Record Label and Napster S Strategy

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  • Topic: Record label, Napster, Universal Music Group
  • Pages : 4 (1056 words )
  • Download(s) : 221
  • Published : March 20, 2013
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Napster, developed in 1999 by Shawn Fanning, is a program that allows music to be traded over the internet. People were able to share high quality digital copies of music recordings over the internet using Napster. Napster did not store the recordings, however. It allowed its members who were logged onto the service to choose from an index of songs. Napster was one of the most popular sites on the internet. The site had some 15 million users in a year’s time. Many college students downloaded so many songs that many colleges had to block the site from their system.

A year after its launch, Napster was sued by the Recording Industry Association of America (RIAA). The RIAA represents major recording companies. The RIAA claimed that copyright laws were violated by Napster for allowing users to swap music recordings for free. The RIAA sought to stop the downloading of copyrighted songs, as well as damages for lost revenue. Song swapping had cost the music industry more than $300 million in lost sales. A few months later, Napster was sued by a heavy metal band, Metallica, and rap star Dr. Dre. They were suing Napster for copyright infringement. In 2000, a judge granted the request of the RIAA and ordered Napster to stop making copyrighted recordings available for download. This would have shut Napster down. Napster was granted a last-minute reprieve until the lawsuits could be tried in court. Despite its many claims, Napster was found guilty of direct infringement of the RIAA’s musical recordings. The company was ordered to stop allowing its millions of users to download and share copyrighted material without properly compensating the owners of the material (Ferrell & Hartline, 2008).

Napster later offered $1 billion to the recording industry to settle the lawsuit. Napster also agreed that $150 million would be paid annually for the first five years to Sony, Warner, BMG, EMI, and Universal, and $50 million annually was allotted for...
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