Napster: Thank You for Sharing
Dear Gen Xer,
The Apple Macintosh 512Ke featured bitmapped monochrome graphics, an 800K 3.5” double-sided floppy drive, and 512 KB RAM. This was the gift John Fanning gave his nephew Shawn after he finished his sophomore year in high school.
Shawn became a boy obsessed. He started learning computer languages and spent the majority of his time online. You could usually find him on IRC, otherwise known as Internet Relay Chat: a massive forum for computer fans, who chatted about coding and software in various channels or “rooms”.
Shawn’s main interest was computer security. He loved looking for open ports and vulnerabilities, writing programs that spoofed his location, locating lines to easily hack through, and taking advantage of numerous flaws in Unix networks.
Shawn soon became a fixture on IRC and was invited to join a private channel called “wOOwOO”. It’s here where sophisticated hackers gathered to help with various exploits. Anonymity was key, of course, which is why every member had their own moniker. Shawn went with the nickname he’d gotten in high school, courtesy of friends who teased him about his matted down hair, which was caused by his preference for baseball caps.
He called himself “Napster”.
Uncle John served as young Shawn’s mentor.
He owned a company in Hull, Massachusetts called “chess.net” that developed games to be played online. Uncle John employed college students and recent grads and invited Shawn to join them. Shawn was instantly exposed to a world of real-life programmers. He cut his teeth coding for the web, building the company’s online store, and generally soaking up the knowledge of his seniors.
When it came time to apply for college, Shawn decided to pursue a degree in computer science. Most of his friends and coworkers had studied at Carnegie-Mellon University. While his programming skills were excellent, they weren’t good enough to get him accepted.
Shawn had only applied to one other school: Northeastern University in nearby Boston. Northeastern was so impressed, they accepted Shawn and placed the freshman in junior and senior courses.
Shawn started classes in the fall of 1998.
Every last one of them was boring. He already knew most of the things his professors were teaching thanks to having worked on programs at Uncle John’s company. Shawn yearned for challenges worthy of his focus. He found one in the form of mp3s.
His roommate kept complaining that he couldn’t find the music he was looking for. While plenty of mp3s were available online, they were unreliable at best. You’d spend forever searching for songs on Lycos or Yahoo!, then groan in dismay when you realized that the links to their mp3s were either missing or broken. Why did it have to be so frustrating finding your favorite tunes? There had to be a better way. Shawn decided to find one.
One thing he realized was that he needed to learn how to program in Windows. All he knew was Unix at the time, so he ordered a book on programming from an up-and-coming site called Amazon.
Instead of cramming for tests or exams, Shawn spent his time studying Windows. He pulled all-nighters and pounded Red Bull, spent his weekends at Uncle John’s company, and crashed out on the threadbare couch after marathon sessions of programming. Whenever he hit a wall or a problem he couldn’t solve, Shawn turned to his former colleagues, as well as his fellow hackers on wOOwOO.
Shawn realized that the solution he was looking for lay in the sharing of mp3 files. Rather than building yet another centralized site which fans could download music from, Shawn’s budding program would locate mp3s on a user’s hard drive, communicate that information to other users, and enable the sharing of those files to whoever happened to want them. The crux of the program was based on a relatively new technology called ‘peer-to-peer’.
The more Shawn worked on his new program, the less he cared about school.
He began to spend most of his time at his uncle’s office in Hull, including the entire winter break after completing his first semester. When his break ended in January 1999, he dragged himself reluctantly into his cousin Brian’s car and headed back to school. When they arrived, Shawn exited the car and headed to his dorm. He got as far as the building’s door, paused while he weighed the pros and cons, then walked back to his cousin’s car and asked Brian to take him back to his uncle’s company. Shawn didn’t tell his friends he was leaving. He simply dropped out.
Uncle John supported the move. He was so impressed with Shawn’s new project, he formed a company in May 1999 before a working version was complete. He made himself 70% owner of the company, a move that left Shawn stunned and confused. Uncle John defended the move. He was the one with the contacts, after all, as well as the business know-how. Besides, nobody would be interested in investing in a company that was majority owned by an 18-year-old.
Shawn signed the papers and got back to work. There was no money involved yet, he figured. 70% of nothing was nothing.
85,000 lines of code later, a rough and tumble beta version of Shawn’s new program was ready. He sent copies of the software he proudly called Napster to thirty friends in June ‘99. Shawn asked them for feedback and requested they keep the program on the downlow. Within a few days, 4,000 copies of the program had been downloaded from Napster’s site.
Everyone was amazed at how easy it was. Napster would field your request for a song, locate a fellow user who had it, then let you download it off their hard drive. Your files were available when you logged on. When you logged off, the files were removed. People could see, for the first time ever, who possessed the song they wanted, and acquire that song with a couple of clicks. Goodbye broken links. Sayonara missing files. Say hello to a revolution.
Uncle John pounced. He got in touch with all of his contacts and showed off his nephew’s cutting-edge software. By the end of the summer of 1999, he’d drummed up enough interest to fund Napster into the winter.
But Hull, Massachusetts was hardly the place for a burgeoning software company. So he and Shawn and a few of Shawn’s friends headed to San Mateo, California.
They set up shop above a bank in a dodgy strip mall.
Shawn and his friends couldn’t have cared less. All they needed was a few empty rooms where they could code in peace.
Soon after the move to San Mateo, Eileen Richardson came aboard. She was a venture capitalist who was hired to serve as Napster’s CEO. Her job was to grow Shawn’s labor of love into a bona fide company.
That was easier said than done. While Richardson did her best to promote Napster to investors, the slippery slope of copyright infringement, coupled with Uncle John’s maniacal claims that he and the company were bigger than Disney, convinced the big shots and their lawyers to smile politely and walk away.
But Napster’s new update, which dropped in October 1999, catapulted the company from rising star to unparalleled phenomenon.
It’s no secret that students lack money.
So it’s hardly a surprise that Napster exploded once they learned of its existence. Tens of thousands of users started signing up each day. It got so bad within a few short weeks, that universities across America started suffering bandwidth issues. Florida State claimed that Napster was gobbling up 20% - 30% of its bandwidth. The University of Illinois complained of losing up to 80%. By the end of November, over 130 colleges and universities had blocked the software from their servers.
This did not slow Napster down. Word of mouth continued to spread, and the furor it had caused on campuses reached the mainstream media. Shawn Fanning’s face was suddenly plastered across every newspaper and television report. He became a folk hero for his generation, a Gen X Robin Hood who stole from the rich and gave to the poor. All of a sudden the entire world learned that their favorite music was free.
Was this fair? Was it ethical? Just as fair and ethical, music fans argued, as the record companies who continued to cash in on the CD craze. Instead of passing on the savings they enjoyed courtesy of cheaper technology, the record companies jacked up their prices, charging up to $20 a CD, which usually contained one or two songs that were worth a damn, with the rest being nothing but filler.
The record companies, to no one’s surprise, staunchly disagreed. All they saw was their profits dwindling faster than their popularity.
Meanwhile, the team at Napster continued trying to improve their product, working round the clock, sleeping under their desks, only stopping now and then to sneak up to the roof of the strip mall and fire up a joint. They fully expected the record industry to embrace the new technology, as well as the flood of information they could take advantage of. Siding with Napster would enable them to see that a fan of Pearl Jam, for example, would also likely dig Neil Young. Plus, they’d have a way to reach them.
But the record companies weren’t interested in new ways. The old ways had served them well enough. Which is why in December 1999, three short months after their move to San Mateo, Napster was sued by the Recording Industry Association of America, along with 18 record companies.
The suit was filed by L.A. lawyer Russell Frackman.
It accused Napster of contributory and vicarious copyright infringement. It also claimed that the company was planning on turning a profit by attracting advertising and investment money through the illegal practices it enabled and encouraged.
Attached to the suit were two hundred songs available on Napster by artists like Elvis Presley, Jimi Hendrix, Bob Dylan, Bruce Springsteen, and The Beatles. The maximum penalty for copyright infringement was $100,000 per song. If the court decided that each song was a separate infringement, the penalties imposed could quickly reach trillions of dollars.
Napster argued that it was protected under the Digital Millennium Copyright Act. The Act had become law the previous year, after incessant lobbying from the music, movie, and publishing industries, who wanted to criminalize the practice of circumventing encryption. While the Act indeed does just that, it also provides a couple of exemptions. The first involves passive ‘service providers’ who serve as conduits for the transmission of information. The second protects services that index or point the way to information.
But where were the musicians in all of this?
Mostly they were divided. Artists like Moby and Chuck D sang Napster’s praises. On the other side of the debate were naysayers like Trent Reznor, Eminem, and Dr. Dre.
There was also another band that disagreed with Napster. So much so they decided to file a suit of their own.
On April 13, 2000, Metallica filed a suit claiming that Napster was violating copyright laws.
They also accused Napster of violating the Racketeer Influenced and Corrupt Organizations Act, otherwise known as the RICO act, which is typically reserved for members of the Mafia. Furthermore, the suit included Yale University, Indiana University, and the University of Southern California, which had allowed Napster to run on their networks.
Shawn couldn’t help but take the suit personally. Metallica was one of his favorite bands. But every time an artist spoke out against Napster, more and more people adopted the software. They couldn’t have cared less about copyright laws. They’d been abused and devalued by the labels for so long, it was time, they felt, to hit them where it hurt. And it wasn’t just teenagers and college kids anymore. Senior citizens, many of them in their eighties and nineties, were logging on and downloading jazz, blues, swing, and more. Napster’s user base grew to over 20 million, and showed no signs of slowing down.
Meanwhile, Metallica was facing a backlash. The suit they’d filed turned many fans off. Some sold their records in disgust. Others hacked into Metallica’s website and posted messages praising Napster.
Things got worse on May 3, 2000 when Lars Ulrich arrived at Napster’s office in a limo with his lawyer in tow. He came bearing boxes filled with the names of 317,377 people who’d been identified as having downloaded Metallica’s music.
Lars and his lawyer posed for the cameras and demanded that the offending 300K+ users be banned from Napster immediately. They were greeted by a chorus of boos. People accused Lars of being a sellout and yelled for him to fuck right off.
Lars entered Napster’s office undeterred, expecting to discover lavish surroundings, only to realize a few moments later that the building he’d entered was halfway decrepit. He rode the elevator in silence up to the fourth floor, where he was greeted by employees, including Shawn Fanning, who told the drummer they’d been fans of Metallica their entire lives. Ulrich’s shoulders seemed to slump. “I really don’t want to sue you,” he said. “All I want is for artists who want to get paid to get paid.”
Napster accommodated Metallica’s request, removing the 317,377 users the band had identified. Napster wanted to prove that they respected musicians and their work. But Lars and the rest of the band weren’t satisfied. Getting rid of the users was nowhere near enough.
It all came to a head on July 26, 2000.
In a courtroom opposite San Francisco’s City Hall, U.S. district judge Marilyn Patel listened to arguments by lawyers for Napster and the RIAA. The 40-seat room was so packed with attorneys, many of them had to sit next door and follow the proceedings on CCTV.
Two hours later, Judge Patel ruled against Napster. While she agreed that Napster itself wasn’t trading illegal files, they’d nevertheless made it possible to do so. “If you design a site to enable infringement,” she said, “you can’t stand by and claim you don’t know what’s going on.” Napster was given two days to comply with the judge’s ruling; two days to shut it all down.
Tears welled up in Shawn Fanning’s eyes. His legal team immediately filed a motion with the Ninth Circuit Court of Appeals.
Meanwhile, a dozen record industry lawyers celebrated at a restaurant called Jardinière. One of them tinkled the ivories on the house piano. Another serenaded the crowd with Gershwin’s, “They Can’t Take That Away From Me”.
News of the court’s decision spread. Forty-six employees felt their lives hanging in the balance. The number of Napster users soared. They wanted to download as much free music as they could before the lights went out. “Napster” became the most searched for term on the internet, ending a 30-week run by “Pokemon”. On July 28, as the deadline to shut down rapidly approached, 22 million users engaged with $400,000 of software.
Nine hours before it went offline, the appeals court decided that Judge Patel’s ruling had raised “substantial questions”. They asked for more time to review the case. Napster’s life had been spared.
Despite the lawsuits and artists who disagreed, Shawn Fanning remained a hero to most.
He appeared on the cover of Time magazine, as well as every other national publication. His popularity skyrocketed when he appeared at the 2000 MTV Music Video Awards. The crowd went nuts when he came onstage and stood next to Carson Daly wearing a Metallica t-shirt. The camera cut to Lars Ulrich who was in the audience. He was not amused.
One month later, on October 9, Shawn made another appearance, this time before the U.S. Judiciary Committee. The hearing was held in Provo, Utah, home to Senator Orrin Hatch, who served as the committee’s chairman. Hatch was a powerful and conservative Republican, but he was also a songwriter and musician, one who had little love for the record industry. He liked what he saw in Shawn and Napster, and approved of a community that bypassed the control music executives had long enjoyed.
Hatch had no say in the court’s decision, but a ruling could be reduced to irrelevancy if Congress decided to change the laws that the RIAA claimed Napster had broken. Hatch wasn’t ready to initiate such action, but he was savvy enough to realize that Napster’s users, now at 30 million and counting, represented a political force that was not to be ignored.
Three weeks later, on October 31, Shawn shocked the world and the record industry.
He announced that Napster had entered into a partnership with Bertelsmann AG, owner of record label BMG, as well as publisher, Random House. The German conglomerate, who was originally part of the RIAA’a suit, had decided it was better to join Napster than to fight them. They believed that file sharing would become a permanent part of the future, and hoped that Napster would help to boost their flagging sales.
While some fans balked at the move, Napster’s mounting legal fees left Shawn with little choice. Despite the software’s popularity, the slippery ground it stood on legally kept most investors away. With Bertelsmann dropping out of the suit and pumping much needed funds into the business, Napster stood a fighter’s chance.
The plan moving forward wasn’t clear, though talk of a minimal subscription fee seemed to be the way to go. Napster wouldn’t be free anymore, though it would be inexpensive. Users, in turn, would be able to download as much music as they wanted from Bertelsmann’s massive library.
The deal was a hedge against the looming decision from the Ninth Circuit Court of Appeals. If Napster lost, a backup plan would be in place. If they won, users would continue downloading and sharing music for free, while the subscription model would head back to the drawing board.
The Ninth Circuit Court of Appeals delivered its verdict on February 12, 2001.
The vote from the three-member panel was unanimous. Napster was guilty of aiding and abetting the violation of music copyrights.
Napster requested another appeal. It was denied in June 2001. Senator Hatch continued to support Napster, but he was unwilling to get the government involved.
Napster was ordered to stop sharing copyrighted music. Shawn and his crew worked to do exactly that. The folks at Bertelsmann tried to hammer out a subscription system that would appeal to Napster’s fans. Those fans, however, had already begun to migrate to Napster clones like Gnutella and IMesh, which had popped up in Napster’s place and learned from its mistakes. Their programs were solely online, without a central server indexing songs, which made it impossible to track them down.
Meanwhile, the major labels announced that they would be developing their own peer-to-peer software, as well as their own subscription models.
Napster returned to Judge Patel on June 28. Their revamped software was able to stop 99% of illegal downloads. That was the best they could do, they said, given the current technology. Judge Patel was incensed. She demanded they do better or call it quits.
Three days later, on July 1, 2001, Napster went offline for good.
Shawn Fanning was 20 years old when he found himself taking on the music industry.
He fought as long and as hard as he could: a modern-day David against Goliath.
Instead of embracing his new technology, instead of helping Napster develop new and profitable paths for artists, the courts remained entrenched in the past, agreeing once again that if anyone held the copyright on cheating musicians, it was the labels who signed them.
You documented that period in time perfectly Sonny. As we got into the 90s the music business was changing. I saw it from the inside and realized the “gravy train” was slowing down. I was changing from working in the music business to sports and security for the venues themselves. I was mentally and physically exhausted looking for an escape. When the Napster situation hit I knew it was over. That genie was never going back into the bottle, no matter what happened to Napster. My daughter was immersed in the tech world and knew the file sharing situation from the inside. Napster might be just a memory now but the effects it had on the entertainment industry are permanent. I remember sitting in an office in a little club in Phoenix with Lars talking to him about the fallout they were getting. Every time the phone would ring he would pick it up and say “Mason Jar (club name), this is Lars, the only straight member of Metallica”. Of course no one believed it was really him. Good times. 😀 Another superb offering.
Holy mackerel, what a great article.😎😎