December 2 2011
It is amazing what a couple of colleges can do. No I'm not talking about keg stands. I'm talking about Napster. In 1999, Sean Parker and Shawn Fanning created the peer to peer music app that completely turn the music industry on its head. You can say if it wasn't for Napster, there would probably be no iPod, or iTunes. Napster caught the industry completely off guard, and they tried every thing to put it back in Pandora's box (excuse the pun). Once people got a taste of free and convenient music, the industry didn't know how to compete. The only thing they knew was lawsuits. If they had an innovative bone in their body, they could have capitalized on the technology for themselves, and maybe Apple and other companies wouldn't be taking them to the bank. However, that's 20/20 hindsight.
Fast Forward to today, and the digital music scape is completely different. There are dozens of services from Pandora to the relatively new Spotify, but what happened to Napster. As of today, it is officially dead. The industry might be somewhat happy, but at least to them, the damage has been done. As of December 1, the music service Rhapsody has absorbed Napster into its fold.
Rhapsody announced last month that it had struck a deal with Best Buy to purchase Napster subscribers and other assets in a bid to boost its user base. As part of the deal, Best Buy (BBY, Fortune 500) -- which acquired Napster in 2008 for $121 million -- will receive a minority stake in Rhapsody.