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Twenty-five years ago, a university student's file-sharing program sparked a war that just about destroyed the music industry. In 1999, while record executives focused on the lucrative CD market, Shawn Fanning's Napster sparked a digital revolution. Its rise and fall is a cautionary tale for the creative industries and artificial intelligence firms at war today.
Napster offered music fans something irresistible. Digital music not only meant quick access to virtually any song, but additionally the power to decide on the way you listened to it. Listeners could create playlists from different genres. It was a precursor to the streaming experience we all know today.
But record executives largely ignored the potential of digital music and did not innovate or compromise. At some point, a deal was on the table through which major labels would equally share a 60 percent stake in Napster. But the deal fell through and the businesses ultimately sued Napster into chapter 11.
The record firms won the battle, but not the war. Their intransigence left a vacuum. Even after Napster closed in 2001, digital music piracy continued. Then got here Apple's iTunes. It was higher for record firms to charge 99 cents per song than for pirates to present it away free of charge. But the labels received nothing from the lucrative iPod sales, which skyrocketed due to the newly available legal digital music. One music journalist said: “Labels gave away their digital music business to Steve Jobs.”
AI firms and inventive industries currently fighting over the usage of copyrighted works should take note.
Generative AI firms claim that a legal term called “fair use” applies to the content they use. Microsoft CEO Satya Nadella compares training AI models to the way in which people learn from textbooks after which use that knowledge to develop latest ideas.
However, artists argue that this violates their mental property and are demanding compensation for the usage of their works by firms that train generative AI models. Recently, over 30,000 artists, including ABBA's Björn Ulvaeus and Radiohead's Thom Yorke, signed an open letter calling the usage of unlicensed training data for the models “a serious, unjustified threat” to artists' livelihoods. Artists like Ulvaeus and Yorke are innovators themselves and have long embraced latest technologies. The tech sector’s failure to seek the advice of and understand the creative industries has turned potential allies into adversaries.
Unlike the Napster era, this time it's not only music that's affected. The New York Times is suing OpenAI, as is the Authors Guild. Penguin Books has announced that it is going to add a warning on copyright pages prohibiting its use in AI training data. But in an indication of how different attitudes are, News Corp has struck deals with an AI company, OpenAI, while also suing Perplexity, one other AI company.
Robert Downey Jr. is preparing legal protections against AI impersonators after his death (though already deceased celebrities, because the announcement of an AI-generated Michael Parkinson podcast shows, have missed the chance to set similar limits).
Governments world wide are also taking completely different approaches to this fight. Singapore has allowed some AI training without copyright restrictions, while the US government has thus far left the choice to the courts. The UK is attempting to keep either side joyful with plans for an opt-out model, but that is unlikely to please either side.
Some market solutions are emerging. Organizations including the FT try to work with AI firms, signing licensing deals and experimenting with the technology. Artists and their representatives may also use existing contracts and update them for the generative AI era.
As these issues are resolved through treaties, courts and legislatures, either side should resist the temptation to polarize.
Creativity and technology have at all times gone hand in hand. The technology industry can learn from Napster's hubris and collaborate meaningfully with developers. In turn, creative industries can learn their very own lessons from the saga by anticipating the irreversible changes that generative AI has brought and embracing the brand new technology.
The alternative is a repeat of the music industry's lost decade – years of lawsuits and missed opportunities that benefited neither side. The best answer for today's creative industries and AI firms is to attempt to shape the longer term together.
