Since launching back in 1999, Napster became the pioneer of online music sharing that you could argue almost single-handedly changed the face of the music industry we see today. At the peak of its popularity it was reported to have over 26.4 million active users a month.
The idea was simple, that anyone could share their record collection with anyone else. The reaction was overwhelming and the music industry as a whole was caught comprehensively with their pants down. But they didn’t take it lying down. The record labels quickly sued Napster and those that used its services through the industry body RIAA, and artists began to choose sides in the growing war including most infamously Metallica who sued the company.
The lawsuits proved costly for Napster and despite their being dropped at the eleventh hour when it appeared German conglomerate and record company Bertelsmann BMG would buy the company, Napster eventually filed for Chapter 11 bankruptcy protection.
The judge in the case decided that the Bertelsmann BMG should not go ahead and instead insisted that Napster’s assets be split up and sold. Napster’s brand and logos were eventually acquired at bankruptcy auction by Roxio who used the enormous brand recognition Napster had to launch a music streaming service similar to todays Spotify.
In 2008, Napster was sold by Roxio to US electronics retailer Best Buy for US $121 million but despite their best efforts the service never grew any significant traction in the increasingly competitive online music space.
Today, competitor Rhapsody officially acquired Napster for an undisclosed amount with the transaction closing Wednesday, November 30. Rhapsody will retire the Napster brand entirely and move existing subscribers over to their service. The move will bury the Napster brand for good. Rhapsody spokesperson Jaimee Steele said of the deal “We are currently migrating Napster subscribers over to Rhapsody. It’s all under way as planned.”
“This deal will further extend Rhapsody’s lead over our competitors in the growing on-demand music market,” stated Jon Irwin, president of Rhapsody in an October 3 press release. “There’s substantial value in bringing Napster’s subscribers and robust IP portfolio to Rhapsody as we execute on our strategy to expand our business via direct acquisition of members and distribution deals.”
But despite the sun setting on the Napster brand once and for all, the spirit of Napster is still very much alive. Founder Sean Parker now works at European music streaming service Spotify and sees his new venture as the spiritual successor to what they started in 1999. “Spotify is an attempt to finish what I started at Napster,” said Parker at a recent press conference.
Napster. 1999 – 2011