Napster Shut Down

July 27, 2000 -- Napster has hit a sour note in court.

A federal judge in San Francisco shut down the popular music swapping Web site — saying the online company encourages “wholesale infringement” against music industry copyrights. U.S. District Judge Marilyn Hall Patel noted that 70 million people are expected to be using Napster by year’s end unless the service is halted.

“It is pretty much acknowledged by Napster that this is infringement,” Patel said.

Injunction Starts Friday

The injunction will go into effect at midnight Friday, after the nation’s largest record producers post a $5 million bond against any financial losses Napster suffers from being shut down pending trial.

Napster’s attorney, David Boies, said the San Mateo, Calif.-based company will appeal.

“I think that a settlement, frankly, is unlikely,” Boies said. The Recording Industry Association of America sued Napster in December, accusing it of encouraging an unrestrained, illegal, online bazaar. Napster argued that personal copying of music is protected by federal law. The ruling also is a victory for the heavy metal band Metallica. The group sued the company, claiming more than more than 300,000 Napster users had traded its songs online. Napster responded by blocking access for more than 30,000 people, but new users continued trading the band’s music.

‘This Is Not Sharing’

“We’re elated,” Metallica drummer Lars Ulrich said. “Sharing is such a warm, cuddly, friendly word ... this is not sharing, it’s duplicating.” Some Metallica fans are furious at their once-beloved band, and a strong backlash looms. “I can imagine there being boycotts,” said Jonah Meadows, a Napster user. “A lot of people are outraged at Metallica for being so petty about this. So I imagine that could happen.” Elisabeth Prot, a sales executive from San Francisco who uses Napster, said she would look for alternative programs to trade music online and add to her collection of more than 120 downloaded music files.

“I’m disappointed,” she said, “but I think that there will soon be another way to download free music on the Internet.” One artist supporting the court’s decision is rap singer Wyclef Jean, speaking at a private gig Wednesday in New York, he said was glad to hear the Napster Web site was being blocked. ”When an artist gives permission to do that to their music, it’s cool,” Jean said. “But if you just take it—and you do what you want with it and the artist doesn’t have control, I think that’s foul.” Wyclef added, he does put MP3 files of his songs on the Web and believes it is important to offer music in that form.

To some supporters, Napster is considered a pioneer in the music industry. ”What Napster has really done is educated the marketplace that this is a great application, and this is how people would like to hear music in the future,” said Gene Hoffman of eMusic, a Redwood City, Calif.-based company that makes unlimited music available for a fee.

Costly to Music Industry?

The RIAA estimates that song-swapping via Napster by an estimated 20 million people worldwide has cost the music industry more than $300 million in lost sales.

But some research suggests that Internet song-swapping may not be so bad for the music industry after all.

A recent study of more than 2,200 online music fans by Jupiter Communications suggests that users of Napster and other music-sharing programs are 45 percent more likely to increase their music purchasing than fans who aren’t trading digital bootlegs online.

“Clearly, people who are using Napster love music. They’re probably our best customers,” said Hilary Rosen, president of the RIAA.’s Nancy Chandross, ABCNEWS’ affiliate WGO and The Associated Press contributed to this report.