Document Type

Closed Project

Publication Date

Winter 2002


Dundar Kocaoglu

Course Title

Management of Engineering and Technology

Course Number

EMGT 520/620


Intellectual property -- Management, Mass media -- Law and legislation, Performing arts -- Law and legislation, Disruptive technologies, Technology -- Management


When the MP3 compression algorithm was invented more than a decade ago, it is unlikely that its inventors predicted a future where its use would spark a phenomenon in the way music is enjoyed. Unlike compact disks or cassettes that rely on mechanical parts, the MP3 encoder is a software program that allows the user to create a digital reproduction of a song that maintains much of its original sonic quality yet is dramatically reduced in size. What was once a large bulky file hardly suited for the Internet can now be downloaded in minutes to seconds depending on connection speed.

Napster was one of the first web-sites that allowed MP3 users the forum to exchange this optimized form of media. Completely free of charge, tech-savvy members began to build an impressive library of songs ranging from Metallica to Mozart and everything in between. This revolutionary type of music distribution did not remain in cult-like obscurity for long and soon its popularity began to spread rapidly throughout the Internet community. Membership increased exponentially and within months, Napster had spawned a sprawling international community of users. A community according the RIAA (Recording Industry Association of America), which was indulging in the illegal reproduction of copyrighted material. In 1999, the RIAA filed a class-action lawsuit against the start-up claiming they were condoning, if not encouraging, piracy of the thousands of artists that the RIAA represented. What resulted was a rather publicized group of passionate individuals who regarded Napster as visionaries or villains.

It has been near three years since the notorious battle of Napster was thrust in the spotlight of national attention and much to the chagrin of its supporters, it is anything but the company it once was (or intended to be). Attempting to appease the legal obligations ordered by the courts as well as create a viable source of revenue, Napster is now a site that is preparing to charge a monthly subscription in order to download "approved" songs. The problem is the "genie is out of the bottle" and many other alternate sites have emerged offering services similar to Napster before it was made the "sacrificial lamb" of the online file-sharing websites. The perspective of the music enthusiast has changed significantly as well. It is very difficult to convince consumers that on-line music is worth paying for when it can be found elsewhere for free with a little determination. The same reasoning can be applied to CD and cassette purchases. Ranging from the retailer to the marketer to the artists themselves, there is wide range of professions that rely on the revenue that is generated through traditional means of record distribution and sales. The influence the A+E industry has on our economy cannot be understated. As bandwidth widens and compression schemes advance, other forms of entertainment, such as movies, are being affected as well. It does not take an economist to realize the severe consequences that would follow if large budget movies became available to the online masses before they were officially released from the studio. It is obvious we are experiencing a paradigm shift of tremendous proportions. An era where technology has accelerated beyond the ability to effectively manage it. With lines no longer clearly defined, the definition of artistic control and ownership has become clouded. How will intellectual property be protected from exploitation in the post-cyber age? Is technology part of the problem or perhaps part of the solution? Can a compromise be found?


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