Napster was first launched in June 1999, built by Shawn Fanning
while he was a student at Northeastern University in Boston. The
original service was a free peer-to-peer file sharing network, allowing
users to download mp3 files from the network of other users without
going through a centralized storage server.
When Napster first came out you got to hear music that you had not heard in years. You also got introduced to new music that you had never heard before. Napster made it possible to discover music. As most will recall, you could go into someone's computer and check out their entire music collections. Everyone who was on Napster was exploring new music as well as their old favorites.
Then Napster was ruled illegal and got shut down by the traditional main stream record companies. Most people who admitted to using Napster said that they had purchased CD's after being introduced to the music on Napster.
The RIAA served Napster with a lawsuit for copyright infringement in December 1999 for $20B.
Napster lost the suit in the Ninth Circuit Court, and settled in 2001
to pay $26M to music creators, and a $10M toward future licensing
royalties.
"We've heard this one before, over and over again: pirates are the
biggest spenders. It therefore shouldn't surprise too many people to
learn that shutting down Megaupload earlier this year had a negative effect on box office revenues. The latest finding comes from a paper titled: 'Piracy and Movie Revenues: Evidence from Megaupload.'"
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