December 7, 1999: The Recording Industry Association of America (RIAA) files a lawsuit against Napster. The company was founded by John Fanning, Shawn Fanning, and Sean Parker as a peer-to-peer file sharing internet service which emphasized audio files stored in an MP3 format. They began operations in June 1999 even though other services were already in existence to share files electronically – IRC, Hotline, and Usenet for example. Napster’s focus on audio files and their easy to use interface were its main advantage over competitors. It was now relatively simply to get access to music files which might have been otherwise difficult to obtain. Bootleg recordings from concerts were also made available to share.
Some felt justified in being able to get digital copies of music they had purchased in non-digital format – records and cassette tapes. Many others simply liked trading music for free. Users could sign in and create their own album to record to a CD of their own selections. High speed networks in colleges were overloaded as students shared music with as much as 61% of external traffic going toward MP3 file transfers. Many colleges blocked the application even before issues with copyright laws intruded, just to free up their networks. On this day, RIAA filed their lawsuit in an attempt to shut Napster down. Instead, it caused a spike in users which would eventually top 80 million.
An appeal was made to the Ninth Circuit Court which was unsuccessful and on March 5, 2001 Napster was ordered to prevent the trading of copyrighted music on its network. They were able to get 99.4% compliance with this order and it was not good enough for the courts. The six songs out of a thousand was unacceptable. In July 2001 Napster had to shut down their entire network. On September 24, 2001 the case was partially settled when Napster agreed to pay $26 million for past offenses and another $10 million against future royalties. They attempted to make the site subscription based and their user numbers dropped.
Music file sharing remains an issue. Millions of people share their files and feel no remorse over the fact. Many studies have been done to see if file sharing actually does decrease sales with most of them saying it does hurt, some saying there is no impact, and others claiming it actually helps boost sales. The issue with copyright infringement made its way all the way to the US Supreme Court where it was held that peer-to-peer networks can be held liable if their software is marketed as a tool for copyright infringement. Some files, those in the public domain for instance, can be shared freely without problems. Some artists and labels grant a public license for unlimited distribution of certain works.
If 99.4 percent is not good enough, then this is a war on file-sharing technologies, not a war on copyright infringement. – Lawrence Lessig
File-sharing proponents commonly argue that file sharing democratizes music consumption by ‘leveling the playing field’ for new/small artists relative to established/popular artists, by allowing artists to have their work heard by a wider audience, lessening the advantage held by established/popular artists in terms of promotional and other support. My results suggest that the opposite is happening, which is consistent with evidence on file-sharing behavior. – Robert G. Hammond
A majority of economic studies have concluded that file sharing hurts sales. – David Glenn
Napster has pointed the way for a new direction for music distribution, and we believe it will form the basis of important and exciting new business models for the future of the music industry. – Barry Diller
Also on this day: The Blue Marble – In 1972, the crew of Apollo 17 took a world-famous picture of the world.
Can I See That Again? – In 1963, Instant Replay was first used during an Army Navy football game.
Fireproof – In 1946, the Winecoff Hotel burned.
Cicero – In 43 BC, the Roman statesman was assassinated.