A new media world: Napster's 10-year anniversary

Ten years after the launch of digital music upstart Napster, Gartner analyst Mike McGuire ponders the controversial program's legacy.

Nostalgia is death.

So far be it for me to wax nostalgic about just about anything - but letting the 10-year anniversary of Shawn Fanning's single-handed destabilisation of the media industry go by without mention doesn't seem right.

In short, my feeling about Napster requires me to paraphrase TV critic Tim Goodman of the San Francisco Chronicle: Everything we know today about the music industry, we owe to Fanning and Napster.

Some shout-outs:

To Shawn Fanning: I say, "thanks". Never have so many media industry analysts owed so much to a single individual. If it weren't for Napster, we'd all be writing reports about the battle between SACD and DVD-A's for market supremacy as replacements for the Redbook-based CD.

To Hank Berry (and to some extent the Bertelsmann AG and BMG Entertainment groups): I bestow the You Were Dead Right Award for actually seeing the commercial possibilities of online music/content distribution. Too bad the music labels, movie studios and others couldn't get in agreement faster to create a paid version.

To Apple and Steve Jobs: You know you owe a nod of the hat to Napster and Fanning, right? Without Napster, and ultimately Hank Berry's undoing by the courts and the content companies, you might not have the market dominance you have now because, frankly, the tethered download options and subscription services might have been the only online alternatives supported by the labels.

But most of all, if it weren't for Napster, the labels would probably have had little if any reason to license any alternative to the CD.

Second, my personal observations about Napster and history:

• It wasn't just Napster and file-sharing that brought the media sectors to the point where they are now. Consumer expectations regarding portability and being able to control the programming of their media experiences were taking shape the minute the first set of non-techies figured out how to program the VCR and how to rip a music CD.
• Why did SDMI and all attempts at encrypted DRM have to be the alternative? I know the literal answer - the labels wanted a level of control over the content they had with CDs and wanted a way to block consumer redistribution of the content once it was digitised. However, straight-up monetisation of P2P, as Hank Berry and countless others argued at the time of Napster's court cases in 2001 and 2002, seems so obvious eight or nine years later.
• Besides underscoring an obvious fact - people like free stuff - Napster's popularity clearly pointed to other important benefits that took several years to catch on. There was a perception that a much wider variety of content was available at Napster than was available in music stores or other online offerings (of which there were essentially none). This benefit took several years to manifest itself in technology and services such as iMeem and Pandora, and recommendation engines such as EchoNest and Media Unbound.
• As for the version of Napster now owned by CE retailer BestBuy, Chris Allen and crew have been able to keep the legitimate version of Napster up and running in the shadow of Apple and the iTunes' success. Their new offering which offers consumers a month of free streaming if they buy a certain number of DRM-free MP3 downloads is probably the closest thing to a real challenge to iTunes that the market's seen in quite awhile.

The music discovery opportunities enabled by the free streaming capability (of Napster's entire catalog) with a simple payment capability might seem like a bit of a throwback but it's actually quite a powerful alternative to the iPod and iTunes.

Mike McGuire is a research vice president with Gartner's media industry advisory services

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