How Music Got Free (8 page)

They called this subculture “The Warez Scene,” or, more commonly, just “The Scene.” Scene members organized themselves into loosely affiliated digital crews, and those crews raced one another to be the first to release newly pirated material. Often this material was available the same day it was officially released. Sometimes it was even possible, by hacking company servers, or by accessing unscrupulous employees or vendors, to pirate a piece of software
before
it was available in stores. These prerelease leaks were called “zero-day” warez, and the ability to regularly source them earned one the ultimate accolade in digital piracy: to be among the “elite.”

Now the Scene was moving from software to music, and it was their enthusiasm for the technology that sparked the mp3 craze. The first industrial-scale mp3 pirate was a Scene player by the screen name “NetFraCk,” who, in September 1996, offered an interview to
Affinity
, an underground Scene newsletter, which like the earliest cracked software, was distributed through snail mail on a 3.5-inch floppy disk.

AFT: Please tell us about this new concept in releasing. We have all seen utils/games release groups before. But, CD music? Who thought of this idea?

NFK: I’ve thought of the idea of somehow pirating music. However I never had the means to do so until now. The problem in the past with pirating music was HD space the only means to distribute the music was in the WAV format. That tends to get huge. Especially if you an average song. We eliminated the size constraints. We use a new format to compress our music. The MP3 format. [
sic
]

Using Fraunhofer’s L3Enc encoder, NetFraCk had started a new crew, the world’s first ever digital music piracy group: Compress ’Da Audio, or CDA for short. (The name was a play on the three-letter .cda filename extension Windows used for audio compact discs.) On August 10, 1996, CDA had released to IRC the world’s first “officially” pirated mp3: “Until It Sleeps,” by Metallica, off their album
Load
. Within weeks, there were numerous rival crews and thousands of pirated songs.

Glover was not aware of any of this at the time. He wasn’t sure what an mp3 was, or where it came from, or who was making the files. He simply downloaded a cracked copy of Fraunhofer’s mp3 player, and put in requests for the bots of #mp3 to serve him some of the advertised files. A few minutes later he had a small library of songs on his hard drive.

One of the songs was Tupac Shakur’s “California Love,” which had become inescapable after Pac’s death several weeks earlier. Glover loved Tupac, and when
All Eyez on Me
came through the PolyGram plant, on a special onetime distribution deal with Interscope, he had even shrink-wrapped some of the discs himself. Now, on his home computer, he played the mp3 of “California Love,” and Roger Troutman’s talkbox intro came rattling through its shitty speakers, followed by Dr. Dre’s looped reworking of the piano hook from Joe Cocker’s
“Woman to Woman.” Then came the voice of Tupac himself, compressed and digitized from beyond the grave.

Glover had heard this song countless times. It was one of his favorites, and he often listened to it with Dockery on the way to work. He had the disc on hand, and had even used his home burner to make a counterfeit copy. Now he ran a head-to-head comparison between the source and the compressed file. As far as he could tell from his computer speakers, the mp3 version sounded identical to the CD.

At work Glover manufactured CDs for mass consumption. At home, he produced them individually, and had spent over $2,000 on burners and other hardware. His economic livelihood depended entirely on continued demand for the product. But if the mp3 could reproduce Tupac at one-twelfth the bandwidth, and if Tupac could then be distributed, for free, on the Internet, Glover had to wonder: what the hell was the point of a compact disc?

D
oug Morris got a new job almost immediately. In July 1995, less than a month after his firing at Time Warner, he was hired by Edgar Miles Bronfman, Jr., the CEO of the Seagram liquor company. Junior was the third-generation scion of the influential Bronfman family of Montreal,
the so-called “Rothschilds of the New World.” Since taking over the family business in 1994,
Bronfman had pushed for reorganization, courageously attempting to transform Seagram from a boring (if highly profitable) beverage distributor into an exciting (but highly risky) global entertainment powerhouse.

As a business strategy it was demented. The Bronfmans had made forays into the entertainment business before, with little good to show for it. Junior’s father, Edgar Senior, had once made a play for MGM Pictures, before being outmaneuvered by Kirk Kerkorian. Junior’s uncle Charles had for many years owned the Montreal Expos, itself an experiment in slapstick. The elder Bronfman brothers had exited these ventures ignominiously, learning difficult lessons along the way about the volatile and unpredictable nature of show business. But they had failed to pass this wisdom on to Junior, who still wanted to be a player.

He had, like Morris, tried to make it as a songwriter. He had skipped college and gone straight into the music business, working pseudonymously for several years as “Junior Miles,” attempting to succeed without trading on the family name. Later, with his father’s backing, he had ventured into Hollywood, producing
The Border
, a 1982 Jack Nicholson flop. This unimpressive track record behind him,
he had returned to the fold as a Seagram executive, where, at the age of 39, he was handed control of the empire.

Seagram’s most profitable asset by far was a stake in the chemical company DuPont. Junior dumped this to raise money to purchase controlling stakes in Universal Pictures and MCA Music Entertainment Group. The two companies were struggling: Universal was mired in the production of
Waterworld
, one of the most expensive and terrible movies in history, and MCA’s catalog was so old it was known as the “Music Cemetery of America.”

Junior wanted Morris to run a division of the latter, betting he could raise the dead. It was an offer Morris approached with some reluctance. He didn’t know Junior very well, and was aware that the industry had hung a target on this rich kid’s back. MCA was a last-place money-suck with 7 percent market share that was also sometimes called “the sixth of the Big Five.” Morris had several other offers on the table, as well as some ideas of his own. Nor was he hurting for money. Two days after his firing, he had sued Time Warner, trying to pull the rip cord on a golden parachute deal worth fifty million bucks. (
Time Warner had countersued, accusing Morris of selling prerelease promotional CDs.)

But after a few meetings with Junior, he came around. With a lifetime of difficult contract negotiations behind him, Morris was a skilled dealmaker. Junior was not. Morris finagled points on profits, stock options at Seagram, and another golden parachute to complement the first.
The initial credit line Junior offered for investing in artists was only $100 million, much less than what had been available at Warner, but Morris could see that, sitting on a limitless tap of booze money, there was a lot more where that came from. Best of all, Seagram was domiciled in Canada, where the lyrics of popular rap songs were not a pressing political issue.

Although Jimmy Iovine and Doug Morris were temporarily estranged as colleagues, they remained best friends and hoped to reunite. The betrayal of Fuchs had stung them both, and Iovine had
raised such a stink after Morris’ sacking that he was no longer permitted in the Time Warner building. Under normal circumstances, he too would have been fired, but Iovine didn’t actually work for Warner directly—he was an equity partner in a joint venture, and the only way to get rid of him was to sell him back his shares. This was an expensive proposition, as Interscope had diversified beyond rap, signing No Doubt, Nine Inch Nails, and Marilyn Manson.

Together, the two came up with a plan. Iovine, the agitator, would make himself unbearable to Fuchs, and push extreme albums like
Dogg Food
and
Antichrist Superstar
that made the provocations of
The Chronic
seem boring by comparison. Morris, the charmer, would work on Bronfman, climbing his way up the corporate ladder and loosening up the purse strings of the Seagram board. Once both sides of the plan were accomplished, the two would reunite north of the border, outside the reach of grandstanding American presidential candidates.

They executed perfectly. In August 1995, Fuchs announced that Time Warner was parting ways with Interscope. The deal was an early warning sign of the growing dysfunction inside Warner. Whatever the cultural pressures, whatever the personality clashes, the move was indefensible for shareholders: what kind of idiot music label dropped Dr. Dre, Tupac Shakur, Snoop Dogg, Trent Reznor, and Gwen Stefani, all at the same time?

In November of that same year
Bronfman promoted Morris to run all of MCA, dramatically increasing the amount of money he was authorized to spend. In February 1996, less than a year after their surprise separation, Doug presented his friend Jimmy with a $200 million check, signed by Edgar Miles Bronfman, Jr., representing a permanent commitment to Interscope Records, backed by the full faith and credit of a continent of drunks.

Only one major release fell through the cracks: Tupac’s
All Eyez on Me
, released during the brief period in early 1996 when Interscope did not have a corporate partner. With its hit single “California Love,”
the double album was Tupac’s masterpiece, and eventually became one of the bestselling rap albums in history. But at the time of its release Shakur—gun enthusiast, actor, thug, lightning rod, and convicted sex offender—was too hot to touch. Shut out of Time Warner and still waiting for the Seagram deal to be inked, Iovine instead distributed the album in a one-off deal with Dutch-owned Philips, meaning the compact discs for
All Eyez on Me
were pressed at the PolyGram plant in Kings Mountain, North Carolina.

Once back in the fold, Tupac began working on a follow-up. Inspired by his readings of
The Prince
(and, perhaps, by watching Iovine and Morris work), he rebranded himself as Makaveli, the power-crazed mastermind of rap.
The Don Killuminati: The 7 Day Theory
was recorded in a span of a few days in August, and slated for release for the holiday season that year. On September 7, Tupac traveled with Suge and the rest of his entourage to Las Vegas to attend a Mike Tyson comeback fight. After Tyson scored a first-round knockout, Tupac started throwing punches of his own, provoking a brawl by attacking one of Suge’s longtime rivals in the lobby of the MGM Grand. After the scene cleared, Tupac left in a caravan with his entourage, riding shotgun in Suge’s SUV. At 11:15 p.m., the two pulled up to a traffic light on the Vegas strip, and a four-door white Cadillac pulled alongside. Gunshots rang out from the adjacent car, and Tupac was hit four times, once in the chest. Suge, driving, was grazed in the head by shrapnel. The two were rushed to a nearby hospital, and Tupac was placed into a coma. Six days later he was pronounced dead.

In the wake of Tupac’s murder, Death Row disintegrated. Suge Knight returned to prison, having violated the conditions of his probation by engaging in the MGM brawl. Dr. Dre had already abandoned the label after feuding with Shakur earlier in the year. Snoop and the other members of the Dogg Pound soon defected as well. Iovine scrambled to keep them all, but managed to retain only Dre, by investing in his new label, Aftermath.

Tupac’s death was a pointless tragedy, to be sure, but it was also
an excellent career move. Sales of his back catalog spiked, and when
The 7 Day Theory
debuted in November it immediately claimed the number one spot. Pac would go on to release six more posthumous albums, selling far more in death for Interscope than he had in life. While at the time commentators wondered if Tupac’s death might signal the end of the gangsta rap genre, Morris and Iovine had access to insider sales projections, and they could see that the fun was just beginning.

In an attempt, perhaps, to exorcise the ghosts, Morris changed the name of MCA to Universal Music Group. On the strength of Tupac’s back-catalog sales, the rebranded UMG crawled its way out of the cellar in 1996, coming in fifth in Morris’ first full year of management. The next two years at Universal were even better. No Doubt’s girl power anthems were the soundtrack for a generation of impressionable ’90s kids; Marilyn Manson was the messiah of the mallgoth; and, while historians of music might never forgive Interscope for signing Limp Bizkit, they would at least note that the band ended up selling forty million records—more than Hootie, even.

In the late 1990s, on the strength of the CD boom, the recording industry enjoyed the most profitable years in its history. The economy was overflowing, aggregate demand was strong, and Americans were spending more money on recorded music than ever before. Profit margins were expanding as well, as efficiency gains in compact disc manufacturing brought the per-unit cost of goods below a dollar—a savings that was not passed on to the consumer, who was charged $16.98 retail. Consolidation in the radio industry also helped, creating a homogenous nationwide listening environment that could propel an album to platinum status almost instantly on the basis of a single hit. Controlling the airwaves was critical—if Limp Bizkit could go forty times platinum, then literally anyone could.

Meanwhile, the controversy over Interscope began to die down. Gangsta rap was here to stay, probably for decades, and anyhow Bill Bennett had his hands full with something called the Project for the
New American Century. Having exhausted himself in his crusade to protect America’s children from hearing the N-word, Bennett would henceforth devote his energy into cheerleading for an unprovoked invasion of a sovereign foreign state. Premised on absurd lies, that invasion would later leave a hundred thousand corpses and a failed, Hobbesian state in its brutal and unnecessary wake. Rap music was safe; the Moral Conscience of a Generation had moved on.

Morris began to look for new talent. As much as he loved Iovine, he couldn’t rely on him entirely. He had to develop Universal Music’s presence outside of the Interscope imprint as well. To that end, he dispatched his A&R men across the country in search of new and unsigned acts. Following his own experience, he instructed his scouts to research local markets carefully and to stay on the lookout for regionally trending hits. Something interesting soon came back up the pipe:
a New Orleans rap conglomerate by the name of Cash Money Records. An independent label, Cash Money had signed dozens of local rappers who, in certain record stores in the South, were managing to outsell even Universal’s best-established acts. Sensing opportunity beyond the parishes of Louisiana, Cash Money was now shopping for a pressing deal with a major. As a demonstration of its marketability, the label was distributing an advance pressing of a song called “Back That Azz Up” by an obscure rapper named Juvenile.

When Morris listened to a song for the first time, he entered
a trancelike state of total concentration. He stopped talking and his face grew stern. His eyes closed halfway and he looked blankly into the middle distance. The old songwriter in him awakened, and his body began to move in time with the rhythm. He tapped his feet; he shook his arms; he bobbed his head in a circle. He continued this way, in tight-lipped silence, until the song was over, then rendered his verdict.

By his own admission, Morris had difficulty identifying which rap songs were going to be popular. He was more of a rock guy, and he relied on label heads to tell him which rappers were most likely to
succeed. But “Back That Azz Up” was different. From the first time he heard it, Morris was certain it would be a massive hit. Years later, he would still quote the song’s distinctive hook from memory—“You’s a fine motherfucker, won’t you back that ass up”—then throw back his head and guffaw with delight.

Cash Money Records was owned by two brothers, Bryan and Ronald Williams, better known as Birdman and Slim. Veterans of the blighted Third Ward of New Orleans, the two had followed Suge Knight’s career closely in the press and wanted something similar for themselves. In early 1998 they flew to New York and met Morris in Universal’s offices to hammer out a deal. It wasn’t easy. Birdman and Slim weren’t just selling Juvenile, but an entire roster of rappers: Big Tymers, Hot Boys, Mannie Fresh, B.G., Young Turk, and a fifteen-year-old tagalong named Lil Wayne. In return they were demanding an 80/20 revenue split and full control of their own masters. But the biggest barrier to striking a bargain proved to be the brothers’ thick New Orleans accents—most of the time Morris could barely understand what the two were saying. Still, he closed the deal, and Birdman and Slim walked out of Universal’s offices holding a three-million-dollar check.

It was the kind of signing that set Morris apart. There weren’t too many label executives interested in spending that kind of money for a minority stake in a roster of untested, sometimes unintelligible rappers who had until recently recorded their albums in Mannie Fresh’s kitchen. But years of scouting the order-taker had taught Morris there was actually no such thing as a regional hit. There was only a global hit, waiting to be marketed. He put the considerable weight of Universal’s promotional team behind the label, and within a few months “Back That Azz Up” was playing in Ibiza.

The rebranded Universal Music Group was a success. Seagram, though, was floundering. Beverage sales were flat and the movie studio was a dud factory. First there had been
Waterworld
. Then had come
Meet Joe Black
. Then there was
Dante’s Peak
,
Mercury Rising
,
and
Blues Brothers 2000
, followed by
McHale’s Navy
,
Flipper
, and
That Old Feeling
. Since Bronfman had taken over, each year at Universal Studios had been worse than the last. The worst was 1998, one of the losingest years for a major Hollywood studio in living memory.