Napster is an online music service that was originally a file sharing service created by Shawn Fanning in 1999 (McManus, 2003). This program brought peer-to-peer networking into the spotlight by allowing users to exchange MP3 files directly with each other. More than 60 million users took advantage of the service, and it quickly became one of the most controversial ventures on the Web, because much of the music being shared was copyrighted material. (BBC News, 2005)
The original Napster was the first major file sharing tool and popularized file sharing for the masses. It was not considered fully peer-to-peer since it relied on central servers to maintain lists of connected systems and the files users provided, while actual transactions were conducted directly between machines (Tyson, 2005). But it was the eventual shut down of Napster that paved the way for decentralised programs such as Kazaa and Gnutella to be developed.
Although there were already relatively popular media which facilitated the sharing of files across the internet, such as Internet Chat Relay (IRC), Hotline, and Usenet, Napster was the first to specialise exclusively in MP3 (McManus, 2003) It allowed users to download one tune at a time; this was a welcome relief to fans who were tired of having to pay for album prices to get one or two good songs. Napster was referred to have “unlocked and made available for download the greatest music library in the history of the world, much of it all but forgotten by the major labels�? (Cohen, 2000). Users were able to select from a wide range of old and new songs, and make compilations of CD albums for free without paying royalties to the artist/composer or the estate of the artist/composer. These were the benefits that drew faithful fans to Napster, but at the same time motivated the music industry to cry foul play as they argued that Napster has caused a drop in CD sales( King, 2000).
Recording Industry Association of America (RIAA) filed the first lawsuit against Napster in 1999, claiming losses of million in royalities. Napster lost the case in 2000 and was about to be shut down except for a last minute stay from the Circuit Court of Appeals. Many argued that any attempt to shut down Napster would simply lead to people using a different medium to exchange files over the Internet. Subsequently, Napster and Bertelsmann, parent of BMG music, agreed to partner so that Napster could be developed into a paid subscription service that would monitor transfers and pay royalties to the copyright holders. Because Napster could not reach agreement with major record companies, it filed for Chapter 11 in 2002.
Although expected to be purchased by Bertelsmann, Napster's assets were instead acquired by Roxio, Inc., Santa Clara, CA (www.roxio.com), which makes software for burning CDs. In 2003, Roxio also acquired Pressplay, a music distribution service that was established in 2000 by Sony and UMG. In 2003, Napster. Inc. together with Pressplay, was re-launched as a legal service with royalties paid to the major music companies.
Currently, Napster. Inc. is placing its focus on competing with other legal online music providers such as Apple iTunes and emusic (Napster, 2005).
Recently in late 2004, Napster. Inc. launched an aggressive marketing campaign against iTunes by introducing Napster To Go (Forbes, 2005). For a subscription fee of $14.95 a month, users can have unlimited song downloads. This new service is described to be “The world’s first portable music service,�? (Napster, 2005) because unlike iTunes, which only allows users to download music into an iPod, this new service is available to any compatible MP3 devices like Creative, Samsung or iRiver. Napster Inc. is also expanding its services to provide music for universities, in an attempt to entice students away from free file-swapping networks like Limewire and Bearshare (eschoolnews, 2005). Cornell University and George Washington University are two of the many universities that have started on the serivce.
Despite favourable results from the new ‘Napster To Go’ service and steady growth in higher education discount pilot program, Napster. Inc. is finding it hard to gain market share in the wake of iTunes. Napster reported at the end of 2004 that it has achieved approximately 5.4 million downloads from their new service, but this compares unfavourably to the 76 million songs sold by iTunes in that same time period (Wikipedia, 2005)
The future of Napster is widely uncertain. Napster is also in direct competition with free music services such as Limewire, which continues to draw a large base of followers, despite the risk of trading copyright content. Therefore, in order for Napster to succeed as a subcription service, the company will need to further challenge its current business model and provide better incentives to draw people into their programs( Laycock, 2004).
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Cohen, J. (2000) “ it matters,�? retrieved on September 24, 2005, from http://wwww.itmatters.com.ph/column/yam_02152001.html
eschoolnew.com (2005) “Illegal file-sharing continues on campus,�? retrieved on September 24, 2005, from http://www.eschoolnews.com/news/showStory.cfm?ArticleID=5864
King, B. (2000) “Napster: Music’s friend or foe?�? retrieved on September 24, 2005, from http://www.wired.com/news/business/0,1367,36961,00.html
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http://www.sean.co.uk/a/musicjournalism/var/historyoffilesharing.shtm
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Victoria Cole 20:46, 28 Oct 2004 (EST)
Ruth kan 06:01, 28 Oct 2005 (EST)
