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before they were the province of a few magazine titles. Compiling
popularity charts – and the related advertising – is also opened up as
the medium switches from physical CDs and tapes distributed and
sold via established channels to new media such as MP3 distributed
via the Internet.
As if this were not enough the industry is also challenged from
another source – the sharing of music between different people
connected via the Internet. Although technically illegal this practice
of sharing between people‘s record collections has always taken place
– but not on the scale which the Internet threatens to facilitate. Much
of the established music industry is concerned with legal issues – how
to protect copyright and how to ensure that royalties are paid in the
right proportions to those who participate in production and
distribution. But when people can share music in MP3 format and
distribute it globally the potential for policing the system and
collecting royalties becomes extremely difficult to sustain.
It has been made much more so by another technological
development – that of person-to-person or P2P networking. Sean
Fanning, an 18-year-old student with the nickname ‗the Napster‘, was
intrigued by the challenge of being able to enable his friends to ‗see‘
and share between their own personal record collections. He argued
that if they held these in MP3 format then it should be possible to set
up some kind of central exchange program which facilitated their
sharing.
The result – the Napster.com site – offered sophisticated software
which enabled P2P transactions. The Napster server did not actually
hold any music on its files – but every day millions of swaps were
made by people around the world exchanging their music collections.
Needless to say this posed a huge threat to the established music
business since it involved no payment of royalties. A number of high-
profile lawsuits followed but whilst Napster‘s activities have been
curbed the problem did not go away. There are now many other sites
emulating and extending what Napster started – sites such as
Gnutella, Kazaa, Limewire took the P2P idea further and enabled
exchange of many different file formats – text, video, etc. In
Napster‘s own case the phenomenally successful site concluded a deal
with entertainment giant Bertelsman which paved the way for