a full history of the music industry would be a lifework in itself, if not an impossible task to fulfil. Moreover, as this would go beyond the scope of this study, this is not what I intend to do here. What I will present here is a short history of the music industry, to be more precise: a short history of the recording industry for I will take the invention of recording sound as my starting point. Of course there were people who made money made with music before there was such a thing as recorded sound, for example by selling sheet music or by the public performance of music. This period is left out of consideration here because my interest lies in the various changes in technology, how these have been initiated or resisted by the music industry and how the use of new technology has affected the recording industry. My focus is on the way in which technologies have been shaped by consumers and the music industry. To make this clear I have divided this section into ‘technical’ periods. As will become clear, this history has a specific focus on the Anglo-American history of the music industry. The reason for this geographical bias is that the music industry finds its origins in the United States and Britain. And still today the market for pre-recorded music is dominated by Anglo-American music.

From ‘talking machine’ to ‘music machine’, 1877 to 1891

In 1877 Thomas Edison found a method to store and reproduce sound; he invented the recording of sound. His invention was done with the purpose to complement the invention of the telegraph and the telephone with a technology that gave sounds a more lasting character. The device he developed for this purpose was the phonograph. (Dowd, 2002, pp. 110-111). The initial use Edison foresaw for his invention was the recording of the human voice, therefore the term ‘talking machine’ often was used to refer to it (Jones, 1992, p. 19). In order to attract investors for his invention Edison predicted the possible business and entertainment applications of his device (including musical recording).

After this first invention there was a long period of inventions and improvements by several other inventors such as Bell and Berliner, whose gramophone used a disc instead of a cylinder. During this period the producers of the machines focused on business uses of the device such as assisting in the transcription and reproduction of office communications. Because of many practical problems the business uses of the device never flourished. It was not until around 1890 that a new application of the device became popular. The organisation of the recording industry at that time was through a system of licensing deals with local firms. It was actually one of these local firms that foresaw the musical use of the device and was the leading actor in promoting this kind of use. Its name was Columbia [1] , this company started to experiment with jukebox-like devices. These so-called nickel-in-slot machines were developed to provide musical entertainment in public places such as saloons.

It was through this new use that the technology of sound recording became very successful and the focus of many companies shifted to musical recordings. This actually meant the beginning of the recording industry since now it was involved in the commercial exploitation of musical recordings, a formulation which can still be applied the to music industry today. (Dowd, 2002, pp. 121-126). During this first period of the recording industry, the production of the software (the recordings) and hardware (the playback devices) was in the hands of the same companies.

The beginning of a new industry and the introduction of a new format, 1891 to 1920s

As more players entered the market competition arose. For a period of time there was not one company or manufacturer that held a monopoly status and during this time there was much competition between the cylinder and the disc producers (Negus, 1992, p. 22). A new product conception led to a change in developments. Instead of public use, what was envisioned was the home use of recording machines and recordings. Obviously this would enlarge the market for both (Dowd, 2002, p. 131, Jones, 1992). For the gramophone disc a cheap way to duplicate recordings already existed. Together with the fact that the discs took up lesser storage space this made other manufacturers use a disc instead of a cylinder during the 1907 recession. Both a new product conception and economic downfall meant the acceptance of one format by the producers. It was the gramophone that eventually became the most popular device (Negus, 1992, p. 22).

It was in this stage that a separation took place between the recording and the reproduction process. The gramophone had become a device that was used for the reproduction of recordings that were made by professionals (Jones, 1992, 22-23). The format that had become dominant was the shellac disc that rotated at 78 rounds per minute (rpm). This format was developed in the late 1890s and became the standard in the 1910s. By the end of this decade the market was dominated by a small number of competitors who were in control of both manufacturing and distributing of recordings. In America these were the Victor Talking Machine Company and Columbia. The main competitors in Europe were the British Gramophone Company and the German Lindstrom (Negus, 1992, p. 3).

The avoidance of new formats and resistance to commercial radio, 1920s to 1940s

The shellac 78 did have some shortcomings, for example it was made out of a very vulnerable material. But although other, technically superior formats were developed, the recording industry would stick to its format until the late 1940s. These other formats were the 33^1/3 rpm vinyl disc and magnetic tape. Both were initially developed for film but became to be used by radio broadcasting corporations. (Dowd, in press, p. 7). Although these formats were technically superior and provided better sound quality, they were not taken up as consumer formats. One of the most important reasons for record companies to avoid these formats was that the consumers device could not play those formats and new devices were not made available. RCA was the only company that experimented with 33^1/3 shellac discs that were compatible with existing home devices but these turned out to be commercial failures because of technical problems (Dowd, in press, p. 23). During the 1920s the record companies did provide the gramophone, the reproduction device, with two improvements. These were electric amplification and the application of stereo. Again, this was something initially developed for film. One of the reasons the recording firms were adopting stereo was out of the fear of “going out of business” because the fast adoption of stereo sound by the public (Jones, 1992, pp. 30-34).

In the same decade the recording companies found themselves confronted with two developments: economic downfall and the rise of a new medium, commercial radio. The long period of success for the record companies who had been able to establish multinational operations came to an end. The number of sales dropped for the recording industry and the number of companies declined. When simultaneously the radio industry flourished the recording companies draw the conclusion that they suffered from the broadcasting of their recordings, the pre-recorded 78s, by the radio stations (Dowd, in press, pp. 8-9). The recording firms argued that the drop in sales was caused because consumers would not pay for recordings if they could hear the music for free on the radio. Their reaction was twofold, they insisted that radio stations would only broadcast live performances to promote their artists and inscribed prohibitions on the recordings to prevent radio stations from broadcasting them (Dowd, 2001).

During this period of recession the two largest record companies in the United States were bought by radio giants. Victor was purchased by the Radio Company of America (RCA) which was the parent company of the NBC network and became RCA Victor. Columbia was eventually acquired by the CBS network (Dowd, in press, p. 8). At the same time a third company that followed a different strategy entered the scene. This company, Decca, provided cheap recordings for jukeboxes in public establishments. Its strategy proved so successful that Decca became one of the biggest record companies and together with RCA Victor and Columbia formed “the Big Three” (Dowd, in press, pp. 8-9). In Britain the market had also evolved, here it was dominated by two companies, Decca and the Electrical and Musical Industries (EMI) which was formed out of the Gramophone Company (Negus, 1992, p. 3). These were all companies that by this time purely focused on the production and distribution of the ‘software’; the recordings. It was the hardware manufacturers that became competitive and the record companies that became concerned with copying and piracy of their recordings. Initially this concern was on the piracy of live performances (Jones, 1992, p. 35).

The acceptance of radio airplay and the battle over a new format, 1940s to 1950s

During World War II the production of records dropped dramatically as a result of two developments. The first were the wartime restrictions on the use of shellac, this obviously limited the production. The second development was a strike of musicians united in the American Federation of Musicians (AFM). While the existing record companies were struggling with these developments, a new recording company with an innovative strategy entered the music industry. This company, Capitol Records was established in 1942. Its new strategy was based on the belief that the broadcasting of its recordings would stimulate rather than harm sales. Already in 1940 a federal court ruled that radio stations could broadcast recordings which led to increased airplay of the recordings. Capitol became the first company to deliver free recordings to disc jockeys. Their believe turned out to be right and in a short span of time the company size grew comparable to the Big Three. In fact, the successful rise of Capitol turned the Big Three into the Big Four. Moreover, its new strategy led to a shift amongst the other record companies, they now all began providing free recordings to DJs (Dowd, in press, pp. 11-13). The acceptance of this new medium had changed the music industry.

Although the strategy had changed, the shellac 78 remained the standard format until 1948. In this year CBS (Columbia) presented its 33^1/3 rpm long playing disc (the LP). RCA responded with its own format, the smaller and inexpensive 45 rpm disc. In the next years a battle over what would become the new standard emerged. The battle came to a compromising end in the early 1950s when both the LP and the 45 were accepted as the new formats by all record companies. The LP was used for albums of extended length like soundtracks or classic music recordings. The 45 became the standard for single songs, used by jukebox operators and radio stations.

The new formats also offered possibilities for new record labels to enter the market (Dowd, in press, pp. 13-14, Shuker, 2001, p. 40). The 1950s are commonly known as the decade in which Rock and Roll emerged. Although some authors do question this and state that Rock and Roll as a musical form already existed in the 1940s it was in the1950s that this new genre became commercially exploited (Shuker, 2001, p. 37). The recording industry saw another blooming period. The Big Four had evolved into the Big Six (in the US) when the record labels of Mercury and MGM had prospered. Once more innovation came from small beginning record labels such as Sun, Atlantic, Stax and Chess. It was these companies that played an important role in revitalizing the industry by offering a new musical genre that met the consumers appeal. And although the market for music as a whole rose, their entrance meant that the Big Six lost some of its dominance (Shuker, 2001, pp. 40-41).

Power over distribution and long steady growth, 1960s to 1979

The answer of the Big Six was focused on the distribution of music. It was in the late 1950s that they found out the importance of distribution. This had become a problem because several formats coexisted (LPs, 45s and pre-recorded tapes in various formats). When production rose because of growing demand this led to problems at the distributors. Therefore the labels started their own distribution systems. By the end of the 1960s the record companies were in control of distribution. Not only of their own products but they also managed to create a system in which many (if not all) of the smaller record companies had become dependent on the distribution power of the Big Six. In order to survive, these smaller companies had to sign distribution deals with the majors who would distribute their records in exchange for fees and royalties (Dowd, in press, pp. 15-16). This system often led to incorporation of the smaller firms by the Big Six.

What would follow in the 1970s was a long period of steady and firm growth of production and income for the music industry. In this decade of prosperity various tape and disc formats coexisted but the industry was not faced with drastic technical change in consumer format. The cassette was the only new format that gained widespread popularity. This tape cartridge, first introduced by Philips in 1963, became the consumer standard for magnetic tape recording. Although other tape formats had been around, the cassette did gain popularity because of a number of social and economic factors. In contrast to the phonograph this new ‘hardware’ device was at first primarily used for voice recording, by researchers, journalists and for sending personal messages to the soldiers in Vietnam (Jones, 1992, p. 36). It showed some attractive advantages for consumers: portability, good sound quality, it was easy to operate and the tapes were relatively inexpensive. As mentioned above, a new feature was that consumers could easily record on cassettes. Not only their own music or voice but also music from the radio or from records (Shuker, 2001, pp. 59-60, Jones, 1990). Another important factor for its popularity was that the cassette could be played in the car which was also (Jones, 1990).

The fight against home taping and the rise of the Compact Disc - 1980s to 1990s

In 1979 there came an end to the long period of economic prosperity and the record industry blamed this recession on home taping. Home taping was the term used for copying from existing recordings or radio broadcasts, a new consumer practice that emerged from the widespread availability and use of cassettes. Obviously the recording industry was not pleased with this kind of use. They argued that home taping was copyright infringement and began running advertisements denouncing home taping as theft (Shuker, 2001, Jones, 1990). Record companies figured that consumers would rather copy recordings then buy them. They claimed that home taping had adversely affected record sales and called for changes in copyright law to secure their income. The recording industry, represented by its official body the Recording Industry Association of America (RIAA) started lobbying for changes in copyright law and a tax on blank cassettes and cassette decks. Several bills were presented to congress but none of them passed (Jones, 1990, Jones, 1992, Dowd, in press). Although it was never established in the US, in several European countries systems were formed whereby a levy on blank cassettes was paid by the consumer. The income from these levies was divided among copyright holders.

Just as the vinyl formats, the cassette did also have an effect on the emergence of new music. Cheap home recording of ‘amateur’ music was now possible and was taken up on a large scale. Soon an underground network of musicians and listeners evolved that was referred to as cassette culture. This suited well with the ‘do it yourself’ culture of punk music and also helped popularise genres like reggae and hip-hop. Although this new format also offered new possibilities for the music industry, at a time of economic downfall, their focus was primarily on its threats.

While struggling with cassettes a new format was launched. The Compact Disc (CD) was first introduced in 1982 by Philips, who was also the parent company of large labels like Polygram and Mercury. This format featured a number of substantial technical improvements. It stored music digitally and optically, this meant that the music on the disc was of high quality and would not deteriorate over time (Dowd, in press, p. 17). A further improvement that the CD offered was its extended 75 minute non-stop duration since it did not know the ‘inconvenience’ of changing sides. Although some record companies initially had their doubts about this new format, Philips was able to convince the most important manufacturers so many music became available on CD. For consumers this new format was a success from the start, within several years from its launch it had become the new standard.

By then the music industry did not only gain income from sound recordings. What had become of increasingly importance was the exploitation of copyrights by publishing companies. These publishing companies had become the actual owners of the copyrights of many recordings. Broadly speaking there are three types of copyright revenue: performing rights, mechanical rights and public performance rights. Respectively these types mean that money has to be paid to the copyright owner one, when the music is performed or broadcast, two, when the music is recorded or mechanically reproduced and three, when the recording is being broadcast or played in public (Negus, 1992, p. 13). It is important to state that although all big record companies have their own publishing companies it does not necessarily mean that an artist that has signed with one company for the exploitation of their recordings also signs a contract with that company’s publisher for the exploitation of their copyrights. The income from copyrights had become an important income source for the record companies so they were prone to protect it. The success of the CD was largely caused because many music became available on this format, this was an important condition for its commercial success. The music industry used this power and their collective lobbying power to ‘protect’ their copyright. They were able to hold back the commercial breakthrough of the Digital Audio Tape (DAT) as a consumer format in the beginning of the 1990s. The threat this new format caused was that it made digital recording and storing on tape possible, thus making tapes with CD quality. Or as Jones puts it more precisely: “…dubbing a record or compact disc onto DAT does not produce a copy, it produces a clone, an exact replica” (Jones, 1990). In the US a bill was passed that imposed a tax on DAT machines and blank DAT tapes. Because this tax made DAT too expensive for consumer use it eventually was used for ‘professional’ use in recording studios. Two similar digital formats were launched by the hardware companies, these were the Philips DCC (Digital Compact Cassette) and the Sony Minidisc. These formats did not became an important format for pre-recorded music nor did it became widely accepted by consumers (Dowd, in press, Jones, 1990). The launch of the CD and other digital formats show that a number of social, economic and political factors are responsible for the success of a new technology. Clearly the music industry has had an important role in this process.

At the beginning of the new millennium five large record companies dominated the largest part of the music market; the Big Five. These companies had all become part of big multinational entertainment conglomerates and had increasingly developed connections with a range of related media and technologies (Negus, 1990, p. 3). This is discussed in the next section.

2.2. The current structure of the music industry and its activities

In this paragraph I will describe the current structure of the music industry and what their activities consist of. In doing this I describe the context in which the local companies work. Because I have interviewed record company executives in the Netherlands it is within this context that the results from my study must be seen.

Majors and Independents

As mentioned in the previous paragraph the music industry is now dominated by a small number of companies, the so-called majors. These companies are: Warner, BMG (Bertelsmann Music Group), EMI (Electrical and Musical Industries), Sony and Universal, they are often called the Big Five. Each of these majors are part of larger parent company. The parent company of Universal Music is Vivendi Universal that also owns TV networks, film studios and companies, press publishing companies and is also a big shareholder of AOL Time Warner. AOL Time Warner is the parent company of Warner Music. This media conglomerate is mainly based in the United States and owns TV networks, film studios and companies, publishing houses and Internet companies. As its abbreviation already makes clear, BMG is owned by the German media enterprise Bertelsmann. This company is also the owner of publishing houses, a whole range of European TV networks and a number of magazines. It is also a major shareholder of Internet companies such as AOL Europe, Lycos and CDNow. Sony Music obviously is part the parent company Sony. It is also the owner of the electronics empire Sony Electronics which has become world-famous from the development of smart technology such as the Walkman and the Minidisc. The English based EMI has, in the recent history, been talking with both Bertelsmann and Time Warner about a merger. This was objected by several governmental bodies like the European Community regulators because of monopoly concerns (Alderman, 2001). As can be seen from this overview is that the majors are all part of international media conglomerates and hold connections with a range of related media and technologies. The strategy that most of these media firms have followed in recent years is that of synergy. What is meant by this buzz word is the symbiosis between various parts of the big media concerns. The combination of the various activities of these businesses must make possible the production and marketing of information and entertainment products that can be crossed over to different markets. Success in one market will be the booster of success in another market. An example of synergy is that a successful book of the company’s book publisher is turned into a movie by its studios, which is promoted by its television stations and magazines, the record company provides music for the soundtrack, one of these songs becomes a hit through airplay on the radio stations owned by the company and a music video is made which is broadcast on the company’s music television stations. This is of course an extreme example of synergy and in reality it is not at all easy to come to such synergy but it shows what power lies in these companies. Not only have the majors direct lines to certain media but as mentioned they are also in control of large part of distribution and own publishing companies.

The Big Five together account for about 80 percent of the total revenue in the music industry world-wide (Negus, 1996, Kretschmer, Klimis & Wallis, 2001). The other 20 percent is taken up by the so-called independents , or indies for short. Independents vary greatly in size, from labels with only one artist owned by the same artist to multinational companies that have world-famous artists under contract and everything in between. Although this diverse group of record companies is called ‘independent’ often the bigger independents have closed distributing deals with one of the majors in order to reach their (global) market. The majors in turn receive money for this and by doing this they skim the profits of these independents.

Another property of the independents is that they often serve a so called niche market. This means that they have only signed bands within a certain genre such as metal (Roadrunner), Punk (Epitaph) or dance (ID&T) that is considered uneconomic by the majors. Because such independent labels only release music of a specific genre, these labels are very recognisable and are able to build a brand that has specific meanings for an audience. What often has happened is that whenever certain genres do get popular and the labels grow, often they are purchased by one of the majors and become part of this major. The music industry is a line of business that is often described as a “winner takes it all” business in which 10 percent of the products has to account for 90 percent of the turnover. It is a business with a large degree of uncertainty about what music will be successful and because high initial costs are involved it is a market in which high risks are being taken (Kretschmer et al., 2001, Shuker, 2001). Even though there are differences between majors and independents, their activities are similar, these are described in the next section.

The activities of a record company

In the first section of this chapter the history of the music industry has been described. It is mentioned that over the years the exploitation of music rights has become an important source of income for the music industry. Although this study only focuses on the record companies that are concerned with the exploitation of recordings, it is very helpful to give an overview of the activities of both publishers and record companies. Kretschmer et al. (2001, p. 423) give a very clear-cut summing up of the main activities of both music publishers and record companies:

Music publishers traditionally engage in the following activities:

Sourcing new talent;
Developing new talent by financing new works and producing pilot products;
Promoting and securing the commercial exploitation of works (e.g. through contracts for performances, recordings, broadcasts, adaptions, etc.); and
Administering royalty income from primary and secondary exploitation (e.g. performances, recordings, broadcasts, adaptions, etc.)

Record companies traditionally engage in the following activities:

Sourcing new talent;
Producing recordings;
Manufacturing a physical product (e.g. record, tape, CD);
Distributing the product;
Marketing and promoting the artist, recording and product; and
Administering royalty income from public performances, broadcast, etc. of the sound recording.

Because this is only a brief summary of the main activities of recording companies, it might be helpful to present a model here of the order of these activities. The following model is an adaptation of a model proposed by Heijmans (1996) in her thesis on the development of the Dutch market for recorded music. What is depicted in this model is what happens to a song one it has been written. In other words, what activities are carried out by record companies after the artist has ‘done his share’.

Figure 1: Model of industry activities,

based on Heijmans (1996).

After writing comes publishing, although this is not always the case, if someone does not have a publishing deal then they will remain the owner of the song. Then the song has to be recorded and officially released by a record label. Bands who have signed with record companies receive money to cover the costs of the recording (e.g. studio rent, recording and mixing personnel). This investment is often ‘recoupable’ from record sales, which means that the band will not start earning after a certain number of records is sold and thus the investment is earned back. After releasing the record two different ‘activities’ take place simultaneously. Obviously the record has to be manufactured and distributed but at the same time it has to be marketed. This marketing and promotion of the record runs through a wide variety of channels, this is represented with Media, Sales and Live circuit. These are the three collections of channels through which the consumer will be reached by the song. Media includes broadcasts on TV and radio but also WebPages on the Internet and articles and reviews in magazines. ‘Sales’ is the collective noun for all sales activities often through and in association with retailers. The live circuit obviously stands for public performances by the artist and related activities.

The above description of the activities of the music industry is obviously seen from the point of view of the music industry. In the model the activities of the artist (e.g. writing, performing) are seen as part of this music industry. Record companies are intermediaries between artist and consumer. Of course other models are possible, one, the cassette culture, is described in the previous section. This was an active underground scene in which there was a direct link between artists and consumers, no record companies were involved. The Internet has in a way been able to revitalise such a model. Not only unknown amateur artists but also artists like Prince, David Bowie and Janis Ian use the Internet to communicate and sell directly to their fans. As mentioned above the Internet is nowadays also part of the marketing mix of record companies. How the Internet has evolved from a scientists tool to a commercial consumer medium is the focus of the next section.

2.3. Short history of the Internet and ‘online culture’

Napster is an application that runs over the Internet. To understand the philosophy of file sharing, the basis of the Napster model, it is useful to take a look at the history of the Internet and the Internet culture that has emerged. The Internet also was a technology that was adopted by several groups in society for different reasons.

Basically, the physical form of the Internet is just computers and wires. These computers are connected together and form an international computer network on which several applications run. The best known and probably most used of these applications are the World Wide Web (the Web) and e-mail. Although most of the present-day users started using it in the 1990s and the Internet really started to expand in this decade it has been around much longer. Thomas and Wyatt (1999) point out that the question of how long exactly is open to interpretation. It is certain that its origins can be traced back to an United States defence research project called ARPANET which was meant to be a communication network that would make it possible to keep communicating in case of a nuclear assault. It was also developed to share computer resources that at that time were very valuable. The underlying principal of the network was the transmission of information in small packets via different computers that were connected to this network. If one of these computers would break down, the packets would arrive to its destinations using other routes. This all works according to the Transmission Control Protocol (TCP) and the Internet Protocol (IP), these are protocols that tell the packets how and where to move. These protocols were defined in 1974 by Vint Cerf and Bob Khan.

In its early years the Internet was the strict domain of scientist, engineers and academics. It was not until the development of the World Wide Web (an Internet interface) and a Web browser called Mosaic that the Internet became usable for ‘normal’ consumers. Before this, people had to be experts to make use of the Internet. In 1991 the US National Science Foundation (NSF) allowed commercial ‘traffic’ over its network. Together with the implementation of the World Wide Web and the introduction of Mosaic this was the starting point for the Internet as we know it today (Guantlett, 2000, pp. 4-5, Thomas & Wyatt, 1999, Berners-Lee, 1999, p. 20). Thomas and Wyatt (1999) present a short history of the Internet, broadly divided in four main periods of development. These are:

The Internet as testbed or ‘scientists’ playground’ where the technical problems of creating a wide area computer network were being ironed out (most of the 1970s);
The emergence of an Internet community, chiefly consisting of computing science professionals and students, when new services and new forms of communication such as Usenet newsgroups began to develop (from the end of the 1970s to around 1987);
The broadening of the Internet into a general academic resource, across the globe, when the information and services on the Internet became more important than the addresses of the connected computers (from around 1987 to around 1993); and
The transformation of the Internet into a general commercial information structure (the current period since the development of the World Wide Web).

Online culture

Just as there is no such thing as the culture offline (e.g. the Dutch culture) neither there is a clearly definable online culture. What I intend to describe here are certain aspects that have become perceived as typical of the Internet. As described above, from the start the Internet has been a network through which academics would exchange ideas and discuss them. These academic values led to a culture in which its users were involved in sharing ideas and information freely. The other group of users that were using the Internet in its early days were the so called techies or with an more unfriendly term computer nerds, hobbyists with a large interest in home computers, networking and programming. Among this group were the founders of firms such as Apple, Microsoft and Netscape. Mackay describes how this Californian counterculture was made of a culture of enthusiasts who were “motivated not by corporate profit but by a concern to change the world and to empower ordinary people” (Mackay, 1997, p. 267). Also among this group were the so called hackers . Nowadays, this term has come to be synonymous for computer freaks who break into protected networks and sometimes cause damage. The term originally was meant for young often male who enjoyed working with computers and whose objective was to understand and improve software. This is explained in the ‘hacker ethic’ based on the following two points:

The belief that information-sharing is a powerful positive good, and that it is an ethical duty of hackers to share their expertise by writing free software and facilitating access to information and to computing resources wherever possible.
The belief that system-cracking for fun and exploration is ethically OK as long as the cracker commits no theft, vandalism, or breach of confidentiality.

Both of these normative ethical principles are widely, but by no means universally, accepted among hackers. Most hackers subscribe to the hacker ethic in the first sense, and many act on it by writing and giving away free software. A few go further and assert that all information should be free and any proprietary control of it is bad. (Raymond, 1996). The mentioned free software has become known as freeware or shareware, this software often is open source so that anyone can make adjustments to it. One of the best known open source programs is Linux, which is an alternative to Windows (Gauntlett, 2000, p. 10). Giving away things for free also led to success for various starting Internet connected companies in the 1990s, for example Netscape. It is the foundation of what Michael Goldhaber calls the attention economy. He argues that the only scarce resource on the Internet is attention, what is meant is the attention of the Internet user, the consumer. Websites will have to struggle to get this attention and one of the ‘strategies’ is giving away free stuff and by doing so the Website builders will hope that its users will spread the word about their Website (Goldhaber cited in Gauntlett, 2000, p. 9-10).

What I want to argue here is that the Internet is built on a principle of information sharing and the belief that this information should be freely available to everyone. There is a group of devoted Internet users that sticks to this principle. But I must also add that the presented picture of online culture carries a somewhat romantic notion about Internet culture and maybe more of a net utopia held by a certain group of users. When commercial companies started using the Internet as a marketing tool and regular consumers started using the Internet of course the Internet culture drastically changed. Despite these changes the Internet is still a free world and the principle of sharing information was one of the reasons for Shawn Fanning and others to create their file sharing Websites. Because Napster has been the application that introduced file sharing to a large audience it is central in my study, in the following section its history is shortly described.

2.4. Napster

Napster is a computer program that runs over the Internet and enables its users to browse to each other’s collections of MP3’s which is an audio file format. MP3 is short for MPEG Audio Layer 3 which is part of a compression technique originally developed by the Motion Pictures Expert Group (MPEG), an expert group for the film industry. This compression technique was developed to shrink multimedia files in order to easily transfer them over the Internet. The MP3 format became popular among the group of techies and other early adapters of the Internet. Before Napster existed there already were Internet users trading audio files using Internet applications such as IRC (Internet Relay Chat) or FTP-sites (File Transfer Protocol) (Alderman, 2001). Because these applications needed specific knowledge and a certain amount of computer skills these were not easy to operate and mainly stayed the domain of techies such as computer science students [2] . One of them was Shawn Fanning who thought this could all be done a lot easier and more accessible. This belief made him write the program Napster a program that was easily accessible and easy to use. This was first launched in 1999 and was a success from the start. Soon Fanning had to replace the servers on which Napster run because it was immensely popular. Of course the program was noticed by the recording industry who weren’t so pleased with it. The Recording Industry Association of America (RIAA) who looks after the music industry’s interests sued Napster in December 2001 for copyright infringement. In the following years a long juridical struggle took place which eventually led to the definitive court ruling that Napster had to shut down its service in September 2002 [3] . This trial, however, could not prevent Napster from becoming even more popular and others to start up Napster-like applications like Gnutella, Morpheus and KaZaA. The juridical fight against Napster was won by the music Industry but they are now continuing the battle by fighting applications such as KaZaA. Trials against these applications are more complicated because they have no central control over its users. KaZaA and others use so called peer-to-peer technology or P2P as it is often abbreviated. This technology is based on the idea that there is no central server, after installing the program on their computer the individual users come into contact with each other directly (Alderman, 2001, MSNBC, 2001, Libbenga, 2001)

In this chapter I have described the history and structure of the music industry. These sections provide an insight in the context of the music industry group of my study. The context of the other group, the online active consumers, is explained in the last two sections. Here, the history and culture of the Internet and Napster are described. These backgrounds and the literature used in this chapter have also been the basis for the topic list used in the interviews with music industry executives. What this topic list looks like and how the discourse of the consumers is reconstructed is described in the next chapter.

Chapter 3: Methods

The previous chapter was primarily descriptive and dealt with the context this study has to be seen in. The following chapter deals with the research design of this study and the way in which this research was conducted. Of course the research design was largely shaped by the theory. The methodological consequences of symbolic interactionism are described in section 3.1. One could say that research is in itself a form of symbolic interaction. Methods carry meaning, they tell how the researcher constructs his reality (Wester, 1995, p. 29). In section 3.2 the methods of data gathering and the interview topic list are presented. The last section of this chapter deals with the methods I have used to make sense of the data.

3.1. Methodological consequences of symbolic interactionism

In the first chapter I explained the theory that is central to this study, symbolic interactionism. Central to this theory is the notion that reality is constructed and that people create meanings about their surroundings through interactions with each other. It is the goal of interpretative research to understand these meanings. This theoretical approach also has some important methodological consequences. First of all, what is studied is the constructed social reality of two important groups, recording industry executives and online active consumers. To understand their meanings about reality the researcher should have direct contact with the reality of the persons concerned. Second, the research should be open in its nature. This means that the researcher should not be preoccupied about the topic and keep an open mind to the realities that are presented by the respondents. Although this open nature should be characteristic of good academic research this is especially the case with the qualitative, interpretative field. Below I will explain how I incorporated these two points in my research design.

3.2. Methods of data gathering

Because the goal is to reconstruct the interpretations of reality held by the groups involved I needed to use methods through which the subjects could express their ideas and beliefs in their own way. I have used two methods to gather data, for each group involved I have used a different method. This difference in method obviously has implications for comparability of the two perspectives. This problem is discussed at the end of this section.

The method I have used to gain insight into the interpretations of the recording industry executives is in-depth interviewing. Roughly speaking, there are two types of in-depth interview: the open-ended interview and the semi-structured interview. For this study I found the semi-structured interview the most useful one. This kind of interview is often used in interpretative research and its main advantage is that it provides comparability between different respondents. The term ‘semi-structured’ refers to the nature of the interview. In contrast to the open-ended interview, in which the researcher only decides the conversation topic, this kind of interview is based on a topic list that includes questions that are formulated beforehand and contains a preferred order. The topic list used in this study is discussed below, the full topic list with the exact formulation of the questions can be found in appendix 2. Unlike a survey-like questionnaire the semi-structured interview does not hold restrictions to the length or range of the answers. The respondents were given all the time they needed to react to the questions in their own words. In addition to the questions in the topic list, so called ‘prompts’ were used during the interview to gain more insight into specific topics or answers. These prompts are questions like “what do you mean exactly with…” or “why do you say this?”. Therefore some of the interviews have taken quite different routes than others because respondents decided to elaborate more on specific topics. This is in line with the remark of van Zoonen (1994, p. 137) that “…the planned nature of the semi-structured interview is to be taken quite loosely”. Also, this contributes to the open nature of the research, a point made in the first section of this chapter.

The questions in the topic list are structured in sections that each contain a theme. Based on the analysis of secondary literature, these themes represented the most important aspects of the situation. The interviews started with a general introduction in which I did introduce the purpose and design of my study and in which the respondents get to introduce themselves. This introduction also served as a way to break the ice and to let the respondents feel comfortable. The first theme was about the Internet, and contained some questions about how the respondents viewed the relationship between the Internet and the music industry in general. In the second series of question this relationship was restricted to the relationship between the music industry and Napster. Not only their personal experience and opinions about Napster were asked but also what they thought of the way the music industry had reacted and if there was a difference in reaction between majors and independents. Furthermore, the Napster timeline, which is also included as appendix 1, was shown and it was asked whether they thought this was the right depiction of the Napster story. The third theme dealt with questions about consumers. These were questions about how the respondents viewed consumers who download music and what their ideas are about what factors are important for consumers to decide to buy or to download music. The fourth theme linked up to the third in that it deals with piracy, a term which is also used for illegal downloading. The respondents had to give their definition of piracy and their connotations with the word since the word also stands for the mythical figure everyone knows from comic books and cartoons. Then some attention was given to two important analogies from the past, these are the introduction of radio in the 1930s and the home taping with the cassette recorder in the 1970s and 1980s. In both cases during a period of recession it was argued by the music industry that these new technologies were the cause for this recession because consumers would not pay for music anymore. This same argument is now made. It was questioned how the respondents saw these analogies and what would be the differences with the current situation. Finally, the last theme dealt with the future of music and the music industry. The questions in this theme are to the respondents’ opinions on the future. During the closing the respondents were given some time to place some general remarks about the topic or the research and to broach important new subjects that were not covered in my topic list. During the interviews my topic list proved to cover all important subjects. Moreover, the order of the questions proved to be logical, often, some of the follow-up questions were already answered before I could pose them. Depending on the answers some interviews were slightly longer and some were slightly shorter but the average time of an interview was about three quarters of an hour. To make the analysis easier the interviews were audio-recorded and transcribed as literally as possible, how this analysis was carried out is described in section 3.3.

As mentioned in the introduction I did restrict the music industry group to record company executives. Appendix 3 gives an overview of the respondents’ occupations and the companies they work for. As can be seen from this appendix, two additional interviews were carried out. The first of these additional respondents is an executive at the Dutch anti piracy organisation BREIN, the other at the Free Record Shop, one of the largest Dutch entertainment retailers. These interviews were conducted to get a broader view of the situation but were excluded from the analysis.

The data of the second group involved in my study was gathered in a different way. In the introduction I have already explained the problem I was faced with: there is no such thing as a ‘standard’ consumer so what kind of consumer do I include? My solution to this problem was defining a group using the rather abstract term of ‘online active’ consumers. But after defining this group was I was faced with a new problem: how do I get in touch with this group? I could not use the same method I had used to approach the recording industry group because of the fact that this group is not organised. So I had to find a way to get in touch with this group. The solution I chose to this problem was to take newsgroup postings as my data. This way I would be able to include reactions from the group I was looking for, consumers who are active online, who had thought about the issue and who were involved enough to give their opinion. After a search on the Internet I found two Websites that provided the kind of consumer reactions I was looking for. Although the Internet and Napster are worldwide phenomena I had chosen to include only Dutch reactions for the simple reason that the respondents in the recording industry group were Dutch too. This would mean that both groups arguably would not be biased because they had access to different kinds of media content which would be the case if I had included more international Websites.

The first Website from which I gathered data is Webwereld, (www.webwereld.nl ) a Dutch online computer news magazine with news topics about Internet, hardware and software. Also included is the possibility for users to give their reactions to the news articles and a forum where users can post their own questions and remarks, this forum is not restricted to computer related topics alone. I searched both the news archive and the forum on words like Napster, peer-to-peer and MP3. The word Napster proved to be the most relevant word to search on because many articles referred to Napster in one way or another. A list of the headlines that this search produced is included in appendix 4 to give a global picture of the range of news items. I selected all relevant messages posted in the period March to October 2002. The reactions together with postings found in the forum of the Website formed the largest part of data for the consumer group. The other Website selected is that of the NPS/VARA documentary series Zembla (www.omroep.nl/vara/zembla). One of the episodes in this series was about KaZaA, carrying the striking title ‘Kazaa, cowboys of the Internet’ in which both the makers of this peer-to-peer network and the anti-piracy unit of the Buma/Stemra were being followed in their activities during one year. This documentary was broadcast several times. Apart from some background information, one of the most important features of the Website is the forum in which people could post their reactions to the documentary and other messages about the topic. Together with the reactions from the Webwereld site these postings formed the data for the consumer group.

Including only online posted messages as data for the consumer group creates a bias in my data. One could argue that the recording industry executives had all the time they want to talk about the topic and the consumer’s perspective is only represented by relatively short messages that are not even reactions to the researcher’s own questions. I am aware of this bias but it is the consequence of my choice to include online active consumers. This is a group that is very difficult to approach in real life so my options were limited. I think it is justified for me to use this set of data to reconstruct the consumers’ interpretations of reality. This data does allow me to get in touch directly with the reality of the persons concerned, one of the general methodological conditions of symbolic interactionism. Furthermore, as I have argued before, this group of consumers has given some thought to the topic and was involved enough to give their opinion. On the Websites I have selected the subjects could express their ideas and beliefs in their own way, which is also an important condition for the symbolic interactionist research. In their reactions consumers have presented their arguments, justified their conduct and given their opinion on the recording industry and copyright. In doing so they created meanings about their social world. In other words, they were involved in symbolic interaction.

3.3. Method of data analysis

The data I have gathered can be seen as the meanings both groups have created about their world and this new technology. The next step in my study was to analyse this data and to reconstruct the interpretations of reality held by these groups. The method I chose to do this is called ‘discourse analysis’. This is a method that has been developed for analysing language in different kinds of settings. In this method, there is an underlying idea about language. Wetherell and Potter (1988) point out that there are generally two ways of looking at language. The first, what they call the ‘old-fashioned’ view, is that language is reflective. It assumes that language is a neutral and transparent medium and that people’s ‘inner’ mental world (emotions, attitudes, beliefs) are reflected in ‘outer’ verbal utterances. In this view discourse is simply descriptive of mental states or events. The second view, clearly taken by Wetherell and Potter, is that language is not reflective but constructive and functional. In this view both the ‘inner’ and the ‘outer’ world are constructed in language and therefore language cannot be reflective. Furthermore, it sees utterances as acts; people intend to ‘do’ things with their language. This implicates that the meaning of an utterance is not straightforward but “…depends on the broader discursive systems in which the utterance is embedded” (Wetherell & Potter, 1988, p. 169).

Although the theoretical assumptions of this method are made quite clear the problem is that there is not a clear and comprehensive work about how discourse analysis exactly ‘works’ as a method and how the function of utterances should be ‘measured’ or identified. Van Zoonen (1994, p. 140), remarks in this respect that in interpretative research in general methodological sections are rarely satisfactory and sometimes even completely absent. What I have followed is the explanation of discourse analysis by Van Zoonen (1994). She summarises the essence of complex procedures proposed by Strauss and Corbin and Van Dijk in a comprehensible way: “The analytical procedure moves from a focus on the smallest units present in texts (words, concepts, propositions) to the examination of relations between these concepts and the overall meaning they can be thought to be part of” (Van Zoonen, 1994, p. 142). In practice this means that I have started with the full transcripts of the interviews and online reactions and reduced these texts to categories. This first coding was done by defining all the important themes in the text. The next step was to identify the way in which these themes were related to each other. This all taken together creates an overview of the meaning created by the groups and thus forms the answer to my research question.

Of course the different respondents all have their own meanings and these often contrast each other, sometimes the stories of one respondent contain contrasting elements. The interviewed persons and online consumers serve as spokespersons for their group but also create their own personal discourse with which they differentiate their meaning or interpretation of reality from other members within their group. These differences in meaning are also part of the analysis and are taken up in the report. By using quotes taken from the interviews and from the online postings I will be able to show the kind of language that is used by the subjects. Van Zoonen 1994) also points out that discourse analysis not only looks at what has been said but also how it has been said. Again the problem here is that no method is proposed to how I should analyse and interpret the choice of words of the respondents. In this study this aspect of discourse analysis is given minimal attention, only by using literal quotes it is made clear how things have been said. However, no further analysis of the choice of words is carried out here.

The different sections of this chapter describe and justify the choices that were made in the research design. The methods of data gathering and analysis used in this study were described. In the next chapter the results of the analysis are presented.

Chapter 4: Results

Before presenting my results it is useful to revert to my research question in order to keep in mind what the data has to reveal. In this study I want to find out what the views of the different relevant parties on Napster are. Moreover I am interested in the differences between these views and the implications of these differences. In the introduction, the relevant parties have been defined as music industry executives and online active consumers. These groups have expressed their views in the interviews and on the selected Websites, this difference is explained in the previous chapter. In the conclusion I will discuss how my findings give an answer to my research question. There I will present what the ‘views’ or discourses of the two groups are. Here the central themes in the discourses are presented in a more elaborate way. The sections of this chapter follow the three most important themes found in the data.

After careful reading, re-reading and categorising the material I found that the categories in the discourses could be classified in three main themes. These themes are present in both the music industry group as well as in the consumer group but for each group these themes exist of different arguments.

The first theme is explanations for the popularity of the technology . This theme is discussed in section 4.1 and contains a complex set of different and related factors that have played a part in the popularity of Napster.

The second theme, discussed in section 4.2, is effects of downloading . This theme is about the conceived effects Napster has had. For the industry this theme is not as straightforward as one might expect, it does contain some interesting contradictory elements. The same can be said about the view of the consumer group.

In the last section of this chapter, the third theme, possible solutions is discussed. This theme exists of solutions to the current situation. At first sight this formulation seems to take on the music industry point of view, since it can be argued that the consumers do not conceive the situation as a problem. But as can be found from the data the current situation does contain problems for the consumers too. Even if they do not conceive the situation that has arose since the emergence of Napster as their problem, they do present solutions which are sometimes strikingly similar to those of the music industry.

In the discussion of the three themes I have used the term respondents to refer to music industry group and the term consumers to refer to the consumer group. Because people from the music industry group also use the term consumer I have stated for each category whether it is part of the music industry discourse or the consumer discourse to avoid confusion. Whenever I did use quotes in this chapter the respondents and consumers are anonymous. In order to recognise whether different quotes, and especially contradictory point were made by a the same respondent the respondents from the music industry have been numbered. Because of the large number of consumers and the fact that most of the consumers only did react once I did not do this for the consumer group.

4.1. Explanations for the popularity of the technology

At the moment, the music industry is facing a period of recession, record sales are declining and revenues decreasing. One of the consequences is that people are getting laid off. The respondents from the music industry argue that downloading is one of the reasons for the decline in sales. The effects of downloading are further explained in the second theme. This theme focuses on the explanations given for the popularity of the technology. Within this new technology, most of the respondents mention that a distinction has to be made between downloading and burning CD’s. One of them argues that although these are two different technologies, they are connected with each other. People can directly burn the music they have downloaded on CD and the situation has become problematic because both technologies did emerge at the same time.

If the respondents would see the emergence of technologies such as downloading and burning as independent processes then their view could be seen as technological determinist. But, this is not the case; the music industry gives a number of different and supplementary explanations for the situation it is in. The consumers also give a number of reasons for their use of Napster and downloading. Partially the explanations of both groups overlap. More important, there are also differences, not only between but also within both groups. Because of the wide variety of explanations this theme is divided into six different categories that all focus on a different ‘part’ of the explanation. These are discussed in the paragraphs of this section: the Internet (4.1.1), the reaction of the music industry to Napster (4.1.2), the music industry (4.1.3), the image of music industry (4.1.4), piracy (4.1.5) and consumers (4.1.6).

4.1.1. The Internet

This first category of explanations focuses on the Internet. The music industry discourse does talk about the Internet culture, the opportunities and threats of the Internet as a medium and the role of Internet Service Providers (ISPs) have played in the popularity of Napster. From the consumers discourse only the advantages of this new technology are described. These advantages form the explanations for their use of the technology

§ Music industry: the Internet culture

This category of explanations is about the Internet culture. A number of respondents mentioned the ‘free nature’ of the Internet as a whole:

…Internet is een vrije wereld waar veel kan… (Respondent 2)

Het is natuurlijk een soort vrijhandelsplaats voor, die niet controleerbaar is. (Respondent 9)

These are some neutral comments about the Internet but one respondent went one step beyond and called the Internet an anarchistic medium that cannot be controlled. He also mentions that on the Internet everyone can be anonymous, and that this anonymity is used by hackers and people who send spam e-mails. This category reflects some of the general remarks I have made in the second chapter about Internet culture. Of course this should be taken as a somewhat romantic notion but for the respondents it is also an indication that on the Internet people behave in a different way than they would in the offline world.

§ Music industry: opportunities and threats of the Internet

Of course, the nature of the Internet in itself carries no direct consequences. All respondents agree that the Internet holds opportunities for the music industry. Because of the specific properties of the Internet as a medium can serve as a promotion tool. These properties are expressed in the following quote:

…zelfs nog met een e-commerce link naar Bol, waarbij je dus gelijk de consument de mogelijkheid biedt om het te kopen, wat nog een stap meer is dan een persplaatsing zeg maar. Dus dat is gewoon een hele goeie promotietool. Mensen kunnen muziek luisteren, streamen, dus gewoon luisteren op Internet, dat kan bijvoorbeeld in pers, in het blad ook niet. (…) Ja, het is gewoon een hele goeie promotietool voor muziek. Daarnaast kun je in forums en in allerlei, hoe noem je dat, discussieplatformen, chatcommunities kun je wat droppen. (…) op artiestensites guestbooks, gewoon allemaal van die interactieve dingen, dus het Internet is daar gewoon een heel goed medium voor. (…) Je kan direct naar je consument, kun je bereiken. Er zit geen, niks tussen. (Respondent 1)

The first property that is explained refers to Bol.com an online retailer, on the Internet consumers can read about an artist and through a hyperlink immediately buy the CD they have just read about. The convergence of different media is the second property that is referred to, this is often called ‘multimedia’. When visiting a web page on the Internet consumers can read about artists and at the same time listen to their music and view video fragments. The third property is ‘interactivity’, through several applications direct communication with the consumers is possible and in this way consumers can give direct feedback to the record company. This interactivity also forms the fourth property, direct communication with the consumer, traditionally this contact used to go through intermediaries such as retailers or radio stations. The Internet also offers possibilities for distribution. This is possible because of the simple fact that the music is digitally stored on CD. Therefore it can be stored on a computer and distributed over the Internet. This step was easily made by consumers already before Napster existed. Computer hobbyists were using applications such as FTP and IRC to trade music with each other. Because a consumer friendly technique is now widely available distributing music has become very easy. Therefore the opportunity of the Internet is at the same time a threat to the music industry:

Dus wij bieden iets legaal aan en daarna is het een koud kunstje voor degene die het gedownload heeft of binnen heeft gekregen om dat illegaal elders te gaan aanbieden. En dat is ook gelijk de bedreiging, dus waar wij de kans zien zit ook gelijk de bedreiging voor ons ook weer in. (Respondent 3)

When Napster was launched the distribution of music over the Internet was made easier and understandable for the ‘average’ Internet users.

§ Music industry: the role of the Internet Service Providers

The widespread use of downloading is often seen as a threat to the music industry, but for other industries it is seen as a positive development:

Maar vergeet ook niet dat in feite Internet gedeeltelijk heel groot is geworden door dit soort dingen. (…) de providers dat zijn in feite de mensen (…) die er ook echt geld aan verdienen. (Respondent 4)

Apart from the technology itself, it is argued that the Internet service providers (ISPs) have played an important role in the popularity of Napster. Consumers use the Internet to search for topics of their interest. Music has always been an interesting topic for a large group of consumers. Because music is favourable content and a reason for consumers to use the Internet, the ISPs did not try to stop this kind of Internet use because they earn money when their subscribers use the Internet to download music.

§ Consumers: advantages of downloading

Consumers started using this new technology and it became very popular. One of the big advantages of downloading that is mentioned by a lot of consumers is that you can find practically anything you want. Especially for lovers of obscure music this is very important, often the music they like is very hard to find or even unavailable. Also the availability of very old music is mentioned. Another advantage is that the consumer is better able to select the music they like. A number of consumers argue that they often only like a small number of the songs on a CD. If they want to have these songs, they still have to pay the full price:

Ik koop geen cd's omdat ik vaak maar 2 van al de nummers leuk vind. Moet ik daar dan meer dan 20 euro voor neertellen?

Next to these advantages a small number of consumers argue that the most important advantage of downloading is a very simple one: downloading is a very cheap way to obtain music. It saves money that can be invested in other things:

Tja, laten we eerlijk zijn, het scheelt een hoop geld, lekker downloaden in plaats van kopen.

A small group of consumers oppose to this view. They take on a view that is not very widespread among the consumers. They claim that everyone knows that downloading is illegal. Although the consumers in this group also have their objections towards the music industry and the CD prices they argue that music is not a first necessity of life. Instead, it is a luxury and if people are not willing to pay the high price of a CD, then they should not buy it at all. One consumer takes on the same argument that is made by the music industry group when he claims that CD prices are conceived as high because downloading or burning is cheaper:

En ik vind het toch behoorlijk hypocriet dat mensen illegaal kopiëren als voorrecht zien, muziek is geen eerste levensbehoefte, het is een luxeartikel waar je voor moet betalen. Maar wel tegen een redelijke prijs uiteraard, maar als je een brander hebt wordt de term "redelijk" helaas steeds verder opgerekt.

4.1.2. The reaction of the music industry to Napster

The music industry did react rather strongly to the emergence of new technology. Both groups argue that this reaction was not very constructive. It did not have a good effect on the image of the music industry.

§ Music industry: the reaction of the music industry to Napster

All of the respondents gave an affirmative answer to the question whether they conceived Napster as revolutionary. Being the first user friendly music trade application on the Internet, Napster has clearly set in a change in music consumption. The music industry did not know how to react to this new phenomenon:

…de muziekindustrie heeft ook iets in een keer in zijn gezicht gesmeten gekregen waarvan ze zoiets had van ja Jezus, wat moeten we hier nu in een keer mee? (Respondent 2)

Trying to define the situation, one respondent tells there were two tendencies among music industry executives. One existed of “whizkids” who conceived that this new technology was going to change everything; this was the new way of selling music. And the “older generation” of people who were working in the business for quite some time thought that what was concerned was only just a small group of students and computer nerds and things would not change dramatically soon. But when the service did grew very popular they panicked and as a result Napster got sued. By many respondents this was seen as acting out of fear:

Ja, kijk, d’r is alleen maar vanuit angst gehandeld. Kijk, ze zijn zich allemaal rot geschrokken en ze zijn allemaal gewoon gelijk in de verdediging gesprongen in plaats van dat ze juist hadden moeten zien van hé is dat niet een mogelijkheid voor ons om daar wat mee te doen. (Respondent 3)

In this view, the music industry should have acted more proactively instead of reactively. What is argued is that it would have been better if they had entered into negotiations with Napster. Instead they wanted to protect their product, the CD and the way in which music was consumed. On the other hand what is argued is that they reacted rightly, after all, the music industry is based on the exclusive right to reproduce the works of their artists. This right was trampled on by Napster users.

Maar als je dat niet meer, als je niet meer de controle hebt over hetgeen waar je branche van moet leven, ja dan is dat dus gewoon heel slecht nieuws. (…) kijk, inhoudelijk gezien kunnen platenmaatschappijen niet anders reageren dan als te zeggen nou sorry maar daar gaan we dus niet mee akkoord (...) ik denk dat er geen andere optie is. (Respondent 9)

This legal action was also necessary because legislation was running behind, copyright on the Internet was a grey area in which clarification was needed. When more and more Napster-like applications were launched the industry saw no other option than to sue them all. The question is how this strategy was conceived by the consumers:

…je moet je afvragen wat, hoe platenmaatschappijen d’r mee om zijn gegaan, wat voor PR-waarde dat dan heeft gehad. (Respondent 9)

One respondent thinks that consumers conceived the situation to be very weird, they could not understand the industry’s reaction.

§ Consumers: the reaction of the music industry to Napster

The reaction of the music industry is indeed often condemned by consumers. It is argued that the music industry only wants to focus on the traditional way of selling music. They did not take up new technologies to create new ways of offering their music. Instead of complaining about downloading, they should anticipate on the technological changes. The music industry should have a more proactive attitude:

Als platenmaatschappijen (…) pro-actief gebruik hadden gemaakt van peer-to-peer-netwerken, zou KaZaA of Napster nooit zo groot zijn geweest.

In addition, the music industry’s strategy of suing Napster and other swapping services is commonly seen as a waste of time and money. It is argued that they are fighting a lost battle because this new technology is unstoppable. This is emphasised by a lot of consumers by pointing to the continuous emergence of new file sharing programs and Websites. For every Website that is closed down by the music industry new ones will emerge. Many of the consumers that have a great deal of computer knowledge claim that Napster and its descendants are not the only way of trading music over the Internet. They point to the possibilities that were already present before Napster was launched:

Wil je muziek downloaden moet je ftp site zoeken, chatrooms, forums. Daar kan je alles krijgen en veel sneller.

It is claimed that everyone who is willing can learn to use these applications. Thus, downloading music is an unstoppable consumer practice. The music industry is not able to turn back this technological change and should find other ways of dealing with the problem. The money spend on lawsuits could better be invested in online initiatives.

4.1.3. The music industry

As shown above, the reaction of the music industry might have had a negative effect on the consumers’ image of the music industry. It is mentioned by some of the respondents that this reaction was partially caused by the culture within the music industry and the way in which the music industry is structured. This category is only present in the music industry discourse, arguably because many of the consumers do not have an insight into the music industry culture.

§ Music industry: the culture of the music industry

The record companies are the owners of the exclusive rights to reproduce the works of their artists and their business is based on the exploitation of these rights:

…het eind van het verhaal is natuurlijk, wij proberen zo veel mogelijk geluidsdragers te verkopen van die artiesten, dat is dan ordinair gezegd. (Respondent 9)

Not only does the music industry want to sell as many records as possible, they also want to make as much profit as possible. This is especially the case for the bigger companies because they are part of international entertainment firms that have a responsibility towards their stock holders. These international companies have a hierarchical structure which means that strategic decisions are made at the top. One of the respondents referred to this top as “ the gentlemen in the high towers ”. The culture within the music industry has been defined by many of the respondents as traditional or conservative. When it comes to the Internet and new media, many of the companies are playing a waiting game. It is conceived that there is a tendency to keep their business going in the same way:

Een afwachtende houding vind ik, dat vind ik dat de hele platenindustrie heeft op het gebied van nieuwe media. Is echt een hele traditionele branche, is al jaren hetzelfde hoe een CD wordt verkocht en de gang van zaken is erg traditioneel. (Respondent 1)

Another criticism on the strategy of the majors came from one of the respondents working at an independent. He argued that the music industry is overflowing the music market with imitations of each others products. He also makes a comparison with the film industry which was following the same strategy in the eighties and because of the low quality of movies saw the number of cinema visitors decline:

De platenindustrie, om een of andere manier, lukt het maar niet om weer te kiezen om die kwaliteit te gaan leveren. Ze zijn gewoon die markt helemaal vol aan het douwen, de consument weet niet meer waar ‘ie aan toe is. (Respondent 4)

Of course, this is a very personal opinion about quality of music but the point this respondent was trying to make was that the music industry works in a very traditional manner and does not know the consumer’s taste well enough.

§ Music industry: differences between majors and independents

The respondent who is quoted above argued that the problem of the music industry is also a consequence of the different target groups of majors and independents. Majors tend to focus on the mass market and therefore have to keep a broader perspective; the independents serve a niche market and are able to better know their specialised group of consumers. The difference between majors and independents also has implications for their use of the Internet. All of the respondents think the independents are more inclined to use the Internet. One of the reasons that is given is that independents are more flexible because they are smaller:

En de Independent kan natuurlijk loos gaan, (…) die kunnen dat veel makkelijker inzetten en gebruiken omdat die dat heel makkelijk en flexibel doen. (…)En een major is dan aan zo veel regels gebonden ook vanuit international. (Respondent 2)

Not only their size and structure differ but also the nature of their products, most independents only release music within one particular genre. It is conceived that it is very hard for these independents to get their music played on the radio, for them, the Internet serves as a new way of getting their music heard:

Dat is denk ik zonder meer waar hè, dat als je toch niet op radio 3 te horen bent en je kan via het Internet wel een platform vinden om je muziek te verspreiden, dat is natuurlijk een groot voordeel. (Respondent 5)

What is also a consequence of the nature of their products is that they attract fans of a certain genre of music. Some of the respondents think that these fans are more inclined to buy the real product and use downloading only as a way of ‘tasting’ the music. Other respondents are more cautious about this aspect of the distinction and point to the fact that downloading could pose a greater threat to independents because a decline in sales can have more drastic consequences for these companies whereas majors have a larger buffer zone:

Independents hebben er juist het grootste last van omdat die 50 procent, of zeg maar 25 verschil in verkoop kan voor een independent de kop kosten en niet voor een major. (Respondent 8)

4.1.4. The image of the music industry

As mentioned earlier the reaction of the music industry to Napster did probably have a negative effect on the image of the music industry. It is argued by the music industry that they already did have a bad image. This is confirmed by the reactions of consumers; the music industry is often seen as a group of monopolists that exploit their artists and have a lust for power.

§ Music industry: the image of the record companies as swindlers and profiteers

Even if there is a difference between independents and majors, the music industry as a whole is faced with an image problem. This problem is recognised by the respondents and partially ascribed to the stories of artists and journalists. Between artists and record companies there are struggles between commerce and creativity. The stories that are told by artists in interviews about these struggles often do not portray the music industry in a positive way:

En dat komt ook wel een klein beetje door artiesten, door de George Michael’s en andere rebellen van deze wereld die vechten tegen hun platenmaatschappijen omdat zij vinden dat ze een wurgcontract hebben etcetera. (…)Maar goed, dat hele beeld heeft dus uiteindelijk wel een negatief beeld over die platen, eh, muziekindustrie gevormd. (Respondent 2)

Because of these kinds of stories, the music industry is conceived as a very wealthy group of people that have earned their money at the expense of the artist. They are also accused of being a monopolist market in which price agreements are made. This negative image of the music industry was enlarged by their reaction to Napster:

…dus als wij als platenmaatschappij gaan roepen van ja wij slepen Napster voor het gerecht (…) dat werkt in de journalistiek en zeker in de stukken van die tijd (…) Een soort van boontje komt om zijn loontje, een soort van net goed. (Respondent 9)

Many consumers saw their negative view of the music industry affirmed. Music was now freely available on the Internet and these consumers figured they would not harm the wealthy music industry by downloading music. One of the respondents explains that this is a weird way of thinking, because people do not hold this conception of other wealthy businesses. This respondent used the Albert Heijn chain of supermarkets as an example of another wealthy business. Another respondent compares the music industry with a different, more creative line of business. He argues that publishing houses are not conceived as being commercial exploiters. The bad public image of the music industry has its consequences:

Je hebt natuurlijk de jeugd, de echte freaks, (…) die denken van we zullen de muziekindustrie es effe goed narren. We gaan lekker alleen maar downloaden. (Respondent 1)

§ Consumers: image of the music industry

Not a small group but most of the consumers hold a very strong and very negative image of the music industry:

…platenmaatschappijen maken verboden prijsafspraken, laten ze die eens aanpakken!!

…[platenmaatschappijen zijn] geldwolven, die reeds decennia lang de consumenten en de artiesten financieel hebben uitgekleed.

It is said by a few consumers that only a few big companies dominate the music market. These companies are seen as too powerful, consumers often refer to them as monopolists and accuse them of establishing cartels and making price agreements. It is argued that the prices are kept artificially high. For the purpose of maximum profits both consumers and artists are being exploited. Especially the exploitation of artists is strongly condemned:

…de roofpraktijken van de labels die vaak een fooi voor de artiest over hebben vergeleken bij de bedragen die zij ten koste van de artiest binnenslepen.

The negative picture of the music industry is used as a reason to download. Some say downloading is a punishment for the evil practices of the music industry. Others even incite to stop buying CDs and end the power of the record companies:

Laten we de muziekindustrie hun macht ontnemen en gewoon geen CD's meer kopen.

4.1.5. Piracy

The quote above is a very straightforward incitement to other consumers to download music instead of buying. By the music industry it is often claimed that downloading is a violation of copyright because no permission is given by the copyright owner to do this. The official word that is used for people who violate copyright law is pirate. Because the consumers were not asked to give their definitions or associations of the word pirate this is a category that is only found in the music industry group

§ Music industry: pirate; mythical figure, radio station or realistic threat?

Most of the respondents hold associations with the caricature like images:

Als ik het letterlijk vertaal, dan weet ik nog van vroeger, een piraat is gewoon iemand die op een schip zit met zo’n lapje voor z’n oog en een zwaard in z’n hand of in z’n broek en zo’n petje op. En het waren toch altijd een beetje, laten we zeggen, de slechte, in de film of in de serie. (Respondent 1)

Although it is noticed that pirates are always the ‘bad guys’, many respondents recognise that the word holds a romantic notion of an adventurous thief. One of the respondents holds a more realistic view on the image of pirate and says pirates were seen as the lowest of mankind, people who would kill for money. The other association the respondents hold with the word is that of pirate radio. Especially the name of pirate radio broadcasting system Veronica leads to romantic ideas:

…piraterij is in zekere zin nog wel stoer. Hé, dat is een beetje, zeker vanuit de radiotijd, is het een beetje schoppen tegen de gevestigde orde. (…) En de overheid accepteert dat niet, maar de gemeenschap wel. Die vond dat geweldig. Dus piraterij daar ging nogal een soort stoere klank in zitten. De ouwe piratenzendertjes enzo, dat was allemaal leuk en allemaal geweldig. (Respondent 3)

The problem with the use of the term ‘pirate’ is then that it holds very romantic associations which possibly diminish the seriousness of piracy. Definitions of the term all carry elements of unauthorised dispersion of copyrighted material. What is proposed is that it should better be called stealing, theft or fraud. When talking about piracy, a distinction is made between individual consumers who burn CDs at home and more professional criminals who systematically produce pirated CDs on a large scale with the purpose of selling them. This second form of piracy is seen as a much bigger threat. The point is that this kind of piracy already exists for a long time; it is the widespread consumer piracy that is a new phenomenon.

4.1.6. Consumers

The last category of explanations for the popularity of the technology focuses on consumers. The consumers argue that the price of a CD is one of the most important reasons for them to download. From the music industry it is argued that this price is seen as high because it is also available for free. Also the music industry group argues that there has been a shift in mentality since music is now free and that expenditure patterns have changed.

§ Consumers: price of CDs

The strongest criticism of the consumers on the record companies is that the price of a CD is much to high. This is also the most widespread reason for downloading. Some of the consumers point to the fact that CDs have very low production costs, especially compared to vinyl, this has never been passed onto the consumer:

De productiekosten van een CD zijn veel lager dan van het goede oude vinyl. Toch is de prijs van een CD alleen maar gestegen. De beloofde lagere prijzen bij de introductie van de CD zijn uitgebleven.

Another argument that is made about the price is that in other countries CD prices are lower than in the Netherlands. Because of this price difference it is argued that the Dutch CD price should be lowered; CDs can be sold in the Netherlands at the same price. Many consumers claim that downloading has become a huge success because of the high CD prices:

Deze muziekpiraterij is ontstaan doordat de prijzen van cd's kunstmatig zo onvoorstelbaar hoog worden gehouden dat het voor de gemiddelde muziekliefhebber niet meer mogelijk is zijn of haar collectie op peil te houden op de reguliere manier.

§ Music industry: the mentality of the younger generation of consumers

The respondents often refer to the youth as the group that is engaged in the practice of downloading. It is this group in particular that many of the respondents are worried about, probably because they are tomorrow’s consumers. The reasoning here is that this group of consumers in particular does not have a notion of copyright. In a striking comparison with copyright on books, a respondent tells that he also did not have a notion of copyright when he was in high school:

Ik bedoel, het is natuurlijk zo onzichtbare materie. Ik weet dat ik nog wel bij, op de middelbare school dat we studieboeken moesten hebben en dat er werd gezegd van ja, die mag je dus niet kopiëren, die moet je kopen. En dat ik dat ook niet begreep. (…) Ja dat mag niet, d’r zit auteursrecht op. Auteursrecht? Wat is dat dan? Hoezo dan? Ja, dat vindt de uitgever niet leuk want dan verkoopt ‘ie minder boeken. Ja, dan moet ‘ie ze maar niet zo duur maken.

(Respondent 9)

What is especially striking about the comparison is that it contains the same argument about price that is made by music consumers when they talk about CDs. The consumer does not hold any notion of what copyright is nor do they experience downloading as an illegal activity. Partially this is caused by the fact that downloading goes with such great convenience. More important, because the younger group lacks an idea of what copyright is, they also conceive music as something that is available free of charge. One respondent remarks that this is also consolidated by the omnipresence of music:

…de perceptie van muziek bij mensen is van het is alom aanwezig, TV, radio, ik bedoel, in winkels, waar je komt, er is muziek. Dat hoeft toch niks te kosten?

(Respondent 9)

By the music industry downloading music is seen as theft because the consumer does not pay for the efforts that have been put in the product, by the artist but also by the record company. It is often compared with shoplifting or filling your car at the petrol station without paying. The problem is that the consumer does not see this comparison because he does not think he is doing something illegal by downloading.

Some of the respondents also point to the fact that digital music has no physical form and that this is also a reason why consumers think they do not need to pay for music:

Het is natuurlijk ook heel moeilijk want vroeger kocht je iets abstracts, je kocht een LP, dat is tastbaar, daar moet je voor betalen net zoals een auto.(…) op het Web betalen ze nergens voor, daarom is die hele belevingswereld op het Web, die moet om. (Respondent 4)

So, the consumer does not conceive music as something they have to pay for three reasons. First, because they have no notion of copyright and therefore they do not see downloading as an illegal activity. Second, because music is available for free in a number of situations. And, third, because digital music is not tangible. Although these are all important factors, the main reason is of course that music is free when you use a service such as Napster. A number of respondents argue that because people do not pay for music when they download, they start to question the price of a CD:

…CD’s worden duur gevonden bij de gratie van dat ze dus, dat dezelfde muziek gewoon, zelfde kwaliteit gratis, of nou ja, voor 1 of 2 Euro te kopiëren valt, digitaal. (Respondent 9)

Because consumers only see the material costs of a CD, they reckon that record companies make a disproportionate profit on CDs. But what they don’t see is that a record company invests a lot of money in producing a CD and all the people that put in an effort in this process all want to be paid:

Het kost een hoop geld, clips, video’s, of clips, foto-shoots, studio’s, gezeik, gezeur, noem het maar op. (…)en dat moet gewoon natuurlijk allemaal wel betaald worden en dat zit in die prijs van die CD. (Respondent 9)

The fear is that the younger generation is growing up with a notion that music is free and that they will not be willing to pay for music in the future too.

§ Music industry: changed expenditure pattern of the youth

Not only is the younger generation not willing to pay for music, they also have less money available to spend on music because of changed expenditures. By many respondents it is said that youth now has a broader range of entertainment choices and the money can only be spent once. Since they have the option of downloading the music or pay someone a smaller amount of money for a burned copy of the CD they will spend their money on other stuff and still have the music:

Dat dus gewoon wat minder geld is voor muziek, dan download je ’t of je kopieert ’t of je koopt ’t voor ’n tientje op het schoolplein. (Respondent 2)

Downloading music saves not only money but also time since you don’t have to go to the music shop to hear the newest music. One respondent points out that downloading costs money too, so part of the money that used to be spent on music is spent on computer equipment and an Internet subscription.

4.2. Effects of downloading

The first theme exists of explanations for the popularity of the technology. The second theme deals with the conceived effects of downloading. The music industry group argues that the effects are economic, the record sales and revenues are declining. As a consequence less money is invested in new talent so the economic effects also are cultural effects. On the other hand, the respondents acknowledge that the effects are not straightforward and hard to measure. From the consumer group comes the argument that downloading can also have a positive effect on sales.

§ Music industry: hard to measure and prove effects

It is clear that a number of factors together have caused the immense success of Napster. But what the industry is most concerned about is what the effects of downloading are. Because the sales are dropping it is often assumed that this is caused by downloading. The problem however is to prove this:

Het is natuurlijk moeilijk om daar cijfers eh, (…) er bestaat maar één situatie en die is zoals nu dus de situaties bestaan niet naast elkaar. (Respondent 5)

Several studies have been conducted to find out how this relation works but their findings are contrary. Some of these studies find that downloading is harming sales because people don’t buy CDs anymore. Other studies show that consumers who often download music are the same consumers that buy the most CDs. The views of the respondents on this point are also contradictory with each other. Sometimes even within the same interview the respondents give contradictory views. This is caused by the fact that respondents differentiate between users and the way in which they make use of programs such as Napster. One of the respondents uses a rather strong metaphor to emphasise this distinction between good and bad use:

Ik denk dat het van beide iets heb, het ligt aan hoe je er mee om gaat. Is een pistool goed of slecht, weet je wel? Weet ik niet. Ik denk dat het er helemaal aan ligt wie ‘m in zijn handen heeft. (…) Dus het wapen is niet gevaarlijk maar de mensen die d’r achter zitten(…)hoe ga je d’r mee om, wat wil je d‘r mee doen? (Respondent 8)

This metaphor is clearly used to demonstrate that the technology of Napster in itself is neither good nor bad. It is the way people make use of it that is good or bad. The group of music consumers is frequently divided into three groups: those who download music to find out what is new. This group uses Napster as a sort of “ extra sense organ”. They download a couple of songs and if they do not like it they delete it, if they do like it they will eventually buy the CD. This is perceived as the good use of Napster, in this sense Napster can be seen as a promotion medium. Then there is the group that only downloads music and does not buy CDs anymore, obviously, this is conceived as the bad use of Napster. The third group exists of people that for some reason do not download and only consume music in the traditional way. Reasons could be very simple and straightforward, like they don’t own a computer or do not know how to operate one. But other reasons can be that they have a certain emotional value with the physical product. It is argued that true music lovers, older people and fans are part of this group; they still want to buy the real product. One of the respondents completes this distinction by saying that there actually is a fourth group: those who did not used to buy CDs and does not download either. This group is left out of consideration here. What is also argued is that genre and age group also have an influence on whether people download or buy music. The younger generation is conceived as being the group that downloads the most. One of the respondents says that only the second group, the group that strictly downloads, should be looked at, because this is the group that causes declines in sales:

Maar vervolgens als de mensen die die muziek tot zich nemen alleen maar dat medium gebruiken en uiteindelijk ook die platen niet kopen, dan ben je d’r nog niks mee opgeschoten. (Respondent 5)

§ Music industry: economic effects

As mentioned above, it is very hard to measure or prove the effect of downloading on sales, this is probably because of the differences in use. At the moment the music industry is in a period of recession and sales are declining. Of course, in the past there have been more bad periods but clearly something is different now:

…daar waren in het verleden ook wel eens minder jaren en mindere omzetten maar wat er nu aan de hand is is toch wel heel heftig hoor. (Respondent 7)

It is said that downloading is at least part of the cause of the current recession. Because of this new technology a large group of consumers does not buy CDs anymore. Downloading is for free and for CDs people have to pay, therefore it is almost impossible for the record companies to compete with downloading. Not only the record companies but many groups are harmed by the decline in CD sales:

…en het gaat natuurlijk niet alleen om platenmaatschappijen het gaat natuurlijk ook om uitgeverij, wat dacht je van de artiesten, wat dacht je van hun managers, agenten, promotors, ik bedoel, dat is natuurlijk een inkomstenderving, dat wil jij niet weten. (Respondent 9)

Especially the fact that the artists are harmed by downloading is emphasised. It is said that it is very weird that consumers are not prepared to reward the people that created the music:

En dat doe je dan, je steelt dan ook van de band waar je eigenlijk om geeft, dus, dat is toch een raar idee. (Respondent 5)

But a couple of respondents also point to the possibility that downloading can have positive economic effects for the artists too. Although there is a group that downloads and does not buy the CD of a particular artist but burns it, this group does get in touch with the music of an artist. If these people do want to see this artist perform live, they still have to buy a concert ticket. In this way, the artist does recover money from this group of consumers. The record companies, however, do not earn any money from ticket sales:

…daar hadden misschien ook platenmaatschappijen veel beter op in moeten spelen. Merchandise, kaartverkoop, dat je daar ook van meepikt. Dus op die manier zou het wel, zou het terug kunnen vloeien. (Respondent 6)

§ Music industry: cultural effects

The effects are not only economic but also have cultural impact. The income of the artist is also harmed by the group that downloads music. It is conceived that, as a consequence, the artists might come to a point where they do not earn enough money to continue making music:

…dan stoppen de artiesten vanzelf, die zeggen: ik heb er geen zin meer in. Het is een blijft en hobby, maar het kost me zo veel tijd en energie en ik verdien er gewoon niks mee, zo ga ik niet verder. (Respondent 8)

Not only could downloading lead to the end of careers, it could also stop careers from starting. Because record companies see their turnovers shrink, they are less willing to invest in new local talent. This has always been the most risk bearing practice of a record company because they have to make huge investments in new bands. Therefore, when the economic tide is not stable, the record companies will focus on selling international products of which they do not bear the investments. This means less Dutch artists will get the chance to become professionals, and this is a threat to Dutch popular music culture.

§ Consumers: downloading for testing and buying the real product

Many of the consumers still have their reasons for buying the real product. One important reason that is mentioned is the difference in sound quality between a downloaded MP3 and an official audio CD. Many consumers make a distinction between their own music consumption. The largest part of the music they download is music they like but would never buy on CD. If they come across music they like through downloading they will buy the official CD

…75% van mijn mp3-tjes zou ik nooit op cd kopen. Dat zijn nummers die je 20 keer luistert op cd zet en (bijna) nooit meer ziet. De andere 25% koop ik ook op cd. (…) Je kan downloaden zoveel je maar wil, de muziek die je écht bij de keel grijpt, die koop je.

People only want to buy the music they are really interested in. It is claimed by a lot of consumers that the possibility to download has led them to buy CDs. They download music to ‘test’ it; to get acquainted with new music and if they like it they will often buy the CD. Another reason for buying the real product is that it includes the official artwork and sleeve notes. Especially when a consumer is a fan of a specific artist, they want to have the real product:

Als platenmaatschappijen denken dat ik echt geen cd meer koop, kan ik ze gerust stellen. Ik koop nog altijd CD's van mijn favoriete band.

It is argued by the music industry respondents that a lot of consumers are not willing to pay for music. Many of the consumers claim the opposite however. They all argue that the majority of the consumers is still willing to pay for music and especially willing to pay the artists they favour:

Want ik ben me bewust van het feit dat goede artiesten mijn steun verdienen. Bovendien wil ik uit eigenbelang dat ze meer maken, en dat zal niet gebeuren als ik ze niet steun.

4.3. Possible solutions

The problem not only carries economical consequences but also cultural. The music industry reacted strongly because of the economic effects. The consumers did see the technology they conceived as ‘theirs’ attacked. Both groups agree that solutions have to be found to the problematic situation that has arisen. First of all, the music industry argues that it should change its strategy into a more pro-active one. They should inform the consumers about the consequences of downloading but at the same time offer value for money and start their own legal music services on the Internet. The consumers offer the same kind of solutions but also mention the idea of a new model in which record companies have become superfluous. This model was also mentioned in chapter 2. Finally, some of the considerations are made about the conditions for a legal model.

§ Music industry: a change in strategy

The defensive strategy that has been taken up to try and stop all the music trading services has two contrasting aspects. It is necessary because it will lead to new legislation, but this new technology is almost impossible to stop, every time new networks and applications are launched. The legal fight seems endless:

En de vraag is of het daarnaast zo te dichten is zeg maar dat die hele wildgroei (…) als dat niet ingedamd kan worden, dan lijkt het haast wel een soort Don Quichote-gevecht. (Respondent 5)

Like the consumers, the respondents say that the industry has to find other ways to deal with the situation. This can also be found from the remarks made about the initial reactions of the music industry. Although they speak about it in retrospect, by saying what is wrong about the reaction they imply what would be a better way to react:

…actief reageren, dus, zorgen dat je nieuwe initiatieven bedenkt, alternatieven om je muziek wel beveiligd en betaald te verkopen, laten we maar zeggen. (Respondent 1)

What is preferred is a more pro active attitude. The music industry should accept the fact that downloading is ‘here to stay’ and find ways to use this new technology to their advantage. One of the respondents answered to the question about the comparison with the introduction of radio that the Internet could follow the same development if the music industry would embrace it:

Dan zie ik Internet dus eigenlijk ook als positief want ik denk dat eenzelfde ontwikkeling zou kunnen doormaken als radio. Mits natuurlijk de muziekindustrie goed over nadenkt en het omarmt en daar goeie formaten voor verzint. (Respondent 2)

A couple of different solutions are proposed by the respondents: Informing consumers, offering value for money and a legal online music service. The consumers also offer a number of solutions. Some of them differ from the ones given by the music industry: the music industry should drop its prices or the artists should start their own distribution. Other solutions are practically the same as those given by the music industry: offering extra features on the CD or starting a legal online music service.

§ Music industry: inform consumers

The first solution is a reaction to the lack of knowledge of the consumers about copyright, the role of the record company and the consequences of downloading. The aim of this strategy is to inform the consumers and create awareness about these topics. Moreover, the final goal is to create a willingness to pay for music among consumers. The problem however with this strategy is that it is very hard to change the views of the consumers. Many of the respondents point to a campaign conducted a couple of years ago and explain this campaign has failed to reach its goal. One respondent argues that this is not the way to convince consumers:

…ik denk dat je de consumenten kun je ook niet overtuigen met een commercial of met iets. Je moet gewoon iets beters bieden. (Respondent 1)

§ Music industry: offering value for money

Offering something better can be seen as a more pro active strategy. This solution knows two variants. The first is making the physical product more attractive by offering extras, for example including the videoclip or demo versions on the CD. The goal of this added value is degrading downloading so that consumers will favour the real product over the Internet:

De platenmaatschappijen moeten gaan zien dat je die extra’s, dat je daarmee consumenten kan lokken. (…) Al dat soort dingen, daarmee kan je de consument weer lokken en dat zijn dingen die ze met Internet nooit zullen krijgen. (Respondent 4)

Some of the respondents claim that it is not only added content but the overall picture of the physical product including the promotion of the product in advertisements should be improved. This first variant of offering something better still focuses on the traditional format. The second variant, on the contrary, is providing an online service that offers more attractive things on the Internet. One of the things that could bring about the consumers favour of this service over unofficial services such as Napster are good sound quality and easy search procedures. Several respondents found Napster disadvantageous on these two points. By offering this and other extras on the service, consumers could choose to use the legal variant:

…maar ik kan me voorstellen dat als je het zo laagdrempelig maakt en zo interessant maakt dat mensen bij jou komen omdat het sneller gaat, beter gaat, kwaliteit beter is, leuke extra’s, weet ik veel wat, mensen ook het gevoel krijgen van dan doe ik iets goed zeg maar, dat er geen reden meer is om in obscure dingen of te gaan zoeken en misschien vast te lopen of niet alles te kunnen vinden. (Respondent 5)

§ Consumers: solutions

The strategy outlined above is also presented by one of the consumers. He argues that in order to convince the consumers to buy CDs they should improve their products. He also offers some suggestions of what extras could be included:

De boodschap is dan ook dat ze hun product moeten verbeteren. Zet videoclips mee op de CD, zet er een making of bij, de tekst in afdrukbaar formaat, interviews met de artiest, een karaoke versie, en in dolby surround de live versie.

A different solution is connected to the consumers’ view of the price of CDs. They argue that if the music industry would drastically lower the prices everyone would be more willing to buy CDs. Other solutions are more linked up with the view of the consumer about the exploitation of artists by the record companies. These solutions propose a direct connection between the artist and the consumer. Because of the Internet, they argue, the music industry has become a superfluous link in the chain:

Waar die platenboeren bang voor zijn is dat ze worden gepasseerd in de toekomst. Ze zijn OVERBODIG(…) De artiest kan zijn of haar muziek rechtstreeks aan bieden op het internet.

A fourth possible solution that is proposed by many consumers is connected to the argument that consumers are still ready to pay for music. This solution is strikingly similar to that of the music industry. What is proposed is a model in which consumers pay a small fee for the music they download. The difference with the industry’s model is that many say that the largest part of this money should go to the artist. Another difference is that some of the consumers want to be able to first listen to what they are going to download:

Laat ze maar een server openen waar je mp3 cd's goedkoop kunt downloaden, na eerst geluisterd te hebben of je hem wel wilt hebben of niet.

One of the consumers also shows how this could be made possible. In his opinion music files of a very low resolution should be offered for free. These are of such a low sound quality that no one would want to burn them on CD but it would be sufficient to test the music and decide whether you want to buy it or not.

§ Music industry: conditions for legal model

No certainty exists about how a legal online music service would look like. Possible variants are an on demand model with streaming of music, another is paying to own songs and a third possibility is a subscription model that gives you access to a database of songs. Whatever the model is, the success or failure of such a service would depend on a couple of conditions. Apart from the fact that the music should be of good quality and easy to find there are a number of legal, technical, music and consumer conditions. First of all, the online content should be legally and technically protected. Second, the music that such a service could offer would have to be recent and complete:

…kijk als de consument op zoek gaat en bereid is daarvoor te betalen dan moet ‘ie ook wel alles kunnen vinden.(…) Dat moeten alle maatschappijen tegelijk doen en op dezelfde manier. En via één website, of via een aantal verschillende, dat maakt niet zo heel veel uit, maar het moet er wel allemaal zijn. (Respondent 7)

So, much depends on co-operation between record companies and with artists. Third, the music should be offered at an attractive price. But most importantly, such a service would have to have the consumer’s confidence. This is stressed by one of the consumers and in the example he clearly takes on a view that fits with the social shaping of technology:

…je weet niet hoe consumenten gebruik willen maken van iets, dat kan je voor een gedeelte proberen op te leggen weet je, maar dat lukt ook niet altijd. Ze vinden iets uit, met Internetten via de telefoon en dat blijkt dan weer geen hit te zijn, maar die dingetjes die je elke dag op televisie ziet, zo’n bijproduct blijkt dan de hit te zijn. (Respondent 5)

The three themes, explanations of the popularity of the technology, effects of downloading and possible solutions, that are presented in this chapter are connected with each other. Together they form an answer to my research question, this is discussed in the next chapter.

Chapter 5: Conclusion and suggestions for further research

Since the launch of Napster, the trading of MP3s over the Internet has become an important activity for many online active consumers. At the same time, consumer technologies such as affordable computers, CD burners and fast Internet access became available. When sales of records declined and the music industry found itself in a period of recession the role of this new way of consuming music was questioned. What effect did downloading have on CD sales? The answer was that it had a negative effect, therefore this new way of consuming was viewed as a negative impulse for the music industry. Although this seems to be a very straightforward story, underneath the surface it is much more complicated. It would be wrong to say that the music industry is opposed to new technology such as Napster and it would be equally wrong to say that consumers do not buy CDs anymore because of this new technology. It was the goal of this study to reconstruct the views of the two most important groups involved in this struggle over new technology; the music industry and the online active consumers. In the previous chapter, I have showed that the discourses of these two groups consist of three major themes: explanations of the popularity of the technology, effects of downloading and possible solutions. These themes are complementary and together they form the answer to my research question. However, it is not possible to give a very clear-cut and straightforward answer to my research question. The views of both groups consist of many layers and contradictions. In this last chapter I will present a summary of the most central and important elements of the views of both groups. In these first paragraphs an answer is given to my research question. In the next paragraph I will elaborate on the connection between my results and the theory. The various choices made within this study also carry limitations, these limitations and the consequences of these limitations are discussed. Since all research poses new questions, in the last part of this chapter some suggestions for further research are made.

First, I will discuss the views on Napster of both the consumer group and the music industry group. The consumer group holds a very positive opinion about the Napster technology. In their opinion this new way of consuming music has many advantages. It enables them to find practically any music they want and, even better, they do not have to go out of their homes and spend money on CDs, they can download it at home and they ‘own’ it for free. Moreover, they can come across new, unfamiliar music. It is claimed that often this leads them to buy the CDs from the artists they have ‘discovered’ through Napster.

The music industry group does not have a negative view on the technology itself, many of the respondents in fact agree that this new way of consuming music offers many possibilities for the music industry. It is the way some consumers make use of this technology that they are opposed to. Roughly speaking two different kinds of use are identified. The first is using Napster to ‘test’ music, if consumers like this music they will buy the CD. This is seen as the good use of the technology. The second way is using Napster to obtain as much music as possible without ever paying for it, this is seen as the bad use of the technology. The industry’s most important objection is that Napster users do not pay for the music they download. Not only the record companies but many other people and most important, the artists do not receive money for the work they have done.

The major concern of the respondents is with the younger generation that is growing up with this new technology, it is assumed that this group is not aware that you have to pay for music. For most of the consumers, however, it is still very important to own the physical product. This group is willing to pay for the music they truly like but at the same time they also want to be able to obtain the music they like a little, but not enough to pay for. Here, a differentiation is made by consumers between kinds of music, their willingness to pay for the music is based on this differentiation. Of course, there is a group of consumers that is not willing to pay for music at all. This group is using arguments about the price of CDs and the amount of money a record company earns from the sale of one CD. It is argued that record companies are making a huge profit at the expense of the artists. Moreover, they argue that the small group of majors has made price agreements and uses its monopoly position to keep prices artificially high. In their view the use of this new technology is totally justified because it liberates consumers. Other consumers have less radical views, some of them are even against consumers who do not want to pay for music. But even less radical consumers argue that the music industry should act much more pro-actively. Instead of investing in expensive lawsuits they should invest in new technology.

The respondents from the music industry are aware of the bad image of the music industry. They do admit that the goal of the music industry is to make as much profit as possible, but this is the goal of any commercial company. In addition, they point out that consumers harm the artists as well. The negative view of the music industry held by many consumers might partially be the result of negative stories about record companies told by artists in interviews. These stories are the outcome of the struggle between artists and record companies, a struggle between commercial and artistic goals. The respondents do agree with the consumers that the music industry should have a more pro-active attitude towards the Internet and more importantly should co-operate better. Ideally, in the view of both groups, there should be an application that offers any music a consumer would want at an acceptable price.

In many ways, both groups are not as far apart as they might think. Especially in the solutions they offer for the current situation some important similarities can be found. Because the current situation is no ideal situation, the conduct of both groups is in contrast with their beliefs about the ideal situation. The consumers are willing to pay for downloading but they download music without. The music industry does see the possibilities of the Internet and although they have undertaken some initiatives they did not yet launched a service that offers the same as Napster. One of the theoretical assumptions from symbolic interactionism is that people act upon their beliefs. At first sight, this assumption seems to be wrong. However, a distinction should be made between beliefs about the ideal situation and beliefs about the current situation. Then the assumption proves to be right. Consumers are still downloading because of their negative view of the music industry. They use this view as an ‘excuse’ for their behaviour; to keep on downloading. The music industry in turn still holds reservations about the use of the Internet. The bad use of the technology by some consumers is used by the music industry as an ‘excuse’ for their fear. They conceive that the possibilities are at the same time the threats to their business. Therefore, technical and legal protection of music is needed.

The complex discourses described above are the meanings that have been created about Napster by both groups. Napster is a technology, this new technology in itself does not carry meaning. The meaning of Napster is created by individuals and social groups. Although this creation of meaning is an individual process, it is by no means an isolated process. As I have mentioned in chapter one, individuals are not all-knowing. Individuals are involved in interaction and through this interaction they are involved in a continuous creation of meaning. These are the most important theoretical assumptions from symbolic interactionism. The results of this study offer support for this theory. The consumers for example did react to news items, the Zembla documentary or each others reactions and experiences. It is upon these news items and other reactions that the consumers have formed their opinions. The music industry executives have formed their opinions upon conversations with other people within and outside the music industry. Often they mention conversations with colleagues, family and friends as their sources of information. What is often referred to is the role of the press. It is also upon the news stories presented by the press that both consumers and music industry executives form their opinions. What is clear is that meaning is created through interaction and that this meaning is not fixed but in constant change.

The meanings that are created also have implications for the development of new technology. For example positive meanings that have been created by consumers have led to the success of Napster. This has also been the reason for others to launch similar applications. A number of other services and new technologies have emerged. Negative meanings created by the music industry also had their impact on Napster and eventually forced the service to stop. For Napster the outcome of the legal struggle has been fatal. The question that remains is what will happen to music consumption on the Internet. As mentioned above, an ideal online music service would fit the conditions of both groups, it would satisfy both groups. Napster did not fulfil the conception of the ideal application. The consumers were very happy with the technology but the music industry was not, they did not earn money from it. The situation has some interesting similarities with the launch of radio. In its early years, this medium was not accepted by the music industry. It was argued that consumers would not buy music anymore since they got it for free over the radio. As explained in chapter two, radio did manage to become a very important, if not the most important promotional medium for the music industry. It can be argued that the Internet could follow the same course as radio did. However, the adoption and function of technology does not come from technology itself but is dependent upon several social factors. In my study I have taken Napster and Napster-like technology as an example of how different groups struggle over technology. This study does provide support for the social shaping of technology thesis. Technology is indeed socially shaped, it is not simply developed ‘outside’ of society nor is it simply adopted by everyone in society because it exists.

The adoption and use of this new technology by consumers also has led to some interesting questions about the consumption of music. The way in which music is experienced by the younger generation is questioned by the music industry. For all of the respondents their experience of music is connected to the physical product. The tangibility of a CD or LP is part of their experience of music. They question is whether the same is still true for the younger generation that is growing up with this new technology in which music no longer has a physical form. By consumers it is claimed that they still want to have the real thing if they really like the music of the artist. From the data, however, it is not clear whether these reactions were from the younger generation that music industry executives were referring to.

This leads to one of the problems of my study. Because of practical considerations such as time and money restrictions, I was not able to draw a representative sample from the entire population of online active consumers. My study is dependent upon reactions posted by unknown individuals. I therefore cannot draw any conclusions about differences in age and downloading behaviour. On the other hand, this never was the purpose of my study. This is an explorative study that uses a qualitative research method. This study does provide an insight into the meanings about Napster created by two of the most important groups involved and, more important, it shows that in many ways both groups are not as far apart as they might think. Some of the choices made in this study have their implications. One of such choices is the geographical restriction to the Netherlands. Because most record companies are international companies with their head quarters in countries such as the UK and the USA it is not possible to say something about the views and strategic choices made by a record company’s international staff. Also the views of artists and copyright collecting societies are left out in my study. Obviously the views of these groups form important factors in the bigger picture.

Not only the exclusion of these groups but also the chosen methods carry limitations. As described in chapter three, the methods of data gathering did create a bias. For the different groups, different methods were used to gather data, therefore the results were not totally comparable. As can be seen in chapter four, the three major themes are present in both groups. Because the music industry executives were posed direct questions and were given a lot of time to react, some of the categories are only present in the music industry discourse.

A further limitations is created by the range of respondents included. It turned out to be quite difficult to get access to the people I wanted to interview. One of the reasons for this was created by the period of my fieldwork. Unfortunately, for unclear reasons, fall is one of the busiest periods for the music industry. But apart from that, many of the people that were approached were not very eager to talk about the topic. Most striking was the fact that some people even were not allowed to talk about it because of company policy. My initial plan was to focus on the five major record companies and a small number of independents and approach the personnel that are engaged in new media and Internet activities. Because many of these people were not willing to co-operate, I had to broaden my scope. But it can be argued that the views of the people that were willing to co-operate are not totally representative for the music industry as a whole. On the other hand, in the conversations it was indicated by the respondents that their views were not exceptionally different from other music industry executives they had talked to.

The limitations of this study described above lead to some suggestions for further research. Moreover, a number of new questions came forward during this study, these should also be posed here. First of all, it would be very helpful to complement my interpretative and explorative study with a thorough quantitative study. Such a quantitative study should focus on the assumptions made by both groups. For example, the difference between downloading and burning CDs (making one on one copies) should be studied. Which of these two is most common among consumers? And does either of these two lead to buying CDs? How often do consumers buy CDs based on their online discoveries? And are there differences in consumer behaviour between countries? These are all questions that need to be posed and can not be answered with the kind of research I have conducted. Other questions that were raised during my study could better be treated in a more interpretative way. For example, does the younger generation wants to have the physical product of are they satisfied with intangible music files on their hard disk? And what influence does this new technology have on the overall music taste of consumers? Is this changed because they can come across other types of music then for example on the radio? And what role do journalists and their stories play in the formation of opinions about the music industry and online music consumption? Some artists have begun to develop their own online music services, some examples are David Bowie, Prince and Janis Ian. This leads to the questions about the views of artists on this new technology and its influence on music production. What is of even greater importance for the music industry is that research should be conducted to find out what the consumer wishes from a legal online music service. The success of such a service would depend on the readiness of consumers to use is and therefore it should be developed in such a way that it fits the desires of the consumer. These questions should all be posed and answered to find out how the music industry will be able to keep on rocking in the free world.

[1] Named after its working region: Washington D.C. Columbia still exists today and is now one of the labels owned by Sony Music Entertainment.

[2] For a further introduction to this early period of “online audio piracy” see the article by Cooper and Harrison (2001).

[3] The Book “Sonic Boom” by John Alderman (2001) describes the full history of Napster. For a more detailed summary of the history of Napster see also the Napster timeline in appendix 1

By Koos Zwaan EMAIL: koossie@excite.com

Master's Thesis for Media Studies at the University of Amsterdam, 2002

Table of contents

Chapter 1: Theory

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