"MPEG Audio Layer 3, more commonly referred to as MP3, is a popular digital audio encoding and lossy compression format invented and standardized in 1991 by a team of engineers working in the framework of the ISO/IEC MPEG audio committee under the chairmanship of Professor Hans Musmann (University of Hannover, Germany). It was designed to greatly reduce the amount of data required to represent audio, yet still sound like a faithful reproduction of the original uncompressed audio to most listeners. In popular usage, MP3 also refers to files of sound or music recordings stored in the MP3 format on computers."
In 1987 the Fraunhofer Institute in Germany began researching audio technology, which later became known as MP3 Files. After five years of research and the Fraunhofer Institute made a huge progression, and created MP1's then in 1994 came MP2's and then the MP3's came. In September 1998 Fraunhofer started to enforce their patent rights and all MP3 encoders and/or rippers and decoders/players had to pay a licensing fee to the Fraunhofer Institute. Then finally in 1999 the Portable MP3 players began to appear.
The idea of compressed audio files, based around the MP3 and has become a profitable business, even though the controversy between artist's rights to the money their music brings in is still ongoing. Majority of the teenage population as well as adults, have MP3 Players and the demand for better MP3 Players is always on the rise. Thanks to the MP3 idea we now have compressed video file players and probably more inventions on the way...