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Winamp’s woes: How the greatest MP3 player undid itself

🌈 Abstract

The article discusses the history and decline of Winamp, a popular MP3 player software in the late 1990s and early 2000s. It covers Winamp's origins, its rapid growth, the acquisition by AOL, and the subsequent mismanagement that led to Winamp's decline despite its early dominance in the digital music player market.

🙋 Q&A

[01] Winamp's Origins and Early Success

1. What problem did Winamp aim to solve?

  • Winamp was created to provide a better way to organize and play compressed music files, which were becoming more mainstream in the mid-1990s. Prior to Winamp, there were limited options like Windows Media Player or RealPlayer that lacked features like playlists and custom skins.

2. How successful was Winamp in its early years?

  • Winamp grew rapidly, with its user base quadrupling from 15 million to 60 million users in the first two years after the company was founded. It also generated significant revenue, with the company bringing in $100,000 per month from $10 shareware payments.

[02] Winamp's Acquisition by AOL

1. How did the acquisition by AOL come about?

  • Winamp received numerous acquisition offers due to its rapid growth and popularity. The company was eventually acquired by AOL in 1999 for $80-$100 million, along with the streaming media startup Spinner.

2. What were the initial expectations for Winamp after the AOL acquisition?

  • There were high expectations that AOL could leverage Winamp and Spinner to build a major music platform, similar to MTV, within the AOL ecosystem. The acquisition was seen as a way for AOL to become a major player in the digital music space.

[03] The Decline of Winamp under AOL

1. What were some of the early problems that emerged after the AOL acquisition?

  • Tensions arose as Nullsoft, Winamp's parent company, was not interested in being a traditional corporate unit. For example, in 2000, Winamp's primary developer, Justin Frankel, released and open-sourced Gnutella, a peer-to-peer file-sharing protocol that conflicted with AOL's interests.

2. How did the change in leadership and culture impact Winamp?

  • After the acquisition, Winamp lost its innovative edge as it became bogged down by AOL's internal politics and bureaucracy. Frankel eventually resigned, citing that the company's control over his "means of self-expression" was unacceptable to him.

3. Despite the decline, how has Winamp continued to perform for AOL?

  • Even though Winamp's history and legacy have been largely scrubbed from its current website, the application continues to be updated and generates an estimated $6 million in annual revenue for AOL. It still has a user base of millions worldwide, though a small fraction of that is in the United States.
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