Online Music’s Hired Guns Mean War

Writer Ken Auletta’s new book about the Microsoft trial bears theintriguing title of “World War 3.0.” If the Microsoft case is a war, the two main opposition generals have left the battlefield and joined the Bertelsmann AG and Napster camp.

What does that mean? Simple. It means get ready for World War 4.0.

There are two ways to read the news that former U.S. assistant attorney general Joel Klein, who led the government’s case against Microsoft, has been tapped to head Bertelsmann’s U.S. division,where Microsoft slayer David Boies is already on board as a lawyer and adviser.

Napster’s longtime foe, the record industry, chose the positive spin, saying that Klein would helpBertelsmann get Napster into compliance with all the rules that the labels saythe company has been violating since Napster founder Shawn Fanning dreamed up the idea in hisdorm room.

But it’s much more likely, even obvious I would argue, that weare on the verge of all-out war.

Ethics-Go-Round

Klein’s hiring has already prompted cries of ethical lapses from somecorners. Critics are asking — in the usual veiled way — whether Klein’srespite from private practice at the Justice Department amounted toresume building.

But jumping back-and-forth between government and industry is nothingnew. Moreover, Klein is not going to make arguments or negotiate with the Justice Department’s antitrust division he previously headed.And government work is a proven way to increase earning power.

Still, any conflict of interest issues that Klein brings with him to the private sector are dwarfed by the hornet’s nest of controversy he’s been hired to help Bertelsmann wade through.

Making His Presence Felt

Klein’s primary role, it appears, will be to advise on and perhaps lobby forBertelsmann’s desired purchase of EMI Records. But his presence so close tothe whole Napster situation can’t be ignored.

Maybe Klein will steer Napster into calm waters. It’s on the verge ofbecome a paid service anyway, so how much of a stretch is it to get it to aplace where it can make all of the labels happy?

But I don’t see that path being taken. Sure, it’s an option, but do you needKlein and Boies on your side to do that? Of course not. You need a kinder,gentler image if you plan to extend an olive branch.

Make War, Not Peace

Hiring Klein and Boies is not a preface to peace talks. It’s a prelude to battle. Andit’s a completely different kind of war than the one fought up until now.

A year ago, Napster was the American militia, running an underground,guerrilla war against the record companies, keeping itself hidden andjumping out only to steal copyrights.

But now it’s got the mettle and mightof a media giant behind it. It may not have the bomb, but it’s got a wholebunch of conventional weapons.

Underground Militia

Napster does still have its guerrilla roots. In fact, that may be Napster’s strongestasset — and the one that Klein is being brought on board to protect.

TheNapster users I know are downloading their fingers off these days, burningCDs like they’re going out of style in advance of the pay-as-you-go or buy-a-monthly-membership days coming to the Napster site this summer.

Now some of them will stay and pay. They’re hooked on the technology, howeasy it is to use, its portability. But even more will go elsewhere. And ifBertelsmann loses Napster’s core audience of young, sophisticated Web users,it loses the franchise.

The reason for buying the site, for striking thesurprising deal in the first place, will be gone.

Duck and Cover

Enter Klein. Now, his most recent experience isn’t with copyright andBertelsmann never even mentioned Napster in announcing his hiring.

Klein knows monopoly issues and government regulation. Think about it: He’s also a guy who knows how to fight corporations. He’s the guy who fought the biggest corporation in the entire technologyworld. And at least to this point, he won.

So Napster fans, rejoice. Maybe your precious network isn’t going to rollover and sell out like Aerosmith on the Super Bowl halftime show after all.Maybe it’s going to go down with a fight.

Take shelter and get a good seat. This one is going to make the Microsoft”war” look like a game of touch football.

What do you think? Let’s talk about it.