How Napster Worked

What was the purpose of Napster? Who created Napster? How is the Napster of today related to the original Napster? Join Lauren and Jonathan as the explore the rise of Napster.

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Episode Transcript

Speaker 1 (00:02):
Get in text with technology with text Stuff from housef
what Com. Hey there everyone, and welcome to tech Stuff.
My name is Jonathan Strickland, I am a host, and
my name is Lauren Vogelbaum. I am coincidentally also a host.
It's fantastic that we have two hosts together because that

(00:23):
means we can do a podcast. And today we wanted
to talk about something we have. One of our listeners
asked us about this. It's a it's an interesting story.
It's a story about an internet company that had a
meteorc rise and perhaps and even more meteoric fall. Uh,
and then it was reborn into something completely different in
a way Napster and Napster's um it's got a bad rap.

(00:48):
It it's kind of becomes synonymous with at least the
old Napster. The original Napster has become synonymous with things
like piracy. Although in the lawless days of the Internet
when everyone just stole from Lars Ulric, Yes, in fact,
he honestly he ended up delivering a lawsuit by hand too,

(01:08):
so full of ire he was, Yes, he took this.
I think I don't know. I don't know that. I
don't know that even a member of Metallica can carry
a sixty thousand page maybe by hand truck, I'm not sure.
I'm not sure by hand, but sure, series of CDs. Yeah.
So anyway, let's talk about Napster and what it was

(01:31):
and what it is today, because it's it's definitely changed
quite a bit. So it's a it's it's all about really,
it's all about music. It's technically it's about file sharing,
but those files are were essentially music files MP three files.
Napster limited itself to MP three files. Lots of other
peer to peer sharing networks used, you know, you could

(01:52):
you could get movies on their all kinds of stuff, games, everything,
any kind of file. Well, Napster was all about all
about MP three and and you have to understand, like
the the days when we first start looking at this idea,
that's way back in the late nineties. Back then, music

(02:13):
was not something that you could easily get on the internet.
It was first of all, anything that was on a
web page was MIDI based or whatever it was, or
mod based. It was just it was not anywhere close
to CD quality. We didn't have an iTunes store that
kind of thing. Yeah, there wasn't, you know, but there
were people who what they would I just say completely,
I just said that. When iTunes was founded, that's a

(02:36):
different show. So anyway, there there's a whole you know.
iTunes for a long time was just a jukebox type
of program where you would manage the music that you
already had. It wasn't a store where you would buy
new music. It was it was a management system. So really,
at this time, the way you would get if you
were someone who wanted to get a music file, you

(02:58):
would essentially have to search around for someone who was
hosting music files on a website somewhere and then download them.
And these these websites were very much unreliable, and uh,
this is what got a certain guy thinking about different
ways of going about it. The guy's name was Shan Fanning. Yeah,
and as he got his first computer and very shortly

(03:20):
after that created Napster. So that was yeah, it was
within two years he had gone from getting his first
computer to creating one of the most influential and notorious
web services and programs of all time. Yeah. He got
his computer from his uncle, John Fanning, who ended up
being a big supporter. Yeah. Yeah, he he provided the

(03:42):
seed money for for Napster in a couple of years.
Yet he was also not just interested in programming right
off the bat, but also interested in Internet Relay Chat
i r S, which is, you know, one of many
different protocols that allow you to communicate over the Internet
and um in an instant instant messagery. Yeah, exactly, as
opposed to like email or something along those lines. And

(04:03):
he got interested in the field of Internet security. And
uh he described himself at the time as a white hat,
not a hacker. So the idea being that he was
interested in finding ways to make internet security more robust,
so and in helping people, not not stealing from people,
right like, not like he might look at a system
and say, oh, you have a vulnerability here, you need

(04:25):
to patch it, as opposed to, oh, you have a
vulnerability here, give me all your things. Um. That was
kind of his his at least that's what he said,
and I have no reason to doubt him. But he
met virtually a fellow named Sean Parker online in those days,
and Sean Parker also becomes important in the Napster story.
So in ninety eight, he was starting to think about

(04:47):
this thing that music files. And by the way, this
kid is a teenager. I mean, you know, if I'm
using the word kid, it's not just because I use
that word for everybody. It's because he was literally like
seventeen to nineteen at the time. Yeah, he was. He was, uh,
well that was when he was eighteen turning nineteen. Uh,
and he he was a freshman at Northeastern University in Boston,

(05:11):
and he knew that there were a lot of kids
his age really interested in music and they really wanted
to find more music. But again, it was really tricky
to find it online because these websites that would host files,
they wouldn't last very long. Maybe someone stops um stops
monitoring it or maintaining it and the links are all dead,
or because of high traffic, you know, everyone finds out

(05:33):
that this is where this one file is, everyone goes
there and then it crashes the site. It was really
really tricky to find a way to reliably get those
music files. Also important to note that was when the
Digital Millennium Copyright Act went into effect. Yes, very important.
That's a Congress enacted that and uh that was that

(05:53):
was essentially Congress's way of saying, we understand that intellectual
property is important that copyright is in and that the
Internet age has dramatically changed how easy it is to
distribute material that is under copyright. So here are some
rules to guide how we can how we can legislate
this sort of stuff, and essentially criminalized the circumvention of

(06:15):
any kind of digital rights management right. It also, however,
created something called safe harbor, which was very important and
would become extremely important in Napster's case. Safe harbor is
a concept whereby it says, if your site or service
is not actively engaged in copyright infringement, but the users

(06:38):
are using your service in order to conduct copyright infringement,
you yourself are not at fault. You cannot be held
at fault for the behavior of your users because the
users are behaving however they want to behave. You're providing
a service. As long as your service is not actively
meant to circumvent copyright protection or to distribute copyright write

(07:00):
materials illegally, then you should be in the clear because
you cannot be held responsible for what other people do.
And that's an important concept. It's also one that ultimately
you could argue was not held up in the case
of naps Yeah yeah, uh yeah, other. While we're on
the subject, other concept that became important in this argument
was the Audio Home Recording Act, of which said that

(07:23):
you are allowed to make unlimited copies essentially of any
CDs and cassettes that you own for personal use and
for your friends, as long as you're not receiving compensation. Right. So,
again the idea being that if I own something, I
can make a copy of it. Usually it's considered a
copy for backup purposes. So for example, let's say I
own a c D and I want to be able

(07:44):
to make a second CD in case something happens that
first one, because I mean I bought that c D.
I feel that's mine. Uh. And this this is this
is something, yeah, something that the music industry was not
so pleased about. I mean every industry. Whenever any sort
of uh invention has come up that allows people to
copy material some way, for instance, VCRs and DVRs, the

(08:07):
various industries get very nervous about it because they're afraid
that well for multiple reasons, but one of the reasons
is they are afraid that that's going to impact sales.
That means that you're going to end up distributing stuff.
And then you cut out the person or entity that
is in charge of distributing that, and then they lose
the copyright and that you know, and that that paid
to make this thing happen essentially, and that they're going

(08:29):
to lose money. Yeah, it's huge, huge thing. When VCRs
came out in the in the early eighties, not but
I remember. But why are you looking at me, Lauren?
Is it only because I'm your co host? Is it
because you actually know that I remember when VCRs came out.
I'm gonna smile on her face, tells me the answer.
All I need to know, folks, on all I need
to know anyway. Um, but yeah, So so that that's

(08:52):
kind of the state of digital copyright. So meanwhile, Sean
Fanning is saying, maybe there's a better way of being
able to find and get the music files that you
really want, and he starts to come up with this
idea where the idea would be to create a centralized
server and that server's job would be to search for

(09:12):
an index music files and uh, and the way it
would work is that you would subscribe to the service. UH,
you would essentially register yourself as a user with the service,
and then as a registered user, You would get a
folder that you would put on your hard drive, and
that folder would be a share double folder. Anything you
put in that folder could be seen by the service.

(09:35):
The server, the centralized server could see whatever you put
in there. Now, in the case of Napster, we're talking
MP three files. So if you put if you had
MP three files already on your machine and you put
them in this folder, it would mean that those would
be discoverable by that centralized server. So someone else who
registers with it wasn't called Napster yet. But when they
register with the service and they search for a particular

(09:58):
music file and you happen to have that music file
on your folder, you're a link to. Essentially, your machine
would pop up and the server would facilitate a connection
between the person searching and your computer so that the
file transfer could complete. So, Lauren, let's let's use well,
we'll use ourselves as an example. Lauren, Let's say that

(10:19):
you've heard about this band called Common Rotation. All right,
Common Rotation fronted by Adam Bush, former actor in the
Buffy the Vampire Slayer series. La He was Warren nerd
of Doom. So, Lauren, you've heard of Common rotation, and
you're thinking, I really want to hear this one song
I've heard about that common rotation does. It's called sit

(10:42):
Down before I Fall Down. But uh, you know, I
don't have access to a way of finding this this song.
Otherwise I go into Napster. It turns out that I
Jonathan happened to have that song and I have it
in the share folder for Napster. And when you do
the search, it put points a link towards my direction,
towards my computer. You hit the download button. My computer

(11:04):
uploads the file and your computer downloads the file, and
it's a direct transfer between the two computers. The centralized
server just access kind of a traffic monitor. Um. And
the cool thing about this is that when my file
gets to you, by default, it's going into your share folder.
You can change those settings, or you could have changed
those settings back in the day because the service doesn't

(11:25):
exist anymore, right, or you can pull it out of
that share folder you wanted to write, but you you don't.
You don't have to share everything you get, but if
you did, that would mean that now there's another instance
of that file that there's two locations, so that if
you can't, if you have trouble accessing the first location,
or if if out, yeah, or if I'm not even online,
like if if my computer is off, you cannot connect

(11:46):
to my computer. But if Lauren is on and she
still has that file on her folder, that means person
number three could come in and get the file from Lauren.
So every time that someone used Napster, they were actually
increasing its utility. So it's a service that got longer
the more people used it, and the more the larger
the numbers joined, the more powerful this service became, right, right,

(12:07):
And so so early Fanning was was developing this this
program and coding everything along with Sean Parker, I think, yeah,
And the story that he did sixty straight hours of
coding without sleep. That sounds like one of those terrific
Internet myths. Although with you know, with energy drinks which
were which were new and the the red Bull was
brand new and they were downing them in cases they

(12:29):
were they were. But so they uploaded this beta to
a website called download dot com and and it hit
really big and people were so excited about it. Yeah,
it was very quickly became clear that this this thing
that they had come up with was going really resonated
really because there are a lot of people who are
really interested in music, and there's also there was also
this growing attitude of if I like one song, but

(12:52):
I don't like the rest of the album, why should
I the whole album for one song. And the problem
at the time was that there was no real way
to buy song by song unless the band had released
specifically a single CD right. Other than that, you were
pretty much out of luck. You had to buy the

(13:13):
entire album, and so that was why a lot of
people were turning. One of the reasons why a lot
of people were turning to piracy because it allowed them
the freedom to get what they wanted without getting all
the other stuff. And one of the big arguments people
have put forward about, you know, the piracy thing, is
that if the music industry had moved faster to make
it more of a accessible Yeah, Yeah, if the music

(13:35):
industry had been moving ahead of the population at the time,
or thinking ahead, or even just looking at the Internet
at that time, which they really weren't, Yeah, then they
could have They could have headed off the whole piracy
issue to a large extent, Like if you make it
easy for people to get your stuff, and then people
will come and pay for your stuff. If, however, it's

(13:56):
way easier for people to steal your stuff, don't be
prized when it gets stolen. Yeah, I have I have
ideas about HBO's content, like like this cable cable television
in general, and yeah, that's one of those things where
you know you'd be like, oh, HBO, go, I'm gonna
get that, and then you realize, wait a minute, if
I don't have the HBO subscription, I can It's only
if I already have it. If I already have it,

(14:17):
why do I any Why do anyway? That's a whole
different show. Um. But so so back in back, so
he had this cool idea. His uncle John, who had
gotten him that first computer, gave him some seed money
and I think maybe facilitated in an introduction to Eileen Richardson. Right.
And this is also around the time Sean Fanning has
decided to call it Napster, which was based off a

(14:37):
nickname he had in junior high school based on his hairstyle. Wow,
that's amazing. Yeah, that's just thought I have, Like I
have to get this fact out there, and if I
don't say it now, it's not gonna happen. So Eileen
Richardson was a venture capitalist, une very funky one. All
you know, all the pund hair right right, all the
reports about her like, yeah, she goes to Amsterdam to
listen to bands and just got pink hair. It's really cool. Yeah,

(14:59):
But so really she's hardcore. She she invested in the
company and signed on as the interim CEO. Exactly. She
she was someone who had had a lot of experience
in investing in internet companies. And you know, keep in mind,
this is ninety nine, so we're still talking before the
big bubble crash. It's the heady days of the Internet

(15:19):
when everyone's trying to figure out, like, there's this incredible resource,
how can we use it to our best advantage? And
she was one of those people who was right there
on the bleeding edge looking at the possibilities, and she
got really excited. She was very much a passionate music fan,
and so she was a music fan and a venture capitalist.
Napster fell right into her wheelhouse, so she jumped in.

(15:41):
She ended up making a very substantial investment, and then
like like you said, Lauren, she began to interim CEO.
By by September, there were forty registered Napster users. Um
and it was connecting a few hundred people at a
time at any given time. Right and by this time
on Parker has gone from being an I r C

(16:02):
buddy to a real life buddy and is working with
Fanning on this project. Uh. And and it was also
right around the same time that the Recording Industry Association
of America also known as the r I double A,
which represents five of the major music labels like we're
talking like the big big ones, the ones that own

(16:24):
everything else, essentially started to really tackle websites that were
hosting music files that were under copyright. So the r
I double A was actually actively seeking uh these sites
being taken down. Now, keep in mind Napsters circumventing all this.
It's no longer looking at websites that are hosting files.

(16:45):
It's looking directly at people's hard drives where there's the
shared folder. So while r I double A is going
after all these websites, Napster's doing you know, business like gangbusters.
And when I say business, it's not really business because
they weren't making money. Yeah, they had revenue generating scheme
at all. There was no way for Napster to make money.
It just that wasn't part of what was going on.

(17:06):
In fact, I'm not sure that was ever really part
of their their their original plan. Yeah, Originally it was
all just about sharing and that you know, they knew
that the service had value, but not in a way
that they could actually monetize. And although you know, they
were looking even in the early days, they were looking

(17:27):
at ways to to to get licenses from various music
labels where they be able to do things like sell
music files through napster Um as well as kind of
you know, diffuse the growing problem of the r I
double a looking out for or even later on they
were talking about, you know, trying to find a way

(17:47):
to count count these hits, count these downloads and and
tally them up and pay the recording artists and the
labels and all of that for the music. So, you know,
it's it's I think it's really important to mention that
because these these kids really weren't out there going like
we're gonna steal all the music, right. In fact, they
were just thinking like, this is a way to share
stuff and it's a tool for music discovery, which was

(18:09):
a that was a big deal too, was the idea
like it's it's getting harder and harder to discover music.
Radio stations might play the same like a couple dozen tracks,
technically obligated to pay the play the same like forty
tracks by their contracts. So how do you discover new
stuff If you don't have the luxury of flying off
to Amsterdam every few months to listen to a band play,

(18:30):
Then how do you discover new music? If you're not
you know, you may not live in a city that
has a vibrant music community. It makes it really difficult. So,
you know, although the record industry was doing fine, It's
profits raised eight percent over the previous year um by
by the end of the year, UM the R I
A filed lawsuit against Napster. Right right around that same time,

(18:51):
Napster hired its first non founding member named ali idar Uh.
And then right at right while that was going on,
our I Double A was really looking at Napster as
a true threat, like this was if if the websites
hosting a few music files were bad, Napster was Darth
Mader coming out to kill all the Jedi, and so

(19:14):
R I Double A really started to concentrate on him.
In fact called Napster a giant online pirate bazarre. That's bizarre,
b a z a R not bizarre, isn't strange um.
And so the thing was that as the R I
double A began to focus on Napster and all this
news broke about coming after Napster, that just made Napster's

(19:37):
profile go up even more, which meant more people discovered
the service, which meant that it actually got more popular
than ever before. Meanwhile, the R I double A was
specifically looking at charging Napster one hundred thousand dollars for
every copyrighted work that was infringed, which which is a bunch,

(19:59):
and that's a lot. And remember, this is a service
that grows incredibly every time someone new joins in, especially
if that person has files on their computer that wasn't
already spread across the entire uh Napster landscape. So if
you know, if I join on and I happen to
have my Tibetan Throat Singing Magical CD that nobody else

(20:20):
in the whole world owns, and it happens to be
on my computer, then suddenly I am of more value
than Napster because there's new stuff that no one had,
no else has yet. If I happen to have Dave
Matthew's greatest hits, there's a chance that was already covered
on Napster. Um, I don't have that album. By the way,
I'm very proud of you. I'm not I'm not passing

(20:42):
any judgment. I'm just saying so, uh, yeah, well that
was fun. But yeah. Here's something that Eileen Richardson specifically
had to say about Napster, and this comes from an
interview she did with Salon where this was after Metallica,
after after Lars Alric himself, it came by and dropped
off this this huge lawsuit because it wasn't just r

(21:03):
I double A that came after Napster. Individual labels and
bands also came after Napster. And uh and so she said,
I think and then in brackets because this is not
exactly what she said, but Metallica and the recording industries
actions are based on a lack of knowledge and fear.
When you're afraid of something that you don't understand, you react,

(21:24):
usually with the lawsuit. But over time, and we see
this absolutely every single day, everybody's learning. We're learning about
the music industry. They're learning about the Internet. I'm confident
that we'll get there together. Now. As it turns out,
her words were not quite prophetic. She was giving a
little too much credit, I think to all sides on

(21:46):
this issue. I don't mean to paint the r I
double A as being this evil uh entity. They were
looking out for their interests in a very very passionate way.
I meanwhile, Napster was looking out for their interests in
a very way. I think that everyone involved was being
a little bit shortsighted about exactly what needed to happen. Yeah. No,
but there is no doubt that the music industry had

(22:08):
not really figured out the Internet yet, in fact, because
no one had a music store that was really of
any true utility at this point. And so that's why
when you have a service that allows people to get
what they want, they go to it. Whether that's piracy
service or if it's one that's legitimate, doesn't matter. If
you give the people what they want, that's where they're

(22:29):
gonna go. And the music industry had not yet figured
out how to give the people what they wanted, and
so that was the problem. By the way, I still
remember the days when I would actually want to buy
an album because I like the album experience. But even
at this point in the nineties, I was one of
these people. I was one of the people saying, I
don't want to buy an entire album. I just like
this one song, and you know, and I can't think

(22:52):
of the last time besides like a soundtrack to a
musical because jazz hands, I can't think of the last
time I sat down and listen and to an album
from start to finish. That's that's actually how I kind
of usually do it myself. If if I have like
an artist well enough, I'll buy the album and sit
down and listen to it several times through. Actually, but
it's been a long time I've done that with They
might be giants, I've done that with them, But it's

(23:15):
Jonathan Colton but and Marian call but beyond like a
few artists, I just don't like fun No, I just
went out and bought the one, the one that everyone
listens to. But anyway, getting back to to Napster, and
around two thousand and they secured around of funding from

(23:35):
Hummer wind Bald, which installed a man named Hank Barry
as the CEO of Napster. Again, another interim CEO, so
Hank Berry takes over for Eileen Richardson in two thousand
and his main concern was to try and resolve the
legal issues that had popped up between Napster and the
r I double A. Uh and other people on his

(23:56):
management team took over the day to day executive decisions
of keeping the company going. So really, uh, Hank Barry
was just looking at the legal issues, not not how
to operate the company. Yeah, yeah, sure, but yeah, you know,
it's when you've got people like Dr Dre talking directly
to you about lawsuits, then you start yeah. Well, and
there were some there there were some artists who were

(24:19):
coming out in defense Limp Biscuit Offspring. I think Chuck
d was, Yes, he was. He was also a big
supporter of Napster um. Yeah, yeah, that was so, so
there were artists on either side of the issue. Obviously.
Two thousand was also when this was another thing that
got Napster a ton of publicity, when colleges started to

(24:42):
ban Napster. Yeah. Something I think that I read a
figure that's something like colleges. It was around across the US,
It was around in March of two thousand. By March
of two thousand, it was about a hundred thirty universities,
but more would join uh and and it was also
their biggest period of activity. They had upward of seventy
million registered users. Yeah, and around two and a half

(25:03):
million people connected at any one time. So so keep
in mind these servers could only handle a certain number
of connections. They had more than one server. But in
the early days, if you wanted to use the service,
you would connect to the server, and then about up
to around four thousand, nine nine nine other people could
connect to that same server at the same time. Uh

(25:23):
some of the service could handle larger loads than others,
but you know, the more you would put in there,
the slower the whole service would go. So you would
you would be connected to a server along with thousands
of other people, which meant that you were limited to
whatever those other people had in their share folders. Right,
so not every music file in the world is available

(25:45):
at any given time. It all depends upon who is
connected to the service at that moment. Uh And. Originally
each server was kind of its own independent world and
independent on you know, just when you signed in with
what server you would hit rend and who else would
be in there, you know. But at this time they
were running about a hundred and forty servers I think
it's the estimate. And ultimately what their goal was was

(26:07):
to link all the servers together so that way, if
I linked to server A and Lauren linked to server B,
they we would still be able to exchange files. Now,
in the early days, that was impossible. We would both
need to be on server A or both be on
server B for that to work. Uh So anyway, uh,
the universities and colleges also began to notice that that

(26:27):
uploads were the upload spies were really dying on campus
because people people were using the service, and that, um
I think I think that by it might have been
in two thousand one of January, Indiana University noticed that
up to of its network resources were being used by Napster. Yeah. Yeah,
And Oxford University really suffered because here's the thing about

(26:49):
Oxford University. They had to pay for any data transferrals
that were transatlantic, So any files that were passing over
the cables that go underneath the ocean that can did
Europe to North America. Yeah, so that they had to
pay per bite, a certain amount per bite for that.
So people on the Oxford campus who were using Napster,

(27:11):
and we're downloading files directly from computers in the USA.
We're really driving that up. Yeah, it would have been
less expensive to have just bought the students the CDs,
right if if if the college had gone out to
a music store and just filled up four hundred carts
with CDs and brought it back to the campus, it
would have been less expensive. Um. Yeah. And and so

(27:35):
this was also around the time when uh, this was
mainly Eileen Richardson's influence here where they were looking at
incorporating more social tools in Napster, things like instant messenger,
chat rooms, yeah, irc stuff that they were also found out. Yeah.
And again this was an idea to kind of help
users discover new music and learn more about the stuff

(27:56):
that they're interested in. Uh. And so it was really
coming a social platform at the same time as it
was under fire from the industry. Um. And so we're
getting now to the point where we need to take
a quick break. But before I say that, remember even
at this point where Napster's going crazy with huge amounts

(28:16):
of traffic, remember it, at this stage it's the most
popular web service that has ever existed. It would be
dwarfed by things like Facebook in the future. But this,
this is before Facebook at the time, connecting you know,
a few million people simultaneously. That was a big deal. Yeah,
so so huge deal. Still not any way to generate revenue.

(28:38):
But let's take a quick break, all right, and now
let's get back to naps here. Alright, So, so two
thousand's coming gone. We're into two thousand and one, and
Napster receives an order to shut down. Uh, this is
an order core order to shut down its services because
the r I double A has said that napster is

(29:01):
complicit in copyright infringement suits. It's not just that it
is a service, it is actively helping people copyright. That's
essentially what it would have to be for it to
get around this whole d m C a safe harbor issue,
and that's a debatable thing. But the judge kind of
sided with the music industry. Uh, there was a stay

(29:22):
in the order to two days later. In fact, I
think a stay was enacted, right, so they didn't have
to shut down immediately. However, not that much longer, they
would get another order to shut down and they actually
would have to do it, uh, and they received right
around the same time during that stay, they received like
sixty million dollars investment money from Bert Bertlesman, of course,

(29:45):
being a giant multimedia company that in fact owned a
bunch of the companies that were participating in a lawsuit
against Napster. Yeah, so you have to understand, Okay, So
Burlsman is this mega multimedia company based out of Germany,
all right, and it owns lots and lots of stuff,
lots of different divisions, and these different divisions don't necessarily
talk to each other. So one division sits there and

(30:07):
sees Napster and sees lots of potential in it as
turning it into a revenue generating service. Another division that
has nothing to do with that first division is seeing
Napster as the pirate that is killing its business and
it needs to go after it. Well I think that really,
I mean, I think it was extremely savvy of Bertlesman
to be investing in them at the time, because they

(30:27):
were looking at it and they were going, this is
potentially the future. This is how they if you know,
what they're doing right now is crappy for us. But
if people people are excited about music, and that's great,
I think, and if we can monetize that. I think
Bertlesman would argue that retroactively, it was not a savvy
move at all. Okay, well sure, but but you know,
they saw that where the future was going. Unfortunately, was

(30:49):
the wrong time to implement it, because it just turned
out that the the the hornets Nest that had been
stirred up was so great as to totally derail any
efforts in turning Napster into a quote unquote legitimate revenue
generator service. Right, yeah, Well they installed Conrad Hilbert's as

(31:11):
so hank Berry steps aside. Meanwhile, like just just as
Conrad Hilberts was taking over, hank Berry had just gone
before Congress and asked Congress to to form some sort
of industry wide license agreement for Internet broadcast similar to
what radio has. And his his argument was that really,

(31:34):
we're just another distribution platform just like radio, so really
we should we should have the same opportunity to license
music the way radio does. The problem with the problem
with establishing a license for every single file is that
it's impossible to do because take take a take a
typical album, that album might have multiple producers, on it,

(31:56):
and each producer has some level of ownership of the
track that are on that album. Then you have the
artists and they also have some ownership on the tracks
on that album, the composition and of actual performance. Right,
So securing a license from every single copy like everyone
who owns part of that content, it's impossible, you know.
He was saying that for one album, you might have

(32:17):
to secure hundreds of licenses just to be able to
have that one album, and then you multiplay that across
the hundreds of thousands of albums that have always existed
in the new ones that are coming out every year,
and you have an impossible situation. There's no way to
legally follow that rule. So what needs to happen is
a new legal way. He wasn't arguing, He wasn't arguing

(32:42):
for for piracy. He was just arguing for a new
legal means to license music, and that was getting really
bogged down in Congress. So then he ends up stepping
aside and uh and Conrad Hilbert takes over. Um. Conrad
didn't have a whole long time to operate Napster before
it got shut down. That was an on June eleven,

(33:03):
two thousand one, that's when Napster shut off its service.
It still existed as a corporate entity, and it started
to really concentrate on finding a way to create a
legal music distribution service. And I say legal with air
quotes around it, because Napster again would be arguing that
what they did was they were safe harbor. They were

(33:26):
only connecting people to do illegal things, right, and that
that wasn't even the purpose of Napster. The purpose of
Nabster was sharing music, and that that you know, it's
the fact that people were using it to share music illegally.
That wasn't Napster's fault. And you can argue whether or
not that's naive or sincere. That's not really our place
to do that. I mean you could certainly, you certainly

(33:46):
could have used Napster in a perfectly legal means if
an artist had given full full permission, like I want this,
you can distribute this any way you like. I have
no I release all claim to it otherwise I just
want my music out there, then it would have been
perfectly legal to to distribute that across Napster. It was
the problem. The problem was there were people doing that

(34:08):
with stuff where that what they didn't have that, They
did not have that permission yet. Now you could ask,
how is this different from taking my copy of a
CD that I've bought, making a copy and giving it. Yeah,
all I've done is just changed the way that Lauren
has has received that music. And is it my fault
that Lauren and maybe two point four million people I

(34:31):
don't know got that music track I don't know? Um,
so it got really complex. Yeah. Yeah. So then the
next note that I have is in two two when um,
the you know, the company was was still shuttered but working,
um and they entered into a beta test of a
secure file trading network that January. Yeah, and uh, and

(34:53):
that was it was something they were really seriously working
on at the same time as trying to figure out
a way to stay evolve the growing financial problems they
were facing as a result of these lawsuits. Yeah. Yeah,
they were so serious. But as a February Burtlesman just
kind of offered to buy the company I think for
for like like twenty million, like not not a whole lot.

(35:14):
It was it was in addition to it was addition,
in addition to the money they had already invested into
the company, which was million I think I could be,
I could be. You know, there are a lot of
interesting reports on this, so it's kind of hard to follow.
It's a little bit timmy why yeah, exactly, whibbly wobbly.
In May two thousand two, Sean Fanning and Conrad Hilbert's

(35:36):
both resigned, right. This was John Fanning, you know, kind
of tried to organize a coup. From the way that
I read it, he was he was trying to oust
uh Hummer and Hank Berry and all the venture capitalists
and and there was all of this in fighting within
the company going on. Fanning eventually filed a lawsuit to

(35:57):
have Berry and Hummer dismissed from the board of directors.
It was thrown out of court. But but but yeah,
as of many things have gotten so bad that um
that Sean Fanning he quits. Yeah. Yeah. And another interesting
note is that Sean Fanning apparently never drew more than
just a regular like paycheck. Yeah. Yeah. His paycheck was
just it was like a middle of the company type

(36:18):
of paycheck. After after founding it, he worked as he
worked as a grant as a coder. Yeah. In fact,
he apparently started getting into trouble because he was getting
so many requests for interviews back when Napster was really
in the news for all this this legal battle stuff.
He was getting so many requests for interviews. He wasn't
able to meet his his coding uh responsibilities, and he

(36:39):
started getting in trouble from his boss. Keeping in mind,
he's the guy who built the tool. Yeah, he's the
guy who kind of technically hired his boss. So and
now his boss is like, you kind of need to um,
you kinda need to get back to work, buddy, Yeah,
but but so so um Napster denied this sale to
Bertlesman um, and it kind of just sort of dies there,

(37:00):
collapsed like a flawn in a cupboard and nice and
that it was trapped like a moth in a bath.
At that point, there were also the major labels were
trying to launch their own services. One of them was
called press Play, which was launched in I think around
two thousand two and it ended in two thousand three.

(37:20):
Another one was called music Net, which was also a failure.
And the problem was that buying music from these services
was often more trouble than what people thought it was worth. Again,
it was not. It became easier to pirate music than
it was to buy it, and if it's easier, people
will do it, and and other other companies like a
Kaza and things like that were popping up. Yeah, so

(37:42):
so you had new Tela as well, you had other
file sharing uh services out there. They were picking up
where Napster had dropped off. And so there were there
were a lot of casualties in this whole rise and
fall of Napster. And you'll keep in mind this is
just to two thousand two, and um, yeah, yeah, it happened.
I had no idea when we started doing this had

(38:05):
happened that fast. Because of such a huge name, right,
you just expect that it had at least a decade
worth of life. And of course we'll get into what
Napster is now in just a minute. But besides the
fact that you had Fanning who never drew anything more
than just a regular salary, Eileen Richardson had a huge
career setback. Business Week ran an article that essentially said

(38:26):
that all of the legal problems were mainly due to
the way Richardson was running the company, which was not
entirely accurate. I'm not very fair to her. Yeah, how
she was running the company and how she was marketing
everything because she was she was very like like free
love about the music. And but yeah, apparently that that
that hit her pretty hard. And also the Bertelsman CEO,

(38:47):
Thomas Milhoff, was was replaced. He was replaced by another
CEO when that Napster deal was went so sour, and
plus the economy itself began to really crumble because keep
in mind his post dot com crash and the ramifications
of that are still unfolding in two thousand two. So

(39:08):
you've got the the company just completely languishing. There's there's
very little of it left. It ends up going into
Chapter eleven bankruptcy, and then there's a a bankruptcy auction
held in two thousand two. This is still happening like
right after another, and a company called Rock CEO purchases
the assets of Napster h in an auction in two

(39:31):
thousand two. They also that same company purchased that failed
music service called press Play in two thousand three, and
so they decided to use the the kind of the
cashet of Napster's name and the foundation of the press
Play service and combine them together to form Voltron. Except

(39:53):
by Vultron I mean a legal music service that everyone
knows the name of, because everyone's heard the name now Napster. Yes,
So they take some time to develop this, and the
reason why it took so long is that they had
to establish those licenses that Napster never could get hold of. Um.
They had been Napster been trying to do that for

(40:16):
especially the last two years of its existence. Uh and
and failed and so yeah, And meanwhile, companies like Rhapsody
UM which was another it wasn't a file sharing thing
that it was a music music subscription plan. Yeah, we're
starting to you started to see some early examples of
other music subscription services. Uh Rock CEO would take years

(40:36):
to develop this. It would actually not be until two
thousand and six. So this is four years after they
bought the assets of Napster that they launched the free
Napster service. They place Chris Gorog as the chairman and
CEO of Napster And in that time, what Napster did
was it used ads to support a free web based

(40:59):
streaming experience. Now, you could stream any song that was
in Napster's catalog a maximum of three times. After that,
you had to either purchase the song or never listen
to it again, at least not on Napster. Yeah, you
had to. You had to purchase the song. Now, nice

(41:19):
thing about it is that you could purchase a DRM
free version of the MP three of whatever song it was,
so you didn't have to worry about Okay, well you
can buy it this song, but you can only play
it on three machines and after that that's it, because
that was one of the big problems of early DRM
music is that you could it would limit how many
machines you could put it on. And you know, here's
the thing about technology, folks. Our stuff gets out a

(41:41):
date and we want to replace it occasionally. So if
you tell me that I can only load this on
three machines, I'm like, well, that's only gonna last like
five years. Yeah, then I have to buy the song again.
What's what's the deal. And this is where you bring
into questions like all right, do you you don't obviously
you don't own the song because you didn't make it,
but you you own the opportunity to experience that song

(42:02):
within the realm of a specific kind of license, and
then you're their argument might might be, well, I want
to use it at home, but none of the things
I have will play it now. It's complicated. Uh and
in fact, we could right do a full episode about
that we've talked about in previous ones. Well. Uh, So
two thousand six they launch, Chris Gore is the chairman

(42:25):
and CEO. Uh and uh they try to get it
moving but doesn't really catch on. For one thing, at
this point, they're starting to to really come into a
competition with iTunes. By now iTunes is really a thing.
And so from two thousand and six to two thousand
and ten that was Napster's existence. But in two thousand

(42:45):
and ten, Gorg ends up stepping down and the president
of Napster also steps down, and best Buy purchases Napster.
So the Napster CEO, Christopher Allen, becomes the general manager
of Napster. Because now it's owned by best Buy, it's
no longer a thing that ROXYO has, and his reporting

(43:07):
relationship is to a best Buy senior executive. So there's
a new new sheriff in town in a sense. And uh.
From two thousand ten to two thousand and eleven it's
run as the best Buy company. And in two thousand eleven, Rhapsody,
which Lauren mentioned just a minute ago, acquires Napster and
folds it into its own streaming music service. So now

(43:29):
Rahapsty and Napster are buddy buddy. Yeah, I think that.
I think that Rhapsody had been in close affiliation with
best Buy at the time. Anyway, I think that was
the official service for the Best Buy line of MP
three players back when that was a thing. Yep, and
uh and and Napster still exists now. Granted, keep in
mind the Napster we're talking about now. Really it has

(43:50):
very little connection to the Napster that was in the
first half of this podcast. Yeah, it's a it's a
purely subscription service. Um. You can use it to download
or stream music two different devices devices nobile, you know.
It's got a sleek looking interface. Yeah, and you can
listen to it like you can if you have a
compatible home entertainment system, you can listen to it on that.

(44:11):
You can listen to it on you know, like I said,
like a MP three players of something like like Pandora
or or Spotify. Although you have you have far more
control than you would on Pandora right right, and when
you subscribe to it, you um cut out all the
ads and all that fans right. In fact, you have
to subscribe to it. You can have a three fourteen

(44:32):
day trials. I recalled in the United States. I can't
speak for everywhere in the world. In the United States,
the current subscription rate as of the recording of this
podcast is nine dollars and cents per month. And um
and yeah, they have apps for Android iOS, BlackBerry, Windows
phone seven. Uh. They have extra features like tailored playlists
have been formed by various either you know, sometimes their

(44:53):
bands or an artist or sometimes it's like a like
a music critic for a magazine will make a playlist
and then they make it available on this so that
way you can listen to the music that people cooler
than you are listening to. Uh. And that, by the way,
for me, that's everybody. I'm not I'm not saying like
you are cooler than I am. I know you knew
that already. I'm just let you know that. I also

(45:14):
know that. So that's I'll go, especially music wise, I
will let myself into that category as well. Yeah, you
know that. I was not aware of Neutral Milk Hotel
until years after they were a thing. That's that's the
kind of guy, I am, but I was. I was
on board with Mumford and Sons before any of you
folks knew who they were besides, unless Mumford and Sons
is listening to this podcast, in which case they probably

(45:34):
knew about it before I did. But yeah, they also
had the Rapsy radio stations, so that's more like Pandora,
you know. And they have their own kind of discovery
algorithms as well, so that you can find music that
if you already like a certain kind of music, you
can find about. But it is interesting if you go
back all the way back to the beginning days of
Napster and you look at some of the things that

(45:55):
Eileen Richardson said, it's the very basis for music discovery
and things like pen Dora. Yeah, the idea she actually
says in that interview in Salon that if you like
a certain artist, you should be able to find other
music that's similar to that artist, which is exactly what
Pandora is all about, that the Musical Genome project. So
it was interesting that she was looking ahead and she

(46:15):
was seeing a future that wouldn't really come to maturity
for almost a decade. Yeah, I think in a lot
of ways, Napster was was you know, it just was
approaching the industry in in an aggressively incorrect way. Um yeah,
well and and and the industry was reacting in a
very uh like knee jerk way. So the combination of

(46:36):
the two meant that you were going to have nothing
but a collision. But but also yeah, just the internet
infrastructure was not quite there yet to provide monetization for
this kind of thing, and and so you know, all
of the ideas that they had were really sound and
just but really, what I think it is is that
the interesting thing to me is that it really created
the whole peer to peer approach. I mean, there were

(46:56):
other peer to peer protocols that were coming into being
it around the same time as Napster, but Napster was
the one that thrusted into the spotlight. And you know,
peer to peer is is is a completely legitimate way
to get information from one computer to another computer. It
doesn't have to be for nefarious purposes or piracy or whatever.
And so I'm very thankful that Napster existed as a

(47:19):
way to kind of get that as as an as
as a thing. I mean, without it, we might have
gone a few more years before anyone really realized the
potential for peer to peer transmissions. So that was something
very important in this whole napster business. Um I'm I'm,
I'm napstered out or now that's about all I got.
All right, excellent, So really we got to thank our

(47:42):
listener for sending that in. I apologize I don't have
your name in front of me. My computer gave me
a little bit of a hiccup just before I came
in here, but I wanted to thank you so much
for that. That suggestions very interesting discussion. I think hopefully
you guys thought so too, And if you have any
topics that you think we should tackle in the future
episode of tech Stuff, I highly recommend you get in

(48:02):
touch with us. Let us know. We really value that
input because it helps us shape the show so that
you guys enjoy it even more. Let us know, send
us an email our addresses tech stuff at Discovery dot com,
or drop us a line on Facebook or Twitter or
handle at both those locations. Is tech Stuff, hs W

(48:22):
and Lauren and I will talk to you again really
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