How Music Got Free: The End of an Industry, the Turn of the Century, and the Patient Zero of Piracy

by Stephen Witt

  Meanwhile, the music industry was going corporate. The counterculture ethos of the ’60s and ’70s was being superseded by a more commercial attitude, and “selling out” was no longer an unforgivable sin. The debut of MTV in 1981 marked the end of album-oriented rock and the resurgence of single-oriented pop. The cultural changes extended to management. Cash transactions in brown paper bags were replaced by independently audited financial statements, and the industry’s long-standing ties to organized crime were finally cleaned up.

  Morris adapted well to this new environment, shaving off his beard and donning a sport coat and tie. Ertegun, a creature from an earlier time, did not. In 1989, Warner Communications announced it was merging with Time, Inc. to create the country’s largest diversified entertainment conglomerate. In advance of the merger, Ertegun had been asked to present his strategic plan for the Atlantic imprint to the suits at Warner at an early morning meeting. Morris showed up on time, then waited along with the other executives in the conference room for his boss to arrive. Twenty minutes later, Ertegun walked in, drunk, at the tail end of an all-night bender, his shirt covered in spilled wine. “Here’s our plan,” he said. “We’re going to make more hits.” Then he walked out.

  By 1990 it was clear that Ertegun’s time had passed. Atlantic Records was a legendary imprint—entire books had been written about it—but the 1980s had not been kind to the label, and at the end of the decade its roster looked like a paleontology exhibit. The $300 million in revenue Atlantic generated in 1989 represented little more than a tenth of the overall Warner Music empire, and much of those sales came from upgrading the classic rock leftovers to compact disc. Behind Ertegun’s back, Time Warner executives proposed removing him and putting Morris in charge. Loyal to his mentor, Morris brought the idea to Ertegun directly. To his surprise, Ertegun approved it, with the caveat that the two would serve as co-CEOs. Under this compromise, Morris would run Atlantic’s day-to-day affairs, with Ertegun serving as a figurehead.

  By this time Morris was 51 years old. He was successful by conventional standards, and Ertegun had paid him well. But it was also fair to say that, after thirty years in the music business, Morris hadn’t really left a mark. His songwriting career was a footnote and his boutique label had never produced a truly memorable hit. He’d overseen some big names at Atlantic, but only at the trailing end of their careers. He’d managed to squeeze a single great album out of Stevie Nicks before she’d succumbed to a vicious cocaine addiction; he’d overseen the last two Led Zeppelin albums, widely regarded to be their worst. Ertegun’s shadow was long, and Morris had spent most of his career standing in it. He was well liked, but not necessarily well respected, and his appointment was regarded with skepticism.

  Within five years he was the most powerful music executive in North America. Ertegun’s apprentice proved to be a risk taker, an indefatigable corporate climber, a man who had spent his life waiting for this opportunity. He transformed Atlantic, investing aggressively in new, unproven talent, even running a loss at the label in 1991, the first in its history. But his bets all paid off, and by 1994 he had tripled Atlantic’s revenues. He moved toward neglected arenas, like bubblegum rap and mainstream country, scoring hits with Gerardo’s “Rico Suave” and John Michael Montgomery’s “I Swear,” among other masterpieces. He developed a pugnacious, confrontational management style, lobbying for larger budgets and greater personal compensation. He frequently butted heads with his overseers, and when they opposed him, he engineered their removal. Toward the end of 1994, with Ertegun’s assistance, he masterminded a daring corporate insurrection inside Time Warner, one that ended with his promotion to his current position, the top slot in North America, where he oversaw nearly a quarter of the national market for recorded music, amounting to nearly $2 billion in revenue, and where all of the company’s U.S. labels—Warner Brothers, Atlantic, Elektra—answered to him.

  Those who joined Morris on his rapid rise to the top spoke of his warmth, his openness, and his extraordinary charisma. Others, more distant, were critical, and complained of his inconsistency, his stubbornness, and his world-consuming ego. Only those closest to him knew of his best asset: the careful, analytical approach he took to solving problems. This aspect of his personality was well hidden. He seemed like a Long Island schmoozer who led with his heart. He was actually an Ivy League graduate with an excellent head for figures. His business decisions were balanced and deliberate, and though he loved music passionately, when he talked of investing in new acts he used the measured language of a scientist. An associate who spent years observing Morris came finally to understand that this was deliberate, and that being underestimated was a way to maintain power. “Morris was like an old country lawyer,” he would later say. “You think people are getting one over on him, but he was always thinking three steps ahead.”

  Now on his way to meet with Warner Music chairman Michael Fuchs in 1995, Morris looked undefeatable. It was only June, but Morris had seen the sales figures and was certain he had the number one album of the year: Cracked Rear View, from the gentle frat-rockers Hootie & the Blowfish. The cargo shorts and hacky sack crowd had turned Hootie into state college superstars, with sales approaching eight million units. Their hit single “Only Wanna Be with You” was a song that seemed scientifically designed to play over the stereo system at the Gap.

  Hootie had not been an obvious winner by any means. In fact, all of Warner’s A&R men had passed on them. The consensus opinion among major label scouts was that the Blowfish were an unoriginal bar band with terrible stage presence and no songwriting ability. Morris disagreed. Or perhaps he granted that this was true, but then contended that it didn’t matter. For Morris, the only important thing was that the band’s popularity was spiking, crossing over from the University of South Carolina to the rest of the state.

  He had learned this lesson many years before, at his first job at Laurie Records, when he transitioned from artist to executive. The shift in roles required Morris to pay closer attention to sales, but in the 1960s keeping score was difficult. Record stores weren’t always inclined to share their sales figures, and even if they had been, in an era before computers, collecting and sorting the data from thousands of retailers around the country was impossible. For this reason the Billboard charts weren’t especially reliable. Neither were radio play statistics—the industry suffered from routine payola scandals, and even in the absence of bribes, DJs tended to play favorites. Only one person at Laurie could provide the numbers Morris needed, a functionary clerk whose real-world job was about as far away from the glamour of the music business as you could get: the order-taker.

  Morris haunted him like a ghost. Whenever a big order came in—which at Laurie meant anything more than a crate of a hundred vinyl records at a time—Morris demanded to know who had placed it, exactly how many units they wanted, and why. The order-taker was understandably perplexed. Shouldn’t Morris be at a nightclub somewhere, looking for the next Jimi Hendrix, instead of here, in the accounting department, pestering a back-office employee? But to Morris the order-taker was the key to the whole thing. How could he know what to sell if he didn’t know what people were buying?

  One of the acts on Laurie’s roster in those days was a generic garage rock band from Mansfield, Ohio, called the Music Explosion. Side A of their lead seven-inch single was a schlocky two-minute cover of a 1964 British Invasion tune titled “Little Bit O’ Soul.” Morris, however, would forever remember this platter by a different name: Laurie 3380, the catalog number the order-taker used to track the sales of the song. Those sales were generally unimpressive, with one exception: a record store in the small town of Cumberland, Maryland, which had, during the most recent inventory cycle, inexplicably ordered two crates of discs.

  Morris was struck by this anomaly. He convinced the order-taker to give him the phone number of the customer. He was soon talking long-distance with the Cumberland store’s owner, who told Morris that through repeated heavy airplay, a local ra
dio DJ had turned this unexceptional song into a regional hit. In fact, the owner was already planning to place another order for the single, as the two crates of Laurie 3380 he’d bought were running out.

  Was there anything special about Cumberland, Maryland? No—a town of 30,000 people in the Allegheny Mountains, it was a standin for Anyplace, USA. Was there anything special about “Little Bit O’ Soul”? No—the song was about as exciting as a mashed cracker. But Morris suspected that what played well in an Appalachian coal-mining town in western Maryland would probably play well anywhere. He pushed the executives at Laurie to market the song more aggressively, and soon DJs around the country had moved it into prime-time rotation. By the end of 1967, “Little Bit O’ Soul” had peaked at number two on the Billboard charts, and Laurie 3380 had shipped more than a million copies.

  Morris never forgot the experience of his first gold record, and he began to trust market research more than he trusted expert opinion—more, sometimes, than he trusted his own ears. Let the other A&Rs scout bands, and go to nightclubs, and fall in love with demos. Let them guess at trends, and fool themselves into believing they had some special insight into the next big thing. From now on, Morris was scouting the order-taker.

  Twenty-seven years later and he was still doing it. When it came to Hootie & the Blowfish, Morris didn’t have to listen to their music; he just had to look at the retail sheets from record stores across the Carolinas, where Hootie was outselling even top national acts. Morris believed that the regional audience for a no-name Carolina bar band understood something about music that the more sophisticated A&Rs who worked for him did not, and he was soon proven correct.

  Of course, there was an unstated assumption behind this approach: that aesthetic quality and commercial popularity were identical. In other words, the album that sold the most copies was by definition the best. This could sometimes lead to unusual outcomes. For example, to a corporate label executive the best album of 1967 was not Sgt. Pepper’s Lonely Hearts Club Band or Are You Experienced, but More of the Monkees. The best album of 1975 wasn’t Blood on the Tracks or Tonight’s the Night, but Elton John’s Greatest Hits. The best album of 1993 wasn’t Enter the Wu-Tang or In Utero, but the soundtrack to The Bodyguard. And so the best album of 1995 was therefore Cracked Rear View. The critics might howl in protest, but the people bought the album, and at Time Warner that was all that mattered.

  But scouting the order-taker didn’t mean that Morris didn’t take risks. In fact, it was precisely this populist economic logic that often led him into dangerous cultural territory. For further down the ledger—and located across an unbridgeable cultural abyss from the anodyne yodeling of Hootie and company—was the 50 percent stake Morris had negotiated in Jimmy Iovine’s Interscope Records. Iovine was Morris’ best friend. Although Iovine lived in Los Angeles, Morris saw him often, and the two talked on the phone several times a day. Morris had first contacted him at Atlantic as a producer for Stevie Nicks, and the collaboration led to her breakout solo hit “Edge of Seventeen.” He’d followed up with albums for U2 and Tom Petty that had dominated the 1980s airwaves. Iovine was short, energetic, rakish, and always wore a beat-up baseball cap that, in more than ten years of friendship, Morris had seen him take off exactly once.

  Iovine could, at times, be a little bit difficult. Morris, more of a political creature by nature, knew you had to manage him. Once, in a meeting with Michael Fuchs, Morris’ Time Warner boss, the executive had immodestly described his multifaceted approach to the media business, and then referred to himself as the Michael Jordan of management. Iovine, acid-tongued, had provided a quick retort: “Yeah, but to us, you’re the Michael Jordan of baseball.”

  But you needed Jimmy for his instincts, both as a producer and as a scout. He had a terrific ear for the hit song, and his pop music instincts approached clairvoyance. He had, in Morris’ words, the ability to “see around corners.” In touch with hidden currents of culture, he was the greatest trend-spotter Morris had ever known. And lately, he’d been pushing a new frontier: hard-edged gangster rap.

  As Ertegun had long taught, understanding the popular sound meant understanding African-American culture. Jazz, blues, soul, R&B, rock, funk, disco, techno, house, electro, and rap—all had their roots in the black American slum. Lately, conditions in those urban ghettos had reached an astonishing level of decay. The crack cocaine trade had triggered an epidemic in crime, peaking in the early ’90s in an uncontained frenzy of gang violence and homicide. Heavy-handed police crackdowns followed, culminating with the 1992 Los Angeles riots, a catastrophic outbreak of low-grade urban warfare in which more than fifty people were killed and more than a thousand buildings torched to the ground.

  Iovine and Morris were certain that therein lay the future sound of pop. In 1992, they had heard an advance copy of Dr. Dre’s The Chronic. The album was confrontational, catchy, packed full of hits and sonically brilliant, but so explicit that the corporate majors wouldn’t touch it. Sensing an opportunity, the two had arranged for a meeting with Suge Knight, the CEO of Death Row Records, the label behind the release. Scheduled just a few weeks after the riots, the meeting took place in Los Angeles at the Ivy, a restaurant better known for the celebrity of its patrons than the quality of its food. Suge wore an oversized white T-shirt and a blood red baseball cap, tilted to the side, and his massive bulk barely fit into his chair. Across from him sat Morris and Iovine, impressed, excited, and maybe even a little afraid. Earlier in the day, Iovine had worked out a plan to win Knight’s confidence: at a certain point in the meal, Iovine would excuse himself to the bathroom. Then Morris would tell Knight that Iovine was a genius.

  Halfway through, the plan was executed. “Suge, listen,” said Morris, indicating the vacant chair that Jimmy had left. “That guy is an authentic genius.”

  Morris wasn’t above a little razzle-dazzle at a sales pitch, but in this case he meant what he said. Anyone could get lucky and produce a hit record, or maybe even two, but Iovine had released dozens. Talent like Iovine’s was exceptionally rare, and when you met someone who had it, you grabbed on to the back of his shirt collar and held on until he ran out of ideas or croaked. If Morris had a secret—he denied having one, of course, but if he did—it was whatever combination of personal qualities that allowed him to keep artists and executives locked in his personal orbit for years, sometimes decades.

  Morris had spent years building this reputation. He was well aware that, in the public imagination, executives of his station were regarded as smooth-talking swindlers. He had certainly known many who had bolstered this stereotype, but he had also noticed that, over the long run, the swindlers ended up marginalized and forgotten. Burning an unsophisticated artist on a record deal might net you some short-term riches, but word soon got around, and then your phone calls weren’t returned. Musicians gossiped. In fact, they bitched incessantly. They complained about even the most generous contracts, and often aired these grievances in extremely public fashion. Cultivating a reputation for probity was the only way to stay in the game. It was an eternal truth of show business: “The secret of life is honesty and fair dealing. If you can fake that, you’ve got it made.”

  Suge Knight was convinced. He was authentic, too. Shortly after the meeting, Death Row signed with Interscope, with Time Warner acting as its distributor. The deal was like a half share in the future: Snoop Dogg, Dr. Dre, and Tupac were poised to dominate the radio waves for years to come, and albums like The Chronic and Doggystyle were destined to become back-catalog bestsellers.

  And that was where the real money was. An entire generation was upgrading its vinyl collection to compact discs, and anytime some kid in Wisconsin bought a digitally remastered copy of Physical Graffiti, Morris got paid. As his fortune grew, though, Morris kept a low profile. Unlike Ertegun—who chased after starlets and partied with Mick Jagger—and unlike Iovine—a fast-talking Brooklyn sharpie who made sure others were aware of the presence of genius—Morris shunned publicity. He was famou
s in the music business, but not well known to the world at large, and his relationship with the press was icy. He rarely gave interviews and encouraged his subordinate executives to do likewise. No one had ever accused him of shyness, of course. He simply knew his business, and that meant putting the artists first. Iovine, Suge, and others could make the headlines. Morris signed the checks.

  But the Death Row deal made publicity inevitable. The label was incendiary, and sales of The Chronic went on to surpass even Morris’ best expectations, establishing both Dr. Dre and Snoop Dogg as bankable long-term stars. Snoop’s menacing persona was just the gloss for a brilliant comic sensibility and a talent for singsong hooks. Dr. Dre was the Phil Spector of his era, whose musical skills and work ethic augured a pop music dynasty that might well last for decades.

  And then there was Tupac. Under the beneficent guidance of Suge, the onetime drama student had emerged from the politically conscious underground and struck a posture of uncompromising fuck-the-world menace. Even on Death Row’s roster he stood out. Snoop looked like a greyhound, and Dre looked like Mr. Toad, but Tupac was beautiful. His hooks were immortal. His voicing and cadence were sublime. His lyrical content was earnest, sometimes almost embarrassing, but he made it impossible to look away. And his fans were legion.

  Talent came at a price. By 1995, a significant portion of Time Warner’s shareholder dividends—paid out to jowly GOP aristocrats in expensive three-piece suits—were being funded by a mobbed-up posse of black hoodlums who rapped about murdering hookers and selling crack cocaine. The malfeasance went beyond lyrics: Suge was on probation for assault; Snoop Dogg was facing a murder rap; Tupac had been sent to prison for sexually abusing a groupie. This uncomfortable intersection of corporate sobriety and glorified crime narrative had drawn attention from the self-appointed guardians of the family, who worried about the corrosive nature of the recorded material on the nation’s morals. Bravely leading this self-described “moral crusade” was Bill Bennett, Ronald Reagan’s former secretary of education.