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

by Stephen Witt

  Tai lived in a different world than Glover and Dockery. He was an Ivy League biology student who came from a background of privilege. He was raised in Southern California, then matriculated at the University of Pennsylvania in 1997. As a freshman on campus with a T1 Internet connection, he’d watched RNS from the sidelines, feeling a bit in awe of the group and wondering how he might contribute. After hanging around in the chat channel for nearly a year and completing various menial technical tasks, he was given an invite.

  Simultaneously, he applied for a DJ slot at the school’s radio station. For two years Kali had waited patiently as Tai made his way up the ranks. He’d cultivated Tai’s interest in rap music and directed him to make connections with the promotional people at the relevant labels. Finally, in 2000, as a trusted senior, a 21-year-old Tai was promoted to music director and given a key to the station’s office. He now had direct, unmonitored access to the station’s promo discs. Every day he checked the station’s mail, and when something good came in, he raced back to his dorm room to upload it as quickly as possible. Victory sometimes came down to a matter of seconds.

  Tai scored two major leaks that year, back to back: Ludacris’ Back for the First Time, and Outkast’s Stankonia. The albums shifted the regional focus in rap music away from New York and Los Angeles and toward Atlanta, and they were massive gets for RNS. Kali was delighted with his apprentice, and over time Tai came to realize that he was being groomed as his replacement. His promotion to ripping coordinator was the dark-world mirror to his position at the campus radio station, and soon he was delegating orders to the RNS rank and file. Kali began to include him in higher-level discussions with the leaders of other Scene groups, and he was given privileged information about the location and management of the group’s topsites. He even came to know some of the other members’ real names.

  For the next two years Tai managed RNS’ roster of leakers. Along with Kali, he carefully tracked the major labels’ distribution schedules and directed his sources to be on the lookout for certain hot albums. Matching sources with albums was an inexact science, particularly since RNS had international scope with potential at every level.

  First there were the radio DJs, who could provide access to their respective station formats: “MistaEd” in Baltimore for underground hip-hop, “BiDi” in Georgia for mainstream R&B, “DJ Rhino” in Minnesota for independent rock.

  Then there were the British music journalists “Ego_UK” and “Blob.” Like Tai, they relied on promotional connections at the major labels and focused on whatever rap artists Universal hadn’t managed to snap up. Their greatest coup was 50 Cent’s “lost” debut, Power of the Dollar, scheduled for release in 2000 by Sony, but canceled after the rapper was shot. Never officially released, it fell on RNS to make sure the album saw the light of day.

  Then there were the Japanese. Presence here was a must, as albums sometimes launched in Japan one or two weeks ahead of the U.S. release date. And even when trans-Pacific launches were simultaneous, the Japanese editions often contained bonus track rarities that appealed to Scene completists. Tai relied on “kewl21” and “x23” to source this material, one an expat, the other a native.

  Finally there were the Tuesday rippers. These were the foot soldiers who spent their own money to purchase music legally the day it appeared in stores. “RL,” “Aflex,” and “Ziggy” weren’t even leakers really, just enthusiasts. This was the lowest level of access, whom Tai directed to scoop up whatever fell through the cracks.

  In 2002, Kali offered to step down and let Tai lead. Tai, now 23, had graduated and was suffering from postcollege malaise. He still lived near campus and worked in the school’s IT department. He’d been relieved of his position at the radio station upon graduation, but he’d managed to keep the key to the office. He had a laptop now, and by night he snuck into the station to make copies of the promotional CDs.

  It was a tempting offer, but for some reason Tai turned it down. In later years he struggled to remember why. It wasn’t fear exactly—at that age he still felt invincible. And he had grown close to Kali, with whom he chatted daily. The group had given Tai a sense of belonging, and he would maintain a presence in its chat channels for years to come. But, for whatever reason, at the age of 23 he opted for retirement. He was given the title “leaker emeritus.”

  And yet, through it all, even from this privileged position of confidence, Tai had no idea that Dell Glover existed. He knew of Dockery, vaguely, and was aware that the group occasionally sourced leaks from inside Universal’s manufacturing plant. But he had no knowledge whatsoever of the quiet presence named “ADEG,” who was in fact the group’s best asset. He had managed the leakers for two years, and almost led the group himself, but even he was in the dark. Kali’s greatest coup was a secret he kept to himself.

  Kali told Glover this was done for his own protection. Glover didn’t buy it. He suspected the real reason Kali kept him isolated was that he didn’t want a rival Scene crew to poach him. But he went along with it, because he needed Kali too. Estimates were difficult, but at any given time global Scene membership probably comprised no more than a couple of thousand people. Kali, with his worldwide network of leaking insiders, was the elite of elites, close to the very top. He had helped to draft the mp3 leaking standards himself. Being Kali’s source was definitely worth the headache. A typical Scene pirate, bribing record store employees and cracking software, might be granted passwords to only three or four topsites. By 2002, Glover had access to two dozen.

  He parlayed this access into the bootleg movie hustle. The growing trade in pirated movies paralleled the rise of pirated music, and in 2001 the home DVD burner debuted. The move from the inferior VCD to the rental-quality DVD brought an explosion in business for Glover. He built another tower to replace the first, with seven DVD burners replacing the CDs. He upgraded his Internet connection from satellite to broadband. He downloaded the last few years’ most popular movies from the Scene topsites to his home PC, then burned a couple dozen copies each. He printed the movies’ titles on the mailing labels and then affixed them to the discs. For each film he also now printed out a full-color cover sleeve and stuck that into a photo album to create a makeshift catalog. During the sales process, customers selected the movies they wanted by pointing to the posters, and, as always, Glover then retrieved the counterfeit discs from “inventory” in the trunk of his car.

  Glover built his customer base carefully. He was selling contraband, and he needed to trust the people who bought the discs. He started with his coworkers at the Kings Mountain plant. Then he branched out to local barbershops and clubs. Soon he was keeping regular business hours in the parking lot of a nearby convenience store. Around Cleveland County, Glover became known as the “movie man.” For five bucks he would sell you a DVD of Spider-Man weeks before it was available at Blockbuster, maybe while it was even still in theaters. And not just Spider-Man; Gangs of New York, Bend It Like Beckham, Toy Story 2, The Ring, Drumline … any first-run mainstream movie from the past five years. And if you wanted something more obscure—say, some art house flick that wasn’t in his immediate inventory—he could usually fill your request overnight.

  The value proposition for his customers was irresistible. Business flourished as Glover undercut the legitimate competition on price and product selection, offering outright ownership with no late fees. He reached a cartel-like agreement with Dockery to serve separate market segments, and by early 2002 Glover was selling 200 to 300 DVDs a week, frequently grossing over a thousand bucks in cash. He bought a second PC and another burner just to keep up with demand. Although he knew what he was doing was illegal, Glover felt he had insulated himself from suspicion. All transactions were hand to hand, no records were kept, and he never deposited his earnings in the bank. He refused to sell music, they didn’t make DVDs at the Universal plant, and the Scene was so far underground that he was sure his customers wouldn’t understand where the supply was coming from.

  Stil
l, he kept his sideline a secret from Kali, who he was certain would not approve. Kali’s paranoia was justified. Since the beginning of the millennium, the FBI and Interpol had been targeting the Scene under a wide-ranging program called Operation Buccaneer. In 2001, an international sting had netted over seventy members of RiSC_ISO, a DVD and software piracy group. Arrests were made in over ten countries, with FBI agents raiding dormitories at Duke, MIT, and UCLA, and even busting four rogue Intel employees who were using the company’s servers to host pirated files. Kali had learned what he could about the investigation from publicly available legal documents posted online. It seemed the Feds had started a topsite of their own, which they dubbed a “honeypot”: a sticky trove of goodies that looked like a secure Scene file repository, but that actually logged the IP address of anyone who used it, and fed that information back to the Hoover Building and Scotland Yard. Sentences had ranged from one to five years.

  Glover had been lucky to avoid this sting. He had never logged on to any of the RiSC_ISO servers. For that he could thank Kali, who had always felt the group was looking for trouble. RiSC was an outlier in the Scene, an amorphous and undisciplined collection of unreliable operators whom the FBI suspected of having ties to offline organized crime. Operation Buccaneer confirmed these suspicions, with Interpol producing evidence that RiSC had brokered sales of cracked prerelease software to underworld groups in Eastern Europe and Russia.

  It was a long-standing principle of the Scene that the leaks were not to be sold. The culture drew a distinction between online file-sharing and for-profit bootlegging. The closed system of topsites was seen as an informal system of cooperation and trade, one that was not only morally permissible but maybe not even illegal. The physical bootlegging of media, by contrast, was seen as a serious breach of ethical principles, and, worse, it was known to bring tons of heat.

  As a moral argument it was perhaps a little tortured; from a legal standpoint it was completely misinformed. Nevertheless, it was an ethos that Scene participants stuck to, and the cultural prohibitions against using the topsites for profit were strong. In fact, for most participants, membership in RNS was a money-losing proposition. They spent hundreds of dollars a year on compact discs, and thousands on servers and broadband, and got little that was useful in return.

  Glover was the exception. Following the Operation Buccaneer raids, Kali put the word out to his own people that anyone suspected of selling material from the topsites would be kicked out of the group. Dockery, for a time, complied with this directive, but Glover did not. He knew he wasn’t getting kicked out of anything. He was too well placed. With Tai’s relevance fading and Universal’s Southern rap acts ascending, Kali would have to rely on Glover alone.

  The suits at Universal had noticed the regional shift in taste, and, having missed out on Outkast, they were now pushing aggressively to lock down the rest of the region. At the urging of rap impresario Russell Simmons, Doug Morris had signed the Houston legend Scarface, formerly of the Geto Boys, and appointed him head of their new Def Jam South imprint. Scarface repaid the favor almost immediately by signing a young Atlanta radio DJ named Ludacris. Combining upbeat production with brash, exuberant wordplay, Ludacris had quickly established himself as the millennium’s big-tent party rapper, and his single “What’s Your Fantasy” had become a spring break staple and a massive radio hit.

  Ludacris was Kali’s favorite rapper, and the standing order to RNS was to leak any and all Def Jam South releases first. In the weeks before Ludacris’ November 2001 follow-up release Word of Mouf, Kali started calling Glover every single day to check on the status of the leak. Some days he called him twice. Glover was annoyed and felt that Kali was taking him for granted, as usual. He was also annoyed by Ludacris, whose music he didn’t care for. After securing the album from inside the plant, he deliberately stashed it in his bedroom closet duffel bag for a full week before handing it over. Even with this delay, RNS leaked Word of Mouf to the Scene 24 days before its official release.

  The next big title from Def Jam South was Scarface’s own album The Fix. Scheduled for an August 2002 release, once again Kali began calling Glover incessantly, looking to schedule a handover as early as June. Glover, annoyed, simply capitulated and sent the album as soon as he received it. It hit the Internet on July 15, 22 days before it was scheduled to arrive in stores.

  The next day, in Kings Mountain, management called a plant-wide meeting. Attendance was mandatory. Standing in front of hundreds of assembled employees, the Danish boss cut straight to the point: a complete copy of Scarface’s album The Fix has been found on a server at Duke University. How did it get there? It rolled off the packaging line only yesterday, and it hasn’t left the warehouse yet. One of you must have leaked it. Tell us who it was. You can do so anonymously if you like, no questions asked.

  Kali had screwed up. In his quest to dominate the piracy league tables, he’d leaked too early, too aggressively, and Universal had been able to narrow down the source of the breach. Glover experienced a sinking feeling, akin to panic. He and Dockery made nervous, surreptitious eye contact across the manufacturing floor. Perhaps only his naturally laconic manner saved him from being caught outright.

  In conversations afterward, the belt buckle posse assured him they wouldn’t snitch. They didn’t want to lose their jobs either. But they weren’t Glover’s only worry. Around the plant, he was starting to hear questions about where, exactly, all these pirated movies were coming from. He even suspected the plant brass might have gotten their hands on some of his knockoff DVDs. He should have known better than to sell the movies to his supervisor. He decided against confronting or warning any of his customers, and they in turn seemed to avoid him. If he was lucky, some sort of implied omertà might save him.

  Five days after this meeting one of Glover’s key suppliers was busted. Van Buren’s security regime had nabbed a temporary shift worker named Chaney Sims after the wand picked up on a prerelease compact disc he’d stuffed into his shirt. He was arrested on the spot and charged with felony embezzlement.

  Glover was in trouble. His sideline was now decidedly unsafe. Sims had been part of his crew, and if he cooperated with the police, the whole operation would be outed. If the cops approached, Glover’s only option would be to stonewall, and pray he only lost his job. Even if he didn’t, he was known to be close to Sims and was certain to be a person of interest in the Scarface leak. His best hope for now was for the investigators to focus on the Duke lead. That was a red herring: neither Glover nor RNS had any connection to the school. Glover had no idea how The Fix had ended up on a campus server, and he didn’t care. All he knew now was that he had to shut it down.

  After work, Glover called Kali and broke the bad news. They had crossed the line. They had leaked too early and the pressure was on. In their conversation, Glover put the blame entirely on Kali, avoiding mention of the movie racket. Their exchange became heated. Glover announced he was quitting RNS forever, then hung up. When Kali called him back, he didn’t answer. He drove home and packed all his contraband DVDs into the trunk of his car. There were two spindles full of merchandise, over 600 movies, worth nearly 3,000 dollars retail. In the dead of night, he drove to the Shelby city limits, and threw them in the town dump.

  CHAPTER 12

  By 2003 rap had gone mainstream. Rap songs dominated the Top 40, playing at dance clubs and at frat parties. The previous year The Eminem Show had been the bestselling album in America, the first time a rapper had ever held the title. Rap had eclipsed rock as the most vital and important music of its time, and Eminem would go on to become the bestselling rapper ever. And, under Morris’ leadership, Universal had taken control of it all.

  The nice thing about the rappers was that they were obsessed with money. They talked about it, thought about it, wrote songs about it, and even threw it in the air. Contract negotiations were a bitch, but once you got them signed, the rappers were relentless grinders who put out albums like clockwork. And once they h
it it big, they doubled up and started acting as A&R men themselves. Signing one hit rapper could spark a chain reaction that led to a dozen more. The hottest new acts on Morris’ roster all traced their lineage to signings he had made years before: the Interscope acquisition in 1996 had netted him Dre, who had led him to Eminem in 1998, who in 2002 had led him to 50 Cent, whose monster hit “In Da Club” would propel Get Rich or Die Tryin’ to succeed The Eminem Show as the next year’s bestselling release.

  There was more in the works. At Def Jam in New York City, Jay-Z’s protégé Kanye West was putting the finishing touches on his debut album, The College Dropout. At Def Jam South in Atlanta, Ludacris, with Chicken-N-Beer, was proving himself to be the industry’s most consistently entertaining voice. And there was still New Orleans, where Mannie Fresh was producing Lil Wayne’s comeback album, Tha Carter.

  He might have been a 64-year-old white guy, but Doug Morris was running this rap shit. He had just scored back-to-back victories from the Interscope imprint he’d spent more than a decade championing. Universal Music hadn’t existed eight years earlier. Now it commanded over a quarter of the global market share and was the largest music company on earth. Morris should have been a legend in his own time, like his mentor Ahmet Ertegun. He should have been famous, with a flattering profile in The New Yorker. He should have been, as he would have put it, in his ineradicable Long Island accent, “yooge.”

  But it wasn’t to be. The rap game was expanding, but the music game was shrinking even faster. Piracy was killing sales, and since peaking in 2000, compact disc sales had fallen 30 percent. Despite the impressive growth in its market share, it was all Universal could do to keep its sales numbers flat. Everywhere else there was carnage. Tower Records was hurtling toward bankruptcy. Sony’s Columbia imprint was still fighting a civil war against its own consumer electronics division. EMI was buried in debt. Bertelsmann was offering its music assets up for sale.