From the first half of 1995 through the late 1990s, MP3 files began to spread on the Internet. MP3's popularity began to rise rapidly with the advent of Nullsoft's audio player Winamp (released in 1997), and the Unix audio player mpg123. The small size of MP3 files enabled widespread peer-to-peer file sharing of music ripped from compact discs, which would have previously been nearly impossible. The first large peer-to-peer filesharing network, Napster, was launched in 1999.
Despite the popularity of the MP3 format, online music retailers often use other proprietary formats that are encrypted or obfuscated in order to make it difficult to use purchased music files in ways not specifically authorized by the record companies. Attempting to control the use of files in this way is known as Digital Rights Management.
Excerpt from http://en.wikipedia.org/wiki/Mp3