03/11/2013 01:25 EDT

Napster Doc 'Downloaded' Debuts At SXSW 2013, Shawn Fanning & Sean Parker Stand By Their Tech

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AUSTIN, TX - MARCH 10: Napster Founder Shawn Fanning (L) and director Alex Winter attend the World Premiere of 'Downloaded' during the 2013 SXSW Music, Film + Interactive Festival at Paramount Theatre on March 10, 2013 in Austin, Texas. (Photo by Michael Buckner/Getty Images for SXSW)

"Downloaded," the first film selected by SXSW thanks to its perfect intersection of the festival's three themes of music, film and interactive technology, opens with the squelchy crunch of a dial-up modem, a sonic signifier of just how far we've come since 1998. The film by Alex Winter, formerly of "Bill and Ted" fame, tells of the rapid rise and dramatic fall of pioneer file-sharing tech, Napster.

"It could have been told from one perspective or the other, and so to make a documentary that had historical perspective and also tells both sides of the story in an objective way is difficult to do," noted infamous Napster co-founder Sean Parker after the world premiere screening at the Paramount theatre ended in rapturous applause. "Coming here, I wasn't sure how the audience would react, but it seemed like everyone was pretty into it. The guys in front of me were really into it, because I was whispering to my fiancé and they told me to shut up."

"Downloaded" is a cautionary tale to be sure, but not of Napster's boy geniuses Shawn Fanning and Parker. It's a warning about ignoring technological advances at your own peril — as late Gnutella programmer Gene Kan told congress during the Napster senate hearings, "It's not like farmers are still using a horse and plow," and as another interviewer pointed out, "opposition is proportional to an idea's greatness." And so the film is really about how an industry stabbed itself in the heart in its drive to stamp out the digital revolution it itself had launched with compact discs.

When the film shows the music industry's earnings collapse, it makes it pretty clear that while Napster was the catalyst, the music moguls sealed their own doom by destroying Napster with litigation rather than negotiation, by "burning their house down," as someone in the movie mentions, instead of acknowledging that the genie could never be put back into the bottle.

"I met these guys a long time ago when Napster was in its death throes," recalled Winter onstage. "I was a big Napster user, and I felt personally when I first got on in '99 that for those of us that were dabbling in the web, it was such a radical jump forward that it was hard to describe what a revolutionary change it was. For me, it was like a global community. And it was story that I felt needed to be told. The perception of Napster was very misleading in the press so I really stuck with it — whether anyone agrees with us or not, we're going to get the story out."

What really stands out most in the film is how young everyone was in those days, with both Fanning and Parker still teenagers at the time, and how short the actual timeline was. At one point, Fanning notes that they went from 30,000 users to 20 million in matter of months ("AOL has 23 million members," he marveled) and reached 50 million before Napster's end.

"We could have done video sharing or document sharing, we could have hidden behind other content types and probably kept the service running," Parkers noted onstage. "But the reason we stuck with music was that we were huge music fans, and that was something that never came through. There was such a campaign by the RIAA and the media and various artists who were upset with us to demonize us and represent us something other than what we were. We were college-age kids who were more like the people in the band than the people running the labels."

Napster did allow people, of course, to steal music. We knew it then, we know it now — when Parker in the movie mentions "we were operating in a legal grey area," it got big laughs in the theatre. As did other similar statements about them moving "legal files." But even so, the point remains that what Napster did was create a groundbreaking "technology," regardless of how it was used, and that idea eventually led to Friendster, MySpace and Facebook. Fanning's naïve, ambition idea to create a peer-to-peer network that connected people to each other rather than just to centralized websites was the ground zero of the modern internet.

The film has great archival footage of the young Napster staff as well as people like Jon Stewart covering the story ("The record companies want you to know that they hold the patent on ripping off artists") and Chuck D ("Napster is the new radio") as well as current interviews with artists like Noel Gallagher, DJ Spooky and Henry Rollins. Parker points out the absurdity of heavy metal and gangsta rap artists Metallica and Dr. Dre being the ones who launched the lawsuits against Napster. (One young man says in old tape says to a reporter, "Someone had to do it, but I assumed it would be someone like Celine Dion.")

Parker, now an investor and board member for Spotify, says the revolution Napster started is still going strong.

"Spotify started to make things happen with streaming music," he says. "Google is following suit, pretty sure you're going to see Apple going into these markets. And they are really well-funded companies that are able to subsidize the free access to music.

"You can put up a music blog with Spotify links or YouTube videos and have a conversation about music without having to seek a license. Even four years ago, that wasn't possible. The economic models for free and open sharing are getting better and better, and luckily these big companies are willing to subsidize that experience."

Fanning, however, pointed out that music sharing is still being stifled by the music industry.

"It seemed like there had to be some resolution [for Napster], but for whatever reason the music industry saw it very differently and it had to do with their stranglehold over distribution. [Now] every time I see a startup working on a digital music site I tell them to run," Fanning said.

"The challenge is we want it to be just like every other part of the internet where you can just have a great idea and have it succeed on its merit. It's still not as far along as it should be — but maybe somebody in this room will fix that."