Revenge of the Nerds

You might recognize the title of this blog as being the title of a 1984 movie which some of you might have been (un) lucky enough to actually have watched. I took something that the entertainment industry had created, and posted a little piece of it on the internet. If this doesn't seem revolutionary, it's because it isn't. Since the early days of the internet, people have been taking the creations of the entertainment industry and posting them on the web. What is so interesting, while watching movies about the history of silicon valley, the development of the internet, and yes, nerds, is the role the entertainment industry itself played in the world we see today. One in which, their profits continue to plummet, while those of various internet start-ups which scorned them, continue to soar.

Back in the days which the entertainment industry considers "good" and "old", music was a real commodity. CD's were expensive and pretty much ubiquitous. Often packed with a number of bad songs and only a few good ones, they were the only way for individuals to get their hands on music they had heard. Interestingly enough, however, this format would eventually be the record association's undoing. One unique thing about the CD (versus a tape or record) is that the information stored on them is digital. This didn't matter much in the beginning, but as hard-drives became bigger and bigger, and technology improved, this became an important point. It was important because it meant that it could be duplicated by a computer and transferred to another. All that was needed now, was some service that allowed people to connect and share these digital songs with one another. Enter: Napster.

A High-school dropout named Shawn Fanning wrote the code for Napster in the summer of 1999. It allowed individuals to engage in peer-to-peer file sharing over the internet with the help of a centralized server. This service was made even more effective due to the development of compressed music files (such as MP3's) that took up much less memory and so could be transferred over the internet faster and stored more easily. Now that centralized server I mentioned earlier, that would prove to be Napster's undoing. It was that centralized server that made it possible for the Recording Industry Association of America (RIAA) to launch a series of lawsuits against it. It is important, however to analyze this decision in a little more depth.

The record industry had a unique opportunity. It's own reluctance to enter the internet age and give users a more effective and efficient way of getting music led this young kid to create a program himself that allowed people to do it. At this point they could have recognized their lack of foresight, and capitalized on the opportunity. At this time there were no other file-sharing programs with that kind of a user base, so most everyone was using Napster. They had a huge number of loyal fans together in one place, using one service. If they had bought Napster and used it to put together a model for distributing music to those same fans, thing might have turned out quite differently for them. Instead, they declared war on the very music lovers who they rely on for their bottom-line. In July of 2000 Napster was crushed by a court injunction.

Obviously by looking at the state of the record industry, and what has happened to the majority of retail music stores (see: ) the battle may have been over, but the war was far from finished. All felling Napster did was cause the nerds to go and create other revolutionary file-sharing services, the results of which can be seen all around us today. It is this strategy that has put the entertainment industry on the defensive and caused them to rely so heavily on DRM technology. In my next post I will follow this saga, and explain how the nerds took their revenge.