Napster documentary ‘Downloaded’ retraces legacy of Silicon Valley’s most star-crossed startup

It has been a dozen years since Napster shut its doors amid enormous legal pressure. But the two kids who launched the pioneering Internet music service in a dorm room may have gotten the last laugh: Napster reshaped consumer technology in ways even its most ardent backers couldn’t have envisioned.

Not only did it devastate the record industry and lay the foundations for iTunes (saving Apple (AAPL) in the process), but it fueled the “peer to peer” movement that led to social media and to “sharing economy” heavyweights like Airbnb. And, of course, Napster made co-founder Sean Parker an Internet sensation — one who later guided Facebook CEO Mark Zuckerberg.

Now a new documentary about Napster’s rise and fall is set to make its Bay Area debut Friday.

Director Alex Winter — perhaps best known for his role alongside Keanu Reeves in “Bill and Ted’s Excellent Adventure” — culled more than 150 hours of raw footage, plus an equal amount of archival film documenting the courtroom battles and congressional hearings that Napster sparked. Having interviewed most of the players in the company’s history, along with many top musicians and legal experts, “I was in the editing room every day for the better part of a year,” he said from Los Angeles.

But his finished product, titled “Downloaded” and produced by TV network VH1, was more than a decade in the making.

Winter initially pitched the movie idea to Napster co-creator Shawn Fanning when the company was still fighting for its life. “I thought, ‘This is a story about a kid going through some extraordinary circumstances,’ ” Winter said.

“Then I realized there’s a much more epic tale here.”

Shawn and Sean’s excellent adventure began in 1998. In that era of dial-up modems, sharing a single MP3 music file could take hours. Fanning, a self-taught programmer from humble roots in Massachusetts, was a college freshman when his roommate complained about how hard it was to find the esoteric music he loved.

Fanning started hacking together a file-sharing technology to let users search one another’s hard drives remotely, then quickly download the results. He recruited Parker, a high school senior he’d met in a programming chat room.

Their vision to help people find others with mutual interests presaged Friendster, MySpace and Facebook. And like each of those social media sites, word about Napster spread quickly across college campuses. As the site took off, Fanning dropped out without bothering to clear his stuff from the dorm.

In the film, he recounts how Parker’s dad drove them to their first investor meeting.

Ron Conway, who put some of the earliest money into Napster, told this newspaper via email that Fanning and Parker’s bold experiment was one of the first to demonstrate the Internet’s power to disrupt entrenched industries.

“You can’t fight innovation,” Conway said. “Better to adapt fast and adjust.”

The young founders moved west and set up shop in an old bank building in San Mateo, where they and their band of coders flopped on air mattresses. At first, they struggled to keep the servers from crashing.

But by late 1999, they’d fortified the system; within months, Napster’s user base soared from 40,000 to more than 20 million. At its peak, it topped 50 million, and Fanning found himself on the cover of Rolling Stone and BusinessWeek.

Parker, in the film, speaks of the company’s ascent as “a pure youth revolution.”

He also acknowledges, perhaps a little euphemistically: “Napster was operating in a legal gray area.”

Just ask the Recording Industry Association of America. Hilary Rosen, the former head of the group, recounts to Winter a meeting in which she shocked record label chiefs by showing them songs being shared on the “rogue website” that hadn’t yet been commercially released.

The association filed suit. Fanning and Parker argued that Napster wasn’t responsible for what its users did, but the labels — and a federal judge in San Francisco — didn’t buy it. “Eventually,” Parker tells Winter, “the lawyers took over.”

Most of the $100 million that Napster had raised from venture capital firms and German media giant Bertelsmann went to legal settlements. Reliving this on screen, Fanning still looks nauseous.

“It was a very traumatic experience for him,” Winter said. “He said the film allowed him to have some psychological closure on the whole event.”

Fanning and Parker declined to comment for this article; representatives said they were traveling abroad.

Although the record labels won the Napster battle, music users flocked to new file-sharing services such as LimeWire and Gnutella. Music executives resorted to suing thousands of users, which experts on all sides of the debate now agree turned off consumers.

“There are no record stores any more,” longtime Sire Records President Seymour Stein laments in the film. “I never thought I’d live to see that.”

Fanning, broke after Napster’s collapse, went on to found a social gaming company that he sold for $30 million. He also was an early investor in startups Uber and Square, both now worth billions.

Parker, meanwhile, became Facebook’s first president and was immortalized by Justin Timberlake’s portrayal in “The Social Network.” He’s a key investor in streaming music service Spotify and, with Fanning, last year launched a video chat site called Airtime.

Parker complains in Winter’s film that lawmakers “still think they can legislate away” peer-to-peer tech companies like Uber and Airbnb, which let people rent out their cars and couches. Others in the documentary credit Napster’s legacy for the rise of WikiLeaks and the way social networking fostered the “Arab Spring” uprisings.

“There’s a very clear line of evolution from Napster to where we are today,” Winter said. “It really was an extraordinary technology — whether it was illegal, revolutionary or whatever you want to call it.”

Contact Peter Delevett at 408-271-3638. Follow him at Twitter.com/mercwiretap.