Chapter 8: The History of Napster

File-sharing services using P2P networks attracted media attention in late 1999 prominently because of the popularity of a program called Napster. The program was created by Shawn Fanning, an eighteen-year-old Northeastern University student. Napster used central servers to compile information labeling what music files were available on a particular users’ computer. These users searched the Napster database, viewed the music which they intended to download, and then linked directly with that user to download the music. Napster simply facilitated the process. Record lables saw this as a threat, and in December 1999 they filed a lawsuit against Napster. In short, the suit stated that Napster facilitated massive piracy among its millions of users. In response Napster claimed that the program exposed emerging and unknown musicians to the general public, the copying of music filed should be considered “Fair use”, and that it should be protected under the 1992 Audio Home Recording Act. This federal action allows consumers to make digital recordings for their own personal use. However, the courts did not agree and they were instructed to shut down completely, but were granted a stay of that injunction for six months. Under an agreement, the program blocked access to any copyrighted songs it did not have a license agrreements for. Napster began negotiations with one of the record labels in the original suit: Bertelsmann AG’s BMG label. The conversation was targeted towards developing a fee-based service that allowed access to all music in the BMG archive. He invested about $85 million in Napster, but could not keep the struggling company afloat. Finally, in July 2001 the program was shut down. In May 2002, Bertelsmann bought Napster’s assets for $8 million. Napster declared Chapter 11 bancruptcy in June 2002, and the brand/logo were purchased at an auction by the music company Roxio. In September 2008, Napster was bought by Best Buy for 121 million, and operates as a paid music subscription service.

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2 Responses to Chapter 8: The History of Napster

  1. If Napster never shut down would we have download systems like Itunes? Also would it cost money to download music on the computer?

  2. mcfowler2 says:

    Obviously, musicians and their record labels want to net as much money as possible off of their talent/recordings. Therefore, their finances were threatened by the free-share system that Napster provided for users. If I had a certain song in my possession, then I could show it available on my Napster account and another user could access/download it through the central server. This creates a financial problem for the music industry as it reduces their potential income it could have from 2 sales to one sale and one sharing of that sale. However, I think from a free share side, Napster account holders should be able to share music across users if it does not violate copyright laws (similar to YouTube)..

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