Case file: a category that formed
Why did Napster fail, and when did music streaming become viable?
Formed since 2026-10-25 · ledger #44
Label licences for on-demand streaming arrived 2008-2011; Spotify launched as they did.
Short answer
Napster (1999) proved that tens of millions of people wanted any song, instantly. Courts shut it down in 2001 because it had no licences. Spotify (2006) waited for licences: it launched in Sweden in 2008 and in the US in July 2011 after deals with the major labels. The binding constraint was legal permission, not technology.
- Killing constraint
- Label licences for on-demand streaming
E5 Legal permission / regulation - Crossing
- 2011
Spotify signs the major US labels and launches in the US in July 2011. - Who won
- Spotify
founded 2006
The technology worked in 1999; the right to stream the catalogue did not exist.
Graveyard
Companies that died proving people wanted this. Capital shown where it was disclosed.
| Company | Years | Capital | How it died | Source |
|---|---|---|---|---|
| Napster | 1999–2001 | — | Shut by court injunction, July 2001 (A&M Records v. Napster) | source H |
Who won once the constraint crossed
- Spotify (founded 2006) — Sweden 2008, US July 2011 source
What changed, dated
- The Ninth Circuit upheld the injunction in A&M Records, Inc. v. Napster, Inc. (2001). source H