Colleges use tunes to lure students
By Jefferson Graham
USA Today
When Lisa Staib was choosing colleges this spring, her cousin, a Penn State student, helped sway her decision by describing an unusual campus perk: free Napster.
A onetime Internet music outlaw, Napster's gone legit. And it's competing with the biggest companies in the industry — including Sony, Apple, Microsoft and Wal-Mart — to get students and other music fans to buy songs online instead of stealing them.
Colleges are hotbeds of music piracy. To give students a legal alternative, digital-music meisters are wooing campuses with generous deals on Internet music-on-demand.
Penn State struck the first deal with Napster in January. The trial program was so successful that many other schools took notice. Now, when students return to school at Penn State and many other top colleges, they'll find free, legal digital music as the latest amenity, alongside cable TV and campus concerts.
About 25 of the nation's 3,300 colleges will offer music to their students on campus networks this fall. An additional two dozen or more are finalizing deals in coming weeks. "There are very few things in life that are more important to students than music," says Penn State President Graham Spanier. "Any school that buries its head in the sand on this is not serving its students well."
Students at schools such as Penn State and Cornell University will have access to Napster as part of tuition. Normal subscription rates are $9.99 a month. Other schools are cutting deals to make subscriptions available to students at discount rates. The University of California-Berkeley is expected to announce a deal with RealNetworks' Rhapsody for a subscription rate of $2 a month. Yale students can get competing service Cdigix for $3.95 a month.
Some schools subsidize at least part of the cost: Cornell says it will spend more than $200,000 for one year of Napster; an alumnus is picking up the check. Tennessee was quoted $18 million to install Napster at all of its state colleges. It backed out, saying it wasn't worth the money.
At Penn State, Spanier says he's delighted with the investment.
He was one of the first school administrators to call for weaning students from unauthorized swap networks such as Kazaa and eDonkey. Spanier cut the first deal with Napster and is expanding it this month from 12,000 students on one campus to 75,000 at all of Penn State's campuses.
He expects daily downloads to jump to 1 million songs — from 100,000 in the spring — when Napster goes campuswide. "The program has been phenomenally successful," he says. "It clearly has reduced the need to pirate songs."
It certainly hasn't eliminated the problem. Licensed services still have gaping holes in their catalogs — no Beatles or Led Zeppelin, for instance — while so-called peer-to-peer (P2P) programs such as Kazaa and eDonkey seem to have everything, plus movies, TV shows and yes, Mom and Dad, oodles of porn.
Even with a celestial jukebox that amounts to a well-stocked virtual record store, the industry has ways to go to change consumer behavior, if Staib's experience with Napster is any indication.
Staib, 18, who began her Penn State career early this summer as a freshman, says Napster is "nice to have, when you can find the songs you want."
While much of the 750,000-song catalog is available for listening, some titles are available for purchase only — such as tunes from Maroon 5 and Ashlee Simpson's new albums.
To find those, Staib went back to Kazaa, which she used back home in Great Falls, Mont.
P2P factories
Weaning college students from peer-to-peer services "is going to be a significant hurdle," says P.J. McNealy, an analyst at American Technology Research. "Colleges are P2P factories."
The services argue that they have many attributes that make them attractive to students. P2P programs such as Kazaa and Grokster are laced with pesky pop-up ads, spyware and often, viruses. Additionally, songs on P2P are often not as advertised or are incomplete.
Napster has been the most aggressive in pursuing the college market. It has eight schools signed up. But it says it won't make much money on the deals. Napster Senior Vice President Aileen Atkins describes student discounts as "slightly" above half price of its normal $9.95 subscription. Napster's interest in the collegiate market is future-oriented.
"Once we can get people to use the service, we have a powerful convergence tool," she says. "The college audience is a very active breeding ground for future music consumers."
She says students also purchase songs to own at 99 cents a song. "Not at the same rate as regular subscribers, but in good numbers," she says.
David Galper, the co-founder of Napster competitor Ruckus Network, calls a campus digital music alliance "one of the best bangs for the buck. The buzz around the cafeteria will be unlike anything else a school can buy."
Galper, 29, is a recent graduate of Massachusetts Institute of Technology. He helped start Ruckus because of what he calls an "extremely frustrating" experience trying to get music in his dorm room. "It would take hours to track down what we wanted. There were viruses and spyware, and throw into that the impending threat of lawsuits. It seemed there had to be a better way."
After a year of knocking on university doors, Ruckus signed up one school to try out its service: Northern Illinois University in DeKalb, about an hour west of Chicago.
Also wooing universities is 27-year-old Brett Goldberg, who runs Englewood, Colo.-based Cdigix.
Ruckus and Cdigix differ from Napster and Rhapsody in that, besides music, they offer video: movies and TV shows, both available as pay-per-view downloads. Rates range from $1.99 to $3.99 per title. Cdigix has educational material available for download, as well.
"Not every student has a TV, but there's an increasing amount of students who bring their PC to campus as their media center," says Goldberg. "This is where students listen to music, watch movies, do everything."
But in accessing the campus online networks, students will find fine print galore. With Rhapsody, students can listen to their heart's content, but they can't download any songs. Downloading or burning them to CD costs 79 cents a song.
While listening is free on Napster and songs can be downloaded free to a computer, it costs $1 a song to move them to a CD or portable digital music player.
The original Napster was created in Boston in a Northeastern University dorm room in 1998 by Shawn Fanning as a tool to help students get easier access to Internet music files, commonly referred to as MP3s.
The music industry hasn't been the same since. Many record stores, especially in college towns, have shut down as students responded to free MP3s by no longer buying CDs.
Even in the face of record-label lawsuits against song swappers — nearly 4,000 have been sued since September — online swapping is bigger than ever. Internet measurement firm BigChampagne says 1 billion songs were available for online trading in June.
Last week, the music and movie industries took a huge hit when the U.S. Court of Appeals for the 9th Circuit in San Francisco said file-sharing companies weren't liable for copyright infringement.
More file swapping takes place on college campuses than anywhere else, says Cary Sherman, president of the Recording Industry Association of America, which has been fighting to recover from a three-year, 18 percent drop in CD sales. The association says $4.2 billion is lost each year from file swapping.
The fall college digital musical alliances will teach students "that music isn't something that should be stolen but paid for," says Sherman. "Hopefully, they will carry that with them for the rest of their lives."
In its lawsuits, the RIAA has targeted students in lawsuits at such schools as New York University, Stanford University, University of California-Berkeley, George Washington University, Princeton, Michigan Tech and Indiana University.
Apple dominates the legitimate digital music industry with its iTunes music store and trendy iPod music players, but it has been surprisingly quiet in the push to bring legal music to dorm rooms through a campus master contract.
ITunes is on a few campuses but not in a big way. Duke University cut a deal with Apple to give 1,600 incoming freshmen free iPods for educational uses. And it's a rare campus that doesn't find students toting sleek, white Macintosh iBook laptops or sporting the iPod's distinctive white earphones.
But iTunes is a download-only service at 99 cents a song and $9.99 for most albums. Savvy schools have been more interested in the more economical streaming or unlimited listening.
"We got Cdigix at below-market rates," says Chuck Powell, Yale's director of academic media and technology. "We weren't able to do that with iTunes. My job is to encourage the right behavior, and if I can help do that by getting my students better rates for music, I'm all for that option."
Napster, Cdigix, Ruckus and Indianapolis-based MusicRebellion all wrap their songs in copyright protection from Microsoft that prevents the songs from playing on the iPod. Apple uses a different copy-protection method. Songs plucked for free from Kazaa and eDonkey are in the open MP3 format, which moves easily onto both iPods and devices from Rio, Creative Technology and RCA and others that work with Microsoft's Windows Media format.
Choices, controversy
The iPod issue "will be a disappointment to students," says Cornell University student Stephen Blake, who served on the advisory committee that helped select Napster.
The decision to align with any one service can be controversial. Students vocally protested Penn State's alliance with Napster because "we didn't have a say in the decision process," says Penn State student Bridget Smith, managing editor of the school paper. "It just popped up there."
Blake liked Napster for the breadth of selection and the ability to both stream and download songs.
But he's prepared for criticism because moving songs to a CD or portable player will still cost $1 a song.
"The big complaint I expect to hear is, 'Why go to the bother when the songs are still free on the peer-to-peer services?' " he says. His reply: "With the lawsuits, the music industry is making a very good case for why we should use the legitimate services."
