Napster’s Confusing Comeback

At its peak, Napster reached tens of millions of users globally, fundamentally changing how people access music. The COO of Napster called me and said, please call off your lawyers and help save our souls. Now Napster's attempting another reinvention, this time as an AI-powered platform centered on creation, interaction, and participation. I think their brand is kind of against the music industry. I think that's been fairly consistent. They need to figure out why are they essential. These are the types of things that beset our digital services at the time. And I'm not going to blame the lawyers. But the lawyers were informing a lot of what people like me were doing. Right now, I think we need to focus and have that focus look at how these AI tools can help that creator content. You think about all these people that came up through TikTok, through social media, Justin Bieber, everybody. Like, it's pretty impressive. Americans who buy albums don't have turntables in the house. So they buy it like a t-shirt or my daughter, a bunch of stuff on the wall, Carol King, whatever it is. and it's about connecting with the artist in some world for the younger generation. We're living in the future already and Napster didn't create that. Welcome to We Fixed It. You're welcome. The show where we take over companies, you come along for the ride, and we try to put them back better than we found them. Napster once operated in a legal and ethical gray area. People wanted to download music from their favorite artists. Napster let you for free. You could just go get it, which made music fans very happy while Napster became enemy number one of the music industry, which lost millions in profits. So, of course, Napster couldn't stay around forever. The loophole closed. Goodbye. Except Napster is now attempting a comeback and trying to reshape the music industry again, this time as an AI company. It seems like they are trying to take on a lot. None of their ambitions are very clear yet, and AI music already has vocal critics, especially within the music industry, which Napster was an enemy of before, which raises the question we're here to fix. Does Napster even belong anymore? And if so, is AI music going to win them a new generation of fans? Are we all going to say hooray, Napster? Well, to figure this out, we're joined by Seth Schachner. Seth is the founder of Strat Americas, a premier business development consultancy specializing in strategic communications, public relations and partnership development across digital media, entertainment and technology. Seth's background includes senior leadership roles at Sony Music, and I think he's had some run ins with Napster from the label side that I can't wait to get into. He also hosts the new podcast Breaking Down the Biz, where he talks shop in an accessible way about the business behind the biz. Thanks for joining us, Seth. Give us a little bit more info. Great to be here with all you, Aaron and everyone. Yeah, I'm a business development executive by trade. I've worked at a lot of entertainment companies, including places like AOL in its earliest days. I was actually their first music exec and universal music amongst a bunch of other places. But a lot of times it's so music in both North America and Latin America, helping them build their initial digital businesses. And Stratamerica is a partnerships consultancy, so I help technology companies, software companies, music and entertainment companies on both sides of the landscape, rights holders and distributors with partnership activity. And I do some communications and public relations works. I've worked with clients like Live Nation, like Microsoft, a lot of time with something we'll talk today about called Smule, which is social music. And I've got, I think, an unusual amount of experience in Latin America for the typical dude sitting in North America and been based out in L.A. for six years. So that's me in a nutshell. Thanks for hopping on with us, Seth. And while you're here, let's all hop into a time machine. Let's talk about the original Napster. When Sean Fanning and Sean Parker launched it in 1999, it scaled at a pace the music industry had never seen, not be denied. At its peak, Napster reached tens of millions of users globally, fundamentally changing how people access music. Instead of just buying CDs, users could instantly download songs from each other for free in seconds. That meant that dorm rooms everywhere were blasting Backstreet Boys, CMX, Christina Aguilera, whatever was popping at the time, and they were getting it for free. As Napster grew and took a real bite out of album sales, the backlash hit fast. The Recording Industry Association of America and artists like Metallica sued, leading to Napster being shut down in 2001 and filing for bankruptcy in 2002. The broader impact was massive with copycat download services and peer sharing services following. The U.S. recorded music industry revenue fell by roughly half over the next 15 years, which is a decline widely tied to the rise of digital piracy that Napster helped pioneer. They opened the floodgates. But Napster, if they were playing in ethical gray areas, they were also directionally right. They tapped into something. right? It proved consumers wanted instant on-demand access to music in a buffet type model. All you can consume. The behavior became the foundation for platforms like Apple's iTunes and Spotify. And you could arguably say it paved the way for streaming services like even Netflix. So Napster didn't win. They got shut out, but it showed what winning could look like. Now Napster's attempting another reinvention. This time it's an AI powered. They have AI companions there's an ai creation engine there's a creator participation layer there's fan engagement and immersive experiences there's an ai platform and an ecosystem with access to ai agents across domains and digital twins and all kinds of stuff so the challenge is that every one of these categories is already pretty crowded and competitive the ai assistance ai music tools creator platforms immersive experiences they're all getting saturated they exist we're living in the future already Napster didn't create that. And AI music's already taking heat for being digital slop and ripping off artists. And unlike 1999, Napster isn't early this time. It's late under a name that still carries both brand recognition and a ton of baggage. Well, Seth, what do you think? Well, you said a lot there. So that's a good 25 years in digital music history. I don't know, maybe you'd want me to start on the time worry. But maybe I'll go back to the turn of the century, which is I think where I had a bunch of interactions with the original Napsters, with Hank Berry, who ran it for the Duchesons. And it was during a time when, to your point, the recorded music industry started to enter a period of freefall, mostly of revenue declines, but certainly profit declines as well. And there were two engines that were driving it, actually. I mean the one that you mentioned is obviously a hugely critical one as well that was very much in the public eye and which people like me – I was head of a label group called Jive Records at the time. So you mentioned one of the artists, the Backstreet Boys. We had artists like NSYNC and Britney Spears and Mystical and Art Kelly and A Tribe Called Quest and a lot of artists. and me along with all of our industry compatriots if you will and competitors were trying to seed the first generation of this country's download services digital services basically and we were here we were doing it in as this rising tide of digital piracy was upon us so to your point people didn't have to pay for albums they could select a track and share it and a lot of these things were dispersed they were either centralized or decentralized peer-to-peer if you if you will and some of them were headquartered in bizarre places. So you don't need a United States legal system to do anything. There's nothing much you can do about it. And so that was an extremely hard period of time because you try competing with that. But the other piece of it, which people don't talk about a lot, but I think is probably equally important, was that we didn't protect those CDs that you mentioned. So those CDs didn't have any ability to protect what we call ripping and sharing with your friends, your uncle, your daughter, whatever the heck it was. That was probably equal, maybe, actually, to the digital stuff. And so that contributed to it as well. And the legal landscape there also wasn't so clear. I don't know if they were sharing you flaws that said, Chino can be earned it to Vanessa and be once in a month a year, and you can all use it for a... The iTunes store flipped the legitimacy pretty quick and flipped consumer behavior pretty quick because not only did you have the store model, you had the hardware to go with it. So as people had the iPods and then eventually the iPhone, You're creating this closed loop appealing and accessible to consumers that maybe had paid $14 for a CD with one good song on it. Now you can buy that song for $1.99 or $0.99 and everybody wins. The device was an enormous factor. It was the device first because Jobs had this device that was better than all the other devices. I don't know if you know what the Diamond Rio was. I have a shoebox here in my house. I should have brought it with all these devices. There's a sitting right over there with – I had a little iOmega disk drive that you'd wear on your belt. I mean just the stupidest stuff. But the device came through and was easy to use and was simple, and he needed music for the device and had to devise a licensing plan for it. And that's where all this came from. There was a lot of other factors that people also don't talk about if you think about it. Do you really want to be pulling files from a file service? You don't know if they're clean, if there are viruses in them, what information you want to give, where it came from. And the American ethos is if I pay a fair price for something, I buy a carton of milk. It's going to be homogenized or pasteurized, and I know it's fresh and it's coming. It's not that far from that ideology, and we didn't have that with the pirate stuff, obviously. So there was a bunch of stuff that came along with it. The first iterations of our downloads prior to the iTunes store – this is three years prior. I'm sure everyone would laugh at that. But I had to sit with people and say, look, we're going to put a Beyonce single out, and for the first 30 days, it's going to be $3.99 to buy the single in Windows Media or in the Amazon store. And by the way, they wouldn't work with each other if you bought it in Windows Media. Of course. But we had to go with liquid audio, amplified, reciprocal, A2B from AT&T, SuperTracks from Portland. There's dozens of digital download services vying to be what Jobs was doing. They're all gone now. There was one name that survived, which is Rhapsody, that's going to be tied to what we're talking about today. Melissa, do you remember this time when it was Wild West and everyone was kind of trying to figure out the legalities and Napster was still viable? Do you remember this time? I do. And Seth, we're really excited to have you as a guest. This is really informative and interesting to me specifically. I come from a live music family. We are all in. My daughter actually right now works at Live Nation. So I went to Berklee College of Music. So she she we're we're very much about going to live shows. We're also very much about our Apple library. And we have also CDs. We have records. We have all the things. And I remember the kids getting their iPods. I remember them having the Sony Discman, all the things. And I do think that that's one of the things that's really important to think about from the audience perspective is that we all use Napster. I will admit to that. Yeah. But it didn't feel great because you were pirating stuff. so I do think that when Apple iTunes came out you know even the whole Spotify the same idea is that you're paying to play and it makes you feel like there's more trust there that you're actually even 99 cents you know we've seen all the lawsuits from the artists against Apple too and saying okay I get one cent for every 99 cents or whatever I understand that you know there a to the music side of it which we could go into too But I do think that there an ability to create some form of trust as an audience, you know, as somebody who's participating in the entire ecosystem of streaming music, in that you feel better about it than pirating music. I agree, totally. I mean, I sometimes don't know if, you know, we're probably of a certain vintage whatever if you remember this i mean i think um you know i've got two they're no longer kids adult age young children whatever young adults and i don't know if they have radically different perceptions of it but i i think it's fair to say that uh maybe different generations have different you know perceptions of price and value and and then maybe ours does for sure no one's gonna buy it out they will buy an album now for example but it half americans who buy albums don't have turntables in the house so they they buy it like a t-shirt or my daughter a bunch of stuff on the wall you know carol kill the echo to whatever whatever it is and it's about connecting with the artist in some way for the younger generation and not even really understanding to your point that like it's not just one song which erin you brought up a very good point that like a lot of people start buying music for just one song versus you know a curated album that has you know, the artist has put it together or the band has put it together in a way that means something to them. And, you know, like there are radio stations that play just B-sides, you know, all that kind of stuff. And it's an interesting component, I think, to the way we actually take in music and take in entertainment and streaming of everything. I mean, videos, gaming, all these things. It's like such short attention spans. I'm not surprised that we're all about the 99 cent song, you know, but I think it's an interesting, you know, inflection point for Napster right now, as they're trying to recreate some energy around their brand and bring it into this century and into the play, the music ecosystem as of today. And so I'd love for us to also talk about that and i i can tell chino you have something to say i think that's a really interesting play and i think seth you bring it up that generationally you know like our kids all grew up napster was the thing it wasn't like the turntable wasn't the thing so yeah that's so i'm i'm that in i'm that in between right i like my parents were the ones that had the vinyls i was a LimeWire Napster kit. Napster was a little bit early. It was like LimeWire, right? Yeah. That's like a little bit later. That's a story it's worth. We're getting into real trouble. But it's really interesting. And I'm going to the Lily Allen concert tonight, right? Where it's incredibly hard to get a ticket. And we talk about kind of the curation and like the evolution of how we consume music, right? So for me, it wasn't that, you know, I didn't have the background of like, oh, you know, you're buying an art. Yes, we're buying albums here and there. But I was the MP3 download generation. The challenge wasn't even I felt bad for the artist because, again, I'm a kid. I'm just wanting to hear great music. You're exchanging your CDs and, you know, your downloads. for me it was just what's not going to make my home computer crash which everyone in my generation like I've broken at least three computers from all of the bugs that went on it so there is something to be said about the security right so for our generation it was just I don't want to ruin my devices and so that's what Apple Music and what Spotify has brought to us and it's interesting now um seth going back to your point of how we're consuming music and now understanding that yeah only one cent of that song went to the artist so people are now caring about artists a lot more because the way that we're interacting with these artists is now often via concerts that's how you get that intimate experience people aren't buying cds as much anymore you might have a vinyl on a page but for me I'm a big you know I'm getting some merch I'm always getting merch at every concert because that's how I get to kind of continue um living in this moment without having that physical cd but going back to Napster and AI and what the challenge is that a lot of people are feeling when it comes to music and AI is that we're everybody is a little bit trepidatious about how they want to experience this AI music can we trust it we've heard a lot of songs you know coming out from different artists quote unquote that are AI and so what's interesting about Napster is, you know, I think their brand is kind of against the music industry. I think that that's been fairly consistent, but they need to pick a lane. You can't be everything to everyone with AI. You're second to the table. And I think there is a way in which to use AI for good. If this is like a playing, you know, people learning instruments and how to kind of tweak that, I don't see a world where I'm hearing, you know, a Lily Allen inspired album via AI. I will never care to do that. Support for today's episode comes from Square. Starting your own business is the dream. Running one can keep you up at night. When you have payments in one place, inventory in another, reporting in a whole different system, and then you still smile and serve customers, that's a lot. Well, get Square. Square helps you run your business without running yourself into the ground. Back when I started my first business, I used Square right away for payments. In fact, I still use it. And when I walk into a shop and I see they use Square too, I can tell it's going to be easy. Square does way more than payments. It handles inventory, team schedules, reporting, and more all in one place. It's smart, transparent, and they know what you need to run your business. If you're starting a business or running one that deserves better tools, Square helps you sell, manage, and grow without slowing down. Right now, you can get up to $200 off Square hardware at square.com slash go slash we fixed it. That's S-Q-U-A-R-E dot com slash G-O slash we fixed it. Run your business smarter with Square. Get started today. I love that you're a Millie Allen fan, by the way. I've done some work with her. So we said a bunch of things there. Let me, let me, cause there's a lot of, you guys are all saying comments filled with interesting insights. We could definitely do an hour or two more, but So one thing just about your points about, I don't know, security and feeling secure, I think if you really took a cold, hard look back at, like, music consumption over the decades, like, so we used to print CDs without copy protection. And the label I worked at, which bought Jive, BMG, we actually, at one or two points, put – that's called copy protection on our CDs. And we got slaughtered in the press over it, and it was like this big public outcry, and there was a big public settlement to offer to the public, like, I guess it was refunds or replacement CDs, of which, like, five or six Americans in the whole country took advantage of. People just loved having the headlines out there about how bad the record labels were. And I think these security concerns or technology concerns vis-a-vis our personal data have rippled throughout everything, including streaming, by the way. I mean look at all the data you give and the social networks in 230. And so that's to me like – that's always going to exist to me personally. Basically, I sort of see it that way. So the AI stuff is a different conversation. I'll just say generally, AI has been part of music for some time now, and not just the stuff that's the fake drink or the fake weekend or the derivatives now in usage. It exists in all sorts of quiet, productive ways that everyone under the sun from people creating tailored playlists for advertisers to aural experiences on radio to make playlists sound better, to chatbots. Like I've had some clients who tried to move, so we did Ringo Starr's chatbot or a couple of easy – it'll tell you automatically when the album's dropping and if he's going to be in Houston, stuff that you can automate in a harmless way that no one's going to be freaked out over. The last Beatles record, Revolver, was reengineered by Giles Martin, Sir George Martin's son, with four eyes all over it to place the guitars or the drums. So, you know, McCartney just pulled a demo tape out of Lennon's apartment and released a track two years ago called Now and Then. So this is all good stuff. I don't know if anyone would have a problem with this stuff. The stuff that everyone's talking about, the recreations of music, very interesting. you know there's a bit of a war now in the in the the landscape over at universal the biggest you know label group has been very public about basically trying to wall it off with their new partners the two new partners the biggest ones being one's called sumo and one is called yudio to me you know to your point about napster those are probably the likely whatever the right word as leaders or successors in this market because you know at least one of them is going to offer a combination of music that people can create and it'll be licensed and it'll probably hew to some of the protocols that folks who own billy allen's catalog and the artists themselves will be able to look at and say hey this is cool or this isn't right for those who don't know suno and udio they're like studios where you can go in and to an increasing degree have uh have participation in the music and the ai music that's created so it started soon i'm more familiar with suno it started where you could put in maybe some lyrics and then the whole rest of the experience is ai created but now it's getting to the point where you can add your own voice you can add your own preferences you can tailor the music styles more and more and it's becoming more of a blend of an artist and ai software but there's still you can't just go upload a track a prince track and say make it sound like this there's a lot of buffers around it yeah and i think that's um that's probably the key thing right now that's out there but you know the the major labels i think you do is kind of the favorite whatever son right now and that they've agreed to kind of wall it off if you if you own lily's catalog for example you know i'm using her as an example but you know or katie perry you don't want to see 50 ai derivative whatever katie perry's and lily allen's next to her stuff on spotify because it collides and it hurts the artist so that's i think that's where the fight is right now you know i bet the monetization of it won't look that differently than streaming which so it's probably going to be poor if you're an artist um but you know the initial like i guess doezer is one of the bigger streaming services globally most americans don't know about it it's big in places like france and latin america you know has reported this enormous number of ai tracks, I don't know if you call it slop, that are sitting on their servers basically. And there's been research that shows that most consumers can't tell the difference sometimes between the fake and the real. But I'm also reading that consumers aren't that interested in it compared to the real stuff meaning like are you going to listen to your friend Lil Allen derivative or do you want to hear from Little Allen And so there some obvious things there Let me talk about Napster for a second, because I know that's what this episode is. I'm going to play the heavy old school, so you can push back on me all you want, okay? I think, and to your point, Nilsa, the value there is probably about that brand name, maybe more than anything, because I think in this landscape, That's probably – and I don't know how much it means anyway in the new AI landscape. Napster itself, after it died, it went down. I already mentioned 2002, something like that. The name was extracted without all the liabilities that were associated from all the copy infringing, right? And it went into something. I think it was a game maker called Roxyo bought it. This is ancient history and renamed the 2.0. It was briefly part of a retailer called Best Buy as well, and then it ran into something called Rhapsody. It's had a bunch of iterations. It went through some Web3 companies, and I knew those guys that were in Seattle. And I don't – Infinite Reality, I think, is what it – I don't even know who owns it now. But I mean unless there's something they're doing with their product that's super engaging and is going to compete with bigger entities like Yu-Gi-Oh! all of whom are going social. And TikTok, we've got to mention, all these guys have got to have legit AI strategies. So that's a big, big, big mountain to scale, if you ask me. What I think, too, and like Seth, again, as a consumer, I only know Napster as a way to rip music, or a way that used to be there. I think, again, because they've gone through all of these iterations, this is, you know, we're trying to fix Napster right now. If I were at the head of NAPS, what I would say to them is there's a great opportunity for you to lean in on the other aspects of AI that people don't know of. I don't think you need to be, you know, there are players that are creating music. But when you talked about, you know, finding and streamlining, you know, if you are a DJ and you want to, you know, host a party. And I know, again, I have a lot of friends who are DJs and just the science that goes behind, you know, creating a beautiful curated hour of music. Why don't you do that? In office, like work from home. There's always different opportunities. like why can't they rebrand it to something that's not doing what other players are doing you're not going to be second third fiddle there but rebranding into a way that we can use the ai in ways that people aren't talking about like you you know i love what you're saying chino because napster's brand is known for specifically for being an outlier right and for kind of upending the industry. So they should lean into that. But I do believe I, you know, Seth, you've kind of brought this up as well. It's only going to be realistic that they can actually monetize this and actually make it successful if they focus. So offering a whole bunch of different things, just to say that they're AI, you know, you know, congruent, it doesn't make sense. So what they really should do is have a very disciplined strategy underneath this with the shared tech, with their shared brand and identity, the shared music data. Otherwise, all these different five offerings that they have currently, it's all just going to become mud and mixed up. So I really say that they really should focus on the strongest offering, which is the repeat thing that keeps coming back, which is the AI collaboration. Right. So like the editing, refining, you know, how do they do that within the tool become like a place where you can, you know, Napster's new app is explicitly built for participation. So it's got the AI companions, AI generated audio co-creation tools, and those are meant to be used repeatedly. And that brings people back to their site and their platform time and time again. And we know from an operations, from a business perspective, repeat customers are your bread and butter. That's what you need. So really, they should watch, you know, how they are focusing on that and what that strong retention signal is off of those types of things versus one off listening. Because I don't know that they can really, you know, compete with the Spotify's apples of the world. They're not going to be able to do that, but they can if they can figure out their niche. And why they're so important, you know, so to me, this is the only realistic way that they can really help to get that focus. You know, I would add to it. I love it. I think, you know, there's two areas I point out in music that, you know, we haven't touched on that to me are probably the most promising areas of opportunity. And I don't define them around the individual technology or kind of the product uses that they're allowing. They're just big buckets of opportunity in general. There's this thing I guess I call collaborative music or the music creator's economy, if you will. It's actually not particularly new. I'll mention what BandLab is. It's owned out of Taiwan, but it's a global entity. Splice out of New York, which is a creation, a creator economy. I worked with an app called Smool that has gotten smaller, but it's all about singing and creating your own songs together. And these are all fabulous things where music's being created. They're not reliant on licenses or IP from others. They're reliant on people recognizing those abilities to create together and share, basically. AI could, of course, be a part of it, probably be a core part of their offering. but i i think that would be an area that i would say you know make make your partner with splice or buy band lab or partner with them or whatever it might be have them by you those are those are super important areas that i think are applicable you know really broadly and um really different from streaming by the way just just just big creation platforms um trying to earn that music too whether it's the copyrights or the recorded music which are the two trees of rights that are so important um but the other area is um you know they call it streaming 2.0 um universals dubbed it their strategy but it's this idea of artists and artists independence from their labels and artists ability to create their own content whether it's social content whatever it might be and you know for a cost i mean spotify's talked about this idea of a premium tier so if you like lily allen or katie perry or taylor swift or metallica maybe you do pay five bucks a month more and you get all this stuff in it including ai by the way um might be merch i mean some of us are older from member fan clubs i'm living a member of some really embarrassing fan clubs in the 70s when i was a teenager but whatever i used to love getting my kiss t-shirt in the mail it was the most fantastic thing in the world to me as a 12 year old or whatever and that's one of the two that like um Napster or some entity could really partner in you know Bandcamp is something that I'd mentioned that's done a little bit of that and SongTrader which owns them there used to be something way back called Artist Direct that was always trying to do this that they kind of went the way of the as well but those are the two things like if I were to point what if you're saying that we're trying to fix Napster that's where I would send them I'm not sure I'd say go down the path of licensing music first you want to license music by the way eventually you want to be friends with rights holders so you don't want to go in and come in the door as someone who's you know offending in some way it's interesting when we talk about music right uh my friend and i let my friends where dj is talking about you know what what are the kids listening to these days often the top songs right now on spotify are songs that have derived from tiktok they're tiktok songs and i I think where Napster would be really strategically inclined is to, if you can create kind of this content music creation for people using these AI tools to help people who don't have a record label to hopefully eventually, you know, maybe you do it enough where you can get to a point of having rights, as you've said, Seth. But if you can introduce the next wave of these like viral TikTok songs that everybody downloads for those three months, because that is a huge opportunity. Influencer marketing is not going away. I don't, you know, especially as Universal and these bigger social media sites have, you know, struggles with the rights, where you can kind of come in with a gap is having unlicensed songs where anybody can create, leveraging these AI tools that you've built to create these songs and music, where, again, you're still leaning into the like, bad boy, you know, outlier. You're leaning into your brand, but yeah. You're doing it in a way that works and eventually, hopefully, you've done it enough. It's become more legitimized where down the road now you can actually create rights for people who want to jump in and then lean on these AI tools. Like, that's myself. Yeah, I think the value proposition for Napster really is they need to figure out why are they essential? What is their purpose? Right. Right. And I think, you know, you've really hit on a potential like a huge, huge opportunity for them to be essential. It's when you solve something and you do it better than everybody else. Right. So for them, it's, again, about defining kind of what is that narrow wedge that, you know, it could be like make me a song in this style, Lily Allen style in 60 seconds using this poem and own that use case, right? Like do that well. Napster, you know, saying that they are going to be, they're the app that's going to be built on collaboration, experimentation, publishing, and doing it with ease needs to prove that. And they need to show musicians and artists that they can stitch these things together, all the tools, AI tools and other tools, you know, you know, in the music industry, there's a lot of, you know, digital engineering, there's a lot of stuff that's going on behind the scenes. And how do they take all those separate things and put them into a collaborative platform that's easy to use, and it's repeatable, they're going to want to come back, they're going to want to keep coming back. And it's going to be like, to your point, you know, it's, it's going to be something like powered by Napster, right? The song comes out on TikTok, and then it's like a powered by Napster would be like amazing for them to be able to be very focused on that area and not be afraid of the AI tools, not be afraid of all of the things that are coming in the forefront. And that kind of leans into their brand, right? That they're like pioneers. I love that. If they came up with something powerful that was creator driven, that actually, you know, was of the moment and stood out and it's been medicine Napster, like that's a defined, that would be a defining moment for them. Right. You know, that'd be a seismic shift. And everyone would say, wait, you know, like their little logo, whatever it might be. I mean, it could really be, you know, where, you know, and creators to your point, you know, influencers and creators today are coming from everywhere. It not that you just have to have gone you know into the village recording studio in LA and gotten a time because nobody going to get that time Right Unless you somebody good Right So again this is for the people that you think about all these people that came up through TikTok, through, through social media, Justin Bieber, everybody, you know, like it's, it's pretty, it's pretty impressive. Yeah. And on the flip side, if they flood the feeds and Spotify is with Napster music, You know, if AI music that just looks cheap, sounds cheap, is easy to make, way too easy to reproduce, you can make a thousand of them a minute, and it all says Napster, that's going to have the opposite reaction. Right. But definitely to Melissa's point, too, I've seen just enormous appetite in some of the international markets for collaborative music. I worked with this app, Smeal, for six years, bringing artists to them. It looks like live karaoke. Artist sings half the track, and then people join to upload on their own. The numbers that I saw in markets like Indonesia, Malaysia are phenomenal, just enormous. Just people want to sing. They want to share. And so I think that's a really critical thing. I do think if you focus on the collaborative aspects in creating, you know, a lot of that is not necessarily dependent on rights. If it's one track, you got to have it licensed. You need a music publishing license for the copyright and a master from a label. It's a very powerful proposition. I do think that TikTok is in such an enormous spot influentially right now. But I think there's a lot of questions around the longevity of artists and some of the music that comes out of those, you know, those hit making, taste making platforms. It may not be something that goes for decades. Some of the initial stuff has been its shorter lifespan. And so it's something to think about, you know. Yeah. And the Suno and the UDO, the AI tools that are allowing people to come in and make what we call AI music, they're either going to learn to play nice with the labels and allow artists content and everyone gets a cut in a royalty, or they're not. And they're going to have to figure out, is that a viable enterprise anymore if they can't have what everyone understands as popular music or mainstream music or the music of their interest and they're just playing with AI music and it never gets legitimized? Are they going to stick around? Maybe they go away. So for Napster to say, we're that too and we're all these other things, I think that they're just not hitting the right notes right now. All right, let's fix it. So we gave him, you know, let's pull in the advice we gave him. So Napster does want to be, we'll call it still the bad boy of the music industry. Like they still want to rub it in your face a little bit that we're not going to play with the labels. Because even if Suno, like I said, Suno and UDO do, and then Napster says, we'll talk to us too. Seth, you said like historically that's not going to happen. Like people are going to say, Napster, get out of here. So we'll stick with that. But there are lots, lots, hundreds, thousands, millions of unsigned creators, independent creators. There are tools out there that help you do different types of production and things like that. But sometimes they're like a one and done type of tool or they're really expensive. So why don't we create this kind of like level the playing field for independent creators and say, look, we're going to sit side by side with labels. Maybe we're a label or an appster. and you're going to come in. AI is going to be a component of what you do. But if you want to play with the AI interface, go ahead. It's sitting here. That's not what we're here to do. That's a toy or experimentation or something to help with your creative process. We're here for serious artists. We're going to help you, let's just say with mixing, with mastering, with production, with remixing, with curating, licensing, distribution. We're going to do it our way. there's some anarchy involved there's an edge to it they're gonna need someone we'll say we'll stay with lily allen they're gonna need a they're gonna need a lily allen to come say you're right i've dropped my label i'm going with napster um i you know i'm not saying she'll be the one to do it but they need someone to cross over and say i what you're doing is the future of the music industry everything that my label gives me and supports me with i can do here i remaster my album it's it sounds incredible um i'm team napster they're gonna need someone to to you know to to make that declaration um and then they're gonna need others to follow otherwise that person is gonna say whoops didn't work so um but napster let's let's let's make them a label let's give them artists not just ai outputs but real artists that are there to have a seat at the table alongside the majors and we'll run with it. So if we do that, Melissa, did we fix it? I think we got them on the right path to being fixed because I do believe they need to pick a lane. I'm very much about the AI co-creation or AI companion led music creation because I think this is a repeatable loop that will be easiest to explain. And it's also interesting and it's of relevance today. I would cut all the different options that they have right now. When you log into Napster, I've replaced their five bets homepage with, you know, more of a guided, curated path that's really personalized with a couple secondary options. I think Napster needs to build trust rails, you know, you know, labeling AI clearly, copyright issues, et cetera, et cetera, because that is going to be really important for adoption later on, especially if they blow up. And you really want to design for return users and return visits. So have, like I said, personalized experiences, journeys, you know, save your progress, personalized prompts, just like a lot of different apps we have today. This is what everybody expects in their responsiveness. And CX is, do you want to continue your track like Netflix, right? Continue your show, resume with your companion. Anything like that, I think is really, you know, suggested for you. New artists suggested for you. Those kinds of things I think are really important. So if we do those things, yes, they're on the right track. Okay. Thanks, Melissa. Yeah, Chino, what do you say? So I don't think Napster needs to recreate Lily Allen's West End Girl and create an East End Girl. That's the title of her current album. I think, as everyone has echoed, you need to pick a lane. I think leaning into this gap of this creator market, these one-off songs, I don't want Lily Allen to be the face of Napster's AI. And if you're going to take real artists and their music, you better pay them a really pretty penny to have that adapted. So, again, I'm not sure that is the lane at this stage for them to go down. But I think looking at an opportunity, like Seth had mentioned, about all of these different apps, whether it's a karaoke, it's a collaboration, and helping real people kind of maybe get a step up in this weird creator economy, these one hit wonders that are three months long, and leaning on those AI tools that they're powering those musics to kind of fill that kind of gray space when we're looking for unlicensed music that we can use in other areas, right? And eventually down the road, maybe it's 5, 10, 20 years from now, then you can start looking into copyright. But for right now, I think you need to focus and have that focus. Look at how these AI tools can help that creator content. All right, Seth, what do you think? Napster as a label, as a reasonably priced alternative to the one-off tools or the really premium price tools that are a barrier for creatives that keep their work from being heard, can they bridge the gap there without over excessively relying on AI. I'm much closer to, you know, what Cheeto's saying. I think the idea of aligning with or creating themselves, branding themselves as a, you know, a creative kind of collaborative platform. You know, I think I mentioned BandLab and Splice. I think that's an area where there's still some opportunity with that brand name and whether that's a partnership and acquisition, just creating yourself that way. I'm much closer to that. I think, you know, music discoveries are really important piece of the pie and that could be part of the strategy as well but i think you got to pick something very specific that you're good at and not be all things to all people if you go too broad don't want the idea of being labeled by the way because i just think it's labels almost like a black a black word these days or you know a you know a name it's like a you know on the blacklist whatever you want to call it in terms of like people looking at it a lot of the artists i work with don't don't want to hear the word label actually don't want to partner with you know with labels they want to just go independently but i think i i sort of came closer to like the discovery and creation platform you know i think about like if you can put yourself into a very very specific like mitch that's useful to people i think about for example you know that shazam is if you guys still use it shazam's been around for like 20 years apple bought it it's i still use it when i'm sitting in front of the f-rex and you know if you can think about that type of utility and gravitate closer to that that's what i'd say and i also agree to stay away from licensing for as long as you can just work with independent artists and creators and build whether it's a catalog of your own licensed music and you can use it for a lot of different things discovery and you can play the licensing game as well we didn't talk about tv syncs or license but there's a lot of other uses that can come out of it so that that's right i'd come come on down on Yeah, there's long tail revenue. If we talk years into the future, they're creating a nice space for it and a space for creators. Maybe it's an anti-label. Well, that's going to wrap up this episode. Once again, we want to thank Seth Shachner for being such a great guest. Seth, how can people hear more from you? Thanks. It was fabulous being on this. We can definitely get you on LinkedIn. It's Seth Shachner. It's a more complicated story, but it's a C-H-N-C-H-N-E-R. and the new podcast is called Breaking Down the Biz. So we're available everywhere and we're going out twice weekly. We're gonna have a lot of great, not just music, but entertainment and tech guests as well. Thanks so much for having me on Aaron and everyone, Chino. Thank you, Seth. Thank you, Melissa and Chino. Couldn't have done it without you. I also encourage you to check out Seth's podcast, Breaking Down the Biz. It's a fun lesson. For those of you writing into our show, thank you. We read everything you send us. 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