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The reality is, however, that there's still little most anyone -- record companies or musicians themselves -- can do to stop the flow of music-swapping on the Net. To regain control, record issuers will have to develop a consensus on technological standards that prevent free copying and distribution. Even more important, they'll have to rethink how they actually relate to music buyers. So far, they've proved brittle and reactionary, traits that Ulrich is none too eager to embrace, even while he defends many of the same positions. In wide-ranging interviews on Napster and the music business, Business Week's Dennis Berman spoke to Ulrich, as well as Chuck D, the former leader of Rap group Public Enemy who has been an active Napster supporter. Edited excerpts follow. LARS ULRICH "We're out there by ourselves, we're fighting what we feel is morally the right fight" Q: Do you feel that Napster has been able to spread so quickly because record companies have been so slow in coming up with suitable systems for digital downloads? A: No question. You know, this whole thing about the record companies, "We're in this together, and the RIAA and the artists and we're all joined, united," and all that crap. Everybody's just looking out for themselves. And I think that if there had been more of a cohesive thing and a way to make this happen collectively, I don't think that this would have been running as out of control as it has. And so we just got to a point where we felt that we couldn't sit around for everybody else to get their s--t together, and that we just had to do what was right for us and what was right for us only. I can certainly tell you I'm not speaking on behalf of the record companies, because I find it very interesting in the last couple of weeks that we've got more support and so on from fans. And we've got more support from other artists. But I have not gotten one f---ing phone call from anybody at a record company. It's really quite interesting. Nobody's called up and said, "We appreciate what you're doing." So now, I almost take a kind of, I would say, a perverse pleasure in sort of being the underdog. We're out there by ourselves, we're fighting what we feel is morally the right fight. Q: Let's work from the concept that what people are doing with Napster is illegal. But assuming digital downloading is here to stay, what really are the systems that can work and how do you, as an artist, feel systems should be arranged? How would you feel about a subscription-based service where, say, Napster subscribers pay a certain fee and those royalties would be divvied up among artists whose work is traded? A: We haven't sat down and figured out what we want to do and how we want to do it yet. And so we were sort of going with the idea that, by the time we rolled around to next year, then there would be a new full record from Metallica. And then we would sit down and see where technology was at that point in time -- instead of spending a lot of our energies dealing with solutions to the situation right now that will be outdated in about half an hour. At the end of the day, this is about control. This is not about hiring, this is not about being part of someone else's system. We feel that this is our music, that we own the rights to it, we pay for it, we have the right to do with it what we want, where we want, and how we want. What surprises me a little bit, is that people are sitting here going like, "Wow, this really came out of nowhere." It surprises me that people are taken aback by this, because anybody who's followed Metallica for many years knows that we've always had this type of protective attitude over what we do and over what our name is used for. And we're very, very, very selfish in, not so much from the financial points and so on, but we're very, very protective and selfish over what our name is used for and who we give it away to. I think what I would ultimately like to end up [with] is a situation where we control every aspect of Metallica's music being downloaded. And then, what you have to look at, really, is Napster and other services like Napster, ultimately are like third-party type of situations. It's almost akin to some of these, like, CD clubs or K-Tel compilation records or something. We have never, ever, ever been part of any of that type of stuff. So Napster, to me, really becomes a sort of a third party outside of the main link between Metallica and the people who we want to have download our music. So why should we go to a third-party service when we ultimately can probably find a way to do it ourselves? Q: Do you feel that the full process might be good for the record industry in the end? That this might be a blip of a couple of months or even a couple of years, and then, in the end, things will change in the record industry? A: I think, ultimately, there will be a balance in there. You have the artist. You have the fans. You have the record companies. And you have the service providers. At some point, there will be a balance that is probably comfortable for everybody. But right now, the advantage that the service providers have is that they are so ahead of the game, from a technological point of view, that it's sort of like everybody else is playing catch-up. And I think, at some point, that curve is going to slow down and that the rest of the record companies will not be as far behind as they are right now. Q: Do you feel that, in the future, you would even want a record company? Couldn't you see, once your contract expires, just selling directly over the Net? Metallica has a big enough name and a big enough following to do that. A: Of course we do. The food chain of commerce in the music business is four clear steps. You have an artist. You have a record company. You have a retailer. And you have the consumer. And everybody in the industry is obviously saying that, at some point in the near future, either the record company or the retailer will become obsolete as we know them today. And my bet is that there will always be a need for a record company to serve the promotional and the publicity functions for baby bands, and there will always be a need for record companies to basically bankroll baby-band projects, and so on. But obviously, for bands that are fortunate enough to be in situations like we're in, obviously it's very, very possible that we could be in a situation a few years from now where we would just sell new Metallica music directly to our fans and circumvent both the record company and the retailer. Q: Do you think Chuck D's attitude is just a knee-jerk reaction to record companies in general and that supporting Napster itself is harmful to all artists in the end? A: First of all, I really respect Chuck. He is an artist. I respect everything that he's done for the community. Let there be no question about that. The more I get to talk to him and debate these things with him, I think it's pretty clear to me that me and him are coming from two different points. He's a little bit more looking at the record company's role in this. You know, he talks a lot about greed and lawyers and accountants and so on. And he's talking about sort of giving it back to the people and so on, which I think is an analogy that I respect a lot. But the issues I have with it, which he knows because we debated them, is that ultimately, by taking it away from the record companies and giving a lot of it to service providers like Napster, is that what you're doing is you're really just taking the power from one entity to another entity, and that, ultimately, that the service providers could end up being as powerful as the record companies are right now. And certainly, I would not predict that they would be any less greedy. You know, right now, they're hiding behind this sort of whole thing, "We're doing it for free," and so on. But ultimately, they are for the big, fat IPO payout. Or an AOL type of company coming and swallowing them up. I think that's where they are ultimately looking to make their money. And so my argument respectfully to that is that I think that one should just not be sort of deluded by the fact that ultimately these dot-com service companies can end up holding the same amount of power and with the same greedy approach that is the perception of what the record companies are today. The only other thing where I think Metallica really, really differs with Chuck's analogies is that -- and this goes back, you know, from the day we started -- is that we have always felt that what we do is a very, very inward, selfish thing. Because we feel that the minute we sit down and think about who it reaches and what people want from us, that that potentially can pollute or alter the pure creative process. So we have always been very, very inward looking, and always in the press talked about how selfish we are. Selfish from the point of view that we do this for ourselves, and there was nothing about what people want from us or expect from us that ever gets in the way of that. Q: How much does it scare you that kids are developing the mentality that music -- and intellectual property in general -- ought to be free? A: If you take a bigger look at the picture here, the danger of where this is heading and the underbelly of the Internet today is that people are taking every piece of information that they get through the Internet for granted. And they basically feel that they have a right to it. And people have become so used to the fact that they can sit in the privacy of their own home and that there's nobody really interfering with it. Q: But information wants to be free, right? A: Yes. That's one thing, information is information. But then there is copyrighted stuff, things that are created from nothing. This whole thing about music, about movies, about literature, it's like anything that is out there is mine, I have a right to it. And that is just the really, really, really dangerous attitude. Q: But it's happening. And it doesn't seem anyone can stop it. A: Let me also just go on the record here and say that I have no issues with Napster as a fine service for people who want to be part of that, who want to make their music or their commodities available on Napster. I have no issues with that, whatsoever. I mean, if people were asked, it would be a whole different situation. But they basically took the liberty of assuming that everybody wanted to be part of that. Whoever wants to put their music up there, whoever wants to download it, be my guest. But I have the right to say that I don't want to come to that party. And you should respect the fact that I don't want to come to the party in the same way that I respect the fact that you want to come to the party. I can guarantee you that every single guy that's sitting there coming up with a business model like a Napster type of service -- I mean, look, this is America, O.K., this is the 21st century. These people aren't doing it for f---ing charitable causes. They're not doing it to benefit mankind. They're not doing it to help all the kids sitting around behind computers in America who are musically starved. They're doing it because, sooner or later, here's my $50 million f---ing IPO and I'm riding into the sunset. So that money that's generated from that is basically then going into the wrong pockets. You know, the main argument that people come up with -- again, I hear it every single day about, you know, we're greedy. But if your argument is that I'm greedy, then you're just as f---ing greedy for not wanting to pay market price for a CD like everybody else is doing. Q: But it seems like then we get to the real responsibility and reaction of the record company. And if you look at what they're doing online, trying to sell legal singles, they're selling them for $2.50 a pop. A: Well, it's not smart. Then you get into a whole other argument I'd love to partake in. Which is, is a $16 CD overpriced? I would say a $16 CD is overpriced. But is a $9 movie ticket not also overpriced? Or is getting the plumber -- you know, my plumber analogy that I'm sure you heard about -- getting the plumber over to my house to fix my toilet for $200, is that not also overpriced. Is it $3.50 for an issue of Business Week? Should it be $2.50? I mean, you can take that through anything. And then you start getting into the real basis of where ultimately this could all end up -- this is about commerce, this is about people's perception of commerce and their rights. And this is about, ultimately, how people view living in a capitalistic society in the 21st century. CHUCK D "This is the first time that the technology has actually gotten to the public before the industry has gotten it" Q: You've been a longtime critic of record companies and the system and how it treats artists. Is your support of Napster just a knee-jerk reaction against the record companies? Or do you truly believe in it? A: I don't think of knee-jerk. I think it's a process of how the whole paradigm of the music industry is changing. I think the industry once prided itself on being a step ahead of the public, you know? Of connecting itself with technology. And they had their advantage. I think that the advantage was misused as far as the CD advent, because prices were jacked, but artistry was used as a disposable commodity once the CD era came about. And it worked to the companies' advantage and not so much for the artists'. And, for example, if a person goes and buys a CD for $17, then they make it for as little as 90-some cents or even lower. It was basically a structure that was put together by an accountant or a lawyer mentality. And those are the guys that took over the music business. Q: Talking to Lars, he agrees with that. But he says that Napster eventually switches those revenues, not to the record companies, but to someone else. Be it a Napster or whomever. A: I look at Napster as a new form of radio, of global exposure. But now, a whole lot of people can get in the music game. The door was once closed, and you only had a selective few making their selections of who they wanted in the music game. Now, you can have as many as a million people operate within the music game and change the whole process of how the money is going to be distributed. I think there will be twice as much money available in the music game. And also combined with ancillary connections. But you'll have a million hands in it. Q: If all music is free, as it is on Napster, who pays for the recording, marketing, publishing royalties? A: I think all that will be rewritten. You'll talk about records being owned, and the splits will be different. Because, as opposed to somebody looking at 10%, somebody could be looking at 100% of the pie. And their percentage is on ownership. Now as far as what a song can do, I think a song will be able to go at a lot of ancillary areas and still will be going onto the offline world and making its money. And you'll see it tied to different situations, like advertising, revenue, sponsorships. And you'll see music come at the public for a varied price stream. And that's something you don't see nowadays. There's no quantitative method -- there's no reason on paper -- that says that this affects the sales of music, when the sale of music is booming more than ever. And, hey, it works fine for me. My bottom line has not sold BMG's, Universal, or Time Warner. So why should I care about them? Q: You should care, though, if your music is made available for free, and you are the one whose bottom line is affected. A: But my bottom line ain't $100 million. I'm making my product for little or nothing, and anything else on top of that, you know, is great. I run five studios. So my overhead is very low. At the same time, you know, what happens if I'm with a major, right? And the major tells me I gotta have a $500,000 video -- why am I spending $500,000 that I don't have? Do you know that it takes $3.5 million to actually get a record to be a hit record? Q: I don't doubt it. A: So why are we even dealing with that dynamic. It's outdated, it's about as outdated as a nine-inning game. Q: Right. But the question is about Napster itself, which can make all this music free. A: But at the same time, you could get your movies free. You can get your movies free from taping it from HBO, Cinemax, or Showtime. Why do people still go to Blockbuster? Q: Because they want to get it when they want it. But you can do that on Napster now. The argument that lots of people make is that once you get rid of a copyright structure and a respect for copyright, you hurt all artists. What happens to the proverbial artist who dies and leaves a family, or Curtis Mayfield [a soul singer who was paralyzed], and has no [hope] of collecting residuals once those songs are free? A: The fact that music was intangible, intellectual property that actually could pay people, it was a period of maybe 50 to 60 years when that happened. That time is over. It's gone. So now, pretty much the whole game plan has to be changed. And I think that the artists that work for those ancillary areas and work from an ability that have global expansion can seek and really reap the benefits. I mean, before, it's like, O.K., you sign a record-company contract, you sign away worldwide rights, and you have records that even go around the world. Right? And then they'd say, the chump change that you was going to get, you never recoup because you owe the record company money that they decided to spend. So that, to me -- all I know is that prior system has worked for a select few. It's worked for the Metallicas of the world. But they're the exception to a very big rule. In black music, I could name you thousands of artists that haven't received any monies out of the records they have done. Let them start from scratch with ownership. I mean, hey, if I know that 10 million people have my song, you don't think I'll be trying to go out there and figure out ancillary ways of [profiting] from that. And at the same time, if I knew that I have songs on Napster being traded, I know that I can get a gauge on how many people are trading the song. You don't think I can't make a deal offline and people would come to that product as well. Q: Do you feel we're at a fulcrum point, a paradigm shift of how we treat intellectual property? A: Yeah, it's the big shift. People are crying, but this is the first time that the technology has actually gotten to the public before the industry has gotten it. So obviously, you're going to hear the people in the industry structure screaming, who have been the biggest beneficiaries of it. And you're going to see them crying to government because now the power is in the people's hands. It's like controlling water. Another thing is that, for the first time, what was viewed as the audience is now a participant. For the first time, startup entrepreneurs and people who have been locked out of the music-business game, over the last 15 or 20 years, now can get in. Q: Well, what do you think is the best example of that? Who's done that so far? A: Oh, I can name tons of guys that started their labels, but they couldn't get into the game because it was strategically placed in Nashville, New York, or Los Angeles, and because they couldn't get into the music game 'cause, No. 1, they were priced out of the market. That was the intention of the majors and the lawyers and the accountants that ran them. They said, "Look man, we're going to have to stand this way." MTV, if you don't have a $400,000 video, you can't get your s--t on. The startup entrepreneur can't compete with that. If you don't pay the radio stations, which is now controlled by three corporations, if not two. If you don't have $700,000 to $1 million, you can't get your record on. So how are you going to promote and market your product? If you're not in the major game, over the last 10 years, you're not going to be in the game at all. Now, a parallel music world has been developed. And this whole financial picture damned near is in reverse of the traditional way, you know? The music industry had a chance to participate in downloadable distribution. And they turned their faces to it and their backs to it, and they probably got a hold of it first. So it's purely a case of the chickens coming home to shoot. So that's my argument. And Napster plays into the realm of downloadable distribution. I mean, with lawyers, they control their masters, and they have a simple argument of, "This is our s--t, leave it the f--k alone." You gotta adapt. It's like if you're on a baseball field and it rains, right? And the umpire still says play, right? You gotta run different on wet grass. |
