Napster (2000) - opportunity squandered

I've been doing research for an upcoming article I'm writing about the progression of popular music history. Lately, I have been looking specifically at the rise of Napster (circa 2000) and the cataclysmic change it caused to the entire industry.

In 2000, Napster had over 38 million active users. It was a genuine phenomenon. An interesting poll was run in 2000 by Webonize (http://www.businessweek.com/2000/00_46/b3707213.htm) where current Napster-using college students were asked if they would be willing to pay a monthly subscription to continue using the Napster service. 68% of users responded yes that they were willing to pay a fee upwards of $14.99 per month.

If you do the math on this, it means that roughly 25 million active users would pay a total of $375 million per month to use the service (that cost next to nothing to run by the way). Over a year, that translates into billions in recurring revenue for the record industry (because they already had Napster in their cross hairs by this time anyway) and a hole lot of happy customers.

I might even go so far as to contend that this was the last big chance the industry had to save themselves from the woes that are being experienced today. Think of what Napster could have become in terms of a whole new way to find music. It would not have taken much to turn it into an amazing social network where people discovered and shared music. Back then, people were actually willing to pay for music.