Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



The Day the RIAA Lost Its War on Technology

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

On this day in business and technology history ...

The Recording Industry Association of America has long had a difficult relationship with technology. In the 1970s, it fought against cassette tapes that it feared would record its copyrighted songs and thus destroy its sales base. In the late 1980s, it killed Digital Audio Tape technology by copy-protecting the format to death. In the 1990s, the RIAA finally met a technology it couldn't control: digital audio. But the RIAA threw its considerable power into fighting it, and the landmark case of the digital-music age was filed on Dec. 7, 1999: A&M Records v. Napster, also known as the RIAA v. Napster case because of the large number of record labels listed as plaintiffs.

Napster was one of the originators of modern peer-to-peer file sharing services. It had come online only six months before the RIAA's lawsuit, but its immediate popularity and its focus on the free transfer of music files put it square in the music industry's crosshairs. The lawsuit only served to increase that popularity by making Napster a household name, and at the peak of its popularity Napster had 25 million active users. However, in 2002 a judge ruled that Napster was liable for copyright infringement, and the site was forced to shut down. Its assets were quickly purchased by German media giant Bertelsmann, which later found itself on the hook for more than $300 million in music-industry claims against Napster.

The Napster case contributed greatly to the RIAA's unpopularity with the public, particularly after it began suing individual file-sharing users en masse for copyright infringement. File-sharing programs were far easier to build than it was for the RIAA to take them down, and in the decade after the Napster case, the music industry's revenues dropped by nearly 60%. The RIAA's general helplessness against file sharing also contributed to the growth of Apple's (NASDAQ: AAPL  ) iTunes, which came online in 2001 and became the first true digital-music sales success, as it sold a billion songs within its first three years of operation.

Napster itself lives on, sort of. Best Buy (NYSE: BBY  ) bought the service in 2008 for $121 million and merged its Napster assets with Rhapsody, at the time the largest on-demand music service in the United States, in 2011. Sean Parker, one of Napster's founders, later earned far greater fame as the first president of Facebook. Justin Timberlake, who played Parker in The Social Network, the Oscar-winning 2010 film about Facebook's early years, famously said: "A million dollars isn't cool. You know what's cool? A billion dollars." Parker should know, as he became one of the world's youngest billionaires when Facebook went public.

Get ahead of the next tech revolution
This incredible tech stock is growing twice as fast as Google and Facebook, and more than three times as fast as and Apple. Watch our jaw-dropping investor alert video today to find out why The Motley Fool's chief technology officer is putting $117,238 of his own money on the table, and why he's so confident this will be a huge winner in 2013 and beyond. Just click here to watch!

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2756497, ~/Articles/ArticleHandler.aspx, 9/26/2016 8:45:35 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,094.83 -166.62 -0.91%
S&P 500 2,146.10 -18.59 -0.86%
NASD 5,257.49 -48.26 -0.91%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/26/2016 4:00 PM
AAPL $112.88 Up +0.17 +0.15%
Apple CAPS Rating: ****
BBY $37.51 Down -0.48 -1.26%
Best Buy CAPS Rating: *