Was the Demise of Napster For the Best?

Previously, the music industry was extremely profitable. There were huge profit margins as the cost of producing an actual disk was pennies. Conversely, this was very annoying for consumers. To acquire music it was very difficult and expensive, One CD costs around $16-25. The reason why the supply remained high was that music has a high marginal utility. Once you acquire the song, you are free to listen to it as many times as you like.

With the introduction of Napster, this whole system was under threat. Buying the artists CD wasn’t needed as you could simply download the song online from Napster. All it took was for one person to buy the song, for the whole world to have it. Should this have continued it would have spelled the end for many artists, there wouldn't have been any economic incentive to buy music. For this reason, the demise of Napster was probably for the best.

In turn, as Napster fell, other streaming services such as Spotify and Soundcloud rose soon later. These services take the best features of Napster while still compensating artists legally. It also led to the fall of the big music labels, who had created an oligopoly n the industry. Nowadays, artists like Lil Uzi Vert and XXXTentacion can garner millions of streams without the backing of labels.