Case Study On Napster Information Technology Essay

Napster is an online service that allows computer users to share high-quality digital copies (MP3s) of music recordings through the Internet. The San

This paper outlines the benefits of environment influence on business. The paper specifically discusses about the FirstGroup Plc and environment influence of PESTEL analysis. what is the impact on the business of the stakeholder such as, Governments, customers and communities. The paper concludes the FirstGroup Plc strategy to overcome the demand of the customers risen above the pack because of its extremely ethical and highly exposed business practices, both in regard to its sourcing and its treatment of its employee. Here I have use the case study of FirstGroup and some web site to have clear idea about the company.

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The operation of FirstGroup Plc is make good strategy to control the external influence factors. PESTLE Analysis is an analyzing of the external influence factor of the business environment. It show the big picture of the company in which area they are working. These are ingredients which are over and over again outside the control or influence of a company, and that is why it is very significant to be aware of them to compact with in the approach of the business. First Group is the leading face of the transportation service in the UK. So here we are reviewing external factors which have influence on internal environment of the business for understanding market growth or decline, in comparable to the situation, possible to lead to good direction for transportation business. The number of employee working with FirstGroup is more than 137,000 in the UK and the USA. Total numbers of people using the rail service are 275 million a year. There are leading transportation service providers in UK. They also provide school transportation service in USA to more than 4 million students a day.

What is PESTEL?

Now ear day’s the business is a not only influence by the internal factor but the external factor also play a more importance role while running a business. PESTEL is mainly use to examine the external environment that has an impact on the business. The main point of the PESTEL is to recognize the major environmental tools by considering external factors that business has to face. The PESTLE covers all the external influences factors affecting a business. PESTLE analysis one of the useful tool which help the business to have very close look of large image of the environment in which we are functioning the business, and what are the new probabilities and what harm a business has to face. By knowing more about the environment surrounding the business in which we have to function, it is an external influence to the business or sector. One can also take benefit of the new technology and reduce the harm.  PESTEL stand for Political, Economic, Social, technological, Environment, Legal analysing tools has more major impact on the business. So the business is trying to identify the external influence that has an effect on the operation of the business. Here in this case of the First Group is one the good example of PESTEL analysis. PESTEL is one type of a business tool where all the letters of the word itself describes what impact it would have on the business environment. PESTLE analysing tool is use for knowing the risk which is linked with market up’s and down’s , and also with the situation, prospective and path of a business or industry. The PESTLE Analysis is generally use as point of reference tool, see to the area where the company stand or what is demand of product in the situation, which carries more impotence outside the business and what effect will it have on the oppression, what is going inside an business. It is describe in web site that “A PESTLE analysis is a business measurement tool, looking at factors external to the organization. It is often used within a strategic SWOT analysis Strengths, Weaknesses, Opportunities and Threats analysis” (Morrison, 2010).

Links and factors affecting business


There is a good example of influences factor use in the case study of First Group. The Political elements mainly is that, the people should use the public transport more than their personal cars and vehicle to reducing CO2 emissions from the environment which one of the major issue faced by the UK government. So for that FirstGroup need to provide safe and dependable services that will give more confidence to the people for using their bus and trains. If more people decide to make use of the public transportation service then their cars and personal vehicle it would automatically helps the environment.


The Legal factor which also has an effect on the FirstGroup is mostly link with the political factor. Most of the time Legal ingredients are separated from the political ingredients mostly because of the growing legal influences external in the national political system, such as European and regional legislation (Strategy Survival Guide)

All the legal needs of the UK government is easily full by FirstGroup, they also try to give more than their best and more than the demand of law. For example, they are trying to take steps which are related to take action to reduce CO2 emissions from their vehicle, to mach Europe-wide standards in advance from the government’s 2010 targets. Transport companies should also buy carbon credits to reduce their CO2emissions. In advance they have built a budget for this.

Environmental & Social

Even environmental and social link in this case study of PESTLE Analysis factors. For the example of CO2 emissions, is an Environmental ingredient which has Political & Legal influence, it has an Social impact in the UK culture where the customer is more Green consumers they like to use the goods and services which are more eco-friendly which also have less impact on the environment study case added.

Political, Social & Technological

Another example is that FirstGroup has invested huge amount to meet up the government objectives for the condition of low down floor so it easy to get in bus for wheelchair users and pushchair responsive in buses which is the most appropriate technology for aged & handicapped persons, so we can see the new technology use for them by the FirstGroup it also demands by Political influence to satisfy Social needs.

An Economics & A Socials

“Economic factors include changes in demand, like the demand for safer school transport has led to research into the introduction of Yellow Buses, based on the US experience. Another economic factor is high fuel taxation. This encourages people to use public transport more. These are customers demands a Social factor influence the Economic one.” (Managing external influences)

Benefit of working with government

The benefit to work very closely with government is that they will encourage people to use the transportation service provide by FirstGroup to reduce CO2 emission in the environment which is one of the step to make environment eco-friendly. It is said that we are responsible to protect an environment. Working with government is not only the reason to make a profit but it also provides a good service to people. The strategy use by FirstGroup is to improve the fuel efficiency in their vehicles, buy new vehicles which are fuel efficient green vehicles, use of other fuel resource like biodiesel, also by giving training to the divers and use of new technology to keep an eye on performance of the divers. Their main aim is to reduce the CO2 emission form their bus up to 25% and from rails up to 20 % by end of 2020. They also make easy for the people how wish to change from the car to public transport by give them schemes in Parking & Ride schemes. It is very difficult to find a parking space in a big city like London. That data itself show the importance of transportation services in the case study. That there is 8% rise in usage of the services to 1.2 billion people have use transportation last year. The FirstGroup has increased their reputation with government and they also has vision like this ‘transform travel’, they also enlarged their network with the government circles by the buses were used during the Olympic Committee’s visit in February 2005 as well as the knowledge to win expectations of new bus contracts to set free hydrogen fuel transport to the public. Their driver does therefore make good business sense.

First Response toward the Changes in demand

First Group plc is the largest, convenient and safer transportation service in the UK. They are becoming popular because the change that has been made in response to customer and government in the First group. When we analyzed the change made by the First then that gives 100% satisfaction to us. Here I am going to represent some of the change made by the First bus services. The FirstGroup has the potential and resources that allow them to connect their actions to create economic importance and possibly to be ready for action and its reward. The strengths of their business is that they have an ability to create a unique products and services according to demand of the consumers, they believe that customer services should be of high levels. Their strengths as a good business unit are their culture, its employment and teaching method, or the quality of its managers. The change in transportation service in UK is due to the political change and new change in the policy of the government in transportation business. FirstGroup has invested heavily in new technologies and providing buses that lower the floor for easy entry for the older and handicap people

Political Change

First is operating throughout UK. The state show that UK has more than 62,113,205 by 2010, and it has been increasing dramatically. In the beginning, the government was worried about the population and usages of private cars by the people that are reasoning Co2 emission was increased and made climate change. However, in 1980, when they made transport service private than First has made a good Climate change Strategy for providing more efficient, novel and sustainable bus service to the people so they like to use more bus service than own cars. FirstGroup main goal is to decrease Co2 emission by 25% till 2020 that is reasoning they implemented different strategy like improving the fuel efficiency, using biodiesel, new technology for driver performance.

Economic Change

In order to exits in the market, everyone has to the response to change, which needs to meet customer’s demands. In order to meet customer response, FirstGroup works very closely with the Neath Port Talbat Council for improving the service. Second most striking features of a first group were that they have started the yellow school transportation services. They have designed special pilot service to the students where students can feel safe and friendly in the bus. Additionally, first has an increased Vehicle safety issue like pad seating, included seat belts, additional escape window and CCTV camera. Another economical response done by First was that in major cities like London, FirstGroup made public transportation so easily by providing park and ride schemes to avoid parking problems and high taxation on fuel paid by using own car.

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Social and technological change

In the UK, people are believed that old people are assets of the cultures, so they need to have special care and attention all the time so First has lunched citizen pass where elderly people do not need to pay any money for their transportation. Mostly the old people like to use FirstGroup bus service because they provide easy and safe service.


The First are very responsive to new technology. The new technological use by FirstGroup is to low down the floor for the old and handicap people so that they can easy enter in the bus. E.g. as see this daily while using the treanslink service that bus derive low down the floor so that handicap people can come in bus. They provide good convenience service for handicap and old people. Moreover, FirstGroup provide good transportation environment such as new road layout and bus shelters.

Environmental and Legal Factors change

High CO2 emission is the biggest problems in the UK that is reasoning climate has been changed drastically so first has developed Climate Change Strategy. Furthermore, many of the legal laws have been changed for transportation because of certain issues. The first has prepared all buses that meet all required by new laws. Even they have been preparing a budget to this.

Overall, First group has been responding all time to meet customer and government demand. They have made a lot of change during its whole journey, so they can survive in this competitive market and give 100% satisfaction to all their stakeholders.

Evaluation of Effectiveness

FirstGroup provide dependable, secure, novel and sustainable transport service. When we go through change that has done by First group then we will come to know that they are always targeting customer’s demand and satisfaction, and they respond quickly to change that is the reason that is successful. When we observe the changes made by First group then we will realize that every time they come up with new strategy and innovation to any type of issues like.

Climate Change Strategy

Increasing in the CO2 emission, they adopted Climate Change strategy in which they encourage the people to use more bus or rail service by giving more convenient, reliable and safe service.

Yellow School Transportation and Pilot Service

By providing the yellow school transportation service, they make up student mind to use more school bus service where they can feel the good, reliable and safe way to reach to school and home every day. Also they are focusing more on the safety issue, so they implemented new things like padded seating, seat belts and CCTV.

Green Consumers

People are more aware about global warming and environmental issues so Green consumers are preferring to use bus and rail services than air or big cars so First has designed their service in the such ways that they can reach to each corner and give more convenient services to all people.

Over all, first has made lot of changes to improve their services in order to meet customer and government demands. First group not only takes care about transportation issues, but they do care about social and environmental issues they are reasoning they are a leader in the transportation services.


SWOT analysis is use to analysis a business sector and whereas a PESTLE analysis the current market demand and situation, mainly demonstrating the growth or the fail back and by this means they try to find out way for demand in market, business possible, and also find out way of market possible. FirstGroup analyses the threats identify the risks take an excellent choose to flop them to an opportunities. Planning scenarios for the future take no chance make FirstGroup a Blue-chip firm in London stokes market. Many factors where First’s control. Change can from this factor- Political, Economic, Social, Technological, Legal and Environmental .The challenge now turned threats into opportunities by looking at feedback of the consumers and to the external influences of the business in order give the consumers best service to their value. FirstGroup make good strategy for the demand of changing environment.


Mateo-based company does not actually store the songs but instead provides an access to every user’s hard drive if he is currently logged on to the service. Napster therefore functions as a sort of clearinghouse, which collects stores and disseminates music recordings. Members can log onto this service, search for the song of their choice, by artist or song title, identify where MP3s of interest are and then download them from another user’s computer hard drive. Napster claiming to have around 15 million users in just a years’ time, has become one of the most popular sites on the Internet. Indeed, students were using Napster so much that many universities had to block the website in order to regain bandwidth.

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Right from its launch, the Napster case had been almost as controversial as it was popular. Barely a year after its launch, it was sued by the Recording Industry Association of America (RIAA). The RIAA represents major recording companies such as BMG, Universal Music, Warner Music Group, EMI and Sony Music. The RIAA said that Napster is violating the copyright laws, by allowing users to exchange digital copies of music recordings for free. The RIAA also demanded that Napster should stop its service immediately. Apart from this the RIAA wanted Napster to pay a huge sum as compensation for the revenues that were lost in the past one year after Napster’s launch.

This E-commerce case related to international business because we know that people from all over the world use Napster to download music. Napster is doing nothing but an International trade of music. This poses a big problem to the BMG, Sony Music and other major recording companies because, once one person has bought the CD and loaded it to his hard drive, the rest of the population can download it for free if they are a member of this Napster service. This brought in a huge loss of revenues for all these companies. The loss due to this type of music swapping by Napster and other related firms accounts to about $300 million. Since Napster is accused of having violated the copyright laws, this becomes a Business Ethics related case.


Napster was created between 1998 and 1999 by a 19 year old called Shawn Fanning while he attended Boston’s North Eastern University. The program was initially written to solve a friend’s problem, who wanted to find music more easily available on the Internet. It was named after Fanning’s Nickname.

The system was called ‘Peer to Peer’ because it allowed music tracks available on one user’s hard drive to be searched and downloaded to another Internet User’s computer. Truly speaking, the service was not a pure ‘Peer to Peer’ since central services which indexed the tracks available and their locations, are similar to the way which instant messaging (IM) works. The capability of the Napster service proved irresistible and Napster use peaked with 26.4 million users all over the world in February 2001.


Within a year of its launch, several major recording companies backed by the RIAA Recording launched a lawsuit against Napster. Some individual bands also sued Napster for allowing free download of music recordings. Metallica, the rock band found that a demo of their song ‘I disappear’ was eventually played on the radio after being circulated in the Napster network for quite some time. Other well-known artists like Madonna and Eminem also vented their intense anger on Napster.

However, some artists found this service turning out to be useful to them. Radiohead, a UK band pre-released some tracks of their album ‘Kid A’ on to Napster and this album subsequently became Number 1 in the US despite failing to achieve this previously.


Finally on March 5th 2001 as a result of legal action an order was issued asking Napster to cease trading of copyrighted material. Napster complied with this order, but tried to make a deal with the record companies saying that Napster will pay past copyright fees and also turn the service into a legal subscription service. In the following year, a deal was agreed with Bertelsmann AG, a German media company to purchase Napster’s assets for $8 million as part of agreement when Napster filed for Chapter 11 bankruptcy in the United States. This sale was blocked and the web site was closed. Eventually, the Napster brand was purchased by Roxio Inc. who used the brand to rebrand their Pressplay service. Pressplay is and online music store that was created in 2002. It is a joint venture between Sony Music Entertainment and Universal Music Group.

Since this time, other ‘Peer to Peer’ services such as Grokster, Kazaa and Gnutella have prospered because it has been more difficult for the copyright owners to sue in court. However, many individuals have now been sued in the US and Europe and the associations of these services with spyware and adware has damaged these services. This eventually reduced the popularity of these services.


In December 1999, as a representative of many major record companies in the music industry, the Recording Industry Association of America initiated legal actions against Napster foe the following copyright violation on the complainant’s exclusive rights for reproduction and distribution of their copyright works:

1. Napster users were directly violating the complainant’s copyright.

2. Napster was liable for contributory violation of the complainant’s copyright.

3. Napster was liable for vicarious violation of the complainant’s copyright.


Napster did not dispute the allegations of direct violation by its users. Therefore the court accused at least some of Napster’s users to be direct violaters through their activities of reproducing and distributing copyright material (music) without permission.

Contributory violation of copyright requires that the defendant should have had some knowledge of the direct violation undertaken by the exterior party and must have materially contributed to the direct violation. The court had already determined that Napster’s users directly violated the plaintiff’s copyright. Napster’s knowledge of these violating activities was proven by the appearance of well-known song titles in promotion screens, a list of 12,000 files that had been subject to copyright violations via Napster and the down loading done by company executives. Finally, material contribution was demonstrated via Napster’s provision of the site and facilities used in directly violating activities. The court consequently said that Napster was liable for contributory violation of the plaintiff’s copyright.

When there is a financial benefit due to the failure to supervise or control a direct violation of copyright where there is a possibility of doing so, a vicarious liability is said to arise. Thus the court said that Napster was liable for vicarious violation as it retained the right to block a user from accessing the network. This detainment amounted to the ability of Napster to control violating activities. However Napster failed to exercise this right for this purpose. Napster’s major attraction for the use of the system relied on the violation of its users. Also, the systems financial viability was directly related to the size of its data base. Thus the court found that Napster obtained direct financial benefit from the violation of users.


Napster unsuccessfully argued four defences to the allegations made against them.

Firstly Napster argued that their right to free speech allowed the legal continuance of their system. The courts determined that free speech is not applicable to the illegal down loading of files without a redeeming purpose.

Secondly, Napster argued that the placement of any ban against the company would result in a lot of financial suffering. However the court held that the hardship borne by Napster is not higher than the interest of the copyright holder.

Thirdly, Napster relied on a legal principle (the Betamax Defence) which states that creators of new technology should not bear the burden of preventing copyright violation where technology is capable of substantial non-violating use. The courts determined that despite Napster non-infringing uses, this principle did not apply as Napster possessed actual knowledge of specific violations and maintained the ability to control them without doing so.

Finally Napster attempted to rely on section 512(a) Digital Millennium Copyright Act (DMCA). This piece of American legislation allows an Internet service provider to provide connections for material that is temporarily stored on its service with impunity under certain conditions. However, Napster could not prove to the court that it fell under the classification of a service provider under the Act.


The District Court ordered Napster to monitor the activities of its network and to also asked them to block access to violating material when notified. Unable to do this Napster consequently shut down its service in July 2001. Due to the outcome of the case Napster eventually declared bankruptcy in 2002 and sold its assets. The Napster trademark was sold to Roxio and a new subscription service using the name was launched in October 2003.


The final decision was made by examining the case based on application and balancing of four factors outlined in Section 107 of the Copyright Act, 1957.

The four factors are

1. The purpose of the use

2. The nature of the work for which the data is being used

3. The amount of the work used

4. The effect of the use on the market for or value of the original work

The analysis of the four factors was relatively succinct and blunt in its conclusion that the exchange of music files had little chance of surviving a test of fair use. I considered the following view of the factors:

Purpose of the Use

The reason why I felt that this factor does not favour fair use is that, first of all the use of music is not transformative and secondly the users of Napster gained a ‘commercial’ benefit. In both the cases the analysis was weak and most of the time flawed but the court said that it wanted to be more sympathetic towards its users. The concept of transformative use inquires whether the downloading activities create some change in the original work and add a utility to it. This transforms the old work into a new one. For example, you read something from and old text and comment on it by giving suggestions for improvement of what has already been written. Sometimes when your suggestions are read and implemented it might lead to an improved version of something that has already been existing. In such a case the data is said to be of fair use because you have contributed in finding out something with a new utility value. Also this new thing that you have created will serve a new need and will have a new audience of users. On these lines, the US Supreme court said that a spoof of a song could be ‘transformative’ as it comments on the work and serves a different purpose, apart from the objective of the original work. The court also made it clear that the transformation of medium, from CD-ROM to an MP3 file cannot be accepted as transformative use. According to Section 107 of Indian Copyright Act, 1957 you also need to find out whether such use is of commercial nature or is for non profit educational purposes, in order to measure and analyse the nature of the use. It is also the responsibility of the District court to find out whether the allegedly fringing use is commercial or non-commercial.

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After all the analysis, the court found some commercial purpose in repeated and exploitative copying. It saved the users of Napster the expense of purchasing authorised copies. The magnitude of users download is a good indicator of his objective and purpose. A person who makes one isolated copy may be using it for a small research project or something similar to that. On the other hand if someone is making many copies, then there is a possibility that he is circulating it among his friends and thus making a huge profit.

Quantity is also a determinant of the potential market harm. Large scale copying stands a very small chance of surviving a fair use test.

Nature of the Original Work

For very obvious reasons, creative work requires more protection than fact based work. Since musical compositions and recordings definitely come under the ‘creative’ category this factor weighs against fair use. While reinforcing this premise they found a little flexibility. However, the analysis is simplistic. Since it was declared that a spoof of a song could be fair use, this factor makes little or no difference in the analysis because a spoof is possible in any type of work. Therefore no type of work should be more or less favoured when it comes to spoofing. This leaves this factor neutral while determining fair use. This shows that one factor influences the shaping of other factors in this discussion.

Amount of the Work Used

The amount of work that has been copied also needs to be taken into account while conducting the fair use test. In 1984, the U.S. Supreme court allowed individuals to record television programmes for later home viewing. That was legalised and permitted. Nevertheless, the court found that Napster users engage in ‘wholesale copying’ of entire works, which is against fair use. The court took no effort to explain why this was considered wrong. They also refused to explain why it is different from any other example of copying whole works.

Effect on the Market

The use of Napster leads to two major forms of harm to the Music industry

Loss of sales of compact discs

A heightened barrier to entry by the music industry into the market for electronic delivery of music

This will not only cause harm to the present market but will also affect the future market which is not a very desirable scenario. To reach this conclusion, the court relied on results of research conducted by the RIAA to test the effect of Napster use on sales. Napster introduced its own study and proved that the use of Napster actually increased CD sales. The court rejected this saying that there was not enough objective data collected for the research.

Overall, the court gave very little room for Napster to make a claim of fair use, having found summarily that all four of the factors weigh against fair use and in favour of violation.



At an absolute minimum, the Napster decision is a reminder to all such clearing houses that the copyright law clearly applies to sound recordings. It also makes it very clear that the courts will look critically and take strict action on large-scale services that copy and distribute works. The Napster decision demands a close look at the copyright implications of the digital library, but its shallow legal analysis offers little insight for better understanding the law. Both the district court and the appeals court seemed to have no sympathy for Napster’s legal position, and consequently neither court seemed to perceive a need to explore and explain the subtleties of the rulings. The proposed digital library has a different structure when compared to Napster. While Napster serves as a clearance house where the system does not actually store the songs but instead provides an access to every user’s hard drive if he is currently logged on to the service, a digital library manager will determine which materials are available for use and only if he permits will the user be able to download the file. The library can also be in the position of facing accusations of direct violation, along with the users who might download, copy, share, and manipulate the files. Such a library system will be most unlikely to have any benefit of the “safe harbour” for online service providers; that protection generally applies only to systems that operate as “conduits” and do not actually choose and post the content.

According to the Napster and other related cases, a library of music files on a computer system may not fit within the protections of the Audio Home Recording Act of 1992. Ultimately, the library depends on fair use and other limitations on the rights of the copyrights owner. Also, we do not get a clear picture of the fair use test from the Napster ruling case. The analysis of the Napster case shows that the court was in a hurry towards a conclusion and hence did not give proper elaboration as to why each of the factors weighed against fair use of downloaded data.

Here I will give you an elaborate meaning of the four factors that are considered in the fair use test.

Purpose of the use

Transformative uses are strongly favoured. If the original recording is being transformed into something that serves a new need and has a new set of users it is said to be transformative. Simply conversion of music file from a CD format to an MP3 format is not considered to be transformative. Courts will also be uncertain of “commercial” uses or any uses that might eventually benefit a commercial party. If the recording or music is being used for some educational purpose like a research project then it is said to be fairly used

Nature of the original work

This factor remains problematic and vague when one is looking at it as a factor to measure fair use. Creative works are generally subject to narrow fair use, when compared to fact based findings and musical works are easily deemed “creative.” Similar to the previous factor when the data is used for educational purposes the court seems to be more sympathetic towards the users.

Amount of the work used

This factor lays a limit on the amount of work that has been copied. A tolerable amount is considered to be legal. However, when it comes to music, the limit on this is reduced a music is deemed to be creative.

Effect on the market

This factor determines how the related market is being affected because of this illegal sharing of information through the internet. The music industry is affected by the decrease in sales of CDs due to the immense amount of music available for free on the internet. This not only affects the preset market but also the future market. The amount ir affects the future market should also be taken into consideration while calculating the fair use of the infringement.

Market harm may be found if the library and the owner make the entire work accessible in the same manner at the same time. On the other hand if the library and the owner make the work available in different versions or at different times market harm will be difficult to infer. In the latter case the library must make the work available in a manner that is specific to a particular course.

The examination of fair use in the Napster ruling is of course superficial. It does not give us thorough information of all the issues. A detailed study is necessary in order to examine the issue of fair use more thoroughly and also to examine its potential implications for the Digital Music Library.


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