Shawn Fanning never meant to change the world, it just kind of happened.
It was January, 1999, and the 18-year-old freshman gazed out the window of his cousin's car as they drove the 40 minutes from Hull, Mass. to Northeastern University in Boston. It was the end of a long weekend and he was lamenting his return to school. While at home he'd made some headway on a piece of software he'd been working on since school started and like anyone consumed with building something from scratch, he wanted to finish it.
By the time he arrived at the campus, he'd come to a decision. With barely a semester of university behind him, Mr. Fanning decided to drop out, head home and devote his attention to the long lines of code scrolling down his computer screen.
He didn't even bother to clean out his dorm room.
A short while after his former classmates ended their freshman year, it was ready. Mr. Fanning's creation - a simple and effective program that let him share his digital music collection with friends - went live on June 1, 1999.
From there, well, pick a simile - a pebble cast in a pond that creates a ripple effect, the first domino in a long line of dominoes, a virus that spreads like wildfire. Whatever. It's easy to see 10 years later - Napster was it.
The music-sharing program represents the dawn of the download decade, a period in which consumers discovered they could acquire whatever media they wanted, when they wanted, for free over the Internet, and in the process toppled imposed business models and forced new ones.
One moment, file sharing belonged to a tiny subculture of tech-savvy computer geeks; the next, millions of average people were accessing their entertainment with a degree of control they'd never experienced before. Media and entertainment companies, which for so long had been happily dictating the terms of the consumption arrangement suddenly found their long-standing and wildly profitable revenue streams threatened. And society, which once had a pretty clear idea of right and wrong, now wasn't so sure.
Ask him, and Mr. Fanning will readily admit he had no idea the impact his program would have.
"It's hard to say that I really could have seen that coming," Mr. Fanning said in a recent interview with The Globe and Mail. "Especially since I set out to build it and make it work for a handful of friends. To see the software and the concept applied on a much larger scale, it was a great experience."
While copyright infringement and file sharing wasn't new in 1999, Napster brought it to the masses.
Although the music industry was the first to feel the effects of digital media, the ability to transform information into data and transfer it quickly over the Internet has changed long-standing business models in more than the record industry. Movie studios, book publishers, TV producers, video-game makers and even newspapers - any business that makes its money from the creation of intellectual content - has been dragged kicking and screaming into a new reality, one many of them were (and still are) unprepared to deal with.
Yet aside from the immediate impact Napster - and file sharing as a whole - had on these industries, a consumer's ability to download entertainment and information has had overwhelmingly positive effects as well.
For every business threatened with extinction, another one recognized the potential of being able to carry a thousand songs in your pocket. Consumers' desire to download content spurred the growth of broadband Internet access, which in turn stimulated the growth of wireless networking, IP communications and video-sharing sites such as YouTube.
Today, we buy our music online, download movies on demand and read newspaper stories on our cellphones.
Meanwhile, legal systems around the world struggle to adjust to the ever-changing nuances of what exactly it is to "share," successfully closing some services and sites, suing thousands of average consumers and convincing ISPs to hand over personal data about their customers. And yet file sharing seems to grow stronger year after year.
Join Globe readers and editors to share your stories and memories from the early days of file sharing
Over the next two weeks, The Globe and Mail presents The Download Decade, an in-depth five-part series examining the profound economic, social and legal changes that have occurred since Napster ushered in the digital revolution 10 years ago.
In all, our team of reporters, editors, videographers and digital designers have put together a package that includes content from more than 30 interviews, more than a dozen of which have been boiled down into podcasts. We'll also feature five documentary videos - one for each story in the series - and five Flash interactives. Interspersed with each story, readers will be able to read dozens of archived columns and news articles from The Globe and Mail covering the events as they unfolded at the time.
The series will also include numerous live discussions at globeandmail.com/downloaddecade, featuring some of the interview subjects in the package, and will offer readers the chance to script copyright legislation of their own.
But before all that, we start with Napster.
Six months after Napster launched, more than 2 million people had downloaded the software. Realizing they had tapped into something explosive, Mr. Fanning joined forces with his uncle, John Fanning, and the pair formed a company and moved to San Mateo, California, to be closer to Silicon Valley investors.
The company even entered into negotiations with members of the Recording Industry Association of America (RIAA), which represents the biggest music companies in the United States.
Although the RIAA was aware of the growing popularity of the MP3 file format as early as 1997 and had spent the preceding years chasing down and shuttering as many MP3 blogs and websites as it could, it faced a different animal in Napster. The speed at which Napster spread around the world and the volume of content passing through its servers was the biggest threat the industry had ever seen.
"[MP3]technology had been around for a while, but it was only in about the summer of 1997 that people started using it to put up music illegally on FTP sites," said Cary Sherman, president of the RIAA in an interview. In 1999, he was in-house counsel for the RIAA and oversaw legal strategy for the organization.
"So we would address the cease-and-desist letters and takedown notices to try and deal with that problem. It was obviously a situation of whack-a-mole, but it was in the early days. When Napster came along ... it was now a situation where everything - anything that anybody ever had recorded - would now be available online for people to take for free. It was a game changer."
Despite continuing partnership discussions, on Dec. 7, 1999, the RIAA sued Napster in Northern California's U.S. District Court, demanding a permanent injunction to stop Napster from committing alleged copyright infringement. The suit kicked off a legal battle that would last for nearly two years and which would eventually bring the U.S. justice system into the age of the Internet, forcing lawmakers to examine the implications of digital media.
But the lawsuit had an ironic effect - it catapulted Napster into the mainstream. Newsweek magazine ran a cover story about Mr. Fanning in March of 2000 and mainstream media outlets began telling the tale of his software and the hair-pulling going on deep in the boardrooms of the music industry. The public was captivated - not only because most users were discovering file sharing for the first time, but because there was little love lost for an industry long thought to have abused its relationship with consumers.
In February of 2000, Edgar Bronfman Jr., then the CEO of Universal Music's parent company Seagram Co., gathered his top executives and lieutenants from around the world for a crucial meeting in New York. The issue at hand: what was to be done about the Napster problem?
Graham Henderson, who had recently given up his boutique music law practice in Toronto to help build Universal's e-commerce division, could sense the changes the minute he walked into the first meeting.
"We went down to New York and walked into this big room, and there was a sign over the stage that said 'We are a Content Company,' " recalls Mr. Henderson, who took over as president of the Canadian Recording Industry Association in 2004. "It didn't say anything about being a music company."
Despite the perception that the music industry wanted to stamp out digital music, put the genie back in the bottle and continue selling nothing but CDs, Mr. Henderson said that the industry wanted to be in the business of going digital, something that was easier said than done.
"We were desperately interested in that, and hundreds of millions of dollars were spent in a race to get a product into the marketplace as fast as we could before the Napsters of the world became entrenched and before consumers thought music is free," he said. "In fact, Bronfman's admonition to us at the time was, 'six months, you have six months to figure out how we can figure out these records and give them to people this way.' "
"Obviously it didn't take us six months, it took us more like two years."
With that mainstream attention came the interest of the venture capital community, and it wasn't long before potential investors began kicking Napster's tires, wondering if Mr. Fanning had indeed invented the distribution prototype for the next generation of the music industry.
Hank Barry was one of those investors. In 1999, he was a partner with the San Francisco-based venture capital firm Hummer Winblad Venture Partners.
"Intense, focused and very young," is how Mr. Barry characterized his first impressions of Mr. Fanning in an interview. "But wise beyond his years. A lot of people don't know this, but the first version of Napster was pretty primitive, but it was the first software program that Shawn Fanning ever wrote, and he wrote it all himself. Every piece of code. Every line. And so, in some ways it's a monumental achievement and in another way it's one of these naive things where you don't know why you're doing something, you're just determined to do it. And I give him a tremendous amount of credit for that. He sort of single-handedly took everyone into a new era on the Internet."
By May of 2000, Mr. Barry's firm had invested $13-million (U.S.) in Napster and he had taken over as CEO of the company on an interim basis. His stint as CEO was supposed to last no more than six weeks until his partners could find a suitable replacement, but he ended up staying on for 18 months.
In early July, the U.S. Senate convened a special Judiciary Committee on Downloading Music on the Internet. Mr. Barry testified on behalf of Napster while a steady of stream of artists and music label executives appeared to appeal to legislators to shut the service down.
Two days after the hearings wrapped up, Napster met with some of the most powerful executives in the music industry in Sun Valley California to negotiate a deal whereby the labels would license Napster, turning it from a rogue operation into a retail business where artists could get paid. Sony Corp. CEO Howard Stringer was there, in addition to Thomas Middelhoff of German media giant Bertelsmann and finally Mr. Bronfman.
"They all said they would [negotiate a deal]" Mr. Barry said. "They said talk to Edgar Bronfman, he's our guy."
Mr. Bronfman is now the head of Warner Music. His office did not return interview requests for this article.
On July 26, U.S. District Court Judge Marilyn Hall Patel ruled in favour of the record labels and ordered Napster to stop helping to make copyright music available for downloading. Although Napster would appeal the decision, and won the right to continue operating until its appeal could be heard, negotiations with the music industry essentially dried up. Mr. Barry never heard from Mr. Bronfman again.
Napster and its lawyers spent the rest of 2000 trying to strike a deal with the record industry, but to no avail. In February of 2001, the 9th Circuit Appeals Court in the U.S. found that Napster was contributing to copyright infringement. Napster's executives soldiered on, but by May of 2002, the company was forced into bankruptcy and sold off in pieces.
"I assumed good faith on the part of the record companies, and that was a big mistake," Mr. Barry said. "While they were having nice cordial meetings with us and saying of course we must make a deal, they were making plans to have their own competitive services and indeed they were making plans to go out and sue 50,000 people that they ended up suing.
"So the idea that they were just the victims of this is hilarious, and doesn't reflect in any way the really utterly bad faith nature of their approach to Napster."
Still, Mr. Fanning said he never entertained much hope that Napster would be able to forge a deal with the industry and evolve into a successful business.
"I wasn't sitting and holding my breath that everything would be miraculously worked out and that a business or anything would be established with the industry," he said. "I knew that it was a pretty big change for them in terms of transitioning and authorizing digital distribution on the scale that would be necessary to maintain a quality service."
One of the most vocal critics of Napster was Lars Ulrich, drummer for the heavy metal group Metallica. Mr. Ulrich became incensed when he discovered that several unfinished versions of the band's song I Disappear were being played on U.S. radio stations. The group was able to trace the songs back to Napster and discovered that in a 48-hour period, more than 300,000 users made 1.4 million free downloads of Metallica's music.
"Napster hijacked our music without asking," Mr. Ulrich told the U.S. Senate Judiciary Committee on Downloading Music on the Internet in July of 2000. "They never sought our permission. Our catalogue of music simply became available for free downloads on the Napster system."
"With Napster, every song by every artist is available for download at no cost," he said. "And, of course, with no payment to the artist, the songwriter, or the copyright-holder. If you are not fortunate enough to own a computer, there is only one way to assemble a music collection the equivalent of a Napster user: theft. Walk into a record store, grab what you want and walk out."
Although Metallica has since embraced digital distribution channels for its music - the band recently released its entire catalogue on iTunes, had provided fans with free concert recordings and provided music for a Guitar Hero video game - many in the online community continue to vilify Mr. Ulrich for his campaign to shut down Napster. A spokesman for Metallica said that due to the band's summer touring schedule in Europe, Mr. Ulrich and the rest of the band would be unavailable for comment for this story.
In a recent issue of Rolling Stone magazine, Mr. Ulrich explained his position regarding Napster.
"Nine out of 10 people go, 'What was that about? It was about money.' Fuck you - it wasn't about money. It was about control," he said. "I'll give away all my shit for free. But I'll decide when and where and how."
While other artists, such as rap icon Dr. Dre, joined in the music industry's quest to quash Napster, other artists such as Limp Bizkit, The Offspring and Chuck D, leader of the seminal hip hop group Public Enemy, came to the service's defence, arguing that Napster and filesharing presented a revolutionary way for emerging artists to find an audience.
Although David Usher has since developed an international following as a solo artist and as one of the more tech-savvy musicians to come out of Canada through his embracing of social media, back in 1999, he was still the lead singer of the Vancouver rock band Moist.
"Napster changed the idea of music as something you paid for to being something that was free," Mr. Usher said in an interview. "It took a whole industry that had its infrastructure built up on making, delivering and selling a CD - a piece of plastic - and it took away the piece of plastic. And without that piece of plastic, you can't support that pyramid of infrastructure that you no longer need when you deliver for free."
For established musicians who came up through a system built on record sales, radio play and landing the cover of Rolling Stone magazine as measures of success, Napster and file sharing shook the foundations of their world. But for emerging artists, and for a generation of kids who grew up plugged into video games, computers and the Internet, digital media levelled the playing field.
Thanks to improvements in sound editing and recording technology, kids in basements and dorm rooms could record and remix their own music and upload it to the Internet, where it could be pushed out to thousands of downloaders and potential fans. Although the phrase "user-generated content" wouldn't come into vogue until the rise of blogging and YouTube a few years later, that's precisely the platform Napster meant for aspiring musicians.
Gregg Gillis was just 17 when Napster was launched. That fall he headed off to university, graduating not just to post-secondary education, but from his parent's dial up Internet connection to the fat pipes of his dormitory, where the breadth of Napster's pirated offerings came into focus. For a burgeoning mash-up artist and DJ, the ability to freely download thousands of songs with which to experiment was nothing short of a dream come true.
Today, Mr. Gillis is best known by his pseudonym, Girl Talk, the internationally known mash-up and digital music artist. His latest record, Feed the Animals, ranked No. 4 on Time Magazine's list of the Top 10 albums of 2008, turned Mr. Gillis into an international sensation with both the mainstream and indie press, and it's comprised entirely of samples taken from songs by popular artists.
"For me, as a music fan, Napster was just insane, where I could just look up anything and go get it," Mr. Gillis said in an interview with The Globe. "But also, as a musician, it was a chance to push my music out to new people. You could get into chat rooms there and send it out. You could mislabel files [a process known as 'Napster Bombing']to get people interested in it. That completely opened the lines of communication for music consumers and allowed everyone to hear anything they wanted at the click of a mouse."
These days Mr. Gillis doesn't download a lot of music. And while he's still a fan of buying CDs, he has no problem allowing his fans to download his songs for free over filesharing networks.
"I like when they buy my stuff and I like when they support it, but I think the spread of my music through peer-to-peer file-sharing networks is part of the reason that I've been relatively successful over the past couple of years," he said. "It's the reason I can play the size shows that I can play and it's the reason that I can go to Europe and go to Mexico and do things like that."
Although he acknowledges that some areas of the music industry - namely the record executives at major labels - are making less money because of free file sharing, and that with less revenue coming in from CD sales many artists are forced to make up the difference through other means such as touring or merchandise sales, Mr. Gillis believes that the advent of filesharing has enabled many underground musicians to find audiences and make a living from their craft.
"I know not every band is going to want to tour all the time ... but I think that for many musicians operating on a more underground or independent level, file sharing is one of the greatest things to ever happen," he said. "I just know so many musicians making relatively weird music, stuff that would be stuck in a very small underground 15-20 years ago, who can live off it, tour now and have huge fan bases."
One shouldn't be so quick as to give Napster all the credit for rewriting the rulebooks for the technology and music industries, says Cory Ondrejka, one of the creators of the online world Second Life who now works for EMI as the label's executive vice-president of digital marketing.
"When you look at Napster, it was a singular piece of technology in the midst of a much larger transformation," he said in an interview. "That transition was going to happen independent of Napster or any other singular piece of software."
In addition to massive broadband adoption, the period of 1995 to 2003 also saw quantum leaps in the power of computers. PCs were doubling in speed and power every 18 months and the Internet was becoming commonplace in North American homes and businesses. When those technologies were combined with the widespread adoption of the MP3 format which allowed music files to be compressed so that thousands of songs could be stored on a single hard drive, suddenly consumers were experiencing music in a whole new way.
"What you have is the emergence of MP3, you have a have much smaller data format and enough CPU horsepower to be able to play it," Mr. Ondrejka said. "This whole idea that you could have your whole music collection in your pocket all the time ... none of us were thinking that way yet, even though we all knew what the technical trajectories looked like.
"I think that it's a fairly typical disruption story where Napster is the singular example that came out of it, but that it was pretty inevitable that that collection of technologies was going to change the music business."
And change it did, but not just the music industry.
While content creators felt under siege by the growing gaps in their business models, other businesses saw opportunity.
"The people who made the money on Napster were the ISPs like Comcast and Verizon," said Mr. Barry, the former Napster CEO. "Broadband penetration in the United States more than doubled in the period that Napster was operating. [News Corp. CEO]Rupert Murdoch once said that without Napster, there was no Internet. What he meant was that it was the availability of Napster that drove Internet adoption in the United States."
The same was true in Canada. ISPs such as Bell, Rogers, Telus and Shaw saw a sharp increase in the number of high-speed Internet subscribers beginning in 1999. Although most of Canada's largest ISPs had begun building their broadband Internet networks in the early 1990s, being able to download music fast was what finally convinced many Canadians to upgrade their connections.
Bell had just 51,000 high-speed Internet customers the year that Napster went online. But by 2002, the company's high-speed subscriber base had skyrocketed to more than 1.1 million customers, according to the company's annual reports. Rogers' subscriber base more than tripled from 185,000 to nearly 640,000 over the same time period while the number of high speed subscribers at Telus jumped from 25,000 to more than 410,000.
"In terms of Internet media, I believe [Napster]was definitely the first example of mainstream usage of the Internet for accessing media," Mr. Fanning said. "I've heard a number of different stories at different times about people's parents and grandparents not really understanding computers or the Internet, getting broadband and getting a computer just to download music. It was definitely a phenomenon in that sense."
ISPs recognized early on that consumers needed a tangible and identifiable reason to upgrade to faster, more expensive, service plans. The ability to download music quickly was used as a selling point, similar to how mobile carriers - many of which are the same companies - are now using services such as Facebook and YouTube to convince consumers to upgrade to data plans and more expensive smart phones.
"The quality of experience went up when you got broadband," Mr. Fanning said. "People were willing to pay for that just based on the value they were getting from the service. Being able to download a track in 2-3 minutes as opposed to 10-20 and not having to use their phone line, I think the value proposition was much better with Napster than without."
While ISPs found themselves growing rapidly at the start of the Download Decade, perhaps no single company has benefited from the rise of digital media as much as a computer company.
When Apple Inc. founder and chief executive officer Steve Jobs returned to the company in 1997, its business was in shambles, and outside of a core group of devoted fans, Apple computers were an afterthought in a world dominated by Microsoft Corp.
Mr. Jobs, however, quickly recognized the power of digital music, and in October of 2001, just as Napster's run was coming to an end, he unveiled a quirky new digital music player that wasn't much bigger than a deck of cards. The first iPod would go on sale later that year and turn what was an also-ran computer company into one of the most powerful consumer electronics firms in North America.
"Napster showed that the world didn't want to buy songs 12 at a time," said Michael Janes, who ran Apple's e-commerce business from 1998 until 2005, who is now the CEO and co-founder of online ticket retailer FanSnap.com. "It just made it obvious that this was the way people wanted to acquire music. They wanted to share it. They wanted to get it this way, when they wanted and how they wanted."
Mr. Jobs & Co. could see the potential Napster represented and recognized an opportunity.
"Apple's view was, let's take the good away from that, let's understand what needs that customer have that are being highlighted that aren't being met by the current record industry and let's figure out a way to do this legitimately so that the record companies and the artists can make money so that everybody wins," Mr. Janes said.
In 2003, Apple launched the iTunes music store, which has since become the gold standard of digital media sales and has grown to become the largest seller of music in the United States - digital or otherwise.
"Without Napster, there is no iPod, period," Mr. Barry said. "Remember that the iPod launched two years before the iTunes store was around, so you have a two-year period where essentially the only source of music for people's iPods was people doing their own ripping from their own CD collection and getting things from Napster or some other service."
For as long as there has been a commercial music industry, a tug of war has existed between musicians hoping to make a living from their artistic creations and fans who want to share their favourite songs with their friends.
Nothing, however, kicked off a legal controversy in the entertainment fields quite so much as digital music. The cloudburst of file sharing kicked off a legal controversy that saw businesses suing website operators, file sharing operations and thousands of customers in an attempt to reign in piracy.
There was a time when some in the music industry wanted player pianos banned because they threatened the producers of sheet music. In the 1980s, the British Phonographic Industry launched a campaign dubbed "Home Taping Is Killing Music" which sought to curb the practice of consumers making cassette copies of commercially produced tapes and vinyl records. The slogan has since become a hit t-shirt design.
Although the music industry had pursued a litigious agenda against sites such as MP3.com, Napster presented a new challenge. Napster wasn't a single website where music was posted that could be downloaded, rather it was a network of users who shared music stored on their own PCs. Napster just indexed the files, but the music wasn't stored on its servers.
Napster's legal struggle moved quickly through the U.S. legal system because it was an instance of first impression - in other words, the courts had never dealt with something like it before.
"That's kinda what I concluded before I thought about making the investment," Mr. Barry said. "Here's something that's never been tried, they might lose, and if they lose [our investors]lose all their money. But if they win, then we've got something really exciting to work with as a company."
Eventually Napster was defeated in the courts and pushed into bankruptcy. Emboldened, the entertainment industries continued their efforts to crack down on piracy and filesharing, scoring victories over Napster clones Grokster, Kazza and others.
The RIAA even embarked on a period of suing average peer-to-peer users for hundreds of thousands of dollars for sharing music.
"We were facing an almost impossible situation," RIAA president Mr. Sherman said. "And we felt that something needed to be done and that if we didn't stand up for ourselves, who would ever think that music ever had value any more? Why would anybody ever spend money for music in the circumstances that we were facing at that time?"
Although the industry used the lawsuits as educational tools, the suits resulted in a consumer backlash against the organization. The vitriol against the industry reached a fever pitch in October, 2007, when the RIAA won a legal victory over Jammie Thomas, a single mother of two from Minnesota, who was fined $222,000 for copyright infringement for sharing 24 songs on Kazaa and was portrayed as a victim of bullying by corporate interests by many in the mainstream media. The victory was shortlived, however. In September, 2008, a U.S. district judge ordered a retrial of the case.
The industry says it has since abandoned its legal strategy of suing consumers. However, several prominent technology blogs - including Wired.com and Techdirt - report that the RIAA continues to bring new legal action against consumers. The RIAA has responded by saying those new actions involve only cases where the defendents were first contacted before August of last year, when the organization decided to stop filing new lawsuits.
With the emergence of BitTorrent technology in 2003, however, the battle shifted to torrent tracker sites - underground Google-like search engines that index files users can download using specialized software - such as TorrentSpy, Demonoid and most recently, The Pirate Bay.
Today, Shawn Fanning doesn't spend a lot of time thinking about Napster, but he's still building software. His first post-Napster venture was a rights registry system for licensing digital music called Snocap. He found dealing with the record labels a tiring process, however, and he soon tired of the music industry and abandoned the project.
Like many in the technology world, he took up playing the online video game World Of Warcraft.
"I became pretty fascinated just by the level of immersion and the connections that you would build with these people you would play with on a regular basis," he said. "There's a collaboration that happens and you would get to know these people pretty well but never really get beyond the surface and learn more about them."
By marrying the online community of World Of Warcraft with the emerging success of sites like Facebook and MySpace, Mr. Fanning came up with the idea for Rupture, a social networking service that connects gamers across platforms and titles. The site is currently preparing for a re-launch after being acquired by video game kingpin Electronic Arts Inc. for $30-million (U.S.) last June. He has since decided to stay on with the startup as it prepares for a summer release.
Although Mr. Fanning created a software program that upended the music industry, dragged the U.S. legal system into a new age and caused his high school nickname to become a household word synonymous with piracy - "Napster" was the moniker Mr. Fanning's classmates gave him because he had a penchant for not washing his hair, letting it become a bit "nappy" - you'd never guess it from speaking with him.
These days, he tends to decline most interview requests - although that's getting harder with the Napster anniversary around the corner - and for the most part he's reluctant to speak about himself. He largely shrugs off questions about Napster's legacy and takes on an "aw shucks" demeanour when you mention his girlfriend - professional poker player and Playboy model Jennifer "Jennicide" Leigh.
Still, he's accommodating, thoughtful and articulate. He's just more comfortable staying behind the scenes and coding, than making himself the centre of attention.
"I've never really been concerned with [my own legacy]especially how it relates to the press," he said. "I mean, I was writing software because I loved writing software. Writing software is a pretty anti-social thing as well. So [a legacy]is not something I tend to think about, I just tend to focus on doing stuff that I enjoy, that I feel good about and I just love creating things, and wherever that takes me, it takes me."