The History of Napster
Back in the 1990’s, the internet was in its infancy. People who wanted to download music had to embark on a difficult search where they may or may not have even found what they were looking for. Google was nowhere near as sophisticated and as powerful as it is today. In fact, Google was born formally on September 4, 1998. Spotify, Apple Music and many other music streaming services that we take for granted today didn’t even exist.
In 1999, Shawn Fanning, an 18-year-old college dropout revolutionized the music industry with a file-sharing program which he called Napster. In addition to Sean Fanning, his brother John Fanning and friend Sean Parker founded Napster. Napster was introduced as a peer-to-peer (P2P) file sharing service. It was mainly used to share music between Napster members. At its peak, Napster had approximately 80 million members registered on its network which was a huge number at the time. At the time, Napster was used so much college students on college networks that many colleges banned the use of Napster because the service was congesting the networks.
Every genre imaginable was available in the MP3 format at Napster’s peak. They were from sources such as analog cassette tapes, vinyl records and CDs. If you wanted a rare album, bootleg recordings or the latest chart-topper, you’d use Napster.
As you can imagine, all good things must come to an end and it wasn’t long before Napster was targeted by the RIAA (Recording Industry Association of America). The RIAA filed a lawsuit against Napster for unauthorized distribution of copyrighted material. The court battle was long and ultimately, the RIAA got an injunction from the courts which made Napster shut down its network and services in 2001.
Soon after Napster shut down, it was forced to liquidize all of its remaining assets. A digital media company by the name of Roxio acquired Napster's technology portfolio, trademarks and brand name for a paltry sum of $5.3 million. The court which was overseeing Napster's liquidation approved Roxio's purchase of Napster in 2002. Roxio then used the Napster brand to rebrand their PressPlay music store by calling it Napster 2.0.
Roxio didn't hold onto Napster for too long. However, they did secure a deal with Best Buy to sell Napster to Best Buy. The deal went through for a whopping $121 million. However, Napster was clinging on for dear life with a mere 700,000 subscribing customers. It was a shadow of its former self.
When 2011 arrived, a streaming service known as Rhapsody made a deal with Best Buy for Napster's subscribers and "certain other assets." It's not known how much the deal was worth as the financial details were never disclosed. However, this agreement let Best Buy hold on to a minority stake in Rhapsody. Napster then disappeared from the United States. However, the service was still relatively popular in Germany and the United Kingdom.
Rhapsody is still going strong with Napster. They’ve continued to develop and market the product in Europe. When 2013 rolled around, Rhapsody announced that it would roll Napster out to 14 more countries. Rhapsody then rebranded their service internationally as Napster in 2016. It’s 2018 now and Napster continues its quest for global domination by expanding as a source for music-on-demand for other services such as iHeartRadio.
Try as you might, it is hard to pin down what exactly went wrong with Napster. Sean Parker thinks that it might be because they hired the wrong people. He thinks that the people they hired weren’t competent executives and that led them down the path of no return. Whatever happened, Napster did pave the way for various music streaming services today and showed the record labels that there was plenty of demand for music on demand.