How music got free

EPILOGUE

Six months after the trial of Adil Cassim concluded, I met Karlheinz Brandenburg in person for the first time. By this time he was 53 years old and his graying beard gave him a distinguished, wizardly affectation. He had continued his work as the director of Fraunhofer’s Institute for Digital Media Technology in Ilmenau, and was an avuncular presence there. His students spoke of him with affection, but he had no children—the mp3 was his legacy.

Now, with the rise of Internet streaming services like Spotify, its retirement was looming. Dieter Seitzer, Brandenburg’s thesis adviser, had anticipated this switch over 30 years before, and his original vision for the mp3 was for streaming media, not storing it. But Spotify didn’t use the mp3 format. It used Ogg, the open-source alternative. Brandenburg and Grill had long suspected Ogg of infringing on their patents, but those patents were more than 20 years old and beginning to expire. The technology was free now. It was the music that cost money.

Still, he could hardly complain, as he was wealthy and successful by any standard. The fruits of his insights could be found anywhere electronics were sold, tracing all the way back to the ancient, five-song MPMan player that Saehan International had commissioned all those years before. In fact, Brandenburg still owned one of those. The thing didn’t work anymore, of course—the battery had crapped out, and no modern computer supported the 20-pin connector by which it transferred files. But for some reason Brandenburg, who was “not sentimental” about technology, had held on to it.

Doug Morris, too, was a lucky man. He’d won the coin toss with Jay-Z, and saved Universal a million bucks. But then The Blueprint 3 had launched a late-career renaissance, far outselling expectations, and by the end of 2010 it was Shawn Carter who’d come out ahead. That same year the music industry bottomed out at less than half its 2000 size. Vivendi finally decided to enforce its retirement clause, and at the beginning of 2011, Morris was replaced as CEO of Universal Music Group, and moved to an advisory position with limited responsibility.

After twenty years at Warner, Seagram, and Vivendi, Morris had earned more than 200 million dollars. Even in his last year, straddling the smoking wreckage of the music industry, he’d cleared more than ten million bucks. Was he overpaid? Perhaps—corporate reports showed that Lucian Grainge, the successor CEO at Universal whom Morris had personally groomed, earned only half of that. Then again, perhaps not. His services remained in high demand, and, in an echo of his Time Warner firing in 1995, a restless Morris was hired away by a rival firm almost immediately, this time as chairman and CEO of Sony Music Entertainment. Morris—a 72-year-old self-confessed technology ignoramus—would shepherd that company’s artists and repertoire into the next millennium. Later that year, the British music conglomerate EMI was acquired by Universal, making the Big Four the Big Three and leaving 80 percent of the recording industry in the hands of just Universal Music Group, Warner Music Group, and Sony Music Entertainment. At one time or another, Doug Morris had run them all.

As artists and labels sought new directions for revenue, the importance of viral videos, publishing rights, streaming services, and the festival touring circuit continued to grow. In 2011, for the first time since the invention of the phonograph, Americans spent more money on live music than recorded. In 2012, North American sales of digital music surpassed sales of the compact disc. In 2013, revenues from subscription and advertiser-supported streaming passed $1 billion for the first time.

The creative industries scrambled to cut licensing deals for streaming media. Apple bought Beats, paying Dr. Dre and Jimmy Iovine more than half a billion dollars each. Google Play debuted. Spotify, Rhapsody, Deezer, Rdio, and Pandora all saw double-digit growth. Bidding wars erupted over the rights to stream the back catalogs of Led Zeppelin and the Beatles. Leading the way was Vevo, hitting five billion views a month and still growing by 50 percent a year. Morris now understood that this, above all, was the thing he’d be remembered for.

But streaming didn’t solve everything. It may not have solved anything. The music streaming platforms were perpetual money-losers, spending unsustainable amounts to license content to attract early users. Despite this spending, artists with millions of plays earned royalty checks only in the hundreds of dollars. In 2013, amid an upbeat economic picture, the recording industry’s total revenues once again declined, to their lowest level in three decades. Consumer research showed that new Spotify subscribers stopped pirating more or less completely. They also stopped buying albums. The labels were now engaged in a difficult two-front war, with the streaming services on one side and the pirates on the other.

Artists began to experiment. Lady Gaga moved a million units in a single week by selling her album Born This Way for 99 cents. Beyoncé released a surprise self-titled “visual” album with 17 attached videos, exclusively sold through Apple. Radiohead’s Thom Yorke pulled his work from Spotify and dumped his album Tomorrow’s Modern Boxes onto BitTorrent. Taylor Swift pulled her work too, then sold nearly two million copies of her album 1989 in a month, the bulk of those as compact discs at big-box stores.

Retail still meant leaks, but the industry was taking better precautions. Kanye West had been a favorite target for RNS for years. In 2011, he struck back. An article in Billboard detailed the “near-military-scale planning” he took to keep his collaborative album Watch the Throne in-house, storing the masters on hard drives locked in waterproof “Pelican” cases that never left the sight of his studio engineers. Opening the cases required biometric identification scans, and the finished masters were shipped to the production plants under careful oversight. The pirates didn’t get it until the Tuesday it was released.

Of course, the easiest way to prevent leaks would have been to get rid of the CD entirely. But even in 2013, after 17 years of psychoacoustic chaos, the industry could not afford to do so—more than a third of the U.S. music industry’s revenues still came from physical album sales, and more than half globally. The last major manufacturing facility for compact discs in the United States was in Terre Haute, Indiana, and the industry still relied on it. Once the discs were shipped to stores, the supply chain was too diffuse to control, and new Scene groups like CMS, MOD, and CR established themselves as contenders for RNS’ vacated crown. But none got close to the dominance that group had achieved, and the music Scene began to decline.

Adil Cassim got a new job as an IT administrator and moved out of his mother’s house. Fearing a civil suit from the RIAA, he refused to speak to the press. Through his lawyer, Domingo Rivera, he continued to maintain that he had no connection to the Internet presence known as “Kali.” Matthew Chow, his codefendant, also refused to speak to the press, and deleted his Facebook profile. Patrick Saunders, the informant, avoided jail time, served probation, and eventually got a job as a paralegal. Simon Tai, RNS’ old ripping coordinator, was never charged with a crime. Tony Dockery served a brief prison sentence, then got a job working the graveyard shift at Shelby’s Super 8 Motel. Bruce Huckfeldt and Jacob Stahler, the APC pirates from Iowa, served probation, then took up powerlifting.

Alan Ellis remained reclusive. After the Oink trial, he never gave another interview, and all trace of him on the Internet was gone. I was unable to discover his current employment status or his precise whereabouts. In the end, after months of effort, I received from him a single email regarding his time at Oink: “It’s a part of my life which I’m happy is now behind me.”

And then there was Dell Glover. In March 2010, he reported to a federal minimum-security prison and began a three-month term. Club Fed proved bearable—more boring than hellish—and he was released in June. He was legally barred from contact with his fellow conspirators, and his friendship with Dockery came to an end. Still on probation, he worried about his ability to find work. But Glover was a grinder, and soon enough he had a job, installing the front-plate grilles at the Freightliner truck factory in Cleveland, North Carolina.

We met for the first time in 2012. Returning from prison, he, too, had developed an interest in weight lifting, and hit the gym with characteristic discipline, adding twenty pounds of solid muscle to his frame. But as his body grew intimidating and bulky, I could see from photographs that his face had actually relaxed, and when he reflected on his life the familiar grimace would fade into an expression of fatherly tenderness. I don’t think he’d ever really considered the risks he was running as a bootlegger. He’d just wanted something and had impulsively gone after it. Nevertheless, his encounter with America’s criminal justice system had marked him, and sometimes, when he was telling me the juicier bits of his story, he would go to the window and pull aside the curtain to scan the block, as if the Feds might still be out there, waiting for him to slip up again.

By the end of the year he’d begun to wonder if there wasn’t an easier way to make money than working 16-hour shifts on a production line. Capital had gone global, and bounced from New York to Montreal to Paris to Japan. Labor stayed local, stuck in Shelby, North Carolina. That geographic disconnect was a key driver of inequality, and Glover was beginning to see it. He enrolled in night school and began pursuing a bachelor’s degree in computer science. He worked fewer hours, and his life became more stable. He regularly attended services at Friday Memorial Baptist. He sold the Navigator—rims and all—to a buyer he found on Craigslist.

Inevitably, though, the sidelines remained. Glover, now 40 years old, continued his work as a self-described “tinkerer.” For small cash payments, he did low-level computer maintenance and repair. He installed software on friends’ computers. He set up wireless routers for the elderly, careful always to protect their networks with passwords. He formatted hard drives and reinstalled frozen operating systems. For twenty bucks, he would jailbreak your iPhone.

The sideline extended to optical disc technology. Xboxes, PlayStations, Wiis, Blu-ray—if your device wasn’t working, you took it to Glover, who would fix it for a small cash fee. Most of the time, somebody had inserted a second disc on top of a first, or maybe the laser had burnt out. The fixes were simple and required no more than a screwdriver and a single replacement part. Meaning, if you had a busted CD player, Dell Glover could fix that for you too.

As technology evolved, such physical relics were left behind. I could relate to Glover’s fondness for obsolete tech—looking to hold on to my music collection, I’d saved every hard drive from every computer I’d ever had. There were nine of them, dating back to 1997, each one double the capacity of the last. The earliest, with just two gigabytes of storage, contained the first few songs I’d ever pirated. Now, across all the drives, I had more than 100,000 mp3s.

It had taken me 17 years to amass all these files, but the rise of cloud computing made the whole thing pointless. My hoarding instincts were fading, curating the library was growing more tiresome by the year, and the older drives didn’t even work with modern systems. Finally I caved, bought a Spotify subscription, and accepted the reality: what I’d thought of as my personal archive was just an agglomeration of slowly demagnetizing junk.

How to dispose of it? I googled “data destruction services” and soon found myself in a warehouse in Queens, carrying the drives in a plastic bag. I was prepared to pay for the service, but the technician told me that, for such a small job, he’d be willing to do it for free. He led me around back, through a massive warehouse shared by a variety of industrial firms, to a small chain-link partition that belonged to his company. Once we arrived, I watched as he donned a pair of safety goggles, then picked up a large pneumatic nail gun. He took a drive from the bag, placed it on a workbench, and systematically blasted a half dozen nails through its metal housing. Then he picked it up and shook it next to his ear, to listen for the telltale rattle of its shattered magnetic core. One by one he repeated this process, until the bag was empty. When he had finished, he gathered the ruined drives in his arms, then threw them in a nearby dumpster, on top of thousands of others.