Q&A: Sean Parker and Shawn Fanning on 'Downloaded,' The Napster Revolution

Napster co-founders Sean Fanning, left, and Sean Parker in a still from "Downloaded."

When you started Napster, obviously it was an idea that you believed in and were very passionate about. How early on did the ethical and legal complications occur to you?
Parker: We were introduced to this guy [Melville Nimmer], he was a legal scholar who had written a book called "Nimmer on Copyright." I was dispatched to Washington D.C. to go meet with him at some fancy law firm. And I remember he sat me down and started explaining copyright law.

[To Fanning] I don’t think I’ve ever told this story before.

Fanning: No, and it’s not in the movie.

Parker: So he hands me a pamphlet, like a little leaflet. It was a 60-page long little book called “Puzzles of the Digital Millennial Copyright Act.” And I was like “What in the world is this?” And he said “Go read this. It’ll explain all the unanswered questions.” This was 1999, and up until that point, only other legal scholars had read this book. And so reading that was the beginning of my legal education.

Was this before or after you guys had been sued?
Parker: Before. And the gist of the book was that none of these issues had ever been adjudicated. No one knew. Literally no one had the answer to the question of whether something like Napster was legal or not. But it was Nimmer’s opinion at that time that our service was very much legal under Safe Harbor D of the DMCA, which covered search engines. But of course this had never been tested because nothing like Napster ever existed before. Look, we never touched the content ourselves. We were just an index. We operated no differently than Google or Alta Vista, if you remember Alta Vista. We were no different than these search engines. The music never went through our servers. It was users sharing music with each other and we just had a list of who had what. That question [of legality] was ultimately decided by the Supreme Court [via the 2005 case MGM vs. Grokster] in a decision that is not really a legislative decision, it’s a judicial decision. And it’s not necessarily based on their reading of the Copyright Act. It’s based on the Supreme Court being very activist and saying “We’ll do what we want.” And I don’t think they’ve really clarified this issue, because for the time being, you can find pirated stuff on Google all day long. And it’s not up to Google to take it down unless someone sends them a notice and takedown request under the DMCA. So all of the legal questions that were posed in the Napster case have never been adequately answered.

A still from "Downloaded"

Did you think that what you were doing was legal? Do you still think it was legal?
Fanning: Yeah.

Parker: There’s two different questions. There’s “Was it legal?” and there’s “Was it right?” Starting with “Was it right?” It was right in the sense that from day one we were trying as hard as we possibly could to meet someone in the record business and get licenses, but we didn’t even know where to start. And knowing that we were in this legal grey area, we were very open to just letting them have our company. We were like “Take the company.” We just wanted this service to keep existing. It wasn’t until later that we realized we had to make money at some point. We were so young we were just like “Oh whatever, we’ll just sleep on couches for the rest of our lives.” It didn’t occur to us that everyone around us was trying to make money, we just wanted to run this thing. We were so hungry just to be a part of the music industry, just to have something to do with music, just to be close to it, just to have a service where people could get excited about music again and you weren’t just forced to listen to whatever the radio stations and the labels and MTV wanted you to listen to. No decision you ever make is either 100 percent right or 100 percent wrong, but I think it was more right than it was wrong.

Now as for “Was it legal?” I actually think that had it ever been adjudicated… and this is something that’s totally misunderstood because we never went to court. We had hearings with judges, but we never had a trial by jury, and that’s because we ran out of money before we ever got to a trial. But had we gone to court at that time, I think there’s a reasonably good chance that we would have won.

Fanning: As for was it right, I think this is a debate that will go on forever. There was so much interest in it on the part of upcoming artists, and many success stories as well as detractors. Look at any innovative or disruptive technology. Very rarely do you have change without any discomfort. But I think the fact that we didn’t take any money from our customers until we had the opportunity to structure a deal and pay the artists says something. We didn’t profit from this.

Parker: This guy from The Black Keys still thinks that I got rich from Napster. We both came out of Napster deeply in debt, deeply in debt. We didn’t even really have any connections except for [venture capitalist] Ron Conway.  We were nowhere. I spent quite a while working odd jobs and trying to keep myself going while I tried to get my next company started at a time when nobody was funding consumer companies anymore. And I remember we bumped into The Edge one time at Chris Blackwell’s house in Miami. We didn’t have money for a drink and he said “I thought you guys were rich Internet billionaires sailing around on your mega yachts.” And we were like “No, we don’t charge users for the service. Where do you think that money would come from?”

A still from "Downloaded"

It’s interesting to hear you say that you were so eager to work with the labels in the early Napster days. Wasn’t the whole thing based on a “power to the people” hacker ethos? Is it really true that you just wanted to be a part of the major label industry?
Parker: It was “power to the people” in the sense that we were saying “let’s break down these gatekeepers, let’s break down these barriers,” but it was also “let’s make sure artists get paid.” The getting artists paid part of it was all we talked about.

Fanning: The reality was we were building something that solved a problem. Once it solved that problem on a big scale it was like “OK, people really like this and it seems to be a better way of doing things so let’s figure this out.” It was one problem at a time.

Parker: We were trying to get the licenses or we were just going to sell the company. And Bertelsmann made a huge investment in the company. They essentially bought the company. So we essentially did sell ourselves to a record label.

Fanning: We had both seen very little of the world and there was a bit of an idealistic viewpoint. We understood the world more in terms of the Internet than in terms of the way things had been before. So it came out of that thinking and from there was built by the user base. It ended up evolving on its own and we were just the representatives. And then Sean was trying to make it a business and legal while we kept it up and running and were scaling and treading water. It was one day at a time. It did end up having this kind of air of revolution around it, but I think that was just the result of the way music was being kind of mishandled and managed at the time.

Parker: It was a cultural revolution that, if it was going to be durable, it was going to have to be commercialized and turned into a business so that both artists and labels got paid. And it never made that transition.

In 2013, is downloading passé?
Parker: Well, technically speaking there’s no difference between downloading and streaming. A download is a stream that gets stored, and a stream is a download that doesn’t get stored. They’re the same thing. These are arbitrary legal terms that are set up by labels and content businesses in contracts. Bits are bits. We call Spotify a streaming service just to make it easier for the press to understand, but if you cache a playlist on your phone, which most people do, than it’s a download service.

Fanning: The idea of ownership is gone. As long as you can hear what you want when you want, that’s all that matters.