MP3.com and Napster: The Entrepreneurs of Risk

Abstract

The MP3’s route to widespread user adoption was long and indirect. It began in the 1970s as an unproven concept of transmitting music over telephone lines. Professor Dieter Seitzer, working at the University of Erlangen-Nuremberg, was trying to optimise the transmission of speech over telephone lines as part of a wider project to expand the capacities and features of the telephone network. The idea of optimising music was a side-interest, but when he was denied a patent because of the examiner’s verdict that the concept was ‘impossible’, he assigned one of his PhD students to prove them wrong. This kicked off a large collaborative process of research across the 1970s and 1980s to work out how to optimally compress audio whilst still retaining the music. Development was slow as often the researchers would be hindered by the limitations of contemporary technology. Researchers were only able to store a short sample of audio at a time due to relatively small storage capacities, and computer processing time was limited at the universities in which they were working. Eventually the researchers successfully compressed an entire song, ‘Tom’s Diner’ by Suzanne Vega, in 1991. They took their work to the Fraunhofer Institute with the intention of rolling it out as a worldwide standard.