This episode originally aired on Spectacular Failures.

In less than two years, Napster became a global sensation... and then record labels and multi-platinum artists brought it crashing down. But in its short lifespan, Napster transformed our ideas about how we consume music, and how much we're willing to pay for it. This story comes from the podcast Spectacular Failures.

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Georgia Overdrive by Truck Stop
Pushing My Luck (Instrumental) by 1WayTKT

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View Transcript ▶︎

You’re listening to Twenty Thousand Hertz. I’m Dallas Taylor.

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If you spent any time on the internet in the early 2000’s, there’s a good chance you’re familiar with Napster. I have to admit, I may have even downloaded a few songs myself… very slowly, one track at a time. Back then, It didn’t feel totally legitimate, but it also wasn’t clear that it was illegal, either. It felt like this magical portal to all of the amazing music that was out there, just waiting to be discovered. Of course, within a couple of years, that portal was completely closed off. But even though Napster crashed and burned, everything that’s come since then—iTunes, Pandora, Spotify… they all feel like they’re part of a direct line that goes right back to Napster. Because in a lot of ways, they are.

It turns out, there is a wild story behind the rise and fall of Napster. It’s a story about a music industry that was completely unprepared for the internet, regular people eager for a new way to hear music, and young innovators who were in way over their heads.

[music out]

This story comes from the podcast Spectacular Failures. Here’s host Lauren Ober.

My pal Alex Lewis has always been into music. He bought his first album — the Barenaked Ladies Stunt — when he was nine. You know the one...

Alex Lewis:...that like, weird chickety China the Chinese chicken song on it. That was the first album that I ever acquired.

My first album was 1990’s “Gonna Make You Sweat” by C+C Music Factory, so we’ve all got our skeletons.

After that first Barenaked Ladies purchase, Alex collected dozens of CDs and organized them in binders. Then one day Alex’s dad called him over to the family’s iMac computer.

Alex Lewis: I remember him just being like, Alex, come check this out. And he's like, you can type in any song into this program, and you can just get it and it's coming from someone else's computer.

The program Alex’s dad was using was called Napster. It was like some secret portal that opened into an endless world of music that Alex could only dream of. And it facilitated some serious father/son bonding.

Alex Lewis: It was sort of like an activity that we did together, at least at first. Where we would just like try to come up with things to find.

Lauren: And what were you guys like, looking for in the days when you and your dad were on it together?

Alex Lewis: So my parents are both self-described deadheads, they're really into the Grateful Dead. And, and so my dad would be like, let's see if they have like, so and so from like the 1977 Cornell concert, or whatever.

Lauren: He was looking for bootlegs!

Alex Lewis: Yeah, exactly. And he was able to find a lot of that stuff.

Though, sixth grade Alex was developing his own musical tastes.

Alex Lewis: I would kind of just like have this continual list of things I was searching on it. And like around sixth grade I was introduced to ska. And I remember like for my birthday, my friend got me a Mighty Mighty Bosstones CD.

Lauren: Yes!

So Alex used his dad’s Napster account to download all kinds of ska bands. Also, a lot of 90s hip hop. The options felt infinite and Alex couldn’t stop searching for new music.

Alex Lewis: I was obsessed with it. I would definitely sit on my dad's computer until he told me to get off and stop downloading songs.

Given the slow internet speed at the time, Alex figures he only downloaded a few hundred songs. But that’s like dozens of albums’ worth of music for free. Which for a nine-year-old without a lot of disposable income is a pretty great deal.

With the click of a mouse, Alex had access to all this music that he didn’t pay a penny for. And it changed the way he thought about music.

Alex Lewis: After Napster, I almost felt like entitled to getting music that way. Or like, or being able to find what I wanted.

Lauren: Like, did it ever occur to you that somebody paid for this?

Alex Lewis: No. No especially then, no. It kind of felt to me at that time that, like this new program appeared and like you could get it easily and all of a sudden you are like sharing the music files with people all around the world. And I don't know if people like thought it was illegal at first. And, you know, my parents are both lawyers.

At the time Alex was using Napster, it wasn’t exactly illegal. But it kind of felt like it. It was novel and exciting and terrifying all at the same time.

In order to understand the music world that Napster was operating in, you first have to understand what came right before.

The 90s were the true salad days of the record industry. Albums were selling 8, 9 million copies right out of the gate. Alanis Morrisette’s 1995 ode to angst, “Jagged Little Pill,” sold 13.5 million copies in the first few years of its release. I mean, you outta know.

By comparison, 2019’s bestselling album —Taylor Swift’s Lover — sold just over 3 million copies. Aww, poor Tay. JK she’s doing fine.

There was a reason album sales were so good in the 90s.

Steve Knopper: If you wanted a song that you liked from the radio…

Steve Knopper: There was only one way to get that song, which was to go to the record store and buy the $18 CD that song was on.

That’s music journalist Steve Knopper.

Steve Knopper: This was the era of, you know, boy bands and teen pop and Britney Spears and so forth and nothing, nothing against those artists. I have great respect for that, for pop music. But I mean, I think it's safe to say that a lot of albums were coming out that had, you know, just the hit or the two or three hits and then a lot of filler.

But obviously, if you’re a person who wants to consume music kind of a la carte, the traditional method of buying entire albums to get the two songs you like isn’t great.

Steve Knopper: And so, you know, right at that point, it was kind of ripe for somebody to come along and disrupt that.

In the mid-1990s, the internet was nothing like it is today. There was no Google or Youtube or Wikipedia. It was basically just some snail-slow dial-up chat rooms with a bunch of creeps in them posing as kids. I mean, I’m sure it was more than that, but as a child of the 90s that’s my recollection.

But in 1998, a college freshman and metal head named Shawn Fanning, saw the possibility that this nascent web held.

Steve Knopper: You know, he had gone on to these message boards online through Netscape or whatever it was. And just kind of found out, oh, there's these things called mp3s. I can go to this website and download some, but it was just super inefficient.

Basically, if you wanted to share music with your friends over the internet, you didn’t have a ton of options other than sending them via email. And anyone who ever tried to share a large file on janky dial-up knows that that process was beyond tedious.

Fanning thought there had to be a better way.

Steve Knopper: He was studying software at Northeastern, I believe. And he was also kind of like, I wouldn't say he was a master hacker, but he was sort of part of that culture. And he just kind of went online, started tinkering around, and he said, you know, I should invent something that makes this whole process easier.

Now Fanning was no stranger to the emerging web. Before matriculating at Northeastern University in Boston, Fanning had been living with a bunch of programmers who were working with his uncle at a startup called Chess dot net.

Ali Aydar, a founder of chess dot net, remembers Shawn in those early days.

Ali Aydar: He crashed in our living room. And during that summer, we taught him how to drive. I went and bought him a programming book. And we taught him some of the first things you need to know about programming and kind of set him off and running.

From the photos of that time, Fanning looked like a super 90s bro. Nautica t-shirt, University of Michigan baseball cap and big baggy pants. But…

Ali Aydar: Not at all. Super shy, very unassuming, very humble. Didn't like to talk a lot.

In August of 1997, Aydar’s chess startup began to fall apart and all the guys living in that house went their separate ways. But just the few months Fanning spent living with them had a huge impact.

Aydar and Fanning casually stayed in touch. Then a little more than a year after they had all moved on, Fanning sent Aydar a note on AOL instant messenger about a business idea he had. It was called Napster. So-called because that was Fanning’s screen name.

Ali Aydar: The way he characterized it, beyond the technical, was it's a way for people to efficiently share content with each other.

Basically, the bare bones was that Napster users would convert their CD collections to mp3s on their computers. Then, through the interface that Fanning was cooking up in his dorm room, users from all over the world would be able to connect and swap those mp3 files. With Napster you could exponentially grow your music collection in a matter of days. For free.

Aydar remembers Fanning was all in on the idea. He thought his music file-sharing idea would change the world.

And Aydar was like, mmm…

Ali Aydar: I didn't think the idea was going to work. And I thought it was a bad idea.

The way Fanning and his business partner Sean Parker envisioned it, Napster would only facilitate downloads between users’ computers. Napster itself wouldn’t house any of that music on its own servers. This would be a purely peer-to-peer operation.

Ali Aydar: The thought that people would open up their hard drives for files to be shared from their own hard drives, I just thought was ridiculous. Just from a security perspective.

Aydar told Fanning not to monkey around with this Napster idea — it wasn’t going anywhere. And he encouraged the teenager to stay in college — advice Fanning did not take.

Fanning used his friends and family as guinea pigs for his new file-sharing idea. By 1999, they had worked out the initial kinks and Fanning and Parker unleashed Napster on the world. It was a buffet of free music and the kids were hungry.

Steve Knopper: Once it hit the Internet, it just went viral immediately. It was just people went, oh, wow, I can do this.

However, creating a piece of free software and releasing it to the masses, does not a company make. Businesses need things like a plan and income.

At the time, Eileen Richardson was a venture capitalist who knew a good internet opportunity when she saw one. To Richardson, the beauty of Napster was that it helped people find all kinds of new music that they might not otherwise be exposed to.

Commercial radio and music video channels like MTV and VH1 for the most part only played major label hits. And Richardson says this never sat well with her.

Eileen Richardson: The record industry, they pick who they think is gonna be famous. They package that person and then they pay off the radio stations and you get to hear it. And after you hear a song five times, you all of sudden think you like it. I mean, it's that simple.

Richardson was taken by the technology. She loved the kind of smorgasbord listening experience and Napster’s potential to break new musical artists. She saw the chance for a profitable business there. So much so that she and a colleague ponied up a few hundred thousand dollars for the fledgling venture.

Richardson then became the company’s first CEO and immediately set about building a team and moving the Shawns — Fanning and Parker — from Boston to the West Coast. Despite his initial skepticism, Ali Aydar came on board to build Napster’s search engine.

Soon, after the teens got a few adults in the room, the user numbers exploded.

Eileen Richardson: A million took time. Twenty million felt like it happened overnight.

Now the problem with this kind of success is that you might draw some attention you don’t want. One group that sat up and took notice of Napster was the Recording Industry Association of America, or RIAA. They’re the music industry’s lobbying arm.

Steve Knopper: They said to each other, wow, this is like somebody cracking the locks on all the Tower Records and looting all the CDs.

But, by the time the recording industry truly grasped what millions of users downloading songs for free meant for the music business, it was too late. Every sleepy college kid in every gross dorm in America was using Napster. Because — have you walked across a college campus? — there’s nothing college kids like more than free stuff.

Here’s MTV’s Gideon Yago chatting with students at Indiana University after Napster began to blow up.

CLIP [MTV]: So how many mp3s do you have on your computer?/ About 600./ Maybe like 100 or something./ Um six or seven thousand./ Come again?/ Six or seven thousand. / For real?/ Yeah. They’re all legit./ How many mp3s do you have on your computer?/ Probably like 300. /For real? Where’d you get them from?/ Truthfully, most of them from Napster./

So if you only take the music Josh, Michelle, James and Damion downloaded, that’s like 500 albums worth of music, which at $18 a pop is about nine grand in lost sales. Now multiply that by all the college students at campuses around the country and you’re looking at a world of hurt for the record companies.

Steve Knopper: And then at a certain point, Napster became mainstream. It went into the pop culture, you know, zeitgeist, if you will.

Napster was becoming a household name. And Fanning, the shy, reserved high school kid that Ali Aydar met a couple years before, was now a sort of a teenage music tech celebrity. Soon he and Parker were all over the media.

Here they are in an MTV interview from back then. Parker does most of the talking, while peering into his crystal ball.

CLIP [MTV, Sean Parker]: We think that when music transitions to digital distribution, people will pay to receive music to their cell phones or their portable devices, to however music is pumped or piped into the home digitally, those...that will be monetized. And artists and labels will be able to make money off of that.

They said while sitting on the roof of a car, drinking Red Bulls. Like true startup founders.

Now what Fanning and Parker were suggesting, this was the roadmap to profitability. All the free music and lost sales would ultimately force the music industry to play ball and engage with digital distribution. Napster, innovative chaps that they were, already had the users and the platform for that distribution. The record labels would provide the music. And the end result would be a paid service kind of like a proto-iTunes or Spotify.

That was Napster’s goal. But that’s not what it was in the early days. In the eyes of the recording industry, Napster was just stealing music. They were pirates. And you know how you vanquish pirates? You sue the britches off of them in an American court of law. Yar!

[music out]

[music in]

Record labels weren’t the only ones who had it out for Napster. Some of the biggest artists in the world were about to jump into the fight. That’s coming up, after the break.

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MIDROLL

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Napster began as an obscure community of people looking for free music, but in just a few years, it transformed into a global sensation. Around the world, people were making it clear that they wanted to get their music digitally, preferably for free. But all of that attention came at a cost, and it didn’t take long before record labels—and some of their biggest artists—had Napster in their sights.

[music out]

Here’s Lauren again.

In 1999, Portia Sabin joined an all-girl punk band called The Hissyfits.

Portia Sabin: I remember when we were all in our 20s we were like really earnest and we were like, no, we're gonna make it as a band, man.

Making it as a band in the late 90s, early 2000s, meant touring and putting out albums. And hopefully getting your music reviewed by one of the excellent music journalists working at publications like “Rolling Stone,” “Spin” or “Alternative Press.” One of those writers was Greil Marcus. He remains one of the most prominent music critics around.

Some time in 1999, Marcus heard the Hissyfits’ song “Something Wrong.”

[SOMETHING WRONG]

He wrote that the song first came to his attention after a radio DJ in Minneapolis plucked the vinyl single out of a bin because she “liked the sleeve: three women dressed in party slips, one wearing leopard-skin, another a tiara, the third a dog collar.” Which really is the most 90s look ever.

Portia Sabin: Greil Marcus was a very important writer. People really cared about, you know, his opinion. And he wrote an article in Interview Magazine that was titled “Pop When It's Perfect”. Not, not that I've memorized it or anything, like I do remember that.

The fact that Greil Marcus would decide to write about the Hissyfits? That was a total game-changer.

Portia Sabin: That's when sort of the phone started to ring and people were...more than just our friends were asking us to tour with them and to play shows with them.

The “Interview” magazine piece got the Hissyfits the type of exposure that tiny indie bands dreamed of. They cut a record and did an ad for Levi’s and toured around the country in a green two-door Ford Explorer packed to the gills with amps and merch. After their tour, legendary rocker Joey Ramone asked the band to play at his birthday party with Rock ‘n Roll Hall of Famer Ronnie Spector. Which is bonkers.

That’s how much clout these tastemakers had.

Portia Sabin: You know a critic like Greil Marcus had an opinion about things and they would be very clear about their opinion. And sometimes I would read a review and I wouldn't buy a record because I’d be like, ugh, so and so thought it was terrible. And they should know.

But all this started to change with the arrival of Napster. Listeners could now download an album for free and just decide for themselves if they liked it or not. And that meant that music’s historical gatekeepers — the critics and the labels — were going to have a lot less sway. And that, combined with plummeting record sales, scared the pants off of the industry.

All this signaled that a huge upending was happening. (See, I didn’t say disruption). Kids could access whatever music they wanted, whenever they wanted and it would be free. Joe Record Exec and John Q. Critic would no longer be the ones calling the shots.

Jeff Gold was a V.P. at Warner Brothers Records in the years just before Napster hit big. He’d been banging on about music and the internet for ages, hoping to find a way for the two to co-exist. He remembers in 1993 a panicked assistant tore into his office to tell him that Depeche Mode’s album “Songs of Faith and Devotion” had been leaked to an AOL chat room.

Jeff Gold: I went, wait a minute, this isn't bad. This is great. We spend all our time trying to get kids excited about music, and then here it was happening on its own.

After the leak, Gold’s team started their own rudimentary internet talk show on AOL. They wanted to own this emerging online space. They called the show CyberTalk and it featured different Warner Brothers artists doing text chats with fans. One chat with Depeche Mode was apparently so popular, it crashed AOL.

But Gold’s bosses were like….don't forget your day job.

Jeff Gold: In the early days, I was shouting into the void. Geffen Records was the second company to have an online presence fairly soon after us. But it wasn't anything anybody was doing. And I was probably the most senior person in the record business thinking about this stuff.

Most of the top record execs were two decades older and didn’t have computers on their desks, let alone know how to use them. So basically they were my dad. And they didn’t see digital music as the wave of the future, especially while CDs were still flying off the shelves. Compact discs forever!

All this meant that when Napster came on the scene, the record companies were like, We don’t know what this mp3 sharing thing is all about, but no. No way is music going online, and no way are you getting it for free.

And the kids were like, um yeah we are, gramps. And you can’t stop us because you don’t even know what a mouse is. Ya burned.

Soooo...Napster posed an existential threat to the record industry. But you know what posed an existential threat to Napster? A little thing called copyright.

Jennifer Jenkins: Copyright is a branch of law that gives creators of all kinds — writers, filmmakers, musicians, poets — exclusive rights over their creations. In many cases, those rights don't go directly to the creators, but are owned by the distributors, the publishers, the labels, because those are the entities that historically have gotten their creative works from the authors to the public, to us who are able to enjoy them.

That’s Jennifer Jenkins. She’s a professor at Duke Law School, where she also runs the school’s Center for the Study of the Public Domain. She’s also the author of “Theft! A History of Music” — a delightful graphic novel about musical borrowing. So copyright is totally her jam.

Copyright came into being in the U.S. in 1790. It’s right there in the Constitution — Congress has the power to pass laws protecting intellectual property and its creators.

Since music protections were added to the Copyright Act in 1831, the medium has always created some challenges. This is largely due to the fact that technologies for listening have changed radically over the years.

Jennifer Jenkins: The story of music is a story of new and disruptive technologies. And, you know, the law sort of struggling to catch up with them.

The player piano, the gramophone and the radio all pushed the bounds of music copyright law. Obviously, so did Napster.

Copyright was at the heart of the RIAA’s beef with Napster. Basically, you can’t offer up all these songs for free because you don’t own them. The end. But it wasn’t quite that simple.

Jennifer Jenkins: We know that many Napster users were totally infringing copyright law because they were uploading and downloading music, whole songs without permission. But under what circumstances do we hold Napster accountable for the actions, the copyright infringement of its users?

Napster’s argument was, hey we’re just providing a neutral platform for users to trade songs. You know, like you’d trade cassette or VHS tapes with a friend. We’re not a music repository.

But as RIAA big boss Hillary Rosen explained in a local news interview, she wasn’t buying it.

CLIP [Hillary Rosen]: You can share music with a friend in an, you know, email, in an instant message, in a hundred different ways. That’s no different than tape trading has been for years and years. The real difference is that a peer-to-peer system that would allow somebody to have thousands of files up on a directory distributing to millions of strangers. I just think that there’s no analysis that says that that’s right, that’s fair or that’s sharing.

Now this is where it gets really tricky to hold Napster liable.

Jennifer Jenkins: We have to employ something called secondary liability. When do you hold a technology producer, someone who provides software accountable for the activities of someone else, your users? The Copyright Act is silent on that. Secondary liability is not in the Copyright Act.

To the RIAA and to the musicians fighting against what they saw as blatant copyright violations, the technology producer should absolutely be held liable for copyright infringement. Back then, musicians like our friend Portia from The Hissyfits made their money in basically two ways: touring and album sales. And if people weren’t buying albums because they were getting them for free on Napster, then that’s a major revenue stream dammed up.

So the musicians fought back. Leading the charge was Metallica’s drummer, Lars Ulrich. In July of 2000, he testified in front of the Senate Judiciary Committee on the future of digital music.

CLIP [Lars Ulrich]: In a 48-hour period, where we monitored Napster, over 300,000 users made 1.4 million free downloads of Metallica's music. Napster hijacked our music without asking. They never sought our permission. Our catalog of music simply became available for free downloads on the Napster system.

And this was a problem because...

CLIP [Lars Ulrich]: ...Most artists are barely earning a decent wage and need every source of revenue available to scrape by. Also keep in mind that the primary source of income for most songwriters is from the sale of records. Every time a Napster enthusiast downloads a song, it takes money from the pockets of all these members of the creative community.

Ulrich wasn’t the only musician opposed to the idea of Napster. Dr. Dre was a vocal opponent as were Christina Aguilera, Garth Brooks, Bon Jovi, Sarah McLachlan, Hanson, Alanis Morrissette and our pal Alex Lewis’ favorite 90s band, the Barenaked Ladies. All those folks were part of a loose group called Artists Against Piracy.

Metallica and Dr. Dre ultimately sued Napster. The Metallica suit claimed that Napster “devised and distributed software whose sole purpose is to permit Napster to profit by abetting and encouraging.” Dr. Dre’s position was even clearer: “I don't like people stealing my music.”

But other artists like Moby, Henry Rollins and perhaps most famously Chuck D felt like this was the direction music needed to head in.

CLIP: [Chuck D on Charlie Rose]: I look at Napster as a situation, or the connection between file-sharing, which this is, and downloadable distribution as power going back to the people. I also look at this as being a situation where for the longest periods of time, the industry had control of technology. And therefore the people were subservient to that technology. And at whatever price range the people would have to pay for it.

The whole debate over Napster crescendoed in September of 2000 when Shawn Fanning appeared at MTV’s Video Music Awards wearing a Metallica t-shirt. He was clearly trolling the band, who sat in the audience rolling their eyes. Meanwhile, I’m sitting in my chair rolling my eyes at Carson Daly’s intro.

CLIP [Carson Daly at MTV VMAs]: Every day I find myself smack-dab in the middle of a music war between fans. I try to justify hip-hop to pop, alternative to mainstream and rap to rock. But what I do is nothing, and the battle to which I’m a part of, is nothing compared to the battle of this next guy’s fight. In the last year this teenager has developed the technology that has revolutionized the way we all get our music and he is here tonight. Ladies and gentleman, creator of Napster, Shawn Fanning.

Just a month after Fanning paraded across the VMA stage, he was in a courtroom dealing with a massive lawsuit filed against Napster by 18 record companies — all members of the RIAA. They claimed that Napster’s service allowed its 20-million-plus users to violate copyright and was thus responsible for the infringement.

Eileen Richardson says she tried to reason with the labels and make deals that would keep them alive, but it was a non-starter.

Eileen Richardson: Hilary Rosen was running the RIAA then and and she, she was on sort of a war path meeting with all the artists like look at this, look at this, look at this. You know, life as you know it is about to end. But, you know, when I talked to her, I was like, the horse is out of the barn. Like, you can't go back. Let's like figure something out.

But it wasn’t happening. The legal battles against Napster moved forward. So the company had to get strategic.

One of Napster’s defenses was the VCR. See, back when the VCR came out, film and television execs were all clutching their pearls. Anyone with a VCR could record anything they wanted from the TV. And that, they figured, violated their copyrights and would be way bad for business.

The VCR manufacturers, on the other hand, were cool cucumbers. They were just like, look all we’re doing is making a device. And people could be using that device for totally legal recording.

In 1983, the two sides made their arguments in the landmark Supreme Court case, Sony Corporation of America v. Universal City Studios, Inc.

CLIP [Sony verbal arguments]: We didn't do a single thing to affirmatively induce the copying of Respondents' programs, unless you want to count the bare act of making the machine. There was nothing between any of the Petitioners and the Respondents-- /Well, what if the rule... is it the rule that if you know the machine is going to be used for an infringing use and you sell it, is that enough? /--If you know that the machine is going to be used and know that the use is to be infringing, that is a facet of a contributory infringement test.

Ultimately, Sony prevailed. The court decided that the company could not be held responsible for VCR owners’ use of the device. So Napster pulled that precedent out in its own court case. And that argument almost would have worked except for three little snags.

The first was that Napster allowed millions of users to download a bajillion songs. The sheer volume of copyrighted material being shared meant that Napster was very different from a VCR, which was only occasionally used to record a TV show or a movie.

Then there was the issue of Napster’s search index, in that they had one. Prof. Jennifer Jenkins:

Jennifer Jenkins: So like, say I was looking for Madonna, right? There was a search index where I would go. And so they had that index so they would know that there was a song called, you know, Madonna “Like a Virgin” on it.

Basically the courts held that Napster knew copyright infringement was happening because they had a search index full of copyrighted material. So while the service wasn’t engaging in copyright violations directly, it was giving violators a big boost.

There was one final whoopsies that really banged the last nail in the Napster coffin. And that was a little internal email Sean Parker sent. Specifically one sentence: “[W]e are not just making pirated music available but also pushing demand.” The operative word in that sentence is “pirated,” says Steve Knopper:

Steve Knopper: Sean Parker in his private statements and in his e-mails, was actually directly acknowledging that Napster was a medium for piracy. And that turned out to be important in court later because the record industry busted him for it.

At this point, Napster didn’t have much of a leg to stand on. But the judge in the case offered them a lifeline. He basically said, if you can prevent copyrighted material from being downloaded using Napster, you can stay afloat. If you can’t, you’re dunzo.

And, they couldn’t. But who would want a public domain-only Napster that mostly just had old classical music, educational recordings and a million versions of the National Anthem?

The service’s main selling point was free access to a massive inventory of songs. So by July 2001, Napster was functionally done. It had settled its cases with Metallica and Dr. Dre, and agreed to a settlement with the RIAA for copyright violations.

When it ended, there was a feeling of disbelief in the ranks. Ali Aydar says Napster really thought the labels would get on board.

Ali Aydar: We honestly felt like they would come around, that they're just not understanding the power of this. They're not understanding the technology behind it. They're not understanding what they could do with this and how important this is for them and that, gosh, if they shut us down like there are going to be others and those others aren't going to be friendly like we are.

But the labels were like, nah we’re good.

This is where the Napster story typically ends—music industry takes down bad boy file-sharing pioneer. But a lot of Napster’s wounds were self-inflicted. Shawn Fanning’s uncle owned 70% of the company and that caused some bad vibes. Because it meant company executives from CEO to the Shawns themselves had no real power to make any business decisions. And that led to a lot of executive turnover, which isn’t great when you’re negotiating with music’s biggest power players.

Still, Napster unlocked a desire in music lovers. Not only did they want access to a huge volume of songs, but they also wanted to access it whenever they wanted and for practically nothing. And that meant that even when Napster failed, there would be a million other services waiting in the wings to fill the need.

Jeff Gold: There's a Bob Dylan lyric about doesn't take a weatherman to know which way the wind blows. It wasn't as if this wasn't obvious to everybody other than the people in the record business. And so while they're furiously trying to shut down Napster, they're all these Napster clones popping up everywhere and they're playing a game of whack-a-mole. And myself and a lot of people I knew were going, this is just absurd. Why don't they just own it instead of, you know why don’t they buy Napster? There can be no clearer evidence that people want their music digitally.

In the wake of Napster’s demise, a bunch of copycat peer-to-peer file-sharing services popped up — Grokster, Streamcast, Limewire, Gnutella, Kazaa, the list goes on. Years later, they were supplanted by iTunes, which allowed users to legally buy music a la carte for a dollar a song.

Today, the vast majority of music listening happens via some kind of streaming service like Spotify, Pandora or Apple Music. In 2019 — 20 years after Napster got off the ground — Americans streamed more than one trillion songs. And record stores? What even are those? In the post-Napster decade, more than 4000 record stores closed in the U.S., including massive chains like Tower Records, which shuttered in 2006.

So while Napster only operated for two years, its influence seems immeasurable. Napster cracked open the door to a world of music free of physical media. And just plain free.

Steve Knopper: People made it clear beginning in, like, 1997 that they were only going to listen to music for free. Many, many people, millions and millions of people around the world. That, as we've seen with the popularity of YouTube, has never changed. There is a contingent, a large percentage of people who are going to want to get the music for free.

Napster caused massive upheaval in the music industry. But the music industry has been reinventing itself for as long as there has been an industry. It has weathered existential threats and technological changes and still managed to keep going. Albeit in a much-diminished capacity these days.

Today musicians might make a fraction of a cent on every song streamed. But the number of income streams has grown exponentially. And technology has allowed artists to reach audiences directly. Music is an art and a business and it will never be insulated from the future. So with that I say, bring it robots.

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This story came from the spectacular podcast called Spectacular Failures. In each episode, Host Lauren Ober tackles an epic business failure, and what could have been done to avoid it. Subscribe to Spectacular Failures right here in your podcast player.

Twenty Thousand Hertz is produced out of the studios of Defacto Sound, a sound design team dedicated to making television, film and games sound incredible. Find out more at defactosound.com.

Spectacular Failures is a production of American Public Media. It’s written and hosted by Lauren Ober, and produced by Whitney Jones. The show’s editor is Phyllis Fletcher, and David Zha is the assistant producer. Their theme music is by David Schulman, and original music comes from Jenn Champion and Michael Cormier. Kristina Lopez is their Audience Engagement Editor and Lauren Dee is their executive producer. The concept is by Tracy Mumford. The general manager of APM Studios is Lily Kim.

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Thanks for listening.

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