Summary Of The Controversy Of Napster

Napster Controversy
Executive Summary
This case takes a look at the Napster company which was launched in 1999 by freshman Shawn Fanning. Napster was later shut down in 2001 due to violations of copyright laws. The Napster;s offerings was later condemned By RIAA (Recording Industry Association of America), a trade group representing the world’s biggest record labels, Universal music, Sony Music, Warner Music, EMI group and Bertelsmann AG.This case study gives a detailed analysis of the creation of Napster and explains why, revolutionary at that point of time, Napster changed the face of the entertainment industry forever.
Predicaments : * Napster a web service provider allows free download of music for its users through internet
* due to internet traffic, providing peer to peer service through internet was a problem . * Its popularity among the music lovers including college students made to use Napster even in colleges which forced the colleges to block this site in colleges . * High profile media campaigns were set against Napster for its activities . * Napster’s compensation package of $1 billion was not accepted by the RIAA. * Napster entered into an agreement with German media and Bertelsmann(RIAA) who gave a loan of $60 million – created chaos that Napster was sold to RIAA. * As a part of competition another website filed a case against Napster for copyright infringement and unfair competition . * when Napster stopped its service providing , more number of same technology based service providers came into existence . * so competition in the global market increased tremendously . * finally it was forced to pay $26 million and $ 10 million to end the ethical problems and to the harry fox license agency for copyright respectively . * It also agrees to give one -third of its revenue to the content owners