The Labels' Losing Battle

A History of Digital Music (Timeline)

BY WARREN COHEN

May 23, 2002

1987
MP3, a digital format which compresses a song to one-twelve of its original size, invented by German research institute. It becomes the de facto standard for "ripping" music to computers from CDs.

September 14, 1998
The Diamond Rio the first portable MP3 player is announced. Later, labels sue the manufacturer, claiming that the Rio is illegal since it has no built-in copy protection.

October 28, 1998
As MP3 proliferate on the web, the music industry lobbies for passage of the Digital Millennium Copyright Act, which outlines how intellectual-property laws will apply to the Internet.

March 1, 1999
Tom Petty releases new song "Free Girl Now" on MP3.com. Two days later, it is taken off due to concerns from his label; Petty says he removed it himself.

June 15, 1999
An appeals court rules that the Diamond Rio is legal, as the law that mandates copy protection in audio devices doesn't apply to computer hard drives or peripherals.

June 1999
Nineteen-year-old Shawn Fanning launches Napster, a program that links hard drives, allowing people to easily swap music files.

December 7, 1999
The Recording Industry Association of America sues Napster, alleging copyright infringement and seeking damages of more than $100 million. Napster claims its not liable for its users' behavior. Songwriters and music publishers also sue.

January 17, 2000
MP3.com launches the Beam-It service. Beat-It allows users access to a database of online CDs once they insert a physical CD into their computer as proof of ownership. The labels promptly sue.

March 14, 2000
Nullsoft, which was acquired by AOL in June 1999, releases Gnutella, another file-exchange program. Within hours, it disappears from the company's Web site. But it is widely copied by other software writers, who keep it alive.

April 13, 2000
Metallica sues Napster for copyright infringement, followed two weeks later by a similar suit from Dr. Dre, who says, "Napster is taking food out of my kids' mouths."

April 28, 2000
A judge finds MP3.com guilty of copyright infringement. While four of five major labels collect $20 million each, Universal receives $53.4 million. In 2001, Universal acquires MP3.com for $372 million in cash and stock.

July 26, 2000
A federal judge orders Napster to shut down its service until the music industry's case goes to trial. Two days later, an appeals court reverses the decision, pending further review. Napster claims it has more than 20 million users.

Oct. 31, 2000
Even though its music division is suing Napster, German media giant Bertelsmann invests about $60 million in the company, saying it will drop its lawsuit once Napster retools its service to respect copyrights.

Feb. 12, 2001
An appeals court orders Napster to block copyrighted songs from its service, but some of the service's 60 million users find ways around the blocking system. In July, Napster shuts down while it develops a new, copyright-friendly pay service.

May 15, 2001
Country star Charley Pride releases first U.S. copy-protected CD, preventing people from ripping it to computers.

October 3, 2001
Labels sue peer-to-peer systems Morpheus, Grokster and FastTrak. One study shows more songs are swapped on these type of services than during Napster's heyday.

December 2001
Label-backed subscription services MusicNet and Pressplay launch, with charges of $9.95 per month. Artists like No Doubt and the Offspring demand that their music be removed from the services because of royalty disputes.

April 2002
The global music industry reports sales fell five percent in 2001, due mostly to piracy. Also in 2001, more blank CDs were sold than music CDs.


With additional reporting by Kara Norman. Copyright 2002, Rolling Stone. All rights reserved.

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