World is in a Napster party

A moment that changed the rules of the game for Music industry

What is Napster?

Napster was a peer to peer internet software company that allowed users to share mp3 files. Interesting piece to note that the company was one of the most popular internet company when the technology was still in its cradles. In order to set the reference point, there were 7 million users on Napster in its 2 years of operation. Compare it with Spotify that has 30 million after 14 years of operation. Spotify wins hands down, right? Lets not jump the guns as we are missing upon a key detail here: Global Internet userbase. In Napster’s final year of operation the global internet userbase was 50 crore (around 8% of world population) while Spotify is operating at times when these numbers have jumped to 500 crores (around 60% of world population). As per Spotify’s founder Daniel Ek, Napster was the biggest inspiration behind Spotify’s coming into being. But what Spotify did, Napster couldn’t- Successful survival. Why on Earth would someone decide to shut a company that is getting so much love from its users? Well, because they were forced to. And why would someone force such a successful company to shut? Well, lets wait for the can to unpack and spill its beans.

Some tech shiz

One central server connected with multiple nodes (personal computers of other users) and if one of the nodes requests a mp3 file then it would check for which of the nodes the transfer rate is the highest and download it from there. This is analogous to the DC++ software that Indian university students use to share files on their campus intranet with one limitation that it was focused on mp3 files.

Free Madonna stalls in the party

Napster moment completely changed the recorded music industry. Music had always been a private good. In its initial days, it was for the consumption of the royal courts. It became more accomodative with time as it served as a vehicle of entertainment for the elites in the society. With the advent of vinyl records and casettes, it became accessible to the masses but still they had to pay for this entertainment. When Napster entered the party scene, everyone welcomed it with open arms. There is a saying that no lunch is free, but to everyone’s surprise this one was. Take whatever you like and have as much as you want. Have one Madonna song in the maincourse along with two Beyonce songs as desserts. It was too good to be true. Napster users soared eating up the sales of viny records and casettes and the royalty that the artists enjoyed. The biggest change it brought to the industry was establishing music as a public good.

Who stopped the party?

Metallica , a popular rock band, found out that an unreleased track of theirs has ended up on Napster. Everyone was enjoying the new song except the rock band who created it. They filed a complaint against Napster in the court alleging Intellectual property infringement . Napster was asked to put an end to the illegal downloading and ongoing piracy on its platform. Napster experimented with subscription based music services to its users for a small fee. More checks and balances were put to control the piracy but all in vain. The company went bankrupt and was sold for peanuts. Napster had lost the game, so did millions of its user.

Party is back with a bang

The Napster moment had ended in the 2000s but it changed the rules of the game in the industry where it was operating. Every industry keeps on experiencing its own Napster moment where such disruptions bring certain irreversible changes that last forever. Right now, the only difference is Scale and timing. Almost every other industry is having its Napster moment at exactly the same time. There is a crazy party going on where every industry is dancing to the same music being played out in sync. An orchestra is being played out. It is something that the post-industrialization world had never experienced. Participants will keep on exiting the party one by one based on their own stamina and resilience. Few would enjoy the party, few would be puking all around and many would be happy its over.