How Music Got Free (20 page)

For Universal, the APC bust was small consolation. These weren’t the main guys. These guys were small fry. They didn’t affect sales. And, meanwhile, the company was having legal troubles of its own. There was this hard-ass attorney general in New York State by the name of Eliot Spitzer who’d been threatening an investigation into the entire music business, citing evidence of record industry “payola.” Spitzer had produced a trove of embarrassing documents, leaked from inside, that he said showed a systematic program of bribery, with industry promoters paying cash to radio DJs to get their songs on the air.

Payola scandals were a chronic problem for the music industry. They recurred every time the promoters forgot there were penalties for it. Over at Warner, Junior had just signed off on a five-million-dollar settlement with Spitzer, and Morris knew he was probably next. In March 2006, Spitzer produced an archive of emails from inside Universal showing a series of cash bribes and gifts paid in exchange for the heavy rotation of Universal artists on drive time radio. The overall level of corruption was small. A few hundred bucks’ worth of high-demand merchandise was enough to tempt the average DJ. Some industry observers wondered if, in a period of declining importance for radio, the crime was even worth prosecuting. The music industry was collapsing, and Spitzer was coming after them for distributing $300 in Amex gift cards?

But radio still drove hits, and was an important component of Morris’ business strategy. Plus, payola was only part of the problem.
Universal had also been “Astroturfing”—hiring mercenary phone banks to call in to radio stations to request “hit” songs, creating an artificial appearance of demand where none existed. The Astroturf campaigns were targeted toward specific audiences with specific demographics. In July 2004, for example, dozens of radio stations across the country were targeted by a series of fake calls from “
Females 18–24, all Black.” Key markets like New York and Chicago were bombarded with phony requests for Ashanti’s struggling single “Rain on Me” up to forty times a week.

The stronger acts like Eminem and Fifty didn’t need this kind of support. They generated real demand by the quality of their music. So Universal’s fake hits tended to be associated with lesser artists: boy band castoff Nick Lachey, hip-hop head case DMX, and trainwreck vanity project Lindsay Lohan. Universal was contractually obligated to promote and support these musicians, even when their artistic output didn’t justify it. That’s where Astroturfing came in, the theory being, if you could make a song
seem
popular, maybe it could cross some invisible threshold and actually
become
popular.

And sometimes it worked. In June 2005, Lohan had starred in
Herbie Fully Loaded
, a reboot of Disney’s
The Love Bug
. The movie’s theme song was “First,” featuring a desperate Lohan pleading for the attention of a distracted boyfriend. There was little organic demand for this bland effluvia, and in the lead-up to the movie’s release “First” failed to chart. But then, following a tepid opening weekend, the MTV music video countdown show
Total Request Live
was inexplicably blitzed with requests for the song. The subject line from one of Spitzer’s subpoenaed emails hinted at the true source of the song’s popularity:

FYI:
we are hiring a request company starting Monday to jack TRL for Lindsay.

The song climbed into the top ten on
TRL
and remained there in rotation for more than a month. And on the back of Universal’s
shenanigans, Lindsay Lohan’s album
Speak
managed to go platinum. (Worse still, it appears some brainwashed unfortunates actually paid real money to see
Herbie Fully Loaded.
) Hits, it appeared,
could
be manufactured out of thin air—provided you had a phone bank full of low-paid mimics and a few hundred dollars in gift cards.

Morris wasn’t personally implicated in the documents. Universal settled the allegations out of court with a $12 million check and no admission of wrongdoing. It was a signature Spitzer “prosecution”: no one went to jail and, except for the money, there weren’t any real repercussions. But at least it was a signal to the industry to turn it down a notch. Maybe they could also produce some actual hits while they were at it?

But Morris knew that no matter how good a song was, you still had to market it. He had this process down to a science. First you wrote a great song. This was the hard part, but Morris knew a hit when he heard one. Second, you got that song played on the radio and television. Because the airwaves were strictly supervised government-regulated monopolies, you had to be a little careful in this step not to run afoul of the law. Fortunately, the radio stations needed you just as much as you needed them. Finally, you pressed and distributed your album, and after hearing that great hit song on the radio, people went out and bought the entire album on CD.

But now the last step was broken. You no longer had to buy the whole album. Even if you held on to some atavistic notion of paying for your music, you could just buy the mp3 single on iTunes. For years the industry had been
selling songs that even their creators acknowledged were not very good. Now they were paying the price. In economic terms, album sales were an example of “forced bundling”—after being bamboozled by
Total Request Live
, the consumer now wanted to hear “First,” but she had to buy all of
Speak
to get it. Who needed 12 Lindsay Lohan songs? One was more than enough.

There had been a time, of course, when the musicians had embraced the album. They had written full-length suites that spanned
four platters of vinyl. Those had been the Ertegun days, which Morris fondly remembered, when Led Zeppelin would write 12 songs spanning two full-length LPs as part of a holistic artistic vision. You sat at home next to your turntable with your headphones and your spliff and you spent two hours listening to the entirety of
Physical Graffiti
in sequence. But album-oriented rock had died in the ’80s, the victim of MTV and the Walkman, and for the last twenty years music had been a hits-first business.

Rappers in particular were totally driven by hits. Their singles were dynamite, but their albums were packed with filler: lazy rhymes over half-finished beats, throwaway songs from unheralded apprentices, unintelligible skits. It was more enjoyable to listen to “In Da Club” 16 times in a row than it was to listen to the entirety of
Get Rich or Die Tryin’
once. Lying on the floor with your headphones was out; running through the park with your finger on the click-wheel was in. No one listened to a whole rap album, not even the artists themselves. The genre on which Universal had staked its future was the one most perfectly wrong for the hits-driving-album-sales approach.

Morris was familiar with the economics of this new business model—it was really an even older business model, abandoned long ago, and now, against all the odds, brought back to life. When he’d started working as a songwriter’s assistant for Bert Berns at Laurie Records in 1963, the album was still an extravagant rarity. Like most labels at the time, Laurie had instead primarily traded in seven-inch vinyl singles that had retailed for ten United States cents. Morris, who still remembered those days, could see how the new digital approach resembled the old one. Once you adjusted for inflation, the contemporary terms of sale were nearly identical. The album was vanishing. Morris had outlived it.

This—more than piracy, more than bootlegging, more than anything else—was what was really killing the music business. Morris had buried enough unsold inventory in his life to know that the previous system was not terribly efficient. Indeed, in a bad year it
sometimes seemed easier to take the discs
directly
to the landfill, avoiding the cumbersome retail supply chain entirely. From a holistic perspective, then, the digital system produced far less waste and gave consumers what they wanted far more quickly. The only problem was that it didn’t make nearly as much money.

Some of Universal’s artists were also beginning to sense this shift in economics. Why pay some crooked DJ to play your song when you could just put it on the Internet? Why bother with a traditional album release cycle that was undermined by leaking at every step? In fact, why even put out an album at all? There was nothing sacred about 74 minutes of music. That wasn’t an aesthetic decision. It was just the storage limit of a compact disc. Why not just put out some songs?

At the avant-garde of this economic model was Cash Money Millionaire Lil Wayne. Both Wayne and his label had been struggling, and Spitzer’s payola investigation had shown that even Birdman’s Big Tymers were resorting to bribing radio stations for spins. Worse, many of the label’s original stars had defected after feuding with Birdman and Slim over royalties. 2004’s
Tha Carter
had been intended as Wayne’s comeback album, but somehow it had leaked from the Universal supply chain exactly two weeks early and failed to even go gold in its first year. “Go D.J.” had been a minor hit, but, outside of New Orleans, people didn’t talk about Wayne much anymore. He was in danger of flaming out, like his estranged buddy Juvenile. And the purgatory of forgotten “Lil” rappers awaited: Lil Romeo, Lil Bow Wow, Lil Caesar, Lil Keke. . . .

Wayne got weird. He grew out his dreads and covered his body with goonish tattoos. He smoked weed like it was his job and developed an addiction to codeine-based cough syrup. His voice became screwed up and froggy. His production turned psychedelic. In 2003, he’d been a skinny, unexceptional adolescent delivering basic-sounding rhymes over basic-sounding beats. By 2005, he had transformed himself into The Illustrated Man, and his auto-tuned music sounded like garbled transmissions from outer space.

He started dumping all of his output to the Internet for free. With no promotional budget and no radio play, and in addition to his normal album release cycle, Wayne started putting out two to three mixtapes a year. Traditionally, the mixtape was what you put on the streets as a demo, to get you signed to a label. But Wayne had been signed to a label since he was 12, and that wasn’t working for him. Musically, the mixtapes were great, much better than his albums. They were weird and fun and danceable, and full of layered, witty lyrics that rewarded multiple listens. They borrowed beats from other albums, songs from other rappers, and then improved on them, sometimes dramatically. There was
10,000 Bars
,
Da Drought
,
Da Drought 2
,
The Prefix
,
The Suffix
,
Blow
 . . . dozens of underground tracks, tracks he made no money from, tracks he
couldn’t
make money from, since they featured uncleared samples that would get him sued.

In late 2005, Wayne teamed up with DJ Drama, an unsigned producer from Atlanta, for a new mixtape called
Dedication
. Drama had some buzz about him; he had already released mixtapes for the up-and-coming Atlanta rappers T.I. and Young Jeezy. Dumped to the Internet in December, exclusively in mp3 format,
Dedication
was a surprise hit that ignited both artists’ careers. Its popularity came not through the radio, but through the blogosphere, where the hip-hop heads were astonished at how good Wayne had suddenly become. The “new” Lil Wayne started getting all sorts of press, from tastemaking websites like
Pitchfork
and
Vice
.

Five months later, Lil Wayne reunited with Drama for
Dedication 2
. The mixtape was smart, and funny, and strange, and profane, and weird in a fascinating way. It sampled everyone—Outkast, Biggie, Nancy Sinatra—and paid no one.
Pitchfork
,
Rolling Stone,
and even
The New Yorker
all called it one of 2006’s best releases—establishment accolades that would have been unthinkable for Wayne just two or three years earlier. By leaking his own stuff first, Wayne had rebooted his career. As Jay-Z and Eminem were complaining about the leakers, Wayne was embracing them. Better than any artist before him, he
leveraged the Internet hype cycle to his own advantage. His boast of “best rapper alive” started to get taken seriously.

But the mp3 revolution was not yet complete: the 2005 model iPod, at $300 retail, was still a luxury good, and most of Wayne’s younger urban fan base couldn’t afford it. They were still in the compact disc era, and Drama was serving them by producing and distributing the mix CDs wholesale on dedicated burners in his Atlanta offices. The discs made their way to urban record stores, where owners reported the sales through SoundScan, with
Billboard
reporting the numbers straight. The mixtapes started to chart, even though they used unlicensed samples and weren’t technically albums at all.

The resurgence of the Cash Money imprint seemed to bewilder the Universal executives. Distribution rights for the label had been folded into Motown Records in 2004, and Morris had brought in Sylvia Rhone to manage it. Morris had hired Rhone before, years earlier, while at Time Warner. At Warner’s Elektra imprint she had excelled, particularly at managing committed fan bases for groups like Metallica and Phish. Morris admired her, and she was a proven operator. But at Motown, she didn’t understand what Wayne was doing. “
The mixtapes were obviously very concerning to us as a label,” she would later tell
Rolling Stone
. “It really goes counter to what we would like our artists to do.”

This and dozens of similar quotes added to the general aura of cluelessness surrounding the music executives. This led to an embarrassing episode a year later, when local law officials, working with Brad Buckles at the RIAA, arrested DJ Drama on suspicion of bootlegging. Drama’s Atlanta studio was raided and thousands of his burned CD mixtapes were confiscated. Those CDs had been labeled “For Promotional Use Only,” but in practice they’d been sold for cash. And since these mixtapes technically contained unlicensed samples, this to the eyes of law enforcement looked like conspiracy.

Officers at the scene told Drama he was being arrested on a racketeering charge. The incident was a telling misstep. Drama had
relaunched the career of Universal’s newest, most popular rapper, and the RIAA had responded by orchestrating a raid on his studio. For some time, confusion reigned, but in the end he was never formally charged with any crime.