4 thoughts on “Napster to Spotify”

1. First of all, I LOVE how Sean Parker is referred to as ‘Sean “You-Know-What’s-Cool-A-Billion-Dollars” Parker’ in the CNN Money article. The Social Network is a great movie and I will proceed to call Sean Parker that from now on. Now, onto an actual substantive law school-quality blog post – or so I hope. It is obvious that Parker is a visionary in that he is able to predict how music listeners and record purchasers will prefer to listen to their music in the near future. Napster changed the game over a decade ago, Parker was involved in the early stages of the Facebook explosion, and now he is investing in Spotify – a software product that in essence fulfills Napster’s original goal of allowing people to listen to music for free. While Parker’s vision and ingenuity can’t really be questioned based on repeated success, his pattern also shows what makes entrepreneurial ideas so difficult. In the beginning of Napster, Facebook and Spotify there was no profit to be made, no income to be generated by the user friendly product. All of the software product’s utility was being enjoyed by the users and there was no money to be gained from the idea. Napster was killed before it was able to generate sizable profits, but Facebook and increasingly Spotify are starting to profit through advertisements either on the margins of the website or between songs. Today, user-friendly ultra-helpful cell phone applications and websites (think Google Maps, YouTube, , Yelp, Urban Spoon, etc.) have made life easier, simpler and faster for many Americans, but the inventors of those brilliant advances have not been able to enjoy profits that mirror the brilliance that coincides with the idea itself. Such dire profit forecasts may make entrepreneurs stop and think whether changing the word in 2013 is actually financially worth it.

   However, take a look at the weblink attached to this post. Innovative, business-oriented minds and the entrepreneurial spirit will never die in humans.

2. http://smallbusiness.yahoo.com/advisor/how-a-teenager-snubbed-college-toi-build-an-apps-empire-.html

3. Here is the article I referenced in class tomorrow:

   http://news.yahoo.com/indicted-megaupload-founder-opens-sharing-004242442–finance.html

   The article highlights the changes that Megaupload founder Kim Dotcom made to his new file sharing website, Mega, to get around some of the legal hurdles that Megaupload ran into. As I mentioned in class, one of the changes includes keeping the decryption keys for uploaded files in the hands of the user, instead of the website. Dotcom feel this will provide his website with protection from certain legal recourse and analogizes the change to “If someone sends something illegal in an envelope through your postal service,” he says, “you don’t shut down the post office.”

   This analogy presents an interesting question in the world of online sharing/communication/commerce. The nature of the online community makes it more difficult to police violations of the law on an every day basis. Additionally, because changes occur so rapidly online, it is easier for websites like Megaupload to adapt to legal challenges against their operations. The question is whether or not the legal system can keep up with these changes. It’s apparent that the music industry and legal community were not adequately prepared for websites like Napster and incurred losses in the hundreds of millions of dollars as a result. We discussed in class that the legal system should not be predictive in nature, but at some point it will need to catch up with the speed and evolution of the internet.

4. Although Sean Parker has played a major role in Spotify’s recent development, the company’s co-founder and CEO, Daniel Ek, has played the critical entrepreneurial role in building Spotify. Since founding his first company at the age of 14, Ek has been a major entrepreneurial player in the technology field. Below are two articles regarding Ek’s entrepreneurial philosophy. The first article provides a brief history of Ek’s successes, Ek’s concept of what it means to be an entrepreneur, and Ek’s strategy of successfully entering entrenched markets. The second article provides Ek’s four requirements for a successful start up: drive, skepticism, fastidiousness, and open-mindedness.

   http://www.thedishdaily.com/news/2012/05/16/spotify-co-founder-and-ceo-daniel-ek-entrepreneurship

   http://www.cbsnews.com/8301-505125_162-32943188/the-spotify-rules-of-entrepreneurship/