The Man Who Broke the Music Business (The dawn of online piracy)

One Saturday in 1994, Bennie Lydell Glover, a temporary employee at the PolyGram compact-disk manufacturing plant in Kings Mountain, North Carolina, went to a party at the house of a co-worker. He was angling for a permanent position, and the party was a chance to network with his managers. Late in the evening, the host put on music to get people dancing. Glover, a fixture at clubs in Charlotte, an hour away, had never heard any of the songs before, even though many of them were by artists whose work he enjoyed.


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Later, Glover realized that the host had been d.j.’ing with music that had been smuggled out of the plant. He was surprised. Plant policy required all permanent employees to sign a “No Theft Tolerated” agreement. He knew that the plant managers were concerned about leaking, and he’d heard of employees being arrested for embezzling inventory. But at the party, even in front of the supervisors, it seemed clear that the disks had been getting out. In time, Glover became aware of a far-reaching underground trade in pre-release disks. “We’d run them in the plant in the week, and they’d have them in the flea markets on the weekend,” he said. “It was a real leaky plant.”


The factory sat on a hundred acres of woodland and had more than three hundred thousand square feet of floor space. It ran shifts around the clock, every day of the year. New albums were released in record stores on Tuesdays, but they needed to be pressed, packaged, and shrink-wrapped weeks in advance. On a busy day, the plant produced a quarter of a million CDs. Its lineage was distinguished: PolyGram was a division of the Dutch consumer-electronics giant Philips, the co-inventor of the CD.

One of Glover’s co-workers was Tony Dockery, another temporary hire. The two worked opposite ends of the shrink-wrapping machine, twelve feet apart. Glover was a “dropper”: he fed the packaged disks into the machine. Dockery was a “boxer”: he took the shrink-wrapped jewel cases and stacked them in a cardboard box for shipping. The jobs paid about ten dollars an hour.

Glover and Dockery soon became friends. They lived in the same town, Shelby, and Glover started giving Dockery a ride to work. They liked the same music. They made the same money. Most important, they were both fascinated by computers, an unusual interest for two working-class Carolinians in the early nineties—the average Shelbyite was more likely to own a hunting rifle than a PC. Glover’s father had been a mechanic, and his grandfather, a farmer, had moonlighted as a television repairman. In 1989, when Glover was fifteen, he went to Sears and bought his first computer: a twenty-three-hundred-dollar PC clone with a one-color monitor. His mother co-signed as the guarantor on the layaway plan. Tinkering with the machine, Glover developed an expertise in hardware assembly, and began to earn money fixing the computers of his friends and neighbors.

By the time of the party, he’d begun to experiment with the nascent culture of the Internet, exploring bulletin-board systems and America Online. Soon, Glover also purchased a CD burner, one of the first produced for home consumers. It cost around six hundred dollars. He began to make mixtapes of the music he already owned, and sold them to friends. “There was a lot of people down my way selling shoes, pocketbooks, CDs, movies, and fencing stolen stuff,” he told me. “I didn’t think they’d ever look at me for what I was doing.” But the burner took forty minutes to make a single copy, and business was slow.

Glover began to consider selling leaked CDs from the plant. He knew a couple of employees who were smuggling them out, and a pre-release album from a hot artist, copied to a blank disk, would be valuable. (Indeed, recording executives at the time saw this as a key business risk.) But PolyGram’s offerings just weren’t that good. The company had a dominant position in adult contemporary, but the kind of people who bought knockoff CDs from the trunk of a car didn’t want Bryan Adams and Sheryl Crow. They wanted Jay Z, and the plant didn’t have it.

By 1996, Glover, who went by Dell, had a permanent job at the plant, with higher pay, benefits, and the possibility of more overtime. He began working double shifts, volunteering for every available slot. “We wouldn’t allow him to work more than six consecutive days,” Robert Buchanan, one of his former managers, said. “But he would try.”

The overtime earnings funded new purchases. In the fall of 1996, Hughes Network Systems introduced the country’s first consumer-grade broadband satellite Internet access. Glover and Dockery signed up immediately. The service offered download speeds of up to four hundred kilobits per second, seven times that of even the best dial-up modem.


Also, he could share files. Online, pirated media files were known as “warez,” from “software,” and were distributed through a subculture dating back to at least 1980, which called itself the Warez Scene. The Scene was organized in loosely affiliated digital crews, which raced one another to be the first to put new material on the IRC channel. Software was often available on the same day that it was officially released. Sometimes it was even possible, by hacking company servers, or through an employee, to pirate a piece of software before it was available in stores. The ability to regularly source pre-release leaks earned one the ultimate accolade in digital piracy: to be among the “elite.”

By the mid-nineties, the Scene had moved beyond software piracy into magazines, pornography, pictures, and even fonts. In 1996, a Scene member with the screen name NetFraCk started a new crew, the world’s first MP3 piracy group: Compress ’Da Audio, or CDA, which used the newly available MP3 standard, a format that could shrink music files by more than ninety per cent. On August 10, 1996, CDA released to IRC the Scene’s first “officially” pirated MP3: “Until It Sleeps,” by Metallica. Within weeks, there were numerous rival crews and thousands of pirated songs.

Glover’s first visit to an MP3-trading chat channel came shortly afterward. He wasn’t sure what an MP3 was or who was making the files. He simply downloaded software for an MP3 player, and put in requests for the bots of the channel to serve him files. A few minutes later, he had a small library of songs on his hard drive.

One of the songs was Tupac Shakur’s “California Love,” the hit single that had become inescapable after Tupac’s death, several weeks earlier, in September, 1996. Glover loved Tupac, and when his album “All Eyez on Me” came through the PolyGram plant, in a special distribution deal with Interscope Records, he had even shrink-wrapped some of the disks. Now he played the MP3 of “California Love.” Roger Troutman’s talk-box intro came rattling through his computer speakers, followed by Dr. Dre’s looped reworking of the piano hook from Joe Cocker’s “Woman to Woman.” Then came Tupac’s voice, compressed and digitized from beyond the grave, sounding exactly as it did on the CD.

At work, Glover manufactured CDs for mass consumption. At home, he had spent more than two thousand dollars on burners and other hardware to produce them individually. His livelihood depended on continued demand for the product. But Glover had to wonder: if the MP3 could reproduce Tupac at one-eleventh the bandwidth, and if Tupac could then be distributed, free, on the Internet, what the hell was the point of a compact disk?

In 1998, Seagram Company announced that it was purchasing PolyGram from Philips and merging it with the Universal Music Group. The deal comprised the global pressing and distribution network, including the Kings Mountain plant. The employees were nervous, but management told them not to worry; the plant wasn’t shutting down—it was expanding. The music industry was enjoying a period of unmatched profitability, charging more than fourteen dollars for a CD that cost less than two dollars to manufacture. The executives at Universal thought that this state of affairs was likely to continue. In the prospectus that they filed for the PolyGram acquisition, they did not mention the MP3 among the anticipated threats to the business.

The production lines were upgraded to manufacture half a million CDs a day. There were more shifts, more overtime hours, and more music. Universal, it seemed, had cornered the market on rap. Jay Z, Eminem, Dr. Dre, Cash Money—Glover packaged the albums himself.

Six months after the merger, Shawn Fanning, an eighteen-year-old college dropout from Northeastern University, débuted a public file-sharing platform he had invented called Napster. Fanning had spent his adolescence in the same IRC underground as Glover and Dockery, and was struck by the inefficiency of its distribution methods. Napster replaced IRC bots with a centralized “peer-to-peer” server that allowed people to swap files directly. Within a year, the service had ten million users.


Glover still considered it too risky to sell leaked CDs from the plant. Nevertheless, he enjoyed keeping up with current music, and the smugglers welcomed him as a customer. He was a permanent employee with no rap sheet and an interest in technology, but outside the plant he had a reputation as a roughrider. He owned a Japanese street-racing motorcycle, which he took to Black Bike Week, in Myrtle Beach. He had owned several handguns, and on his forearm was a tattoo of the Grim Reaper, walking a pit bull on a chain.

His co-worker Dockery, by contrast, was a clean-cut churchgoer, and too square for the smugglers. But he had started bootlegging, too, and he pestered Glover to supply him with leaked CDs. In addition, Dockery kept finding files online that Glover couldn’t: movies that were still in theatres, PlayStation games that weren’t scheduled to be released for months.

For a while, Glover traded leaked disks for Dockery’s software and movies. But eventually he grew tired of acting as Dockery’s courier, and asked why the disks were so valuable. Dockery invited him to his house one night, where he outlined the basics of the warez underworld. For the past year or so, he’d been uploading the pre-release leaks Glover gave him to a shadowy network of online enthusiasts. This was the Scene, and Dockery, on IRC, had joined one of its most élite groups: Rabid Neurosis, or RNS. (Dockery declined to comment for this story.)

Instead of pirating individual songs, RNS was pirating entire albums, bringing the pre-release mentality from software to music. The goal was to beat the official release date whenever possible, and that meant a campaign of infiltration against the major labels.

The leader of RNS went by the handle Kali. He was a master of surveillance and infiltration, the Karla of music piracy. It seemed that he spent hours each week researching the confusing web of corporate acquisitions and pressing agreements that determined where and when CDs would be manufactured. With this information, he built a network of moles who, in the next eight years, managed to burrow into the supply chains of every major music label. “This stuff had to be his life, because he knew about all the release dates,” Glover said.


He also applied for a slot as a d.j. at the school’s radio station. For two years, Kali cultivated Tai’s interest in rap music and told him to make connections with the promotional people at various labels. In 2000, Tai, now a senior at Penn, was promoted to music director at the station and given a key to the office, where he had access to the station’s promo disks. Every day, he checked the station’s mail; when something good came in, he raced back to his dorm room to upload it. Beating rival Scene crews was sometimes a matter of seconds.

Tai scored two major leaks that year, Ludacris’s “Back for the First Time” and Outkast’s “Stankonia.” With his Scene credentials established, for the next two years Tai managed RNS’s roster of leakers. Along with Kali, he tracked the major labels’ distribution schedules and directed his sources to keep an eye out for certain albums.

To find the albums, RNS had international contacts at every level, who went by anonymous online handles. According to court testimony and interviews with Scene members, there were the radio d.j.s: BiDi, in the South; DJ Rhino, in the Midwest. There was the British music journalist who went by KSD, whose greatest coup was 50 Cent’s “lost” début, “Power of the Dollar,” scheduled for release in 2000 by Columbia, but cancelled after the rapper was shot. There was DaLive1, a house-music aficionado who lived in New York City, and used his connections inside Viacom to source leaks from Black Entertainment Television and MTV. There were two Italian brothers sharing the handle Incuboy, who claimed to run a music-promotion business and had reliable access to releases from Sony and Bertelsmann. In Japan, albums sometimes launched a week or two ahead of the U.S. release date, often with bonus tracks, and Tai relied on kewl21 and x23 to source them. Finally, there were the Tuesday rippers, like Aflex and Ziggy, who spent their own money to buy music legally the day that it appeared in stores.

The only leaker Tai didn’t manage was Glover—Kali kept his existence a secret, even from the other members of the group. Glover resented the isolation, but being Kali’s private source was worth the trouble. At any given time, global Scene membership amounted to no more than a couple of thousand people. Kali was close to the top. A typical Scene pirate, bribing record-store employees and cracking software, might be granted access to three or four topsites. By 2002, Glover had access to two dozen.

His contacts made him an incomparable movie bootlegger. He built another tower to replace the first, with burners for DVDs instead of CDs. He upgraded his Internet connection from satellite to cable. He downloaded the past few years’ most popular movies from the topsites, then burned a couple of dozen copies of each. Expanding his customer base beyond his co-workers, he started meeting people in the parking lot of a nearby convenience store. Around Cleveland County, Glover became known as “the movie man.” For five dollars, he would sell you a DVD of “Spider-Man” weeks before it was available at Blockbuster, sometimes even while it was still in theatres.

In January, 2003, Glover leaked 50 Cent’s official début, “Get Rich or Die Tryin’,” to Kali. It became the bestselling U.S. album of the year. He followed that up with albums from Jay Z, G Unit, Mary J. Blige, Big Tymers, and Ludacris, and then began the following year with Kanye West’s début, “The College Dropout.” After a scare, in which Glover worried that a release might be traced to him, the timing of leaks became more and more a point of focus. Glover’s leaks began to hit the Internet about two weeks before the CDs were due in stores, neither so early that the leak could be traced to the plant nor so late that RNS risked being bested by other pirates.

The group’s ascendancy came during a period of heightened scrutiny by law enforcement. In April, 2004, the F.B.I. and foreign law-enforcement agencies conducted coördinated raids in eleven countries, identifying more than a hundred pirates. The R.I.A.A.’s anti-piracy unit was staffed with investigators, who hung around the chat rooms of the Scene and learned its language. They tried to infiltrate the Scene, and tracked the leaked material and its dissemination throughout the Internet. Their research began to point them to one increasingly powerful crew, RNS, and they shared their findings with the F.B.I.


Glover had been thinking about retiring from the Scene. He started leaking when he was in his mid-twenties. He was now thirty-two. He had worn the same haircut for ten years, and dressed in the same screen-print T-shirts and bluejeans, but his perception of himself was changing. He didn’t remember why he had been so attracted to street bikes, or why he’d felt it necessary to own a handgun. He found his Grim Reaper tattoo impossibly stupid.

Glover’s DVD profits began to decline. Leaks from the Scene were now publicly available within seconds of being posted to the topsites, and even those who were technologically challenged could figure out how to download them. Within a couple of years, Glover’s income from bootlegging dropped to a few hundred dollars a week.

Glover began to make his feelings known to Kali. “We’ve been doing this shit for a long time,” he said in a phone call. “We never got caught. Maybe it’s time to stop.” Surprisingly, Kali agreed. Though the plant’s security was increasingly loose, the risks for leakers were greater. Between foreign law enforcement, the F.B.I., and the R.I.A.A.’s internal anti-piracy squads, there were multiple teams of investigators working to catch them. Kali understood the lengths to which law enforcement was willing to go. Some of the targets of the 2004 raids were his friends, and he had visited them in federal prison.

Then, in January of 2007, one of RNS’s topsites mysteriously vanished. The server, which was hosted in Hungary, began refusing all connections, and the company that owned it didn’t respond. Kali ordered the group shut down. RNS’s final leak, released on January 19, 2007, was Fall Out Boy’s “Infinity on High,” sourced from inside the plant by Glover.


Vu, a veteran of the bureau’s computer-crimes division, had spent years searching for the source of the leaks that were crippling the music industry. His efforts had finally led him to this unremarkable ranch house in small-town North Carolina. He introduced himself, then began pressing Glover for information. Vu was particularly interested in Kali, and Glover gave him the scattered details he had picked up over the years. But Vu wanted Kali’s real name, and, although Glover had talked on the phone with Kali hundreds of times, he didn’t know it.
The next day, Kali called Glover. His voice was agitated and nervous.

“It’s me,” Kali said. “Listen, I think the Feds might be onto us.”

Vu had anticipated the possibility of such a call and had instructed Glover to act as if nothing had happened. Glover now had a choice to make. He could play dumb, and further the investigation of Kali. Or he could warn him off.

“You’re too late,” Glover said. “They hit me yesterday. Shut it down.”

“O.K., I got you,” Kali said. Then he said, “I appreciate it,” and hung up.

In the next few months, the F.B.I. made numerous raids, picking up RickOne, of OSC, and several members of RNS. They also found the man they believed to be Kali, the man who had cost the music industry tens of millions of dollars and transformed RNS into the most sophisticated piracy operation in history: Adil R. Cassim, a twenty-nine-year-old Indian-American I.T. worker who smoked weed, listened to rap music, and lived at home in the suburbs of Los Angeles with his mother.

On September 9, 2009, Glover arrived at the federal courthouse in Alexandria, Virginia, and was indicted on one count of felony conspiracy to commit copyright infringement. At his indictment, Glover saw Adil Cassim for the first time. Cassim was clean-shaven and wore his hair cropped short. He was stocky, with a noticeable paunch, and was dressed in a black suit.

A month later, Glover pleaded guilty to the charge. The decision to plead was a difficult one, but Glover thought that his chances of acquittal were poor. In exchange for sentencing leniency, he agreed to testify against Cassim. The F.B.I. needed the help; the agency had thoroughly searched Cassim’s residence, and a forensic team had inspected his laptop, but they had found no pre-release music. Cassim did not admit to being a member of RNS, though two pieces of physical evidence suggested a connection to the group. One was a burned compact disk taken from his bedroom, containing a copy of Cassim’s résumé, on which, in the “Properties” tab, Microsoft Word had automatically included the name of the document’s author: Kali. The second was Cassim’s mobile phone, which contained Glover’s cell number. The contact’s name was listed only as “D.”

Cassim’s trial began in March, 2010, and lasted for five days. Glover testified, as did several other confessed members of RNS, along with a number of F.B.I. agents and technical experts. In the previous ten years, the federal government had prosecuted hundreds of Scene participants, and had won nearly every case it had brought. But on March 19, 2010, after a short period of deliberation, a jury found Cassim not guilty.

After the trial, Glover began to regret his decision to testify and to plead guilty. He wondered if, with a better legal defense, he, too, might have been acquitted. He’d never been sure exactly what damage leaking music actually caused the musicians, and at times he seemed to regard it as something less than a crime.

“Look at 50 Cent,” he said. “He’s still living in Mike Tyson’s house. Ain’t nobody in the world that can hurt them.” He continued, “It’s a loss, but it’s also a form of advertising.” He paused. “But they probably lost more than they gained.” In the end, Glover served three months in prison. (Tony Dockery also pleaded guilty to conspiracy to commit copyright infringement, and spent three months in prison. Simon Tai was never charged with any wrongdoing.)

In their sentencing guidelines, the attorneys for the Department of Justice wrote, “RNS was the most pervasive and infamous Internet piracy group in history.” In eleven years, RNS leaked more than twenty thousand albums. For much of this time, the group’s best asset was Glover—there was scarcely a person younger than thirty who couldn’t trace music in his or her collection to him.

On the day that Glover’s home was raided, F.B.I. agents confiscated his computers, his duplicating towers, his hard drives, and his PlayStation. They took a few pictures of the albums he’d collected over the years, but they left the duffelbag full of compact disks behind—even as evidence, they were worthless.

Source: http://www.newyorker.com/magazine/2015/04/27/the-man-who-broke-the-music-business
 
That was a real interesting read. Usually I would've passed such a long article but it's a slow work day with the long weekend approaching and half the people planning to leave after noon.
 
Couldn't leave the article once I started reading it. Its a good read. All the makings of a hollywood potboiler.
 
Great Article to read (a big one) - Thanks for posting here.

Wish there is a movie on this subject.....with all technical details mentioned in this article....
 
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