Music Pigopolists aim snouts at finance capital

VC's Napster 'shame'

Music industry lobby group the RIAA has been attacking cherished institutions of national life, such as the military and education, in recent months. But by attacking finance capital itself, could the pigopolists have gone too far?

Two record labels are suing a venture capital firm Hummer Winblad Venture Partners for giving Napster a lease of life. HWVP gave Napster a $13m capital infusion in April 2000, which EMI and Universal claim prolonged the file swapping service.

The history of Napster litigation is important, here. Napster had been slapped with a lawsuit the preceding December, but when Hummer Winblad invested, Judge Patel had made no ruling that Napster was involved in illegal activity. The good Judge issued her preliminary injunction three months later in July 2000. (She finally ruled in February 2001, but not after questioning out loud whether the oligopolists had a right to maintain their traditional cartel into the distribution of online music, too).

Big Chill

The music and film industries' litigation is intended for one reason only: to encourage a climate of fear.

The punitive suit against the file swapping students is intended to create an example for file sharing software developers everywhere: that they could be impoverished for life. The suits against Sherman Networks in Australia and 'DVD Jon' in Norway are intended to show that no corner of the world can provide refuge from the United States' DMCA. The case against Verizon, as Thomas C Greene pointed out in this important analysis, is both more draconian and much more subtle. The suit intended to encourage ISPs to proactively block file sharing, but it also has the effect of rendering the Bill of Rights' fine words meaningless, because of a failure of the judicial branch.

And how our elected representatives protecting us? The Democrats are beholden to Hollywood's money, and call for stiffer penalties; while the Republicans are so blinded by folklore or theoretical notions of how capitalism should work to see how it actually behaves in real life. And so both parties have missed a populist campaign.

However the suit against the VCs - designed to deter investment - may be one step too far. As the San Jose Mercury reports, finance capital isn't going to like this one bit:-

"The uncertainty attendant to those pending lawsuits is deterrence aplenty to the flow of investment capital to new technology,'' says a VP . "Even without the threat of direct suit, investors in innovative technologies face the very real risk of loss of their investment.''

Now, at school we were taught that the reward for risk was something called 'profit', so to hear VCs complaining about risk may strike some of you as little bogus. At the same time, the nuturing of new entrepreneurs is a value held dear to many here, and by attacking finance capital it may have given both sides of the partisan divide some common cause. Maybe. ®

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