How the Music Industry Learned to Love Piracy

How do you disassemble a decades-long, multibillion-dollar industry in just a few short years? This was the question at the heart of this summer’s two-part Paramount+ documentary, “How Music Got Free,” which examines the greed and myopia of the music business in the late 1990s and early 2000s, when an assortment of otherwise feckless teenagers and tech enthusiasts finally figured out how to trade songs over the internet. Depending on your perspective, it is either a delightful yarn about the money-changers in the temple getting their due or a long, sad narrative about corporations and consumers banding together to deprive artists of a fair wage.

Far from demonizing the innovators of online music piracy, “How Music Got Free” regards them as digital Robin Hood figures, visionaries whose passion for technology and music leveled the economic playing field. One montage contrasts the Croesus-like wealth of artists like Master P with the hardscrabble lives of residents of Shelby, N.C., as if seeking to justify piracy in one persuasive sweep of social-realist juxtaposition. Shelby is the home of Bennie Lydell Glover, a computer wizard and CD-manufacturing-plant employee who smuggled countless embargoed records onto the internet — a pipeline of prerelease material large enough to affect the sales of artists as big as Kanye West and 50 Cent. The documentary is also quick to point out the orgiastic profits reaped by record labels during the ’80s and ’90s, when CDs could be manufactured for around $2 and sold for $20, a practice that proved doubly lucrative as the new format induced consumers to buy their record collections all over again. The old expression goes: Pigs get fat; hogs get slaughtered. When the damage was done — from 2006 to 2016, CD sales dropped 84 percent — an entire generation had internalized the notion that they should never expect to pay anything for the music they cherished. The carnage could scarcely be calculated.

“How Music Got Free” offers a sympathetic look back at the early days of this paradigm shift, but it’s worth remembering how music moguls and corporations actually responded to piracy at the time. Their reaction might best be described as a Keystone Kops-style combination of outrage, threats and litigation that mirrored the general stages of grief. Their indignant protests had a plaintive message: “You’re stealing from your favorite artists!” The unspoken second half of that was: “That’s our job!”

This is worth remembering specifically because “How Music Got Free” was produced by Eminem, among others, and features a parade of industry bigwigs including Jimmy Iovine, 50 Cent, Timbaland and Marshall Mathers himself. Today the documentary treats the rise of online file-sharing services as first an astonishment, then a nuisance, then an existential threat and then, amazingly, a panacea. The original pirates are judged to be “pioneers” who lit the only clear path forward for the music industry. That path turns out to be streaming, a neat compromise between letting consumers listen to whatever they want online and collecting just enough money for it that big record labels are satisfied with their cut. A highly weird coda praises the contemporary streaming economy as a populist breakthrough, wherein, per the documentary’s narration, “we are one step closer to an artist being able to chart their own course.” Also: “Fans can experience music in their own ways.” Also, per one Panglossian talking head: “If you like music, you have more opportunities.” Also: “The artists themselves are just having more direct relationships with the consumers,” which — what does this even mean?

History is written by the winners, and Eminem, Iovine and the rest of the plutocrats involved with “How Music Got Free” are clear victors in the aftermath of the piracy wars. What is left unmentioned, of course, is the surrounding blast crater, which has functionally erased a once-thriving ecosystem of middle-class musicians. Those artists survived on the old model of physical sales and mechanical royalties; now they have been almost completely excised from the profit pool of the streaming economy. Perhaps you have read the numbers and wrangled with their penurious abstractions. Per the Recording Industry Association of America, streaming currently accounts for 84 percent of revenue from recorded music. One estimate had streaming platforms paying an average of $0.00173 per stream; more recent numbers have it as $0.0046. Either way, a majority of that princely sum is typically captured by record labels, while the artist is left to make do with the remainder. I will save you the trouble of getting out your calculator. What this means is that it is essentially impossible for all but a glancingly small number of musicians to make meaningful income from their recordings.

All turned out well, and music was solved forever.