Matt Graves: Napster’s Improbable Journey

matt gravesMatt Graves (@mgrooves) is a communications executive who has worked in and around the digital music market since 2001. In that time, Matt has worked with a diverse set of high-profile and high-growth companies, from Twitter, Rhapsody (a service he helped launch) and imeem (a now-defunct music playlist startup) to BandPage and OpenAura. He now heads a PR consultancy, Tripleshot Communications, living and working in San Francisco. This column was originally published in Medium.

Yesterday afternoon, the Rhapsody music service announced that it will retire the Rhapsody name, and re-brand its service (and the company) under the Napster brand.

The Napster name has had a long journey in the 17 long years since Shawn Fanning first created the service in early 1999. I thought it might be helpful to put together a short history tracing that path.

The original Napster: 1999–2002

Initially, Napster was a pioneering (and legally questionable) service that made it easy for anyone to easily find and download any song, album, concert or other musical obscurity — all for free, from strangers on the web. The service was created by Fanning, a gifted young programmer from Massachusetts who introduced Napster — the first great peer-to-peer file-sharing software — to the world in June 1999.

Source: TIME; cover credit: Gregory Heisler: (http://content.time.com/time/covers/0,16641,20001002,00.html)

Within a year, Napster had won a legion of fans around the world (at its peak, the service claimed some 70 million users, who used the service to gleefully download billions of MP3s). It also attracted the ire of the recording industry (most notably the band Metallica, who quickly found themselves on the receiving end of one of the web’s earliest video memes). The controversy made stars of Napster and its co-founders, Fanning and Sean Parker (yes, that Sean Parker); Fanning soon landed on the cover of TIME magazine — and Napster, Inc. landed in court. (Spoiler alert: they lost, badly.)

By the summer of 2002, it was all over for Napster 1.0: Shawn Fanning left the company, Napster went bankrupt, and its name and assets were sold off for $5 million to a different company, Roxio, then best-known as the manufacturer of CD burning software. The rapid rise and fall of the original Napster were documented in Alex Winter’s excellent 2013 film, “Downloaded” and in Joseph Menn’s equally excellent 2003 book, “All the Rave: The Rise and Fall of Shawn Fanning’s Napster.”

Roxio & “Napster 2.0”: 2003–2008

In its second act, Napster was the name of a different (and LEGAL!) music service launched by Roxio in the fall of 2003. This service had little to do with the original Napster: it wasn’t peer-to-peer music delivery. You couldn’t find everything under the sun. Shawn Fanning wasn’t involved. And perhaps biggest of all: the music on this Napster wasn’t free. Roxio had simply slapped the Napster name onto PressPlay, a major-label-backed music service it acquired in mid-2003.

Eventually, Roxio sold off its CD burning business to focus entirely on this revamped and rechristened “Napster 2.0”. Roxio took Napster as its new name, and operated the service (which it humbly described as “unequivocally the most complete and comprehensive music service in the world”) for another four years.

During that time, the new Napster tried mightily to get consumers interested in its subscription service. Its marketing efforts included running a 30-second ad during the 2005 Super Bowl. The ill-considered spot— produced entirely in-house at Napster, and dubbed “Do the Math” — tried to sell consumers on the value of unlimited music for $15 a month, compared to the pay-99-cents-per-song cost of music on iTunes.

The Best Buy years: 2008–2011

In its third act, Napster was still the name of a legal music service, this time operated by electronics retailer Best Buy, which acquired Napster (the company and service) for $121 million in cash in the fall of 2008.

Image credit: BGR (http://cdn.bgr.com/2008/09/best-buy-napster.png?w=624)

Best Buy had previously dabbled in digital music: in 2003, it partnered with subscription service MusicNow to introduce kiosks where people could buy music downloads while shopping in Best Buy stores; in 2004, the companycut a deal with Roxio to sell subscriptions to “Napster 2.0” in its physical retail stores; and in 2006, it partnered with Rhapsody and SanDisk to launch a co-branded music offering with a not-terribly-imaginative name: the Best Buy Digital Music Store.

If the idea that consumers would drive to a physical store to buy music downloads seems odd, it should — especially knowing that those downloads were incompatible with what was then the market’s leading music device: Apple’s iPod. But that didn’t stop a mid-aughts mania among retailers vying for a stake in digital music: in late 2003, Wal-Mart launched its own music download store; in 2004, Circuit City bought the MusicNow subscription service; and in 2006, Tower Records — once the country’s largest music retailer — announced it, too, was launching a music download store.

Seemingly everyone wanted in on a chance “to take on iTunes”. It went about as well as you’d think: Circuit City sold MusicNow to AOL in 2005, and went bankrupt three years later. Tower Records was sold in bankruptcy and liquidated its stores in late 2006. Wal-Mart shuttered its download store in 2011. And none of this impacted Apple, which by 2008 had emerged victorious as the country’s largest music retailer (edging aside all concerned).

In digital music, Best Buy fared no better than its competitors. After operating Napster for three years, the company opted to sell the service and return to its core strengths. Which brings us to Rhapsody…

The Rhapsody era: 2011-present

In the fall of 2011, Best Buy sold Napster to Rhapsody International (the parent company of the Rhapsody service) in exchange for a minority stake in Rhapsody.

Rhapsody is the elder statesman of the subscription music space. The service, one of the first all-you-can-stream-music-for-$10-a-month services, launched in December 2001. [Disclosure: I was part of the team that launched Rhapsody, during subscription music’s embryonic earliest days, and ran PR there for many years.]

In its lifetime, Rhapsody has seen almost as many changes as Napster. Initiallylaunched by a San Francisco startup called Listen.com, Rhapsody was acquired by Seattle-based RealNetworks in 2003; merged into a joint-venture with MTV Networks in 2007; and spun off into into a second life as a startupin 2010. Along the way, Rhapsody has grown its subscription business in part by gobbling up subscribers from other companies exiting the space, including MTV (in 2007) and Yahoo (in 2008) in addition to Best Buy.

Excerpt from the original launch plan for “Aladdin”

It’s worth noting that Rhapsody was originally inspired by the first incarnation of Napster. In early 2001, the startup that launched Rhapsody, Listen.com, acquired a small startup named TuneTo.comthat had drawn up plans for a new type of music service. This project, code-named “Aladdin”, was designed to create a legal version of Napster, one where people could listen to unlimited streaming music for a flat monthly fee. But unlike Napster 1.0, this new service would “put the genie back in the bottle” by enabling musicians, labels and publishers to be compensated as people streamed and downloaded their music.

Looking at the original launch documents for “Aladdin” — eventually christened Rhapsody in the summer of 2001, after a lengthy naming process — you can see that the vision for what subscription music could be was there from the start:

Rhapsody marketing material, summer 2001. Everything old is new again.

Since absorbing Napster’s U.S. subscription business in 2011, and — afteracquiring Napster’s international business in the spring of 2012 — Rhapsody has continued to operate and grow the Napster business outside the U.S.

Now, with yesterday’s announcement that “Rhapsody is becoming Napster”, the Napster brand is poised for a fifth act — and Rhapsody is headed for a graveyard crowded with the corpses of other digital music brands (a list that includes PressPlay, MusicNet, FullAudio, Streamwaves, Yahoo! Music Unlimited, MusicMatch On Demand, AOL’s MusicNow, Virgin Digital, MTV’sUrge, Ruckus, Microsoft’s Zune, LaLa, MOG, Beats Music, and Rdio, among others — and that’s just in subscriptions).

With Spotify, Apple, and Google (soon to be joined by Amazon) all pushing hard into the subscription market that Rhapsody pioneered, it will be interesting to see what the late-game name-change accomplishes for the combined company (Nap-sody…?) and where the company’s new leadershiptakes things from here.

As someone who spent years advocating for Rhapsody and the subscription model, I’m hopeful for the company’s future. But I have to admit that I thought The Verge’s headline on the news (“Rhapsody rebrands itself as Napster because ¯\_(ツ)_/¯”) nailed it. As a former Rhapsody colleague told me last night, “There’s something both ironic and appropriate about the Napster brand — early, illegal, and arguably totally irrelevant — being the longest-surviving thing in digital music.”

Brad Hill


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