Napster: From Illegal Weapon to Killer Application

Amidst the hot debate about whether or not music should be free, are ethical and moral considerations as well. The emergence of digital entertainment, whether MP3, peer-to-peer (P2P) applications, video streaming, or audio books, has caused an inevitable shift in the entertainment market (Weiss, 2006). Napster rapidly became a success when it started allowing its customers to download MP3 music free of charge. In fact, Napster’s form of file-sharing shifted the entertainment market from a commodity base to a service base by eliminating cost to the customer. This paper will discuss the major issues in this case study, who the key stakeholders are and how they have changed since Napster’s beginning, what the stakes were for the different constituencies associated with Napster’s first and second incarnation, why Napster was unable to succeed in the marketplace, and what the appropriate balance is between fair use rights of consumers and the financial interest of artists and the recording companies.

Organizations like Napster take away a content owner’s ability to restrict the supply of his/her intellectual property on a large scale. Thus, the ethical concern was that artist in the music industry as well as major record labels would not be rightfully compensated for their work (Weiss, 2006). In the absence of control, copyright owners would be unable to maintain pricing control, and revenues would be lost as they are predominately driven from CD sales. As a result, the music industry has resorted to litigation and restrictive usage rules on licensed or retailed digital products (Weiss, 2006).

In the beginning Napster was not concerned with protecting the intellectual property rights of the artists and songwriters (Weiss, 2006). ...

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... be used in part to compensate the record companies and artists for providing music. Napster made a decision in the best interest of everyone and that was to take away the “free” idea of Napster (Weiss, 2006).

In conclusion, the Napster saga continued as it agreed to team up with various artists to provide a secure membership-based service. This new venture will provide the Napster community with quality file-sharing while also providing payments to right holders, including recording artists, songwriters, recording companies, and music publishers. Therefore, a resolution to satisfying the music industries argument would be to charge a fee for the use of the system so all parties will be satisfied.

Works Cited
Weiss, J.W. (2006). Business Ethics: A Stakeholder and Issues Management Approach, Fourth

Edition. Mason, OH: South-Western Thomson Higher Education.