All language subtitles for How.Music.Got.Free.2024.S01E01.1080p.WEB.H264-ShoutOutToKali

This is a small town called
Shelby, North Carolina.

It's just a small country
town, not a lot to do.

If you know 20 different
sets of people,

you pretty much know
everybody in Shelby.

Would you believe
me if I told you

this little town down South

brought the music
industry to its knees?

Yes, sir. Love you, man.

Back in the day, this
place was printing money...

- That camera?
- Yep.

All because they made a
little thing called CDs.

The CD manufacturing plant.

That was, like, one
of the better jobs.

But who really got paid, hmm?

The town, the artists, or
the music industry, hmm?

People love working
here with us.

Rocsi, take one.

I'm Rocsi Diaz,
entertainment journalist

and former host of 106 & Park.

This is the secret
history of the music biz

that they don't
want you to know.

This is the story of
how music got free.

You'll get over it.

- Okay, let's go.
- Okay.

It spans the globe
like a superhighway.

It is called internet.

Audio computer files,
MP3 dropped a bomb

on the multibillion-dollar
recording industry.

There's no reason that
you have to pick up a CD

in order to buy music.
- Pirates go for the hits.

Willfully violated
thousands of copyrights.

The goal of the pirates
wasn't about money.

- It is not okay.
- I talk to kids.

They can't believe it.
- Now the court will decide...

And does the punishment
fit the crime?

- $222,000.
- Something's got to be done.

Will irreparably harm
the music industry.

Should you be compensated
for your work?

A lot of things are possible.

It doesn't make it right.

That's ultimately where
the future should be going.

A whole generation got
used to the idea that...

all: Music should be free.

When man first started
reproducing sound

back in the late 1800s,
this is what we heard.

Today's stereo
systems have improved,

and the sound of music
people are listening to

couldn't be better,
right? Wrong.

♪ Shimmy, shimmy, ya,
shimmy, yam, shimmy, yay ♪

Just when music lovers
thought they had assembled

the best audio systems
money could buy,

along comes a new
technological development.

It's called the
Compact Disc, or CD.

Hip-hop was a vinyl game.

It came from the DJs.
You know, vinyl's heavy.

Like, you ever carry
a crate of records?

♪ Drop that down,
pass it all around ♪

CDs, you could throw all
your CDs in a CD case,

take them, take the cases
out, put them in a CD booklet.

We took pride in it,
how we organized it.

You had your fly
Walmart CD holder

on your visor with your top
ten CDs right there lifted.

Record companies
have banded together

to promote a new product.

Music sales were flat
from 1978 to 1985.

And then what the
music industry did is,

they embraced this
CD technology,

and the growth was incredible.

Because they... over ten
years, they had gotten

everyone in the world to buy,

rebuy their entire
music catalogs.

They sell for around $20 each.

The player itself can cost
from $450 to well over $1,000.

'99 was really the biggest
year in the music business.

When the CD business took off,

everyone got fat really fast.

Oh, my gosh.

The money that the record labels

would put behind
promotion, it was crazy.

It was like almost every
single album release

literally turned into
a Super Bowl event.

Labels, they used to
send cases of champagne

in celebration of, you know,
so-and-so's album coming out.

They literally had
money to throw around,

and you can see it
because of the production

of their videos.

This was during a
time period where

it was, like, Backstreet Boys...

The Backstreet Boys will
be joining us very soon.

Versus 'NSYNC versus Eminem.

First-week sales are just
going through the roof.

The one and only Britney Spears.

Everyone say hi to
Britney. All: Hi!

Your first-week
sales are everything.

That record's gonna get broken

by the next person
that comes out.

That "Marshall Mathers LP,"
when I looked at that plaque,

I was like, I want that.

It was kind of like printing
money for the record industry.

Their revenues skyrocketed.

They could charge more,
and their costs went down.

The business was crazy...

600 million, 700
million CDs a year

being shipped in the U.S.

You could sell a
million CDs in a week.

That was the business
that we were in for years,

where you never
had to question it.

You never had to think about it.

Once the CDs and
the money came out,

it changes the
evolution of how artists

and producers got paid.

Companies didn't
even actually adjust

the artist royalty rates to
increase the amount of payouts

that they were making, even
though they were charging

$4 or $5 more for a CD
than they were for an LP.

Capitalism was leaking money,
and people were figuring out

a way to enrich
themselves with culture.

I remember when I found
out that it's, like,

less than 2 bucks to print a CD

that you're charging me $15 for.

It's like, oh, wow.

I'm in the wrong
side of the business.

You know, we talk
about what went wrong.

What went wrong for
who, is the question,

the artists or the industry?

In Shelby, there wasn't
a lot of jobs around.

Textile mills, that was
where most of the people,

for generations, had worked.

Well, now the mill's gone.

So when a new plant
came, everybody would try

to get a job at that plant.

I heard about a CD
manufacturing plant

that was hiring.

The plant was so different
than what everybody

around here was used to.

It was a go-to job.

You know, I was
excited about it.

We had a cafeteria,
two break rooms.

Clean environment, AC.

Nice bathrooms.

I mean, just a good environment.

The showers, the
lockers, the canteen...

I was like, shit, this
a nice place to work.

I love technology, so,

you know, I just wanted
to learn everything.

And just seeing
the whole process

all the way through
was pretty fascinating.

A limousine would pull
up in front of the plant.

They would bring the master
disc in in a briefcase.

They in a clean room.

That's where they actually
take the mother...

The mother copy.

And the whole room has to
be sealed, air controlled.

Everybody has to be...

Got gloves, gowns, everything.

Yeah, covered.

It looked like one of
those virus movies,

like "Outbreak" or something.

Had all this technology,
laser-guided vehicles,

robotic arms, motor
machines, pressing machines.

You just sit up here
pushing a couple

of buttons on a computer.

It'll come, pick up
the order for you,

and then it'll bring
you another pallet

and set the pallet
on there for you.

That probably didn't
cost 60¢, 70 to make,

and they were
selling for $17.99.

You coming in to work,
you seeing plaques.

Dr. Dre, Snoop Dogg,
platinum, double platinum.

Diamond. What the
hell's diamond?

Oh, man. Damn. Yeah.
- Over the top.

I wasn't making
but what, $8.50?

- Yeah, $8.50.
- $8.50.

That's what I'm saying.
They wasn't paying nothing.

While the record industry
was on their CD hustle,

a group of
music-obsessed teenagers

armed with dial-up internet

were about to change
the game forever.

I showed up at college with
a 2 gigabyte hard drive.

And by the end of
my senior year,

I'd completely filled six hard
drives with pirated music.

All of the music
that was available

on these file-sharing services

was being put on
there by these kids

in their moms' basements.

But I felt that no one
had ever really understood

quite what had happened.

So I started investigating it.

So there was the internet
that the public used,

and then there was
the underground.

Going back to the 1980s,
there was something

called the warez scene,

or otherwise known as
the software scene.

You had all these
computer games.

They were kind of expensive,
and teenagers got really into

stripping the copy
protection off the games.

You know, they would jack
the newest "Doom" game

or "Quake" or whatever it was.

Initially, the warez scene was

mostly just about software...

games, programs,
things like that.

It was really the allure
of, you know, free software,

games, which were
expensive, you know?

I didn't have 60 bucks to spend

on a video game at the time.

I was about 15 years old.

Things were not ideal at home.

I had emigrated from Pakistan
about four years back,

and, you know, I
was still adjusting

and getting used to life here.

And I think I just found a
sense of belonging online.

In real life?

In real life, I'm Todd Schaffer.

And at the time, I
was living in a place

called Earleton, Florida, which,

if you can find it on
a map, congratulations.

It's tiny.

And I guess in many
ways, I was just

a regular 12-, 13-year-old kid.

The difference being is
that one of my good friends

when I was really young
had access to a computer.

I grew up in a weird,
interesting part of Brooklyn.

I guess you could say
the block I grew up on

was, like, middle class.

My parents were programmers,
so at a young age,

we got a computer.

You know, I'm from LA.

We came from a
low-income household,

grew up in the projects.

Gangs were everywhere.

Computers are kind of what
kept me off the streets.

You know, online, you could have

multiple identities if you want.

You know, I didn't have to be
this poor kid down the block.

I could be anybody.

It was almost like this world
outside of the current world.

Being online was a way for me
to escape from the real world.

I started on IRC.

IRC was a protocol
that is used for chat.

I got into, you know, a
bunch of public channels

and started meeting
different people.

You know, I hadn't been
exposed to the world

in any kind of way.

Yet, in the evenings,
I'm sitting here

talking to people from Australia

and California, Europe.

It was so primitive back then.

There was no, like,
profile images.

No one knew what
you looked like.

So it was, you know, really pure

interaction back then.

They're united across
boundaries of class

and race and identity.

But everyone disguised
themselves behind alts.

They didn't really know
anything about one another.

You know, they were anonymous.

From what I recall, I was
conversing with someone.

We were talking about
audio compression.

It was after the
conversation with this person

that I went to the website
for the Fraunhofer Institute.

The Fraunhofer
Institute in Germany,

they were led by a man
named Karlheinz Brandenburg,

who is a mathematics wizard
and an audio engineer

and a computer programmer.

Starting in the 1980s,
he spent 10, 15 years

figuring out how he
could delete information

from compact disc
files, shrink the music,

and stream it over
the telephone.

It took him about ten years
until he had something

that was reasonably
working well.

But they weren't able to
find commercial success

with this technology.

There was a lot of
politics involved.

So in the end, Brandenburg,

kind of in desperation
in the mid-'90s,

just posted this MP3 encoder...

basically this shrinking
ray for music...

online for public
download for free.

The warez scene picked it up,

and then it got me thinking.

What if I could extract the
CD audio into a WAV file

and then compress that?

The first song that I ripped was

Metallica's "Until It Sleeps."

♪ It hates you, so hold me ♪

I guess the rest is history.

The Recording
Industry Association

is really the trade group for
America's record companies.

We counted sales to certify
gold and platinum records.

And we had a, you know,
huge anti-piracy force.

The American music
and recording industry

has long been the hapless victim

of the worldwide
illicit reproduction

and sale of our copyrighted
sound recordings.

And this practice, of course,
is popularly known as piracy.

Physical piracy, it's historic.

Like, in the old days, like,

the guys would open
the trunk of their car,

and they... you know, they
would have a bunch of cassettes

and hand them out on the street.

If I see my tape out there,

I'm throwing your
whole table up,

and you might get robbed.

We sent an MTV staffer
to Uptown Manhattan

to snoop out the price
and the availability

of pirated Jay-Z discs.

Physical pirates, they
were selling fake CDs

or fake cassettes, and
they were distributing them

to flea markets or, you
know, around the world.

And it was actually a
really big business.

The piracy and counterfeiting

of which I speak

is estimated to total about
$1.2 billion in value,

and it represents one out
of every four recordings

sold in world markets.

And the perception was
that this physical piracy

really hurt sales.

Piracy harms America...
its creativity,

our balance of payments,
and our rights owners.

Come on. Let's be honest.

Who really gets hurt by piracy?

Was it really harming the
country as a whole, hmm?

Or was this a warning
signal for an industry

that refused to change?

Around 1994, maybe,
I was working

at the CD manufacturing plant.

You had to start out as a temp,

and then chances
are, you would become

a full-time employee,
which paid a whole lot

more money than being a temp.

I was at work every day on time.

I worked all the overtime
they asked me to work,

and I gave it 100%.

So they moved me up.

It felt good, you know,
starting from the bottom

and then gradually
making my way to the top.

Working at the plant, I
got invited to a party.

And when I went to
this Christmas party,

I noticed CDs laying
around that was not out.

So then I kind of
put it all together,

and I figured out, you know,
somebody inside the plant

was kind of smuggling CDs out.

Dell, he ain't slow.

He started noticing.

He was like, how you
getting over here

to do such, such, such, such?

I was like, well, Dell, look.

You sending me over
here to clean up?

"Oh, hell, yeah, boss. I
got you. I'll clean up."

I'ma clean up everything.

"I'ma go all over there,
clean up real good."

There'd be CDs just
sitting on the floor,

and you'd have to go
clean that stuff up.

I mean, they printing money,

and they leaving
it on the floor.

Shit, I'm picking me up some.

At first I was like,
I'ma take just one.

Then I said, this shit.
This Mary J. Blige.

I might scratch it. I'm
taking all this shit.

So, gradually, as
I seen more CDs,

I started taking more CDs.

And I started giving them
out for Christmas presents,

birthday presents.

I had so many CDs.

I ain't feel bad, not
even a little bit.

I did in the beginning, but
then I thought about it.

I didn't. I didn't.

I didn't. I ain't feel bad.

I felt bad at first.

If they wanted me to be good,
they would've paid me more.

The music industry
had always been

really concerned about piracy.

When the home cassette tape
recorder was introduced,

their sales plummeted
through the floor,

as people started to
create cassette dubs

rather than buying albums.

And in the mid-'90s,
they were really,

really worried about CD burners.

They thought that
was the big risk,

and that's where they had
all of their attention.

Once file-sharing
technology came along,

they understood,
though, that everything

that had come
before was nothing.

Okay, we're speeding, John.

Have you heard of
this thing, MP3?

It's this...
- I just got it.

- Yeah?
- I just picked it up.

Really?

- You can download...
- You can download songs

from the internet.
- Right.

You can download songs
and then, you know,

basically pass them around.

And you can play them
back, and you can...

and copyrighted songs.

At this time, you've
got broadband internet.

You have a computer with
a compact disc tray in it.

Your hard drive is
getting just big enough.

And then, of course,
the warez scene

gets ahold of Fraunhofer's
MP3 shrink ray,

which you can apply for
free to your compact disc

to shrink it by 90% or more.

Before that, if you wanted
to download an audio file,

it was huge.

The equivalent of a song might
take you hours to download.

It was one thing
to take, you know,

a software application
like a game,

you know, some editing, you
know, tools or whatever.

It was another to,
like, take a file format

that was too big to
download or upload

and compress it by a
factor of, like, 10 to 30.

I mean, it was of the
coolest technologies

that any of us had
ever seen, right?

Like, it all of a
sudden made possible

the transmission of music.

People just started, you know,

ripping music and sharing it.

The fact that just a bunch
of ragtag group of hackers

all got their hands
on it and just thought

it was the coolest thing ever,

we ended up using the technology

just to innocuously share,
you know, whatever records

we had in our own house,
you know, with one another.

So that spawned this
whole second wave

in the warez scene.

Music's probably been the
one constant in my life

since I was very young.

Especially towards,
like, high school,

people started to throw parties.

Friends were into DJing.

Hip-hop was a thing.

I was into hip-hop.
Like, I was a DJ.

It all kind of based
around this common theme

of loving music.

Very quickly, they
started to organize

MP3 ripping scene groups.

Four or five groups
sprang up in competition

within a couple weeks.

The very first was
a group called CDA,

which was Compress Da Audio.

Our group name was
Old School Classics.

I was "the leader" of OSC.

The Apocalypse Production Crew

were a dominant force
to be reckoned with.

I mean, APC was the top
dog for a long time.

Being in APC, RNS was a group
that we raced to releases.

RNS was the number-one
MP3 group in the scene.

RNS was the three-letter
acronym for Rabid Neurosis.

The leader of the group was a
14-year-old named Al Capone.

I kind of settled on
the Al Capone moniker

because of bootlegging.

In my 12-year-old,
13-year-old mind,

I fancied myself as far larger
and more important than I was.

When I joined the RNS channel,
it was less than 15 people.

I would be given
the operator status,

which was kind of
a kingmaking thing,

I guess, for my knowledge
of how to move files around.

I was not a wealthy
kid. $15 was a big deal.

Like, if I wanted
to go buy an album,

mowing a lawn back then,
like, that was a $20 job.

We would all rifle through
the CD collections at home

and rip the single
track and upload it.

As kind of the
technology progressed

and we went from 28.8K modems
to DSL and cable modems,

you know, the ability from
going from single tracks

up to entire albums started.

I joined as a ripper.

I would have the
responsibility of ripping a CD,

taking those tracks, uploading
those files onto a server,

and then that gets distributed
across the RNS sites.

Like, we were the sources
for services like Napster

and Kazaa and LimeWire.

Kazaa and LimeWire,
Napster were just feeding

off of what they were doing.

This was the dawn
of the golden age

of internet piracy.

While the pirates were building

a brand-new digital world,

the record industry was
still living in the past.

So, in the early fall of '99,

my head of anti-piracy
came to me and said,

you got to look at this.

And he literally
came into my office,

you know, took over my computer,

and turned on Napster.

So now that we have
Napster, how do we use it?

He said, pick a song.

Do you want to type in
any name of an artist?

So I said, you know,
Madonna, "Holiday."

Let's do Butthole Surfers,
'cause butthole is a cool name.

Surfers.

And then...
- Just hit Enter.

Hit Enter.

And sure enough, 60 versions
of Madonna, "Holiday," came up.

So we got a lot of
Butthole Surfers.

It was like, whoa.

And at the bottom of
the Napster application,

you could see how many people
were online at the time

and how many songs were
online at the time.

I said, this is unbelievable.

Let's reach out to them,
because maybe they don't know

that this is completely illegal,

like completely illegal.

Within a few weeks,
we got a call back

from somebody who had said that

they had just
started at Napster.

And we said, well...

Welcome back to "1515."

The Recording Industry
Association of America

has filed a gigantic
lawsuit against Napster,

although the
company, which stores

no illicit music itself,
doesn't seem too concerned.

So we sued them in
December of 1999,

but, of course, that
didn't shut it down.

It only made it more popular.

Napster was growing and growing.

How many MP3s do you
have on your computer?

About 600.

Maybe, like, a
hundred or something.

Uh, 6,000 or 7,000.

- Come again?
- 6,000 or 7,000.

When Napster first came about,

I didn't understand
the internet yet.

I thought Yahoo was a person.

Right now it's trying to log in,

but a lot of people
are trying to get on.

So it's popular.

I hadn't heard of MP3s
when I came to school.

One day, one of
my friends sent me

the player that plays
them and a song and said,

look what this does.

And, you know, we
experimented around with it

and found out that we
could go onto the network

and find other songs.

So here you have this
one platform that is...

"I can get everything I want."

"MP3," I've heard rumors

that it's the
second-most searched word

on the Internet after "sex."

When people started going to
these peer-to-peer sites...

Yeah, crazy.

It's crazy.

Do you see how we are?

And this shit is that long ago.

It was maddening.

It was like, here
we go. Here we go.

Battleship, battleship.

Get to your stations.

You'll get sites with just
thousands of different songs.

- So it's easy, you would say?
- It's very easy.

I don't even know.

Is there a statute of
limitation on this shit

before I start saying
that I was downloading

and I was a part of Napster?

It was so bad.

Oh, my gosh.

The pirates are out to get you.

Don't let them brand
you with their mark.

You need to make
an income somehow.

You got to pay the bills.

The way that it's set up
right now, it's theft.

If you worked at McDonald's
and we went into your store

and took all your meat and
you had to pay for that,

you're gonna be kind of upset.

Musicians should be able
to earn from their work.

This is about
Metallica and Napster.

Let there be no
question about that.

That's billions of dollars.
Something's got to be done.

Since the time that our case
has been before the courts,

Napster has grown from
a few thousand users

to over 50 million users.

You're not opposed, I gather,

to file sharing on the internet?

I do support people
sharing music.

Unfortunately, right
now I'm being accused

of sharing music that I'm
not supposed to share.

This was the thing
about Napster.

It had a huge amount
of music on it

that you couldn't
get anywhere else,

music that wasn't sold
by the record companies

or by the artists, that was
very tightly controlled,

and, in fact, artists never
would have released it.

There's this song that
everybody wants to hear,

the last Nirvana song
we ever recorded,

which is a cool thing.

The track is called
"You Know You're Right."

Everybody knew we had it.

We were like, we're
never gonna release it.

But then this past May,

the song was leaked
onto the internet.

The fun thing about Napster was,

it had such a
diversity of music.

We weren't into it for,
you know, making millions

off of the backs of
artists or anything.

Like, straight up, we just
wanted music really bad.

This person was in Spain,
and he put clips of it up.

I guess we're more of
the Robin Hood, right?

You know, we're just
spreading the music

and getting it out there, and
we're just listening to it.

It was so fan-centric.
I really got that.

And that's why the whole
thing was just really hard.

Music, believe it or not, used
to come out every Tuesday.

Why Tuesdays? I don't know.

Systems... it's accounting.

The industry was built on
that foundational truth.

You wanted the independent
distributors and the retailers

to all have the music as close
to the same moment as you can.

It goes back decades.

As soon as the scene group
started pirating music,

they turned it into a race.

And it was a race
to be the first

with a new song on the internet.

When you're, like,
a Tuesday ripper,

which is somebody that
gets stuff on release day,

Monday night, you're
doing a release check.

And you build a route to
where you were gonna go

to pick up releases
on Tuesday morning.

CDs usually came out
on Tuesdays in stores.

It was imperative that,
once we had access

to the physical CD itself,

that we would rip it
as fast as possible,

upload it onto the internet.

To us, I guess, it was a game.

You'd drive to Best Buy, and
you'd wait for it to open.

'Cause the minute
the doors open,

you're going straight
to the singles rack.

You'd end up getting pissed
off at Best Buy employees

'cause you know they have
it, and they're like,

oh, well, we just
haven't put them out yet.

"I need you to go get it."

They started bribing people
who worked at Walmart

to leak them stuff, because
the discs would show up

a week or two in
advance and be sitting

in the back of the store.

I only need one.

You have to get home, rip
it, scan all the cover files,

and everything
has to be perfect,

and hopefully none of the
other 400 people globally

are gonna upload it 5
seconds faster than you.

Then they realized it was
possible to sometimes get

the compact disc before
the release date.

Maybe the music company
sent out a promo disc

to a radio station.

I worked at a college
radio station,

and once I became
the station manager,

that would give me
access to the mailbox.

So all the CDs
that would come in,

I would be the person to
be able to open the boxes

and then rush them
back to my dorm room,

rip them, upload it,

and then bring those
CDs back to the office

before, you know, anybody
knew anything about it.

Two of my biggest
releases for RNS

was Ludacris's first album,
"Back For the First Time,"

and also Outkast, "Stankonia."

Seeing that package from
Def Jam, ripping it open

and seeing what it was,
and being like, oh, shit,

this needs to go up right now.

You go out and you look
at the largest names ever

to grace the front
page of "XXL,"

and you name it,
we got their album.

We ripped every
single Def Jam album.

You had, like, DMX, Method
Man, Ja Rule, Ashanti,

all the Jay-Z albums,
Freeway, all of Murder Inc.,

State Property, Yayo,
and Lloyd Banks,

the Eminem album.

As soon as the artists
turned in the record,

you could, like, set a stopwatch

for how soon it
was going to leak.

One of the unintended
effects was that

it broke the whole
Tuesday thing, right?

'Cause now what
was Tuesday, right?

People wanted to
listen to new music

on any time they felt like it.

You could just see that
we were affecting the way

that they were releasing music.

Berman changed the street date.

I think you moved it to Friday.
- Yeah.

We moved the street date up,
and it became a cycle with us

that we always had our street
date that we marketed to,

and then we had our plan
B, and then we had our,

"Okay, we're just
gonna have to pivot."

And if you had to spend

an extra few hundred
thousand dollars on shipping,

that's what the price
of the game was.

The economic damage
they caused was real.

It's not an exaggeration
to say that they were

the ones running the entire
music distribution platform.

While the industry was trying

to rewrite the playbook...

Eventually, the
scene said, well,

maybe it's possible to get
the music even earlier.

The pirates were already
changing the game.

And so they kept burrowing

into the music
industry supply chain.

And they kept getting further
and further up the ladder,

first through the promo guys,

then through the
distribution guys.

And then, finally,
they found a link

into the music
pressing plant itself.

So, growing up, I didn't
get out of Shelby a lot.

You know, wasn't really
anything to do around here,

so I spent a lot of
time on the computer.

I like to learn, so I was
pretty much fascinated

by how computers work.

He's always been that innovator.

He always wanted
to start something,

and he was always
interested in stuff

that we didn't have
anything... any idea about,

like the computers
and technology.

You took him down to Sears.
- Yeah.

Was he old... he wasn't
even old enough to drive.

And he went and
purchased a computer.

So, when I got my first
computer, I took it apart,

and I put it back
together just to see

how everything tied in together.

He done tore that computer up.

And he put it back together.
- Yeah, he did.

- And I was impressed.
- Yeah.

Dell, the boy is a genius.

He was supposed to be on
Wall Street somewhere.

Shelby too little for him.

I was completely self-taught,

never had a class.

Call it a gift from God,
I just kind of knew.

I had this building
built in the backyard.

I had ran me a network
cable down there, you know,

so I would have internet,
and that pretty much

became, like, my
little workshop.

Tony Docker was a friend of mine

who worked at the CD plant.

I found out he had a computer,
and he found out I had one.

So we started hanging out
and started doing things,

you know, pretty much
on the computer side.

He came out and sat me down
at his computer and said

some guys wanted to talk to me.

Kali, he asked me to be a
member of the group RNS.

I didn't know a lot about him.

I knew he was from California.

He was always paranoid
about, you know, the Feds,

so he took a lot of precautions.

You know, he only talked to you

through encrypted software.

The screen name Kali is K-A-L-I,

which is a reference to
the Hindu God of death.

Who is Kali? He
liked to smoke weed.

He likes to listen to
hip-hop. He was in California.

We had a lot of conversations,

and we knew each
other for many years.

But I never knew his name.

It was a big deal for Kali to be

number one as far
as on releases.

He did not want to
get beat on any leaks.

He wanted us to be the
first group to leak it.

He was the one that was
able to sort of bring RNS

from top two to undisputed
number one in the MP3 scene.

He was able to consistently
get major releases

two and three weeks
ahead of time,

which was kind of unheard of.

Kali knew I worked
for Universal Music

and I could get the stuff

before anybody
else could get it.

I did remember seeing Adeg,
A-D-E-G, in the channel.

I didn't know who he was.

Adeg was the star.

He was Kali's number-one ripper.

He kept him hidden and
didn't want anybody

to know who he was.

Kali, he only really cared
about, like, the cachet

of winning within the scene.

There was just always something
that bugged me about him.

Kali was the mastermind of RNS,

and he took over from Al Capone.

And some say he
actually sort of, like,

he had a coup and
ended up in charge

of this music distribution
and leaking group

that was Rabid Neurosis.

Under Kali's leadership,

the group took it
to the next level.

We started to see
an increasing amount

of pre-release music,
which means before it was

available to the public.

That became, like, yet
an additional problem.

'Cause Paul Rosenberg
is blowing up, yo.

That's what it is.

Yo, let's get the camera on
Paul Rosenberg for a minute.

By the time we were
doing "The Eminem Show,"

there was a lot of anxiety
around albums leaking.

I think the first major leak,

I believe it was
"The Eminem Show."

MTV.com is reporting

all 20 songs were
leaked to the internet.

No other radio station has the
balls to play this, Anthony!

The world debut
of the new Eminem.

♪ This looks like
a job for me ♪

♪ So everybody
just follow me ♪

All that work, like,

days, months, hours that I spent

writing it, recording
it, tweaking it,

like, all that shit,
now these songs leak.

And I'm, like,.

It was like music
should be free,

and then it's like,
okay, well, here's what

you don't understand if
music should be free.

I have an engineer to pay.

There's an entire army of
people that work at Interscope

that need their paycheck.

You don't understand.

This Eminem thing is bizarre.

It was annoying.

It was messing with
his creative process

and how he wanted
people to hear it.

What do I do?

Do I try to make songs
like those that leaked?

But then people go,

well, we already
heard that from you.

Well, we just found out
today that we have no choice

but because of demand and
the piracy and everything

that's going on out there
that we have to push

the Eminem album
up, the new album,

"The Eminem Show," up to May
28th rather than June 4th.

The whole marketing plan
went out the window.

I mean, every hour
that record was out,

you were losing sales.

I'm, you know,
falling over my desk,

and Eminem's screaming at me.

What do I want people at home
to know about this record?

It's out today.

Like, us ripping a record,

it was actually
good for the artist.

It was free exposure.

Your copy off the internet
is, like, not shit.

It sounds like shit.

We just shrugged it
off and figured, like,

they sort of don't get it.

This is the first
time that Eminem

has put lyrics in the album
so people can read the album.

And there's lyrics in it.

It has a free DVD on the
first two million copies.

And there's a DVD
that it comes with,

and there's, like,
a lot of cool stuff,

like, extra bonus stuff that
you can get if you go out

and you buy the CD.

And we have no choice but
to stop everything else

we're doing and get
this record out.

As the album got
released, probably a month

before the release date,

he had to reschedule his tours.

And he was pretty
upset, from what I read.

Whoever put my
on the internet,

I want to meet that
mother and beat

the out of him.

Oh, I got Eminem's new CD.

I got Eminem's new CD.

That was my first
album that suffered,

so it was devastating to
me in the sense of, like,

oh, I just did all
that for nothing.

As an artist, you
want to make something

for the world to have,

and now you're complaining
that it's being distributed?

Come on.

When Eminem hits, that
became the waterfall

for all those ones
that followed.

Korn's "Untouchables" was
leaked a full two months

before its release date.

The Recording Industry
Association of America

stopped internet postings
of Madonna's new single.

The track, it got leaked.

♪ Da-da-da-da-da ♪

It started moving faster.

You were sitting here waiting.

What's the date gonna be?

Is that 12 days in front?

Is that 9 days in front?

Is that 14 days in front?

You could do whatever
you wanted to do

to make the process
of recording an album

a security stronghold.

You could record the
album in the Pentagon,

Navy SEALs inside the studio.

The second you handed
that album over

for it to be
manufactured, that was it.

This is 50 Cent.

My album's coming
out February 11th.

I turned the album in.

It was in the possession of
the actual record company,

the CD release.

It would come out, like,

three, four weeks ahead of time.

And all the work that you put in

and the brainpower and the hours

and everything that you
put into your project

is kind of out the window now.

Anytime a leak happened,
suddenly you have

millions of dollars at stake.

How are we gonna deal with this?

I think Berman usually
was always the one

to break the news, and
Berman would just go...

I mean, just the
look on his face,

knowing the call he had to make.

Berman was a wolf
when it come to that.

He be like, Timbaland,
nothing is gonna get leaked.

I promise you.

They were looking at
the company saying,

well, somebody broke
it down on your side.

The music industry was
chasing itself in circles

trying to pinpoint the
source of these leaks.

Steve Berman couldn't
even explain it to me.

I'm saying, explain
to me this shit.

Artists were pointing
at the labels.

- They were pissed.
- They were pissed.

They were pissed.

Get the off my phone, Steve.

Labels were pointing at Napster.

We've looked at how our
mastering is happening.

The manufacturing plants
now have extra security.

It's not us. It can't be us.

He probably throw his hands up.

hell.

Naturally, if anybody tells you

they didn't feel abject
fear, they're full of shit,

'cause we were terrified for us.

We were terrified for the art.

We were terrified
about everything,

and we didn't understand it.

None of them ever
suspected a factory worker

down in a little
town called Shelby.

You have to think,

what if there's a giant hole in
the boat, and it's not fixable?

What do we do?

I remember Jimmy
walking in and saying,

we got to flip this. We
got to attack the problem.

I didn't give a shit
what anybody was doing.

I was a CEO, and I was like,
I can't live like this.

I don't want to be the
guy to sell the last CD.

That's where we put on...
I don't say hard hats.

I say helmets. Like,
we were at war.

It's one of the biggest
exports America has,

and it's going out of business.

They all thought
they'd seen the worst.

I never could picture
it being one person.

But Dell's plan...

Adeg, he was a star.

Without him, none of
this would have happened.

Well, Dell's plan was
just taking shape.

Well, Dell's plan was
just taking shape.