Home > Articles > M&M > A History of the Digital Music Revolution - Part V


Life After Napster













August 2001

Vivendi Universal acquires MP3.com.


September 24, 2001

Napster agrees to settle the class action lawsuit for copyright infringement by the National Music Publishers Association for $26 million.


October 2001

EMI agrees to license its catalog of music to Sony Music and Vivendi Universal’s Pressplay. 


October 4, 2001

The RIAA sues the companies behind the Grokster and Morpheus file-swapping services.

The company behind KaZaA is added later.


November 2001 

Vivendi Universal licenses its catalog to the subscription service FullAudio.


December 11, 2001

The MusicNet digital music subscription service (owned by BMG, EMI and Warner Music) launches, with minimal notice by the greater music-swapping public.


December 19, 2001

The Pressplay digital music subscription service (owned by Sony and Vivendi Universal) launches, with minimal notice by the greater music-swapping public. 



January 10, 2002

The Napster digital music subscription service launches, with minimal notice by the greater music-swapping public. 


January 23, 2002

U.S. District Judge Marilyn Hall Patel puts a hold on the lawsuit against Napster by the RIAA until February 17, as the two sides discuss a possible settlement.


March 2002

9th Circuit Court of Appeals confirms that Napster must remain offline.  The company later announces that it will postpone the launch of its subscription-based service.


April 2002

The FullAudio legal digital music service is introduced.


May 2002

File-sharing site Audiogalaxy is sued by the RIAA.


May 14, 2002

Founder Shawn Fanning and several other executives including CEO Konrad Hilbers resign from Napster, in reaction to a recent rejection by Napster's Board of Directors of an offer from Bertelsmann AG to purchase the company.  Napster is near bankruptcy, and has laid off many of its employees in recent months.


May 17, 2002

Just days after the round of resignations, Bertelsmann AG’s offer to purchase the company is accepted.  Fanning, Hilbers, and the rest of the group that resigned in reinstated.  Bertelsmann will acquire Napster's assets and commit to paying $8 million to cover Napster's debts.


June 3, 2002

Napster files for Chapter 11 bankruptcy in an effort to restructure the company and protect it (and its intended new owner Bertelsmann AG) from creditors. 


June 17, 2002

Audiogalaxy settles its copyright infringement lawsuit with the RIAA for a “substantial” undisclosed sum.  The company blocks access to most of the copyrighted music files that were being downloaded by its users.


August 29, 2002

Napster seeks approval of its proposed sale to Bertlesmann AG in a Delaware court.  The RIAA and Music Publishers Association both object to the sale.


September 3, 2002

Bankruptcy Judge Peter J. Walsh blocks the sale of Napster to Bertelsmann AG.  Internal documents revealed that Napster CEO Konrad Hilbers expressed specific allegiance to Bertelsmann, which put in doubt whether the deal that had been structured was the most fair offer available to Napster to reimburse those to whom Napster owed money.  Most of Napster’s remaining employees, including founder Shawn Fanning, are let go as the company prepares for Chapter 7 liquidation.


November 15, 2002

Roxio bids $5.3 million in cash and stock to purchase the remaining assets of Napster, including its most valuable asset, the logo and name of “Napster.”


November 27, 2002

Roxio’s offer to purchase the assets of $5.3 million Napster is approved by the bankruptcy court.




January 2003

American retail giants Best Buy, Tower Records, Virgin Entertainment, Hastings Entertainment, Trans World Entertainment and Wherehouse Music join forces to launch Echo, a legal online digital music service.


The International Federation of the Phonographic Industry (IFPI), in association with the RIAA, launches the Global Release Identifier (GRid).  The technology is designed to identify and track copyrighted works as they are distributed online.


March 10, 2003 

Fleetwood Mac's “Peacekeeper” and Madonna's “American Life” become the first major label singles to be sold digitally online.  The singles will be sold through legal services like Rhapsody, MusicNet and Pressplay.


April 3, 2003

The recording industry sues four college students in federal court for sharing digital copies of thousands of songs over file-sharing networks.


April 25, 2003

A federal judge at the US District Court in Los Angeles rules that the companies behind file-sharing services Morpheus and Grokster are not legally responsible for the illegal exchange of copyrighted material by their users. The IFPI and RIAA appeal the decision.


April 28, 2003

Apple Computer Inc. announces the launch of the iTunes Music Store.  For 99 cents per song or $10 per album, users can purchase songs from the music catalogs of all five major record labels.  The site is a success, selling 5 million downloads in its first eight weeks.



April 29, 2003

Users of file-sharing programs KaZaA and Grokster begin receiving messages the RIAA, reminding them that sharing copyrighted music on peer-to-peer networks is illegal.  The RIAA sends millions of these messages, with minimal impact on the habits of users.


May 2, 2003

The four college students sued by the RIAA for file sharing agree to the terms of a settlement.  The students pay damages of between $12,000 and $17,500 each, but admit no wrongdoing.


June 5, 2003

A US district court forces Verizon Communications to reveal the names of four of its customers to the RIAA, which had accused them of offering copyrighted songs for download over Verizon’s Internet service.


June 25, 2003

The RIAA announces it will begin preparing lawsuits against users of file-sharing networks who distribute copyright music.


July 2003 

The RIAA issues over 1,000 subpoenas to Internet service providers to obtain the names of those users who are believed to be making available the largest collections of music to other users of file-sharing networks.


July 28, 2003

Roxio announces it will launch its new legal online digital music store, under the name “Napster,” which it acquired the previous November.


July 30, 2003

Believing that the subpoenas recently served against it were unconstitutional, Pacific Bell Internet Services files a lawsuit against the RIAA.


August 8, 2003

Boston U.S. District Judge Joseph L. Tauro rejects the efforts of the RIAA to force Boston College and Massachusetts Institute of Technology to reveal the names of several students believed to be sharing music online.  In the ruling, Judge Tauro states that the subpoenas, which were issued in Washington, cannot be served in Massachusetts.


August 19, 2003

The RIAA and the IFPI turn to the 9th Circuit Court of Appeals to overturn the ruling of the US District Court in Los Angeles that stated that the companies behind file-sharing services Morpheus and Grokster are not legally responsible for the illegal exchange of copyrighted material by their users.


September 9, 2003

The RIAA announces lawsuits against 261 alleged users of file-sharing services for illegally trading copyrighted music online.  The RIAA issues a statement that warns that it is prepared to issue thousands of lawsuits to curb the sharing of copyrighted music.


October 9, 2003

Roxio introduces a test version of its new legal online digital music store, which will sell songs for 99 cents each.  The new software will be called “Napster.”







   PART I:  The Dark Ages:  When Time Stood Still

   PART II:  Dawn of the Computer Age

   PART III:  Dawn of the Internet

   PART IV:  The Rise of (and Battle Over) the MP3

   PART V:  Life After Napster 


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