Napster's Priceless Publicity

Prediction: It won't be long before marketing consultants start telling startups eager to get into the public eye, "Do something really reckless, really stupid. Stupid enough to get yourselves sued."

It'll be called "the Napster Strategy," and pretty soon, accounting software will be available to weigh its costs and benefits. "Sure, a slight miscalculation or an unexpectedly generous jury or angry judge could mean your premature extinction," the consultants will warn. "But get it right" -- as Napster may still be able to do -- "and you'll be on your way."

Free Publicity

Every e-commerce company worth its salt knows the value of good media exposure. Raymond Lemire, the founder of FlyingNoodle.com, told me recently that the busiest day in his company's five-year history came after a guest on NBC's "Today" show briefly mentioned the site.

The first order came within 20 minutes of the broadcast and 100 more followed during the next 24 hours. It didn't come as a total surprise to Lemire, who has long believed in the power of the media. (When his company was young, he and his staff sent out 100 press releases each and every Thursday, knowing that even a few tiny articles would generate orders and help to build a customer base.)

Bad Boys

The value of "bad" press -- and even whether there is such a thing -- has long been the subject of intense debate. At least, before Napster. Now we have word from Media Metrix that Napster has become the fastest growing online application the company has ever measured. The tracking firm said Napster grew by 345 percent from February through July -- when nearly 5 million users were counted on the company's books.

What happened during that time? First, Napster became a major news story and soon thereafter, it became a Capital "C" Cause. The Recording Industry Association of America started the ball rolling when it filed a lawsuit back in December of 1999, but that was a dry, run-of-the-mill copyright dispute that lacked personality. Which is exactly what Dr. Dre and Metallica brought to the table last spring.

Shawn, a.k.a. 'David'

Suddenly, the Napster issue had it all: the built-in drama of the courtroom, philosophical arguments about individual freedom, big personalities in the form of rock and rap stars, and -- most appealing of all -- a David and Goliath dynamic.

It became a can't miss story, and Shawn Fanning, Napster's not yet 20 year-old founder, was suddenly gracing the cover of music, news, and even men's magazines. In the past year or so, the New York Times alone has run 143 Napster pieces -- including a couple of dozen letters defending the network -- according to a search of the Great Gray Lady's archives.

The conclusion has to be that bad publicity does, in fact, translate into eyeballs in the dot-com world. But is that enough for long-term business success ? That all depends on what happens to Napster inside the courtroom. And while things look bleak in the shadowy gloom following the harsh penalty imposed on MP3.com last week, there might actually be some cause for optimism.

After all, the judge in the MP3.com case will apparently stop short of delivering a fatal blow to the company, which is what the plaintiff was asking for, albeit indirectly. Still, the award is a sizeable one and it is clearly meant to have a chilling effect.

Bruised, but Not Broken

Could Napster withstand a similar penalty? Not likely. If one were handed down, it might make people rethink the Napster Strategy. But a more likely scenario being bandied about is that Napster will be harshly rebuked, heavily fined and given a provisional stay of execution -- to be revoked in the event the company dares to break the rules in the future.

That, of course, would alter Napster completely, transforming it from a free and open forum for exchanging music files to a closely monitored network where only public domain or licensed music could be transferred between users. Still, that scenario does include a living, breathing, possibly even thriving Napster.

How'd They Do That?

Don't think others haven't noticed the numbers. Although Napster now has some venture capitalist backing, the company will never break any records for spending on marketing , branding or advertising. Why should it? The media has done all of that work, gratis. "Napster" is emblazoned on T-shirts and hats. Everybody knows the name -- it's a marketing coup the average dot-com would pay dearly to match.

Best of all, the Media Metrix findings show that people have taken the final step. They've gone from knowing the Napster name to logging on and using the technology.

Now, I realize that Napster is no typical case. Not many dot-coms can instill the kind of passion that prompts fans to hack into "enemy" sites just to digitally scribble pro-Napster Graffiti.

But every dot-com that knows the challenge -- and cost -- of acquiring customers, has to be green with envy. Sure, the pending lawsuit dangles over Napster's head like a dagger, but if millions of new users and legions of die-hard fans come along with the risk, it might be worth a little spilled blood.