"Metallica Brings Lawsuit"; "Metallica Alleges Theft"; "Metallica Demands Napster Site Shutdown". What is Metallica's problem? As you probably know, Metallica is a rock band and the band members are upset at a web site by the name of Napster. What is it exactly that Napster does? Well, if you have downloaded any music from the Internet lately, you utilized a musical file format called MP3.


Aggregate Demand (AD), Aggregate Supply (AS), Capital Resources, Choice, Competition, Demand, Entrepreneurship, Property Rights


  • Identify the controversy associated with online music distribution.
  • Recognize copyright as a method for establishing property rights.
  • Connect downloading free music to the abstract concept of property rights.


"Metallica Brings Lawsuit"; "Metallica Alleges Theft"; "Metallica Demands Napster Site Shutdown". What is Metallica's problem? As you probably know, Metallica is a rock band and they are upset at a Web site by the name of Napster. What is it exactly, that Napster does? Well, if you have downloaded any music from the Internet lately, you utilized a musical file format called MP3. Napster acts as a "digital matchmaker" between people who trade MP3 songs. If you wanted a Metallica song, all you need is a computer, the MP3 program, and Internet access. You log on to the Napster site, download Napster's file sharing software, and in a few minutes, you will have an MP3 version of the Metallica song.

CD PlayerAgain, you might ask yourself why Metallica is so fired up about MP3 file sharing. Let's think for a moment about what it is that Metallica does as a band. First, they write music, second they perform music, and third, they record music. As a band, Metallica makes a living writing, performing, and recording music. People purchase tickets to attend Metallica concerts and they purchase CD's and cassette of Metallica recordings. Did you know that Metallica receives a portion of the purchase price of each tape and CD sold? That portion that the members of the band receive is called a royalty payment. Metallica earns a living from the royalty their receive from the sale of each and every CD and cassette.



Activity 1

So why is Metallica so fired up about the Napster Web site? Check out the official Metallica website and read what the band members have to say about Napster. Once in the Metallica Forum, locate the Headlines frame, scroll down, and click on "A note form the band."

  1. According to Metallica, what is Napster doing or offering that is wrong and illegal? [providing Metallica music for free]
  2. What is the legal term for the act that Metallica objects to at the Napster Web site? [copyright infringement]
  3. How does Metallica feel about the MP3 format? [they are okay with MP3 in and of itself, they object to how it is being used]
  4. How many music formats does Metallica list? [four] What are they? [MP3, CD, Cassette, and Vinyl]
  5. What examples are given of other businesses that do not offer their services free of charge? [mechanics, contractors, plumbers, machinists, doctors]
  6. What is Metallica's point? [other professions do not give their work away for free so why should Metallica]

You have heard what Metallica has to say on the subject of online music. Now let's check out what other musicians are saying about Napster. Follow the link and read what Courtney Love, Chuck D, Madonna, and Bono are saying.

  1. Do the artists quoted support or oppose the use of the Napster file sharing system? [support]
  2. In general, what reasons do the artists give for supporting Napster? [sharing music over the Internet allows many more people to enjoy music, it is a great tool for getting your name out to the public, once people hear it online, they go out and buy the CD, it's a cool way to reach fans]

Activity 2

There is an extremely important principal underlying the battle between Metallica and Napster, that principal is private property. Just think about your own private property - the stuff that belongs to you. The question is - what kind of control do you have over your own stuff, your property? Most people would agree that property, the stuff that belongs to you, gives you the owner specific rights. We can categorize your rights into four requirements, the right to 1) possess, 2) control, 3) exchange, and 4) protect your property.

Property that meets these four requirements is said to be "well defined". You might be thinking that these characteristics sound obvious. You might even be thinking that these characteristics apply to everything and everyone. The truth of the matter is that not all stuff qualifies as private property. For example, who owns the air you breathe or the road that runs in front of your house or apartment; what about the clothes on your back or the CD player in your pocket? In order for you to have full right to your property it must have the four requirements we discussed above. Private property that is "well defined" is really "well protected", giving you the right to possess, control, exchange, and protect your stuff as you see fit. Test your understanding of property rights by completing the chart below. You will compare the property rights of two items, a car and air and then decide if the property right, for each item is well defined or not.

Characteristics Items to be compared Make a comparison

Record yes, no, or sometimes

How are they similar?
How are they different?



1) Is possession of the item possible and legal?(can you possess the item?)


[no, possibly sometimes]


Differences: [it is easy to determine ownership of a car, ownership of air is possible only within a building or room, you have the right to a non-smoking environment]

2) Is control of the item exclusive to the owner? (can someone else claim ownership without your say so?)

[yes, unless activity is illegal]


Similarities: [both can be used illegally]

Differences: [it is easier to control the use of your car than air]

3) Can you exchange the property right for this item? (can you sell it or give it away?)




Differences: [you can sell a car, it hard to sell air]

4) Are the rights to this item protected from illegal use or theft? (is there a law and is it enforced?)



Similarities: [if the air is confined it can come under certain laws, the right to own a car is well protected]

Differences: [if the air is not confined, it is not protected, cars are well protected]

What did you determine? Is the property right to a car the same as the property right to air? [no, the property rights of owning a car are well defined, property rights to air is totally different story and is limited to air confined to a building or room]

So, what does this discussion of well-defined property rights have to do with the battle between Metallica and Napster? The battle is really over the property rights of music. Who owns the right to Metallica's music? Did you know that it is illegal to copy and distribute someone else's work in a way that does not pay them for their work? Did you also know that it is okay for you to purchase a CD or tape and they convert it to a digital format? So, it is legal to make a copy for yourself but not for your friends. Read this article to find out more about the Metallica lawsuit.

The chart below asks you to compare the traditional musical formats of CDs and tapes with the new digital MP3 format. Complete the chart below and answer the questions that follow.


Online Mayhem I - Metallica VS Napster is designed as a way for you to explore the controversy of online music distribution. Technology and innovation often challenge the rules of property rights and the opening of the Napster Web site is no exception. So, how much did you learn as a result of this experience? Take the following quiz to test your knowledge.

  1. What is an MP3? [a digital music file with near CD quality]
  2. How do people exchange MP3 files? [over the Internet, on computers, or MP3 devices]
  3. What service does Napster offer? [MP3 file sharing]
  4. Why is Metallica suing Napster? [illegal distribution of music]
  5. What rights do you have when you own property? [the right to possess, control, exchange, and protect your property]

Stay tuned to EconEdLink for Online Mayhem II - Revenge of the Napster


If you are interested in the founder of the Napster Web site, Shawn Fanning, the link below provides an interesting profile of the Napster creator.