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History of Internet Music Services
by Alex Cosper (2/15/2014)

Music became an important part of the internet in the late 1990s when it became practical to listen to music on computers. Even though it was possible to stream music online in the mid-nineties, most people had slow internet connections on "plain old telephone" lines. It was known as "dial-up" and it was guaranteed to be a painful internet experience. At first the answer to bandwidth was faster computer modems, increasing from 14k to 28k then 56k. By the end of the nineties many people had internet connections that were fast enough to download music.

The main turning point in internet music history was 1999 when Napster and MP3.com became enormously popular websites that allowed users to "file swap" or download free music that users shared online. Within the next five years many similar file swapping sites popped up and the major record labels, represented by the Recording Industry Association of America (RIAA), began taking legal acton to shut them down. Similar sites included KaZaa and Limewire. The RIAA prevailed in many cases that involved suing individuals for illegally downloading music, as well as getting sites shut down that violated the Digital Millennium Copyright Act of 1998.

The technology that resolved much of the piracy issue came from Apple, starting with the iTunes Music Store in 2003. Apple provided a seamless solution for legal downloads and was able to use its brand as a gateway to digital downloads. By 2005 the iTunes Music Store had surpassed physical retail outlets such as Tower Records in revenue and by 2007 iTunes was the top money making music retail outlet in the music industry. The store expanded to include apps and eventually movies, paving the way for the digital download revolution. The introduction of the iPhone and the iPad helped fuel the popularity of smartphones, which became portable listening devices for music as well as gadgets for connecting with the internet.

Another website that was influential in crafting a new model for internet music delivery was Spinner, which was acquired by AOL in 1999. Based in San Francisco, It was the first music site to provide menus of different musical genres and a legal service to hear popular music online. In 2002 Spinner merged into Netscape Radio, which broadcast over a hundred radio stations. AOL repositioned Spinner in 2008 for music fans who like artist interviews and live performances mixed with album tracks.

AOL acquired San Diego music streaming site Slacker in 2013 and redirected Spinner.com to Aolradio.slacker.com, ending the Spinner era and replacing it with Slacker, which was originally launched by Celite Milbrandt and Dennis Mudd in 2007. Mudd had been the head of a similar service called MusicMatch, which merged into Yahoo Music, a service that originally grew out of the 2001 acquisition of LAUNCH Media. Another early legal streaming music service that started by the end of 2001 was Rhapsody. It was launched as its own company, although it was owned by RealNetworks. Napster re-emerged in 2003 as a legal paid service under the new ownership of Roxio. Napster later merged with Rhapsody in 2011 after being acquired by Best Buy.

None of these streaming services were able to compete with iTunes, as they all accounted for small market shares compared with iTunes' massive market share, which continued into 2014 despite a growing crowd of financially struggling music streaming services. Pandora Radio began in July 2005 and by 2013 had over 200 million users. Spotify was launched in October 2008 and within a few years attracted about 10 million users then doubled that base by 2013.

Streaming music services had populated the internet music landscape by 2013, as even iTunes Radio was born to compete with Pandora, Spotify and others. Despite plenty of press that streaming had taken over, iTunes still held on as the top place to buy music, while streaming companies struggled to develop a model for profit. Both streaming and digital downloads each serve unique purposes that play into the consumer revolution of expanding choices.

Another milestone in internet music has been the sharing of music through social media. Now artists can build online followings just by clicking around social networks. The most widely used social networks for musicians include YouTube, Facebook, Google+ and Twitter. ReverbNation has been an emerging platform for indie artists to sell their own music. After Google acquired YouTube in 2006 musicians now had an easy way to share their videos online with fans. It opened the door for indie artists to connect with new fans through comments on videos. YouTube has become so influential to music that in 2013 Billboard began incorporating YouTube clicks into its music charts.