Napster: How MP3 Defeated CDs, Metallica, and the iPod. Business History.
Napster was released in 1999 and transformed the entire music industry. In this BusinessPolymers series, we'll cover:
Why Napster was a revolution
How MP3s and piracy spread
The war between Metallica and Napster
The reasons for Napster's success
Lawsuits, lawsuits, lawsuits
How Napster was shut down
How Apple leveraged Napster's success
What impact did this program have on the world
The mass distribution of MP3 files occurred in 1995-1996. At the same time, the internet was becoming even more widespread.
Sean Fanning created Napster in 1999. His partner, Sean Parker, created strong PR and built a company out of the small program. Parker attracted investment.
By the end of 1999, more than 25 million people were using the program. The author of this article also followed suit. But most importantly, the program itself and the ability to download "free" mp3s even become a reason to connect to the internet.
In 2000, Napster became a popular way to download new and old songs. Sometimes, even unreleased tracks. This happened with Metallica's "I Dissapear." The band heard the song on the radio, even though it wasn't yet finished. Lars Ulrich, Metallica's drummer, was outraged and became the main spokesperson for the subsequent prosecution of Napster.
Napster is a small program for Windows systems (versions for Mac and Linux were later released). The program allows users to search and download mp3 music files from any computer running the program.
While downloading files, users could chat. People often discovered new music on this network, which they immediately downloaded.
In 1997, a normal connection speed was 28 kbps, which allowed users to download 3-10 songs in 6-8 hours. In 1999, when Napster appeared, ADSL technology became widespread, and it became possible to download hundreds of megabytes overnight. At that point, any teenager could download an album in literally an hour. Meanwhile, a legal CD in a store cost $12-16.
In 1997, WinAmp was released, which became one of the most popular players for Windows for 10 years. I remember downloading music in 1997. I bought my first modem in 1997, with a data transfer speed of 14,400 kilobytes, meaning I could download a couple of songs half the night. In 1998, the speed increased to 33,600, then 56K. Until the end of 1999, downloading one MP3 album overnight was a blessing. However, we feared arrest every night.
There are tons of sites with MP3 files, but the selection was limited everywhere. Or there were problems downloading. Today, I can easily find almost any album on Apple Music. Back in 1997, we spent all night downloading Beastie Boys. There were no download resume programs yet; the connection would drop, and we'd have to download again. It was fun.
Everyone understood that downloading music from unauthorized sites was illegal. However, the scale of internet piracy was small. And everything changed with the advent of Napster.
In short, as we've said many times in Business Polymers, strong commercially successful products or breakthroughs like Napster happen when several powerful catalysts converge. You can listen to music on your computer, and after 1998, on an MP3 player, like one of the first, the Diamond Rio PMP300.
In early 2000, the film "Mission: Impossible 2" starring Tom Cruise was about to be released; the soundtrack's title track was Metallica's "I Disappear."
The film hadn't been released yet, the song wasn't finished, and the album hadn't been published. However, in early 2000, someone from the studio leaked an unfinished track online. It ended up on Napster, where it was downloaded by hardcore music fans, and eventually found its way onto the radio. The band M themselves were very surprised to hear their work on the radio.
I won't go into all the details. There are tons of them out there. The main thing to know is that Metallica drummer Lars Ulrich led a crusade against Napster. He saw it as a fight against piracy. He received a lot of hate from music fans, but also overwhelming support from his fellow musicians. Major-selling artists almost universally called Napster piracy. The animated series "South Park" portrays this situation very harshly: If you steal music, you condemn musicians to a SEMI-LUXURY EXISTENCE.