Whatever Happened to Napster? And the Bundle Mistake You're Probably Making | The War on Mediocre Business Ep. 5

Whatever happened to Napster? At its peak it had 80 million users and was the single biggest thing on the internet. Then the music industry sued it out of existence and learned exactly the wrong lesson.

In this episode of Whatever Happened To, I break down how a 19-year-old named Shawn Fanning built the fastest-growing service the internet had ever seen, why Napster was really the loudest customer feedback the music industry ever got, and how the labels won the lawsuit but lost control of their whole business two years later when iTunes showed up.

I'm Scott Monday. I run two businesses in California's Central Valley and I love unpacking the businesses we all grew up with and the lessons operators can pull from them.

0:00 — The internet ground to a halt in 1998
0:25 — Napster becomes the biggest thing online
0:39 — How peer-to-peer file sharing actually worked
0:51 — Whatever happened to Napster? (and who I am)
1:03 — Shawn Fanning and the $20 album problem
1:35 — The program that hit 80 million users
1:50 — Napster was really customer feedback
2:16 — The fatal flaw: they never owned the music
2:33 — RIAA and Metallica take Napster to court
3:21 — The court order and the shutdown
3:41 — The labels won, then iTunes changed everything
4:26 — Music sales fall from 12 billion to 7 billion
4:58 — The real lesson: nobody wanted the bundle
5:21 — Where I sold a bundle for a decade at CRATE
5:57 — The question for your business
6:11 — Subscribe and where to read more

Napster wasn't just about free music. It was customers telling the industry they didn't want to pay $20 for 12 songs to get the 2 they actually wanted. The industry heard that message and spent its energy suing college kids instead of building the thing customers were asking for.

So here's the question worth sitting with: where in your business are you still selling a bundle your customers quietly resent?

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I write about this stuff every week in The War on Mediocre Business: https://scottmonday.substack.com