Chief opens up about evolving business

Q: The original Napster is gone, but file swapping certainly hasn’t gone away. Despite the more than 1,000 lawsuits brought against individuals, usage is up 40 percent since December 2002. How can a paid service compete?

A: I said all along that I think our No. 1 competitor is the pirate services. We will continue to grow because consumers who have their own charge cards, or are parents of small children, understand that the law is clear and that file sharing is illegal. But there is a very large market of people whose attitude is, “Well, I don’t yet see a reason why I have to stop.”

The music industry is going to continue to file lawsuits around that. The cows just got so far out of the barn with illegal piracy, before there were legitimate services, that I think we should expect that the amount of time it will take to really turn it around will be measured in years, not months.

Q: What happens to services like RealNetworks’ Rhapsody if the music industry finds a way to license these peer-to-peer services?

A: I think it would be great if the music industry came up with a true détente with the peer-to-peer, but the problem is there’s not just one you can create a détente with. What happened with Napster is instructive because one company, Bertelsmann, tried to do just that. The other guys’ attitude was, “Hey why do we want to give you, Bertelsmann, control over this thing that’s so important to the future of our industry?”