The ’90s were an amazing time to be in the music business. There were expensive parties, album launch events, and so much was happening everywhere. The massive sales of CDs from overwhelmingly popular artists like Nsync and Backstreet Boys were making an overwhelming profit. No one could have foretold how this was all about to change with just a simple idea of compressed audio, which would later be known as MP3. This article is all about taking you on a trip back in time and reflecting upon how impactful MP3 was for the music industry.
The birth of MP3 was a pivotal moment in the history of entertainment and media. No one could tell how it was about to disrupt the whole music industry. It made an enormous impact on musicians all around the world because no one was buying physical copies of music anymore. Who would, in their right state of mind, buy those CDs? If they could get that for free, right? The music industry wasn’t viable anymore, and it failed because of the rapid changes. The concept of MP3 changed people’s relationship to the internet, culture, and society’s overall cogs.
Fraunhofer Institute is considered to be the birthplace of MP3. Karlheinz Brandenburg was the co-inventor of MP3 and was often considered the father of MP3. The story began in West Germany in the late ’70s. Compression of music was a concept people were just familiar with. A fine German gentleman called “Dieter Seitzer” was the visionary who came up with the idea of MP3. He noticed the digitization of music with a CD and thought, why don’t we just store all the data in ONE centralized computer and then stream it to people? This is why he applied for a patent to use the phone system to transmit music. This idea originated in 1982.
However, they had a huge problem considering how an average CD took about a million bits of information to store only one second of audio. And the telephone line they were trying to use could only do about 128,000 bits per second. For his idea to work, he had no other option than to reduce the data size from the disc by at least 90%, which was deemed impossible.
Around the late 80’s Dieter’s star student Brandenburg, made a breakthrough. He studied psychoacoustics and realized how the human ear had a handful of flaws. For example, two tones that were similar together in pitch were hard to differentiate and would cancel each other out. This made him realize how most of the intricate audio details you’d get from a compact disc were not discernible to most ears. Thus, he came up with a series of mathematical models to eliminate those unwanted data that you probably won’t hear. By doing this, he was able to do what everyone thought was impossible, which is shrinking the file by an extraordinary amount. To the normal ears, there wouldn’t be any discernible differences from the original sound, which exceeded the expectation and shocked everyone.
Fast-forwarding to 1995, Fraunhofer posted a shareware version of its mp3 coding software on the internet which had very limited functionality. There was a serial number method where you had to buy and punch it to unlock full access. But because of the way software underground worked in the ’90s, these numbers were very accessible. The software engineers tried to counter it by sending prosecutors after them. The software started to leak out of the academic audio and computing sphere to the broader public. And by ‘96, the pirates found out about it.
Around ‘98, everyone started listening to free music on their computer, especially teenagers. Collecting music on the MP3 version rapidly became a pastime activity for a lot of people. Dan Tsurif, a former MP3 pirate, was the founder of the MP3 piracy group titled “AudioPunks”, specializing in multiple music genres. They had downloaders from all over the world. Back in the ’90s, if you wanted to find these mp3 files, you had to be in an IRC channel, which was super exclusive, invite-only chat rooms. They had a ratio system, where if someone had to download one song, they had to upload two in return. Multiply that amount to a hundred, and we could clearly see how overwhelming the spread was. Back then, it was considered as “File Sharing” and not “Piracy.”
In the late ’90s, the staff of the recording industry association of America, most commonly known as RIAA, started to monitor the internet to realize the rise of mp3. They didn’t consider it a threat in the early days, but they saw it as an opportunity. They started calling the idea a “Celestial Jukebox” which was a theoretical construct. It was an idea that every song ever made would be available on the cloud, right underneath your fingertips. But it was a missed opportunity by the industry. The former executive of Sony Music Group “Rick Dobbis” says he didn’t realize the importance of the whole concept. Considering the digital revolution, every company had only one question in mind. How would they use this to their advantage? Sony played its hand by trying to legalize the download process for the first time by adding a price tag. According to the major music industries, the computer was only made for crunching numbers and making spreadsheets. The companies who tried to collaborate with the music industry had trouble expressing how it could benefit them, as they had no idea about the record business world. This is the time where peer-to-peer came and changed everything.
In 1999, people realized file-sharing was really fun but complicated. Shawn Fanning and Sean Parker then created the legendary app called “Napster”. They were two teenagers hanging around the IRC, as mentioned earlier chat rooms exchanging mp3 files. Back then, the MP3 files were available, but there weren’t any central indexes from where you could download them easily. That’s when Fanning proposed the idea of a new technology, which would connect these files, a p2p server. It’s basically a technology where multiple computers have access to each other’s files, making it the ultimate trading tool. Sean Parker acted as the face of the organization, where Fanning wrote the code and dealt with technical issues. It was the first computer program he ever wrote.
When RIAA discovered Napster, they realized the idea of their Celestial Jukebox was revived. They called Fanning and Parker and informed them how their work was infringing on copyright, but they wouldn’t budge. Napster became immensely popular overnight. In an RIAA board meeting held at the Four Seasons Hotel, LA, in February 2000, all the heads of the music industry labels were present. In that meeting, they realized that every single song they had ever produced, be that hit or miss, was available on Napster. On a question of morality, most people didn’t feel like it was stealing but sharing. When people could get music for free, there was a lot of concern about its moral code. When Napster hit, it wasn’t only an issue for the music industry, but a global issue considering the teenagers learned how to do the same thing with movies on DVDs. With time, all kinds of media you’d be able to play on the computer was being made free to everyone. However, Napster was a good thing for the independent artists because it gave them exposure, as they wouldn’t have to sign a record deal to release their music. But it wasn’t so good for the major league artists, as it directly affected their revenue.
Lars Ulrich, the drummer of Metallica, and his bandmates made a movement against Napster, saying it was illegal and filed lawsuits against its creator for copyright infringement. This movement made Metallica fans worldwide downright hate the band, resulting in posters, pictures, and media that shunned Metallica at every step. Napster was like a symbol of freedom to all music lovers, and Ulrich’s movement directly attacked said freedom.
On December 7th, 1999, RIAA officially filed suit against Napster for facilitating copyright infringement. The trial took place in San Francisco on 3rd May 2000. Napster argued how they personally don’t share any files but only facilitate connections. Therefore they should not be held accountable for their actions. RIAA strongly declined, insisting how this was a theft of intellectual property. In the end, the judge ruled Napster was guilty of intellectual theft, which left Napster bankrupt. It would’ve been considered a very dark day for music lovers all over the world until dozens of apps similar to Napster started emerging all over the internet. They had names like “MyNapster”, “Napigator,” “Cute MX,” etc., which was a direct punch in the gut of the system. Iit was incredibly difficult for the law to address and shut them down.
The answer to this piracy was to give the people what they wanted, but in a legitimate way with a fair and reasonable price. This is when people felt the need of an online music store. The labels which tried this idea failed miserably. People from the music industry said the users were promoting piracy, whereas the tech guys debated how the industry needed a more stable business model. Only one person was able to act as a bridge between this gap, and that person was none other than Steve Jobs. Back then, Mac Products only represented about 3% of the market share, but he had a mission of bringing this company around. When he introduced the iPod in 2001, he saw a great opportunity in the music space for Apple.
In 2002, Steve Jobs announced to RIAA how he was about to create an online music store. In a meeting with them, Steve displayed the inner workings of the iTunes store. Its simplicity made it brilliant, and the fact that it worked better than anything anyone has seen before acted as their savior. Steve Jobs wanted every song on iTunes to cost only a buck. He wanted to sell singles off of every album which was on iTunes. He did not want a single album on the store that you couldn’t break down into singles, which seriously impacted the music industry who wanted to sell whole albums. The fans were really happy with iTunes and declared how this is what they’ve been waiting for for a long time. CD sales had dropped down almost one quarter in just three years. Buyers got fed up with paying for the full album where they only loved two or three songs, which made iTunes very viable. This made a lot of artists take their products off the platform. With the sales slipping, the industry shifted its attention back to people who pirated music, which created a lot of controversies. In protest, the head of RIAA, Hilary Rosen, resigned. This situation made people all over the world hate RIAA, and for this reason, even more, people got on board the pirate ship.
The industry, over the course of 15 years, shrank significantly. When they were under threat, the industry decided to merge itself with other music enterprises, which eliminated many jobs for the common people.
Around the mid-2000’s, Piracy was still a huge problem. Everyone had moved to torrents to get music. The industry was preoccupied with P2P and illegal theft and had to think of a new strategy to survive.
All of these issues with piracy gave birth to a small idea, which popped inside the head of Daniel Ek, a CEO of a torrent company, which made him conjure up a plan to make people go legit again with the business model he called “Spotify.” He talked to all the labels and wanted them to give his service a chance. The industry had learned from their previous mistakes and gave him a chance to solve this issue. Physical sales were over, whereas the idea of streaming was taking over. The idea re-incarnated the music business like a cure for fever.
The MP3 is now obsolete technology. However, did you know whenever you’re streaming music on your phone nowadays, you’re using the same technique Brandenburg pioneered back in the ’80s? Mp3 created more value than it destroyed with its chain of events. The idea of “Celestial Jukebox” was finally a reality, and it all happened because of MP3. We hope you enjoyed your trip back in time. What are your opinions on the MP3? Were you one of the ones who used Napster?
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