Eric Nicoli background: From Martinson, Jane, “Eric Nicoli: Music Boss Who Went from Choc to Rock,” The Guardian, January 27, 2006, p. 31.
“In all of our research”: Eric Nicoli quoted in EMI news conference, audio webcast from April 2, 2007; other details about the press conference come from this source.
Barney Wragg background: Author interview with Wragg.
“I realized that as an industry we’d kind of been smoking crack”: Ibid.
Analysis of EMI struggles: Paraphrased from author interview with Ty Braswell.
Barney Wragg did research and worked with Steve Jobs and Eddy Cue: From author interview with Wragg.
“In a moment of desperation”: Confidential source.
Eric Nicoli’s spending: From Dugan, Emily, “Money to Burn: How EMI’s Profligate Bosses Filled a House with £20,000 Worth of Candles,” The Independent, November 30, 2007, p. 27.
Wragg…leaving the company for reasons he wouldn’t divulge: Author interview with Wragg.
Steve Jobs’s manifesto and quotes: From Jobs, Steve, “Thoughts on Music,”
apple.com, February 6, 2007.
“My instinct is it will beef up the digital sales pretty significantly”: Author interview with Ian Rogers.
“spreadsheet that plays music”: Ian Rogers quoted in “Convenience Wins, Hubris Loses and Context vs. Context, a Presentation for Some Music Industry Friends,”
October 6, 2007, blog post, fistfulayen.com “All the stuff we’ve been saying”: Author interview with Ian Rogers.
“Digital isn’t the future—it’s today”: Author interview with Tom Corson. Alicia Keys list of formats: Provided by BMG.
Ringtone revenues: From BMI. “We see no sign of it slowing down right now”:
Author interview with Rio Caraeff, 2006.
“You’re doing it for the person who’s in the mall and their phone rings”: Author interview with will.i.am, 2006.
Edgar Bronfman Jr. speech, including Baek Ji Young and SK Telecom: From Convergence 2.0 Symposium keynote address, September 17, 2007, transcript.
Ricky Martin detail: Confidential source. Juanes promotion: From Cobo, Leila, and Ayala Ben-Yehuda, “Digital Business Heats Up for Latin Music,” Reuters/ Billboard, December 17, 2007. “It is a huge, huge, huge piece of the business”: Confidential source.
Jupiter Research and M:Metrics studies: From Morrison, Dianne See, “WMG Reports Fall in Ringtone Sales; Mobile Remains Soft, mocoNews, February 7, 2008. “It doesn’t seem like anything that’s going to have a long-term sustained growth”: Author
interview with Peter Paterno, 2006. “People say, ‘Ringtones are fashion’”: Author interview with Mark Donovan.
“I don’t think the research indicates”: Confidential source.
“It’s mind-blowing—I’m listening to music constantly”: Rick Rubin quoted in Hiatt, Brian, “Biz Bets on Subscriptions,” Rolling Stone, December 13, 2007, pp. 17–18.
“If you’re a massive music fan”: Author interview with Ted Cohen. Total Music detail: From “Universal Music Takes On iTunes: Universal Chief Doug Morris Is Enlisting Other Big Music Players for a Service to Challenge the Jobs Juggernaut,”
Business Week, October 22, 2007.
Steve Jobs may be coming around to subscriptions: From Hiatt, Rolling Stone, December 13, 2007, pp. 17–18.
Description of The Long Tail theories: From Anderson, Chris, The Long Tail: Why the Future of Business Is Selling Less of More (New York: Hyperion, 2006). “I passed out twenty copies of Chris’s book”: Author interview with Erin Yasgar.
“You want to take a record label profitable quickly?”: Author interview with Terry McBride.
Rhapsody/iTunes percentages from NPD Group study: Cited in Hiatt, Rolling Stone, December 13, 2007, pp. 17–18. “It’s getting better”: Author interview with Terry McBride.
BitTorrent, discussions with movie and record companies: Author interview with Ashwin Navin.
“The music companies were just paralyzed”: Ibid.
Some 2,700 music retailers have closed since 2003: From the Almighty Institute of Music Retail. “We’re trying to reposition the business”: Simon Wright quoted in
“Steep Rent Forces Closure of LA-area Virgin Megastore,” Associated Press, December 27, 2007.
Radio listenership: From Arbitron.com.
“It’s going to be difficult to make a lot of money”: Author interview with Joe Smith.
Paramore deal and “You have to sacrifice to get somewhere”: From Knopper, Steve,
“Reinventing Record Deals,” Rolling Stone, November 29, 2007, p. 13.
“Say I was considering being the sole investor”: Author interview with Steve Greenberg.
“It gives the label more incentive to work hard”: Author interview with Chris Black.
“They’re going to have to use 360 deals”: Author interview with Chris Lighty.
Aimee Mann detail and “A lot of artists don’t realize how much money they could
make”: From Byrne, David, “The Fall and Rise of Music: The CD? It’s Dead,” Wired, January 2008, pp. 124–129.
“It’s easy to see why bands would resist”: Jamie Kitman quoted in Knopper, Rolling Stone, November 29, 2007, p. 13. “My knee-jerk reaction would be ‘no way’”: Jordan Kurland quoted in Ibid.
Jim Griffin’s tax-the-ISP plan, as well as Paul McGuinness quote (from speech) and Gary Stiffelman quote: From Knopper, Steve, “Best Plan to Save the Record Biz: Bill the ISPs, Make File-Sharing Legal,” Rolling Stone, May 1, 2008, p. 51.
“A day that will live in infamy”: From Peisner, David, “The October Surprise,” SPIN, January 2008, pp. 82–86.
Radiohead quotes and comScore numbers: From Binelli, Mark, “The Future According to Radiohead,” Rolling Stone, January 23, 2008, p. 57.
“I’m truly saddened because I think music has been devalued”: Trent Reznor quoted in Westhoff, Ben, “Trent Reznor and Saul Williams Discuss Their New Collaboration, Mourn OiNK,” newyork.com, October 30, 2007.
“You see these articles about the disaster in the music business”: James Mercer quoted in Peisner, SPIN, January 2008, pp. 82–86.
David Byrne and Nonesuch: From Byrne, Wired, January 2008, pp. 124–129.
“The mixtapes were obviously very concerning”: From Serpick, Evan, “How Lil Wayne became a Superstar,” Rolling Stone, June 26, 2008, p. 15.
“The idea of fighting it seems kind of silly”: Author interview with Mac McCaughan.
Doug Morris’s salary: From Vivendi S.A. Form 20-F filing with US Securities and Exchange Commission, June 29, 2006.
“If I could just make records and work with artists”: Author interview with Mark Williams.
Guy Hands information and quotes: From Langley, William, “Profile: Guy Hands,”
telegraph.co.uk, January 20, 2008.
“The recorded music market has been declining and may continue to decline”: From Vivendi S.A., Form 20-F, US Securities and Exchange Commission, June 29, 2006.
Ahmet Ertegun anecdote: From Dannen, Hit Men, p. 252.
Doug Morris’s retelling and “the truth is, that’s what it’s all about”: Author interview with Morris, 2005.
Acknowledgments
FIRST, THANKS TO the more than 230 executives, scouts, publicists, artists, lawyers, technologists, authors, teachers, inventors, managers, and DJs who shared their recollections of working in this bizarre and colorful industry, which, as Frank Dileo says, is in “a confusion of flux, a flux of confusion.” A small portion of them spoke anonymously or off the record; most of the rest are named in the endnotes if not in the text. I’m especially indebted to those who agreed to multiple interviews—Gil Friesen, Jerry Moss, Joe Smith, Marc Finer, Bob Jamieson, Bob Buziak, Bill Scull, Bob
Sherwood, Stan Cornyn, Jim Caparro, Jim Guerinot, Randy Cole, Al Smith, Paul Vidich, Kevin Gage, David W. Stebbings, Howie Klein, Roger Ames, John Briesch, James T. Russell, Talal Shamoon, David Leibowitz, Michael Schulhof, and others I’m sure I’ve missed.
Eric Garland of BigChampagne.com saved my butt a number of times—he
suggested a rough outline at a critical, last-minute point in the pitch process, revealed important sources, and lightly pointed out when I was wandering aimlessly in the wrong direction. I owe him numerous Shiner Bocks at the top of a parking garage someplace in Austin. Several sources were kind enough to review technical passages, including the professorial James T. Russell, the good-humored Talal Shamoon, and my older brother, Mark Knopper, who in addition to inventing the internet (more or less) was (through his coincidental friendship with a pre–Rykodisc Rob Simonds) the first person I ever knew with an actual CD player. Garland, Steve Greenberg, Jenny Eliscu, and my old Colorado Coalition pal and bullshit-detector Leland Rucker
volunteered their time as readers; all made thoughtful comments, some of which led to drastic restructurings of entire chapters.
Wylie O’Sullivan, my editor, inherited this project, and turned out to be the absolute perfect person for it. She was gentle and patient, critical and pointed,
adaptable and receptive—all at the right times, and all in an encouraging way. Daniel Lazar, my agent, happened across a “funny little article” (as he calls it) I wrote in
Wired about attempting to kill a cheapo PC with viruses and spyware. Six ideas, three months, and eight proposal rewrites later, thanks to his savvy, perseverance, and
connections, I had a book deal. This book wouldn’t have been possible without Maris Kreizman, who held Wylie’s post at Free Press before leaving for another opportunity in early 2007. I regret never getting the chance to truly work with her. Thanks to
Dominick Anfuso for believing in this project all along. In the UK, I’m grateful to Dan’s counterpart, Dorie Simmonds, as well as Andrew Gordon for signing the book,
and Angela Herlihy and Katherine Stanton for seeing it to fruition. Patty Romanowski Bashe is a former Rolling Stone editor who knows her Hall from her Oates; I was lucky to get her as copy editor.
About forty interview subjects did not wind up in the text, mostly for space reasons. They were knowledgeable and insightful and shared their valuable time—
particularly Davitt Sigerson (who turned me on to Andrew S. Grove’s book), Bob Divney, Dave Richards, Steve Wozniak, Tim Sommer, Jim McGuinn, Konrad Hilbers, Russell Frackman, Milt Olin, Tom DeSavia, Gilles Boccon-Gibod, F. Joseph Gormley, Asif Ahmed, James Diener, David Pakman, Lucas Mann, Bruce Flohr, Fred von
Lohmann, and Fred Goldring.
Enthusiastically setting up interviews, suggesting sources, or just being kind when I needed it were Lisa Stone in Gil Friesen’s office, Sunnie Outlaw in Strauss Zelnick’s office, Michelle Burt in Jeff Ayeroff’s office, Annie Meaher in Tom Corson’s office, Nathaniel Brown, and Lisa Lake (for hooking me up with Joe Smith and Marc Finer).
Also helpful with connections, interviews, recollections, running interference, or tracking down clippings: George Boyd, Ann Morfogen, Jeff White, Diana D’Angelo, Marianne Hasselbach, Will Tanous, Amanda Collins, Debbie Densil, Hannah Pantle, Stephanie Gold, Sara Christensen, Mary Van Daele, Bobby Ewing, Michael Zager, Molly Schoneveld, Kathryn Litsas, Bill Bentley, Jim Kloiber, Christian Algar, Joanne Dant, Lauren Harris, Fernando Aguilar, Stephan Weikert, Wendy Washington, Brian Lucas, Yvonne Gomez, Sohayla Cude, Karen Allen, Joerg Howe, Marc Pollack, Alfonso Alvarez, Marnie Black, Patti Conte, Peter Lofrumento, Chad Goonan, Vera Salamone, Jacqueline Park, Rich LaMagna, Kay Lyn Byrne, Matt Graves, Matthias Rose, Nakia Fowler, Susan Gordon, Doug Wyllie, Ilka Becker, Carrie Davis, Ricki Seidman, Isabelle Caldenbach, Cathy Arthur, Laura Ormes, Jennifer Stryd-Donahue, Steve Karas, Jeannie Kedis, Steven Strosser, Sue Turner, Nadia Rogers, Anna
Vrechek, Leyla Turkkan, Sarah Weinstein, Theola Borden, Christina Rentz, Jocelyn Johnson, Andy Greene, Carol Chisholm, Diane Retiand, Gary Morgenstern, and Bob Kostanczuk.
Anna Loynes provided sales numbers from Nielsen SoundScan; Jonathan Lamy did the same from the Recording Industry Association of America. Mark Coleman, author of the excellent book Playback, was friendly enough to respond when I came across his name on the I Love Music board and (in somewhat confused manner) sought his advice.
My editors at Rolling Stone—especially Jason Fine and Jonathan Ringen, but also Joe Levy and Jann S. Wenner behind the scenes—have since 2002 given me the best possible journalistic platform to observe the cataclysmic shifts in the music industry.
They were also kind enough to keep the work coming as I trudged through this book.
My colleagues Brian Hiatt and Evan Serpick gave important insights at key times.
Other editors who offered encouragement or at least looked the other way when I stopped pitching to them (temporarily!): Adam Rogers of Wired; Josh duLac of The Washington Post; Greg Kot, Carmel Carrillo, and Kevin Williams of the Chicago Tribune; Genetta Adams, Kevin Amorim, and Glenn Gamboa of Newsday; Tina Maples of the Milwaukee Journal Sentinel; and Joe Rassenfoss and Mark Brown of the Rocky Mountain News.
Special thanks to Gloria Gaynor for her patience.
My friends and family have always enthusiastically supported this project, even when they became understandably sick of hearing about free-goods allowances and compression schemes: Dorothy Knopper, Doug, Abbie, and Benjamin Knopper, Don and Peggy Ramsdell, Jonathan Boonin, Larry Gallagher, Michael McKelvey, Maynard Eaton, David Menconi, Jim DeRogatis, Tim Riley, and fellow idiot Mark Bliesener.
Gary Graff met me at a Detroit-area hotel buffet on a gray Christmas Day 2006 and gave a crucial bit of advice he probably doesn’t even remember.
Finally, my father, Morton P. Knopper, died August 3, 2008. Thanks, Dad. I hope you can get books up there.
About the Author
Steve Knopper is a Rolling Stone contributing editor who has covered the music business since 2002. Since beginning his career in 1989, as an obituary writer and concert reviewer for The Richmond (Virginia) News Leader, he has contributed to such publications as Wired, SPIN, Esquire, National Geographic Traveler, Billboard, Newsday, the Chicago Tribune, and the Rocky Mountain News. He lives in Denver with his wife and six-year-old daughter.
* The name came from a street gang at the time called “The Insane Unknowns” and a fleet of coho salmon at Burnham Harbor in Chicago, which Dahl was driving by when he heard a report about gangs on the radio. “Lips“ was a non sequitur.
* I will let the reader decide whether Cohen’s comment is “rockist”—defined by Kelefa Sanneh in the October 31, 2004, New York Times as an unfair slam against well-crafted pop music because it somehow isn’t “authentic” enough. Sanneh wrote,
“Rockism means idolizing the authentic old legend (or underground hero) while mocking the latest pop star; lionizing punk while barely tolerating disco; loving the live show and hating the music video; extolling the growling performer while hating the lip-syncher.”
* Others remember the meeting a different way, saying Zelnick tried to mediate the dispute between Pearlman and the band. “It was actually a relatively friendly
meeting,” says a source privy to the talks. “Lou gave the boys hugs. They were angry at Lou because they felt he was taking too much of the economics and they had made a bunch of demands. The boys laid out very aggressive terms, perhaps even
reasonable, but Lou was not prepared to go there. Ultimately the meeting was disappointing for the boys.”
* In 2003, after Florida officials investigated hundreds of complaints about Pearlman’s Trans Continental Talent Inc. website, I interviewed Pearlman by phone for Rolling Stone. The complaints came from actors, singers, and others who said the website charged them $1,500 apiece and did little more than post their résumés online—if that.
Friendly but rushed, Pearlman denied all the charges. “Trans Continental is a big company and stands by our name and reputation,” he said, blaming the media for sensationalizing the complaints. “People who know us know the story. It doesn’t help the image, but it hasn’t hurt me.”
* This is an understatement. On its website, Fraunhofer calls this team “inventors of the MP3,” and media often refer to Karlheinz Brandenburg as “the father of the MP3.”
The truth is not so simple. A bunch of companies earned patents for contributing ideas and technology to the format. One of these was Bell Labs, where Brandenburg worked briefly in the late 1980s. Then Alacatel-Lucent bought Bell Labs’s MP3
patents. Then the company insisted on receiving royalty payments, just like the Fraunhofer Institute, which gets $2,500 for every video game that uses the MP3 format. So when Microsoft paid $16 million to license the technology for including MP3s in its Windows Media Player, Alcatel-Lucent’s lawyers sued. They won a $1.52 billion judgment, although a federal judge in San Francisco set aside the ruling in August 2007. “I never call myself the inventor of MP3, because there’s a lot of
people,” Brandenburg says in an interview. “I know on whose shoulders I stand. But on the other hand, I certainly had a lot to do with the development of MP3.”
* In 2000, the RIAA would successfully sue MP3.com after the company bought
45,000 copyrighted CDs and posted them on an internal server for unlimited customer use.
* The mischievous Offspring later offered bootleg T-shirts with Napster’s copyrighted kitty-in-headphones logo to fans via its website. Napster sent a cease-and-desist letter.
Napster’s hypocrisy was duly noted in the media, although both camps agreed to a deal and gave the proceeds to charity.
* This story has become a sort of legend, with various members of SDMI
remembering it in a slightly different way. Randy Cole swears it took place exactly as described in the text, and others confirm his recollection. Talal Shamoon agrees,
mostly, but says Smith wasn’t angry; rather, he and another Sony Music staffer merely left the tense meeting to strategize and get some air. For his part, Smith, who agreed to several phone interviews for this book, says: “It’s probably a true story. I do
remember the incident. I remember the shots. I don’t remember the humor.”
* In 2006, Sony Corp. opened an online music store, Connect, intending to compete with iTunes. It sold files in the ATRAC format, which worked only with Sony digital players—not iPods or any other devices. The store went nowhere and closed about a year later.
* Warner Communications Inc., owner of the Warner Music Group, invested in Atari, then a huge moneymaker, in 1976. Does that mean Steve Jobs was (indirectly) an employee of Warner? No, says Steve Mayer, an Atari and Warner Communications executive of that era, in an interview. But Mayer notes that after the Apple I came out in fall 1976, Warner had an opportunity to buy the Steves’ new computer company and passed. Why? “Because there was no future in personal computers,” Mayer dead- pans.
* To clarify, the Audio Home Recording Act exempted computers that copied music. It did not exempt file-sharing software services, like Napster or Kazaa, from allowing users to trade copyrighted music files with each other via the internet.
* Michael Jackson’s personal life has largely buried what made him such a magnetic performer in the Thriller era. Even on eBay, it’s almost impossible to dig up copies of the old, celebratory Michael books: Moonwalk, a ghostwritten autobiography, is so long out of print that my attempt to purchase it on Amazon produced instead
Moonwalker, a kids’ coloring book and concert-film tie-in, in which a leather-jacketed Jackson saves the universe from aliens.
* Rebuttal from country singer-songwriter Shelby Lynne, in the New York Times Magazine, January 13, 2008, p. 31: “You can’t roll a joint on an iPod.”
* Morris did not respond to numerous interview requests for this book.
* Executives from major labels had told pre-iTunes digital music services—including Napster and Real—that they couldn’t license content because their hands were tied with artist contracts and publisher agreements. There are a number of theories as to how Apple cut through all that: 1) The previous models that labels had discussed were subscriptions, which were more complicated, and iTunes’s pay-by-the-song approach was easier to work out; 2) failed early services such as MusicNet (which never went online) and Pressplay had already done much of the heavy lifting as far as haggling with artists, publishers, and attorneys; and 3) label execs were stubborn until they found something they liked, the iTunes Store.