Back in the early 90s, a British entrepreneur named Ricky Adar came up with the idea of selling music over this new thing called the “internet,” an idea that was way ahead of its time. He couldn’t find anyone interested in funding his vision. And besides, the market didn’t seem ready for something as radical as selling music in a completely non-physical form.
I mean, seriously. Who would ever want to have a music format you couldn’t touch? It was just too much of a technological and philosophical leap.
But then in 1994, Adar had a conversation Karlheinz Brandenburg who worked at a German research firm called The Fraunhoffer Institute. After years of work, their software algorithm had been chosen as the international standard for compressed audio on CD-ROMs. It was called “ISO-MPEG1-Audio Layer 3” or “MP3” for short.
Adar was very impressed by what Brandenburg and his team had accomplished. They had solved a lot of the technical problems that had stopped Adar from moving forward with his idea a few years earlier. He immediately recognized what Brandenburg’s people had done. He exclaimed, “You will destroy the music industry with this.”
Brandenburg replayed “That’s not our intent and frankly, I don’t think we’ll do it.” Famous last words, right?
A few months later, the people at the Fraunhoffer Institute began to notice something strange. Newsgroups started by the super-early adopters of the Internet started discussions about the potential of Layer 3 encoding when it came to music. Shortly after that, song files started appearing online.
Fast-forward to the first months of 1999. He didn’t know it at the time, but Shawn Fanning was on the way to becoming the most infamous college student in the world thanks to a nimble little program he would call Napster.
Shawn is something of an unauthorized copy himself. Back in 1980, his Uncle John threw a massive party at his parents’ house in Brockton, Massachusetts. About 3,000 people turned up, including a band. One of the members of that band hooked up that night with John’s sister Colleen. Nine months later, Shawn arrived.
By the time Shawn was in high school, he was a full-blown computer geek. During the summer, he worked at Uncle John’s company, Netgames,” When he got out of high school, he enrolled in the computer science program at Northeastern University in Boston.
Even though he was immediately pushed ahead into senior leval course, Shawn quickly grew bored. Instead of going to class, he’d fool around with the $7,000 notebook computer he got from his uncle. Then his roommate introduced him to the world of MP3s.
He loved scraping the Internet for song files but like a lot of people, Shawn grew tired of dead-end searches, dropped FTP downloads, and central services that crapped out under the strain of too many people trying to grab the same song at the same time. So, with encouragement from Uncle John, Shawn wrote a program–a music application–that was way better than traditional search engines.
Shawn spent 16 hours a day on the project, getting help from two guys he met on Internet Relay Chat’s w00w00 (remember IRC?): Sean Parker (later of Facebook) and Jordan Ritter. They helped him debug the code and troubleshoot issues.
By June 1, 1999, it was complete. Shawn gave the program the nickname people had given him because of his short, curly, nappy hair: Napster.
He let 30 friends he met in chat rooms download the program on the condition that they kept Napster to themselves and didn’t tell anyone about it.
But within just a few days, Napster has spread from 30 people to more than 15,000 users. By the fall, that number had increased to tenfold and users were trading upwards of 3.5 million files.
Uncle John stepped in to take care of the business end of things. He really didn’t have much of a plan, but he could certainly see the potential of the technology.
This is when the recording industry started to take note, drafting its first complaint and demanding that Napster shut down. When that didn’t work, the Recording Industry Association of America (RIAA) filed a copyright infringement lawsuit.
The war was on by the middle of 2000. Under American copyright law, Napster was doing something incredibly illegal: It was allowing protected intellectual property–song files–on a central server for free distribution to anyone. This illegality is not in dispute. Where it got weird and wrong was with the PR battle.
Napster adopted the position of standing up for the music fan. CDs were too expensive. The industry was control by elites who didn’t have the interest of the fan at heart. “We’re also just helping people love music even more!” they said.
Meanwhile, the RIAA’s heavy-handed legal tactics didn’t exactly endear themselves to the public and the war emerged as a case of David and Goliath. And making a bad situation worse was Metallica.
On April 13, 2000, Metallica filed a lawsuit against Napster for aiding and abetting the theft of their music. And in May, drummer Lars Ulrich held a press conference in front of Napster headquarters in San Mateo, California.
He brought with him a 60,000-page printout of 335,435 names, people who had downloaded Metallica songs from Napster for free, which added up to 1.4 million copyright violations involving 95 Metallica songs. I quote:
“We take our craft ‑‑ whether it be the music, the lyrics, or the photos and artwork ‑‑ very seriously, as do most artists. It is therefore sickening to know that our art is being traded like a commodity rather than the art that it is. From a business standpoint, this is about piracy ‑‑ a/k/a taking something that doesn’t belong to you; and that is morally and legally wrong. The trading of such information ‑‑ whether it’s music, videos, photos, or whatever ‑ is, in effect, trafficking in stolen goods.”
As a band that developed its reputation of encouraging fans to record their concerts and trade tapes, it seemed a little weird to some people. Stuff like this appeared online.
Despite the backlash, Metallica was not in a forgiving mood. And to be fair, they weren’t the only outfit to sue Napster. Dr. Dre took them to court as did Eminem. Em famously declared that “If you can afford a computer, you afford $16 for my CD.”
My mid-July 2000, Napster had more than 20 million users even as they were being sued into extinction. The RIAA was on their way to winning and Metallica, Dr. Dre and Eminem were getting their way.
But not everyone was against Napster. Fred Durst of Limp Bizkit was such a fan that they went on a tour in support of the company that summer. Chuck D of Public Enemy became an evangelist for what Napster was trying to do. And The Offspring was all over the potential of file-sharing, although they cheekily made up bootleg Napster t-shirts and sold them through their website. Napster then claimed copyright infringement and issues a cease-and-desist order. Oh, the irony. (Everyone soon kissed and made up and all the money from those t-shirt sales went to charity.)
While all the lawsuits and public recriminations were filing back and forth, some secret meetings were taking place. July 15, 2000, has gone down as a pivotal date in the history of the recorded music industry. On that day, representatives from Napster and three of the five major record label sat down in Sun Valley, Idaho, to talk about a deal.
Should the labels buy names and turn their network into something they could use? Napster’s people wanted a 50-50 split of any future equity. The labels were thinking more like a 90-10 split in their favour. No one would budge and the meeting broke up without reaching an agreement.
To be fair, such a deal would have never flown with the Securities Exchange Commission. It would have flagged such a purchase by the industry would have constituted monopolistic practices laced with collusion. (The labels would soon try their own download platforms under the names PressPlay and MusicNet, but the less said about them, the better. They were wretched and awful and were soon put out of their misery.)
The lawsuits went ahead and the original Napster was ordered shut down by a judge. Napster shut down in July 2001 and bankruptcy came the following year after which all its assets were sold off. (A resurrected Napster exists today as the rebranded Rhapsody, the first true streaming music service.)
At its peak in February 2001, Napster had 26.4 million active users. Less than six months later, it had none. But boy, did it change everything.
- Dozens of other file-sharing programs popped up in Napsters wake: Limewire, Audio-Galaxy, Bearshare, Kazaa, Scour, CuteMX, Freenet, eDonkey, Wrapster, Grokster, etc. They became targets of more lawsuits with some surviving longer than others.
- File-sharing moved from using a central server to peer-to-peer communication where every computer on a file-sharing network became an access node. The first of these was Gnutella, a creation of Nullsoft that was spread by AOL.
- Meanwhile, record labels found their profits decimated by file-sharing. When Steve Jobs presented the idea of the iTunes music store to them in 2003, he knew he had them over a barrel. Having failed with PressPlay and MusicNet, the labels had no choice but to acquiesce to Jobs’ demands for a la carte song selection with tracks going for 99 cents each.
The original Napster may be gone, but it introduced the world to music on the Internet. Nothing has been the same since.
Further reading at The Guardian.