Napster Business Model | Business Model Navigator

Overview:

Napster is the name given to three music-focused online services. It was founded as a pioneering peer-to-peer (P2P) file sharing Internet service that emphasized sharing digital audio files, typically audio songs, encoded in MP3 format. The company ran into legal difficulties over copyright infringement. It ceased operations and was eventually acquired by Roxio. In its second incarnation, Napster became an online music store until it was acquired by Rhapsody from Best Buy on December 1, 2011. Later companies and projects successfully followed its P2P file sharing example such as Gnutella, Freenet, Kazaa, BearShare, and many others. However, some services, like LimeWire, Scour, Grokster, Madster, and eDonkey2000, were brought down or changed due to copyright issues.

Industries:

Information Technology

Entertainment

Similar firms (based on pattern co-occurrence):

2 shared patterns

3 shared patterns

2 shared patterns

Business Model Patterns:

Digitization

How they do it: Napster was a pioneer in the are of digitizing music in form of the MP3 format. Its intial platform allowed its users to share those MP3s. Although the service was shut down due to copyright violations, a lot of digital music services emerged afterwards building on the success of Napster.

Peer-to-peer

How they do it: Napster’s initial offering was to allow users to exchange MP3 files with each other. This was revolutionary as this wasn’t possible with older music formats such as CDs. By allowing users to share their music, they were able to access a greater library of music than they previously owned. It’s ueasy to use software design made it popular.

Subscription

How they do it: Today Napster operates as a music streaming service, allowing users to listen to an unlimited amount of music online for a monthly subscription.

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