How Broadband Has Changed the World: Part 2 - Napster, Myspace, and The Dawn of Web 2.0

How Broadband Has Changed the World: Part 2 - Napster, Myspace, and The Dawn of Web 2.0

In the early days of the internet, there was a chaotic flurry of activity and growth, along with a thirst and potential for faster speeds and better platforms upon which to share various media (e.g. music, video, games).

It was only a matter of who was going to recognize and take advantage of the opportunities, and when. website growth over time

Image via Internetlivestats.com

Between the years of 1995 - 2000, the internet had grown from 23,500 websites to over 17 Million.

By 2001, the online universe had grown to 500 million users and 30 million websites. Dotcom startups were hot stuff and investors wanted in on their expansion – often overvaluing stock prices.

But like scientists explain that the universe cooled and slowed down after the big bang, so did the dotcom bubble eventually burst. Stock valuations deflated, many companies went out of business and internet entrepreneurs were forced to work with what was left over.

The Evolution of Online Sharing and Self-expression

As the internet revolution of the 1990s was changing the way we communicated, another technological innovation being developed and no one could predict how disruptive of an impact it would have on the world. 

The MP3 (.mp3) was introduced in the mid-90s as a way to compress large music files for storage on small hard drives.

Suddenly, music fans (mainly teens and college students) were "ripping" their entire music collections onto their PCs for easier access and storage. 

In 1998, after the official standardization of the .MP3 was accepted, a new music player application called WinAmp was released - enabling people to use their PCs as a stereo system.

The popularity of this new file format spread quickly throughout the internet. A perfect storm of technology was brewing.

Students Shawn Fanning and Sean Parker saw how their friends were using MP3s and thought it would be cool if they could share music with their friends. Fanning then created Napster, a Peer-to-Peer file sharing platform that would allow you to search for and download music files with anyone else with the program installed.  

Napster caught on like wildfire in 1999 would lead to a massive explosion of people sharing and downloading MP3 files across the world. According to Wikipedia "High-speed networks in college dormitories became overloaded, with as much as 61% of external network traffic consisting of MP3 file transfers." 

The internet was all of a sudden a much cooler place to hang out.

By February 2001, 80 million people were using Napster and 250 billion songs were being downloaded in one month

Outside of college campuses Broadband usage grew dramatically from 5 million users in 1999 to 67 million people in 2002 (roughly 10% of home internet users) – thanks to an increased need for faster downloads.

While college kids were enjoying access to a world of free music, the Recording Industry Association of America were not so happy.

Several A-list musicians like Lars Ulrich of the band Metallica and rapper Dr. Dre waged a war on illegal downloading; going so far as to seek legal action against individuals and file a class-action federal lawsuit against Napster which was elevated to the U.S Supreme Court. 

This public battle over copyright infringement would later contribute to the demise of Napster, and forever influence how all forms of media would be shared and distributed through the internet.

Music fans were pissed that their “rights” to free digital music were being threatened. Many argued that you can record a song from the radio without punishment. So, why isn’t downloading considered the same thing?

The R.I.A.A's actions only made music fans more outraged and an online revolution of criticism, mockery and calls for boycotts ensued.

 

Metallica haters

 

Image via ShreddingRadio.com

 

There was no easy solution in sight. 

At the height of all of this drama, Steve Jobs took the opportunity to launch iTunes in January 2001 - just one month before the federal court ruling which brought Napster to its knees. Again, internet users felt like “the man” was trying to bring them down.

Seeing this growth of broadband especially in the college markets, Bill Gates also made a $1 Billion dollar investment in 2002 by launching Xbox Live, a subscription-based online gaming service, to compete with PS2. He bet people would be willing to pay a $9.95 subscription fee for online gaming, an idea many moaned was “Preposterous!” at the time.

While Napster eventually fell, it had left a legacy of a more socially connected, media sharing internet.

The time between 1999-2003 was also a time when the concept of “online identity” was evolving – especially after the launch of the Blogger and Livejournal platforms which made it easier for people to publish their content without needing to code a website. WordPress would launch later in 2003 and push the blogging world  and web development as a whole  even further.

People began to share more personal information and ideas on their blogs – talking about their true identities, sometimes representing themselves with their true name rather than an alias.

With this great opportunity for people to share and comment on exactly what they were thinking came varying degrees of positive and negative consequences. For example, some people got fired, while new authors, artists and  musicians were being discovered through their personal shared stories via blogs.

Image via filmofilia.com

Social media platforms were the natural next step in the online self-expression evolution.

Out of web 1.0 websites like Classmates.com, SixDegrees.com and AOL community forums came new platforms like Friendster, which offered a new way to connect with other people online through common bonds.

While Friendster had reached 2 million users in the first few months, a group of employees at a struggling post-dotcom crash era internet marketing firm called eUniverse built their own social media platform – Myspace - taking the best features of Friendster and giving it a broader focus beyond dating.

Unfortunately for Friendster, which suffered numerous outages, managerial issues, and infrastructure problems (i.e. it “couldn’t handle the heavy traffic from users”) it wasn’t able to keep up with the demand people had for social networking, and users eventually migrated en masse to MySpace.

We began expressing ourselves in new ways through customizable MySpace profiles.

The “Myspace Face” became popular, and we relished in the idea in showcasing our “artfulness” through our profile images taken at high angles, and showcasing our love for the music that defined who we were. 

 

By the end of 2004, the number of broadband internet users was nearing par with dial-up subscriptions and connection speeds were increasing. The thirst for speed wasn’t slowing down.

Likewise, mobile phone adoption was increasing; 45% of teens (38% of which were sending text messages daily) and 65% of adults now owned a cell phone in the U.S. Cingular Wireless was also charging an additional $2.99/month to users to use a Myspace app on their mobile.

88% of online Americans said the Internet plays a role in their daily routines. And 53% of Internet users said they do more of certain everyday activities simply because they can do them on the Internet.”

Teens were spending up to an hour and 22 minutes using social networking platforms like MySpace daily – time was being taken away from watching television to go online instead.

There was so much more to see and do on the internet thanks to new ways to communicate with one another and look up information (e.g. Google and Wikipedia).

At the height of Myspace’s popularity in 2005, former PayPal employees Chad Hurley, Steve Chen, and Jawed Karim saw an opportunity to provide a streaming video platform that enabled everyday people to upload videos of themselves and share them with the world. MySpace had proven that our daily lives were as exciting as a reality TV show. 

So, why not provide the video platform to do just that? And so, in 2005 YouTube was born.

The MySpace team quickly saw the opportunity to embed YouTube videos onto the platform and a new partnership bloomed. It also helped to spread YouTube content across the web.

Thanks to MySpace, new careers were being launched. Tila Tequila was one of the first internet celebrities to get her own reality TV show – and some kid named Justin Bieber was finding his first fans.

Justin Bieber early Myspace pageImage via Obsev.com

Even independent filmmakers had an opportunity to get their content seen by the world.

Arin Crumley and Susan Brice created “Four Eyed Monsters” and were the first to really tap into “the power of social networking” to promote their film. They created a 9 episode video podcast to document the behind the scenes of getting their film screened and crowdsourcing app so their fans could demand screenings at their local theater.

They also reached out and partnered with Youtube to become first feature-length movie to be uploaded to the site, which at the time had a 15-minute maximum upload time. 

In 2005, these two were paving the way and writing the playbook that many others would follow.

Other entertainers such as Dane Cook, The Arctic Monkeys, The Plain White Tees, Lily Allen and Katy Perry were also finding their first fans on the social network.

Finally, there was a platform to prove whether an artist could attract an audience before they signed on with a record label. And for the first time, fans could communicate and share feedback with the artists who captivated them.

How Brands Were Getting in on the Action

Because MySpace was growing in popularity, brands naturally wanted to “tap into” this action, but were often left clueless, frustrated and apprehensive on how they could participate in this new “digital landscape.”

By 2005, most advertisers were still adjusting to pay-per-click Google ads via the Adwords auction (introduced in 2003), versus homepage takeovers and rich media ads. Now, there was a new beast to conquer and none of it made any sense.

To participate, brands would have to be willing to give up their brand message and let the customers take control. Fortune 500 brands no longer owned the medium and were competing with smaller businesses, “Myspace Celebrities,” teens with strange hair, and there was absolutely nothing they could do about it.

Everything ad execs had been taught about attracting and engaging customers was suddenly wrong.

But a few companies recognized and embraced the opportunities to have a deeper connection and conversation with customers online – selling and sharing the brand message in a new and interactive way. Large CPG brands like Coke, Apple and Procter and Gamble (P&G), and Burger King, got into the game early and experimented with how to launch products with social media.

Burger King’s “Subservient Chicken” interactive online video game helped sell the brand message of “chicken just the way you like it” to an online audience.

 But still, the advertising industry at large did not understand, and tried to push the "traditional ways" onto the new platform. According to Bloomberg.com, brands were able to purchase corporate MySpace pages for roughly $100,000 and used those pages to connect with MySpace users in new ways.

P&G created a social media campaign called “miss irresistible” and brand page to launch a new Crest toothpaste which drew 40,000 new MySpace friends and 3 million page views.

Other brands like Unilever’s Sunsilk shampoo were buying MySpace homepage takeover ads to wrap a brand message around social media content. Little did Myspace realize at the time, this push would contribute to it's downfall.

Myspace homepage takeoverImage via adrants.com

By 2005, MySpace had established itself as the most popular media advertising property online with 27 million members (it eventually sold to News Corp. in 2005 and signed a 3-year exclusive ad sales agreement with Google in 2006).

Meanwhile, a young Harvard student named Mark Zuckerberg was feverishly working on a social media platform that would connect university student networks across the U.S. (and soon the world).

While MySpace got caught up in serving eyeballs to advertisers, and giving users the ability to express themselves through music and custom profile, Zuckerberg focused on creating a more streamlined platform with new ways to connect like-minded users via groups, and keep people updated on their friends’ lives.

Early Facebook profile page

As is dramatically portrayed in the film The Social Network, Zuckerberg was also less focused on generating ad dollars in the early days.

Instead, the strategy was to build a closed network consisting exclusively of college students from 2004 until 2006, when the platform would eventually become open for anyone to use. He wanted to understand the culture that was being created before worrying about generating revenue. Many other tech startups would follow that model in the years to come.

As a result, Facebook overtook Myspace's user base by 2008, with many users complaining that Myspace had become “too commercial,” that aliases like XxSparkleZKittenzxX were dumb, and pages were inconsistent and taking too long to load.

Myspace error message
Myspace vs. Facebook market share over time

At this time, the expansion of the digital universe was accelerating again as high speed access proliferated (it had far surpassed dial-up at this point) and new businesses and technologies were rapidly emerging to make things even better and faster for life as we know it today.

The success of social networking sites like MySpace, Facebook, YouTube and more inspired a new generation of entrepreneurs and startups to emerge and once again attract investor attention.

Come back next week to see how all of this evolved and created the digital world in which we currently live.



About The Author

Andrea Wahbe is a freelance B2B marketing strategist and corporate storyteller who writes about Canadian SMEs, marketing, and digital media trends. Follow her on Twitter.