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Online Music Distribution in a Post-Napster World Case Study Background Information • Service has been shut down since July 2001. • June 3, 2002, Napster Filed for bankruptcy. • October 29th, 2003, Napster will re-open with its new pay service. • Conflicting rights: 1. The rights of artists and record labels to receive payment for their labors 2. The rights of consumers to share their favorite songs with fellow internet users 3. The rights of copyright holders to protect their intellectual property 4. The rights of entrepreneurs to push the limits of technology • By 2002, a study found that 13 million of U.S internet users were downloading music they didn’t previously own. • The Napster service reached its peak usage in February 2001, when an estimated 80 million people were members of the Napster community, and over 1.5 million people were using the service at any given time. • Recording Industry Association of America (RIAA), filed suit representing the interests of the record labels regarding fair compensation. • The band Metallica followed with an additional lawsuit against Napster, claiming the file swapping was piracy. • Napster defended their interests by pointing to the Audio Home Recording Act (AHRA), which allowed consumers to record and share music with their peers for noncommercial purposes.
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