Napster was an online music file sharing service created by Shawn Fanning while he was attending Northeastern University in Boston and operating between June 1999 and July 2001 . Its technology allowed people to easily copy and distribute MP3 files among each other, bypassing the established market for such songs and thus leading to the music industry's accusations of massive copyright violations. Although the original service was shut down by court order, it paved the way for decentralized peer-to-peer file-distribution programs, which have been much harder to control. The service was named Napster after Fanning's hair style based nickname.
Napster's brand and logo were purchased after the company closed its doors and continue to be used by a pay service. They also maintain: http://free.napster.com/
Shawn Fanning along with two friends he'd met online, Jordan Ritter, a fellow Bostonian, and Sean Parker, from Virginia, first released the original Napster in June of 1999. Fanning wanted an easier method of finding music than by searching IRC or Lycos. John Fanning of Hull, Massachusetts, Shawn's uncle, ran all aspects of the company's operations for a period from their office on Nantasket Beach. The final agreement gave Shawn 30% control of the company, with the rest going to his uncle. It was the first of the massively popular peer-to-peer file distribution systems, although it was not fully peer-to-peer since it used central servers to maintain lists of connected systems and the files they provided, while actual transactions were conducted directly between machines. Although there were already networks that facilitated the distribution of files across the Internet, such as IRC, Hotline, and USENET, Napster specialized exclusively in music in the form of MP3 files and presented a friendly user interface. The result was a system whose popularity generated an enormous selection of music to download.
Although the recording industry denounced music "sharing" as equivalent to theft, many Napster users felt justified in using the service for a number of reasons. Many believed that the quality of new albums had decreased by the late 1990s, with the typical bestselling album containing only one or two good songs bundled with many low-quality "filler" songs. At the same time, the cost of the CD format had decreased immensely, but the price of CD albums had stayed constant. People praised Napster because it enabled them to freely obtain hit songs without having to buy an entire album. Napster also made it relatively easy for music enthusiasts to download copies of songs that were otherwise difficult to obtain, like older songs, unreleased recordings, and songs from concert bootleg recordings. Some users felt justified in downloading digital copies of recordings they had already purchased in other formats, like LP and cassette tape, before the compact disc emerged as the dominant format for music recordings.
Irrespective of these justifications, many other users simply enjoyed trading and downloading music for free. With the files obtained through Napster, people frequently made their own compilation albums on recordable CDs, without paying any royalties to the artist/composer or the estate of the artist/composer. High-speed networks in college dormitories became overloaded, with as much as 80% of external network traffic consisting of MP3 file transfers. Many colleges blocked its use for this reason, even before concerns about liability for facilitating copyright violations on campus.
The service and software program were initially Windows-only, but in 2000 Black Hole Media wrote a Macintosh client called Macster. Macster was later bought by Napster and designated the official Mac Napster client, at which point the Macster name was discontinued. Even before the acquisition of Macster, the Macintosh community had a variety of independently developed 3rd party Napster clients. Most notably was the open source client called MacStar, released by Squirrel Software in early 2000. The release of MacStar's source code paved the way for 3rd party Napster clients across all computing platforms, of which gave users advertisement-free music sharing options.
Heavy metal band Metallica discovered that a demo of their song ‘I Disappear’ had been circulating across the Napster network, even before it was released. This eventually led to the song being played on several radio stations across America and brought to Metallica’s attention that their entire back catalogue of studio material was also available. The band responded in 2000 by filing a lawsuit against the service offered by Napster. A month later, rapper Dr. Dre, who shared a litigator and legal firm with Metallica, filed a similar lawsuit after Napster wouldn't remove his works from their service, even after he issued a written request. Separately, both Metallica and Dr. Dre later delivered thousands of usernames to Napster who they believed were pirating their songs. One year later, Napster settled both suits, but this came after being shut down by the Ninth Circuit Court in a separate lawsuit from several major record labels (see below).Also in 2000, Madonna, who had previously met with Napster executives to discuss a possible partnership, became irate when her single "Music" leaked out on to the web and Napster prior to its commercial release, causing widespread media coverage. Verified Napster use peaked with 26.4 million users worldwide in February 2001.
In 2000, A&M records and several other recording companies sued Napster (A&M Records, Inc. v. Napster, Inc.) for contributory and vicarious copyright infringement under the US Digital Millennium Copyright Act (DMCA). The music industry made the following claims against Napster:
(1) That its users were directly infringing the plaintiff's copyright; (2) That Napster was liable for contributory infringement of the plaintiff's copyright; and (3) That Napster was liable for vicarious infringement of the plaintiff's copyright.
The court found Napster liable on all three claims. 
Napster lost the case in the District Court and appealed to the U.S. Court of Appeals for the Ninth Circuit. Although the Ninth Circuit found that Napster was capable of commercially significant non-infringing uses, it affirmed the District Court's decision. On remand, the District Court ordered Napster to monitor the activities of its network and to block access to infringing material when notified of that material's location. Napster was unable to do this, and so shut down its service in July 2001. Napster finally declared itself bankrupt in 2002 and sold its assets. It had already been offline since the previous year owing to the effect of the court rulings. 
Along with the accusations that Napster was hurting the sales of the record industry, there were those who felt just the opposite, that file trading on Napster actually stimulated, rather than hurt, sales. Proof may have come in July 2000 when tracks from English rock band Radiohead's album Kid A found their way to Napster three months before the CD's release. Unlike Madonna, Dr. Dre or Metallica, Radiohead had never hit the top 20 in the US. Furthermore, Kid A was an experimental album without any singles, and received relatively little radio airplay. By the time of the record's release, the album was estimated to have been downloaded for free by millions of people worldwide, and in October 2000 Kid A captured the number one spot on the Billboard 200 sales chart in its debut week. According to Richard Menta of MP3 Newswire, the effect of Napster in this instance was isolated from other elements that could be credited for driving sales, and the album's unexpected success was proof that Napster was a good promotional tool for music.
One of the most successful bands to owe its success to Napster was Dispatch. Being an independent band, they had no formal promotion or radio play, yet they were able to tour to cities they had never played and sell out concerts, thanks to the spread of their music on Napster. In July 2007, the band became the first independent band to ever headline New York City's Madison Square Garden, selling it out for three consecutive nights. The band members were avid supporters of Napster, promoting it at their shows, playing a Napster show around the time of the Congressional hearings, and attending the hearings themselves. Shawn Fanning, the founder of Napster, is a known Dispatch fan.
Since 2000, many musical artists, particularly those not signed to major labels and without access to traditional mass media outlets such as radio and television, have said that Napster and successive Internet file-sharing networks have helped get their music heard, spread word of mouth, and may have improved their sales in the long term. One such musician to publicly defend Napster as a promotional tool for independent artists was Dj xealot, who became directly involved in the 2000 A&M Records Lawsuit. Chuck D from Public Enemy also came out and publicly supported Napster. Although some underground musicians and independent labels have expressed support for Napster and the p2p model it popularized, others have criticized the unregulated and extra-legal nature of these networks, and some seek to implement models of Internet promotion in which they can control the distribution of their own music, such as providing free tracks for download or streaming from their official websites, or co-operating with pay services such as Insound, Rhapsody and Apple's iTunes Store.
Napster's facilitation of transfer of copyrighted material raised the ire of the Recording Industry Association of America (RIAA), which almost immediately - on December 7, 1999 - filed a lawsuit against the popular service.  The service would only get bigger as the trial, meant to shut down Napster, also gave it a great deal of publicity. Soon millions of users, many of them college students, flocked to it.
After a failed appeal to the Ninth Circuit Court, an injunction was issued on March 5, 2001 ordering Napster to prevent the trading of copyrighted music on its network. In July 2001, Napster shut down its entire network in order to comply with the injunction. On September 24, 2001, the case was partially settled. Napster agreed to pay music creators and copyright owners a $26 million settlement for past, unauthorized uses of music, as well as an advance against future licensing royalties of $10 million. In order to pay those fees, Napster attempted to convert their free service to a subscription system. Thus traffic to Napster was reduced. A prototype solution was tested in the spring of 2002: the Napster 3.0 Alpha, using the ".nap" secure file format from PlayMedia Systems and audio fingerprinting technology licensed from Relatable. Napster 3.0 was, according to many former Napster employees, ready to deploy, but it had significant trouble obtaining licenses to distribute major-label music.
On May 17,2002, Napster announced that its assets would be acquired by German media firm Bertelsmann for $85 million. Pursuant to terms of that agreement, on June 3 Napster filed for Chapter 11 protection under United States bankruptcy laws. On September 3, 2002, an American bankruptcy judge blocked the sale to Bertelsmann and forced Napster to liquidate its assets according to Chapter 7 of the U.S. bankruptcy laws.
See main article: Napster (pay service). After a $2.43 million takeover offer by the Private Media Group, an adult entertainment company, Napster's brand and logos were acquired at bankruptcy auction by the company Roxio, Inc. which used them to rebrand the pressplay music service as Napster 2.0.
In the 2003 remake of The Italian Job, a flashback depicts Shawn Fanning (playing himself) stealing the program from a computer expert played by Seth Green while the latter is napping, providing a humorous folk etymology for the name. Later in the movie on the Los Angeles traffic control boards we see the phrase "You will never shut down the real Napster".
An episode of animated television series Futurama, "I Dated a Robot", centres on the illegal distribution of robotic celebrity clones over the Internet. The organization responsible for this was thought to be named "Nappster," a reference to Napster. It was later revealed, however, that the full name was "Kidnappster" with a piece of tapestry covering "Kid" from the logo.
In the South Park episode "Christian Rock Hard", Stan, Kyle, and Kenny illegally download music for inspiration for their band 'Moop.' They are then caught by police and shown the "horrors" music pirating does to musicians. After seeing this, they start a strike and famous musicians/bands join them, among them are Rancid, Master P, Ozzy Osbourne, Meat Loaf (all four also playing in Chef Aid), Blink-182, Horny Toad, Metallica, Britney Spears, Missy Elliott, Alanis Morissette and The Lords of the Underworld (minus Timmy).
Musical parodist Johnny Crass satirised the 2000 Metallica v Napster conflict in his song "Internet Sandman", a parody of Metallica's "Enter Sandman". Crass takes a heavily anti-Metallica stance in the parody, and depicts the band and co-founder Lars Ulrich in particular as vengeful property-protectors whose actions over the controversy "screw the fans".
Tom Smith wrote a song called "I Want my Music on Napster".