Why napster lost

It was, essentially, a cataloguing system that searched your hard-drive, listed all the MP3 music files contained in it, and allowed those to be shared with and played by anyone else using the software. Together with Sean Parker, Fanning created a service that made music discovery almost instant and without cost.

Shawn Fanning became the poster boy for online music sharing after creating Napster as a teenager Credit: Getty Images. Compared to the music streaming services we now have available at the click of a button or even a few short words directed at a smart speaker, Napster required a little more effort before you could reap the rewards. First you had to download the software. Then you connected to the internet, fired up the Napster software, then typed in the name of the song or artist you were looking for.

Napster would connect you with other users who had a copy of that song, and then allow you to download it. It was an industry-destroying genie, and Napster was the spell that released it from the bottle forever. Napster came at the end of a decade of expansion and healthy profits in the global music industry. It was too hard to deny myself the free music then, and it would probably be too much for me today.

Few industries have ever experienced such disruption. Thanks in large part to Napster and its ilk, music had become a public good, and there was no putting the cat back in the bag. Although Napster would get shut down, Spotify and Apple Music did eventually capitalize on how technology changed music from a scarce resource, to one that we all expected to have for free.

The repercussions for who could succeed in the music industry would be massive. Napster burned brightly and briefly. It was created in by the brothers Shawn and John Fanning, and founded as a business by Shawn and his friend Sean Parker, later the first president of Facebook.

The service only existed as a peer-to-peer file sharing service from June to July , but it caught on like wildfire. The internet was far less commonly used in , but at its zenith, Napster still had about 70 million users globally by comparison, Spotify has about million today , after 13 years in operation. Napster gave users access to more than 4 million songs ; at some universities, traffic from Napster accounted for about half the total bandwidth.

Downloaded files from Napster sometimes brought computer viruses with them, but many, like myself, were willing to take on the risk.

Though a few artists, like Chuck D of the rap group Public Enemy , defended Napster for making music more accessible, most of the music industry hated it because its popularity meant they were losing money. The 20th century music industry was predicated on the idea of selling physical recordings of music—records, tapes, or CDs live performances were a secondary source of income.

Napster was a company with a popular software in search of a revenue model, one it would never get the chance to find. Napster was eventually shut down in due to lawsuit by the Recording Industry Association of America, the trade group for the US music industry. A US court found Napster was facilitating the illegal transfer of copyrighted music, and was told that unless it was able to stop that activity on its site, it would have to shutdown. They are now used by a small, but profitable, music streaming service owned by the media company RealNetworks, but the product is unrelated to the original Napster.

By February of the next year, universities began shutting down access to the platform. Rap artist Dr. Dre followed it up with a lawsuit of his own just a few days later. Furthermore, Metallica demanded Napster to delete more than , users on its platform as a result of that violation. The band had even provided Napster with a list of names and IP addresses. On the 10 th of May, , Napster eventually deleted , user accounts. Interestingly enough, not all artists were campaigning against the platform.

Chuck D, frontman of hip hop group Public Enemy or the rock band Limp Bizkit publicly came out in support of the company, stating that Napster helped them to increase awareness of their music. In order to fight off these lawsuits and to keep the business running, Napster went out to raise its first public round of funding.

Hank Barry, a former lawyer, and partner at Hummer, was appointed interim CEO of Napster to bring more legal expertise and legitimacy to the company. A few weeks later, in June , Napster hired David Boies, the attorney who has represented the United States government in its antitrust case against Microsoft in the early s, to defend the company in its lawsuits. Interestingly enough, the ongoing lawsuits did not seem to affect its growth.

In order to appease judges, Napster began to tout a significant change to its platform. It stated that it planned to charge users a monthly subscription fee in order to access the files. Music labels would then get a share of that income, depending on how often their files had been downloaded. In February , the U. Federal appeals court confirmed its ruling from July that deemed its filesharing software to be engaging in the exchange of copyrighted materials and therefore violating copyright laws.

Unfortunately, the labels did not accept that offer, forcing Napster to remove all copyrighted material. They went ahead and hired 50 temps to form an editorial team that, with the help of software, would scour the platform off of any illegal files. As a result, the average number of files shared per person dropped from in February to just 21 in May of the same year.

A month after the ruling, Napster had already lost a quarter of its 60 million users. As a result, on July 1 st , , it shut down access to the software. District Judge Marilyn Hall Patel, later that month, ordered the service to remain offline until it could figure out a way to keep the illegal files off. Around the same time, Napster had also settled its lawsuit with Metallica. On the 20 th of July, a U. His replacement became Konrad Hilbers, a former executive at Bertelsmann.

In the coming months, Napster continued to battle lawsuits while trying to legitimize its business. In October , it had to lay off 15 percent of its workforce equal to 16 employees in an effort to keep the business afloat. The ongoing negotiations with the remaining record labels furthermore led to the delay of the launch of its subscription-based product.

In the meantime, Napster continued to lay off employees while sourcing more loans from Bertelsmann. Then, on May 17 th , , Bertelsmann announced that it had acquired Napster.

The transaction, furthermore, allowed Napster to file for Chapter 11 bankruptcy protection. Konrad Hilbers, who just a few days prior announced his resignation, as well as founder Shawn Fanning, decided to remain with the company.

Representatives of the rock group Metallica and the artist Dr Dre, who are taking separate action against Napster, called the decision a "huge win.

Napster's service makes use of MP3 - a file format that allows the storage of music files on a personal computer in small packets of data - by providing software which enables internet users to see what MP3 files other Napster users have stored in their computers. Using the software, users can search and download songs from other people's computers. Napster was created last year by a year-old computer student Shawn Fanning, whilst he was toying around with the web at the University of Michigan.

The recording association asserts Napster is guilty of contributory copyright infringement.