Napster

Napster is a music and file sharing service that burst onto the Internet scene in a major way during the year 2000. Their technology allowed music fans to easily share MP3 format song files with each other, thus leading to massive copyright violations.

As of this writing (and much is surely still up in the air), Napster has lost a major legal battle and is seeking to settle the suit by offering to pay $1 billion out of their future profits. In order to pay those fees, Napster is planning to institute a monthly fee for users.

Napster's technology requires the use of their central servers, which undoubtably made them a convenient legal target. It is unclear whether fully peer to peer (no central server) systems such as Gnutella will be on the availability of free music sharing on the Internet. Surely if Gnutella develops into a viable (and free alternative), but with no central server to take the legal heat, Napster's proposed business model (paid access) will fail.