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Napster is an online music store owned by Best Buy. It was originally founded by Sean Parker and Shawn Fanning in 1999 as a free online peer-to-peer (P2P) file sharing service, which mainly focused on sharing MP3 audio files.
The original Napster application allowed users to illegally bypass digital music industry standards, resulting in massive intellectual property violations. As a result, the original Napster organization faced legal difficulties for copyright infringement. During its heyday, there were 25 million Napster users with approximately 80 million sound recordings.
Today, Napster offers paid services, such as a basic subscription to listen to online music, a premium subscription to download discounted audio files and Napster Mobile, which allows users to listen, purchase and download music via mobile devices.
Even though several programs for file transfer were available when Napster emerged - including Hotline, Internet Relay Chat (IRC) and USENET - Napster was a trend setter that dealt exclusively with MP3 audio files.
Originally, Napster attracted music enthusiasts in search of hard-to-find sound recordings, such as older, unreleased songs or bootlegs of live concerts. All songs were available for free download. Users created personalized compilation albums by downloading the songs on recordable media, such as CDs, without paying fees to artists, writers or record companies.
As Napster grew, networks became overloaded. For example, approximately 80 percent of university network traffic was attributed to MP3 downloads and file transfers, and Napster was subsequently blocked on college campuses.
Napster also faced piracy allegations from the Recording Industry Association of America (RIAA), which filed multiple injunctions and lawsuits against Napster. A&M Records, Inc. vs. Napster, Inc. was the key court case that changed the course of Napster history. As a result, the U.S. Court of Appeals for the Ninth Circuit found the plaintiffs copyrights were infringed by Napster. Napster was ordered to provide $26 million in compensation to copyright owners and plaintiffs.
In February 2001, a $10 million advance against future licensing royalties was also paid. In March 2001, a preliminary injunction was issued ordering Napster to remove all plaintiff sound recordings, whereby Napster halted its service. To settle remaining charges, Napster's free service converted into a paid subscription service. In 2008, electronic retailer Best Buy purchased Napster for $121 million.