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In the fall of 1999, Shawn Fanning, an 18-year-old college-dropout revolutionised file sharing and the music industry by releasing Napster. Fanning wanted to look for an easier method to search for mp3 music files other than using Lycos and Internet Relay Chat(IRC). (Greenfeld, 2000). Napster was originally created to be a peer-to-peer file sharing service, allowing users to swap and download copyrighted songs on a global scale. Fanning’s creation was an instant hit with thousands of users within the first few days of its released. Later, Shawn incorporated Napster with the help of his uncle, John Fanning. The young company raised venture capital and relocated to California. With Napster’s increasing popularity, it soon came under the radar of the music industry (Answer.com, 2005)
On December 7,1999, Recording Industry Association of America (RIAA) filed the first lawsuit against the Napster for copyright infringement. It demanded $10,000 for every copyrighted song traded over the system (Rottgers, 2002). Not long after, the heavy metal band, Metallica joined in the fight and sued Napster because the network’s users have been rampantly trading their copyrighted songs online. The lawsuit was a failure and the widespread media coverage of the case only gave Napster more publicity (Hershbein, 2000). At its peak, Napster attracted over 60 million users.
On March 5, 2001, RIAA won a temporary injunction, which ordered Napster to stop trading copyrighted music over its network (Borland, 2001). In July 2001, despite attempts to overturn the court-imposed shutdown ruling, Napster had to close the doors on its MP3 file-trading network to comply with the court decision (Harris, 2001). On September 24, 2001, Napster finally agreed to pay over $26 million to settle its legal battle with songwriters and music publishers, and an additional $10 million against future royalties (Singer, 2001).
In order to pay for the legal damages, Napster decided to change its business model; instead of offering free service, it will convert to a subscription system (Borland, 2001). Along with this change, Napster incorporated the use of an audio fingerprinting technology licensed by Relatable to filter out copyrighted songs.
On June 3, 2002, Napster filed for bankruptcy protection from its creditors. This decision forms part of a deal announced a month before, under which Bertelsmann, the German media giant, agreed to buy Napster's assets for just $8m. (Staff, 2002). On September 3, 2002, an American Bankruptcy court’s ruling block the sale to Bertelsmann and the judge forced Napster to change its reorganisation efforts into a Chapter 7 liquidation (Vance, 2002).
During the Napster bankruptcy auction in November 2002, Roxio, a CD burning firm announced it would pay out about $5.3 million to acquire Napster's assets. Roxio intended to launch Napster with another newly acquire asset- Press Play- as a legitimate service, offering legal music downloads via a paying system (OUT-LAW.COM, 2003) This new service, Napster 2.0, was officially launched on October 29, 2003. For $9.95US per month, users were allowed to legally download songs into a library and listened to them from within the program. If users liked to burn these songs to compact disc, they had to pay a fee to do so (Perez, 2003).
On August 9, 2004, Roxio and Sonic Solution announced a definitive agreement for Sonic to acquire the consumer software division of Roxio for a total purchase price of $80 million. Under the terms of the transaction, Napster was to re-brand itself to become Napster. Inc. (Langford, 2004).
In the most recent development, Napster. Inc. launched Napster To Go in late 2004 as the world’s first portable music service (Napster, 2005). Napster To Go promised that for $14.99 a month, users are able download an unlimited number of songs onto compatible MP3 players.
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Daniel Fisher 00:53, 9 Sep 2004 (EST)
Ruth kan 03:35, 28 Oct 2005 (EST)
