Napster (1999)
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Napster was a pioneering peer-to-peer file-sharing application launched in June 1999 by Shawn Fanning and Sean Parker, primarily associated with the distribution of MP3 music files. Its user-friendly interface, vast catalog of hard-to-find recordings and college-dorm viral growth made it a cultural phenomenon, but also the target of copyright-infringement lawsuits from the RIAA, Metallica and Dr. Dre. The service was shut down by court order in July 2001 and the company filed for Chapter 11 bankruptcy protection in June 2002; its intellectual property was acquired by Roxio for $5.3 million in November 2002 and relaunched as a subscription service.
02 / Napster (1999) FAILURE REASONS
Failure reasons
Napster was killed by copyright law, not by competition. A centralized database indexing every shared song made it a clear litigation target, and the lawsuits — led by the RIAA, Metallica and Dr. Dre — ended with a court order shutting the network down in July 2001. Napster then burned through money trying to reinvent itself as a legal, monetizable service, but the mounting legal fees and compensation costs forced a Chapter 11 filing in June 2002. The brand survived through acquisition, but the original company did not.
03 / EVENT HISTORY
Events in the structured record
- Launch
Shawn Fanning and Sean Parker launch Napster in June 1999; peer-to-peer MP3 sharing goes viral on college campuses.
- Lawsuits
Metallica, Dr. Dre and the RIAA file copyright-infringement lawsuits against Napster.
- Court-ordered shutdown
A court orders Napster's network shut down in July 2001.
- Bankruptcy and sale
Napster files for Chapter 11 in June 2002; Roxio acquires its IP for $5.3 million in November.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
Napster's intellectual property was acquired by Roxio for $5.3 million in November 2002 — a sale of assets, not a loss. No audited loss figure with disclosed subject, period and basis was extracted; the $130M funding and $1B valuation are retained as non-empty input, not loss.