Napster - Napster Software Developed By Shawn Fanning, Record Industry Opposes The Controversial Service, 1999-2001

Napster achieved widespread celebrity as a peer-to-peer file-sharing service that allowed people to trade compressed MP3 computer files for a wide range of popular music. Napster's browser software, which was installed on more than 40 percent of the world's personal computers in early 2001, enabled users to locate, share, and swap compressed MP3 music files. Users simply sent in a request for a song. Napster software then checked its database and located the MP3 file with the song on another user's hard drive. The MP3 file containing the song was then sent from one user to the other.

Napster's file-sharing system can be credited, at the very least, with motivating the major record labels that effectively control the distribution of popular music to find alternatives to their hard copy, full-price music distribution system. Napster's popularity made the recording industry realize that it would need to find a way to distribute music to consumers in other formats, notably online over the Internet, while still protecting its intellectual property.

Napster's wildly popular service was also credited with boosting the sales of a wide range of computer gear, including CD burners, portable MP3 players, and personal computers equipped with fancy speakers. By 2001 CD burners had become standard equipment on 70 percent of all computers sold, according to The Washington Post. Napster was also a factor in the growth of broadband services, such as cable and DSL Internet service, which grew by 150 percent in 2000. A broadband connection made it possible to download songs much faster than with a dial-up modem. The Consumer Electronics Association, in support of Napster, argued that closing Napster would discourage innovation in the marketplace.