Napster
Napster was a music and file sharing service, created by Shawn Fanning, that burst onto the Internet scene in a major way during the year 2000. Their technology allowed music fans to easily share MP3 format song files with each other, thus leading to massive copyright violations. The service was named Napster after Fanning's nickname (he used to take a lot of naps, according to Peter van der Linden).
Napster was first released in the fall of 1999. Almost immidiately (December 1999), several parts of the American music industry filed a class-action suit against Napster. This gave Napster a lot of PR, and millions of users flocked to the service. Napster use peaked with 13.6 million users in February 2001, according to comScore Media Metrix.
In July 2001, Napster's servers were shut down because of the lawsuit. On september 24th, 2001, the case was partially settled. Napster agreed to pay music creators and copyright owners $26 million in settlement of damages for past, unauthorized uses of music, as well as an advance against future licensing royalties of $10 million. In order to pay those fees, Napster tried to convert their service to a subscription-system. A prototype solution was tested out in the spring of 2002, but was never publically available.
On 17 May 2002, Napster announced that its assets would be acquired by German media firm Bertelsmann AG for $8 million.
Pursuant to terms of that agreement, on 3 June Napster filed for Chapter 11 protection under U.S. bankruptcy laws. On September 2nd 2002, an American bankruptcy judge blocked the sale to Bertelsman and forced Napster to liquidate its assets according to Chapter 7 of the U.S. bankruptcy laws. Most of the Napster staff was laid off, and the website changed to display "Napster was here".
Since the settlement, several other peer-to-peer programs (systems with no central server) such as Morpheus and KaZaA has been released. These programs have overtaken Napster as the primary source for mp3 fans to obtain the music they want.
Napster's technology required the use of their central servers, which undoubtedly made them a convenient legal target. It is unclear what the effect of fully peer-to-peer systems such as Gnutella Kazzaa or Audiogalaxy will be on the availability of free music sharing on the internet. If Gnutella or Audiogalaxy develops into a viable (and free) alternative, but with no central server to take the legal heat, Napster's proposed business model (paid access) might fail.
Another potential successor to Napster is OpenNAP. Since most existing Napster clients can select what server they connect to, and since there is a free software clone of Napster server, anyone on the Internet can theoretically open up a small competitor or successor to Napster. If this is true, the death of Napster might only mean a temporary slowdown in the growth of filesharing.
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