If the online music world at the turn of the millennium could be summed up in one word, it would be “Mp3”. Mp3 technology is a new one that has created waves in the world of music – ushering in both benefits and disadvantages. The advent of MP3 technology has changed the way individuals listen to music and also the way music is sold and how new bands are being discovered and how music is being packaged. The new technology has allowed music lovers to do many things they could never do before. Almost anyone can enjoy Mp3 technology as long as they have a modern computer with an Internet connection. The advancement of Mp3 music technology has allowed consumers to gain access to very low-cost music. Music sharing among friends is an acceptable practice, although profiting from online music sharing is illegal. There are many free song downloads online, and they are available at highly affordable rates, never costing more than $1 to download music per song. As a direct outcome of MP3 technology, many websites are offering both legitimate and pirated music. Music fans with access to high-speed modems have been swapping songs over the Internet ever since the MP3 technology arrived. And with the advent of the iPod and other Mp3 players, music has become mobile. When the tape was discovered, the LP records suffered a setback, and later came the CDs that replaced the tapes. According to Nielsen SoundScan, with the introduction of Mp3 music, audio album sales have fallen 18 percent between 2000 and 2006, after accounting for paid digital downloads from online stores like iTunes. With the Mp3 format, not only the medium of music is affected but also how it is packaged, distributed, and launched. Thesis: Mp3 technology has impacted the music industry negatively by cutting into its sales, creating conflicts between artists and recording companies, changing its distribution pattern, and endangering copyright issues. The German company Fraunhofer-Gesellschaft developed Mp3 technology and has licensed its patent rights to the audio compression technology – the United States Patent 5,579,430 for a “digital encoding process”. The inventors named on the Mp3 patent are Bernhard Grill, Karl-Heinz Brandenburg, Thomas Sporer, Bernd Kurten, and Ernst Eberlein. However, two names are particularly important in the context of the development of Mp3 – Dieter Seitzer, a professor at the University of Erlangen, and Karlheinz Brandenburg, often called the “father of MP3” (Bellis, 2003). According to Karlheinz Brandenburg, it took several years for Mp3 technology to fully develop, and even then, it almost failed. Fraunhofer Gesellschaft explains as follows: “Without Data reduction, digital audio signals typically consist of 16-bit samples recorded at a sampling rate more than twice the actual audio bandwidth. So more than 1.400 Mbit is used to represent just one second of stereo music in CD quality. By using MPEG audio coding, it is possible to shrink down the original sound data from a CD by a factor of 12, without losing sound quality” (Bellis, 2003). Mp3 is the common name for MPEG-1 (Motion Pictures Expert Group) (Audio Layer 3, a form of sound compression approximately 12 times smaller th