Napster Case Study
Napster & MP3: Redefining The Music Industry
Introduction
Napster was the first, very innovative music technology application that allowed users to download MP3 from the internet and other peers for free, or at a cost. Napster strongly adapted the word sharing and put it their own terms to avoid any copyright infringement but it ended badly on their part. This disruptive technology was leading the market and had over 60 million users by 2001. Although very similar technologies were soon after developed, Napster was still on top and lead the market. Many users knew exactly what they wanted but getting it seemed to be the difficult part once Napster and the RIAA went into a legal battle. More commonly, the industry has been shaped from Napster and the base product that has been derived. Napster may have been a failure to the industry but it shaped the industry for the future from 2001 until present and for years to come.
1. What is Napster’s business model?
Being as though Napster was the first to market with their music search engine for MP3 files, they successfully managed to set up an online community where users could download these files. Napster had its market segments and was targeting the college and high school demographic, as described in the case study. The main objective was to give users the opportunity to listen to the songs before they wanted to go ahead and purchase them. During the dot.com boom, when Napster was created, it seemed as though the developers only wanted to create the program to attract a client base to increase the value of the company mainly to sell it off to a larger, more valuable company. Once the main database of Napster was created, they started off by seemingly trying to create a membership based business model. They had a free membership to start as a trial run, basic membership for relatively inexpensive that would cost between $2.95 and $4.95 per month. This basic membership would have a limit on file
Introduction
Napster was the first, very innovative music technology application that allowed users to download MP3 from the internet and other peers for free, or at a cost. Napster strongly adapted the word sharing and put it their own terms to avoid any copyright infringement but it ended badly on their part. This disruptive technology was leading the market and had over 60 million users by 2001. Although very similar technologies were soon after developed, Napster was still on top and lead the market. Many users knew exactly what they wanted but getting it seemed to be the difficult part once Napster and the RIAA went into a legal battle. More commonly, the industry has been shaped from Napster and the base product that has been derived. Napster may have been a failure to the industry but it shaped the industry for the future from 2001 until present and for years to come.
1. What is Napster’s business model?
Being as though Napster was the first to market with their music search engine for MP3 files, they successfully managed to set up an online community where users could download these files. Napster had its market segments and was targeting the college and high school demographic, as described in the case study. The main objective was to give users the opportunity to listen to the songs before they wanted to go ahead and purchase them. During the dot.com boom, when Napster was created, it seemed as though the developers only wanted to create the program to attract a client base to increase the value of the company mainly to sell it off to a larger, more valuable company. Once the main database of Napster was created, they started off by seemingly trying to create a membership based business model. They had a free membership to start as a trial run, basic membership for relatively inexpensive that would cost between $2.95 and $4.95 per month. This basic membership would have a limit on file