Penn State University, the RIAA and Napster - the axis of spiel - continue to defy the laws of common sense and economics that our country once held dear.
Penn State trustee and RIAA legal counsel Barry Robinson has denied having anything to do with the university's recent adoption of the Napster music service. Robinson told the school paper that there is no connection between his work at Penn State and the RIAA, saying he only deals with "day-to-day" legal matters for the RIAA, which include suing college students, children and senior citizens. He did not hear word of the agreement between Penn State and Napster until "36 hours" before it was officially announced last week, according to The Collegian.
The key word here is "agreement" because it's a bit far-fetched to think Robinson had no idea of Penn State's plans. And here's why.
Back in September, Penn State's President Graham Spanier told reporters about his ongoing efforts to build a "music fee" into students' tuitions. Spanier was ahead of his time to be sure, as Penn State now has students fronting part of the cost for the "free" Napster school service.
Spanier also works side-by-side with RIAA President Cary Sherman on the Committee on Higher Education and the Entertainment Industry.
So while Robinson may not have known about the exact timing on the Penn State/Napster "agreement," it seems a stretch to think neither Spanier or Sherman mentioned that such a scheme was well underway. What is even harder to believe is that Robinson did not help spur such a plan on given his uncomfortable role in both lobbing threats at Penn State while being a trustee.
Penn State and Napster have billed their subsidized service as a possible model for universities around the country. Again, one has to wonder whether or not Sherman and Robinson were made aware of these aspirations. Wouldn't both Penn State and Napster want to check with the kind-hearted people at the RIAA about their plans to bill this as a "model" before rolling it out. Surely, Spanier and Sherman had a chat about the idea, and we would hope Sherman checked with his legal counsel on the concept.
And, what if, the legal counsel and Penn State board member actually suggested the idea himself, making all of his cronies happy? Never. No, he only heard about it hours before the deal passed, which is months after Penn State's own students were told about and asked to test the program before launch.
In May of this year, the RIAA sent a notice to Penn State, accusing it of copyright violations. The pigopolist trade group later apologized to the school for these actions. It turned out that a professor with the last name Usher had posted MP3s of his own singing efforts, which the RIAA lawsuit bot had confused with songs from the musician Usher.
Since the incident happened to a Penn State professor, and the RIAA has such close friends at the school, it made the uncharacteristic move of sending an Usher CD and T-shirt to the professor. Needless to say, the RIAA did not offer a similar olive branch when it incorrectly lobbed a $300 million lawsuit against a pensioner.
It seems Penn State is uniquely privileged when it comes to the RIAA and the music industry.
The university says its paying for the $9.95 per month Napster service out of its IT budget. With 83,000 undergraduates and graduate students, this would theoretically take the monthly bill to $830,000. In addition, Penn State has announced plans to stretch the service to its hundreds of thousands of alumni. Now, we're into the millions.
Other universities should pay attention to these figures when Napster comes knocking. Be sure to ask for a generous discount - something close to free for the service.
Exactly how Napster plans to make money on its service is unclear. The total of 83,000 students pulling down millions of tethered downloads is sure to pump up bandwidth costs. This leaves Napster turning to the 99 cent per song charge students can pay for a permanent download.
But, as Apple's Steve Jobs has pointed out, legal music downloading is a money losing proposition. Apple makes its money on iPods. Napster has no atrociously high margin
hardware to sell.
So once again, with Robinson's conflict of interests and denials aside, we're left thinking the axis of spiel pushed this deal out to make legal music downloading at colleges look feasible. Good for the legal Napster. Good for Penn State and its lobby group cronies.
The best bet Penn State has at this point is to have Spanier cruise over the corporate governance and economics experts at the school for a second opinion. ®