Shortly after Napster’s founding, though, Fanning struck the deal of a lifetime. In May, just before the public debut of the software, John, 35, had convinced Shawn, 18, to sign a piece of paper granting him 70 percent of Napster’s equity in exchange for his services as chairman and CEO. John had quickly abdicated the CEO position, but he remained the chairman of the company, and as majority shareholder, was legally in control.
He paid little attention to day-to-day business. As Shawn and Sean set up offices in Silicon Valley, John remained on the other side of the country in Hull, Massachusetts, using the salary he drew and private sales of Napster stock to rehab a condemned mansion he had purchased years before. As it became clear that Napster would not survive without industry support, executives at the company implored him to strike a deal with the majors. John responded with recalcitrance: “Fuck the record industry.”
Morris watched this tortured saga from a distance. He did not share Bronfman’s or Middelhoff’s enthusiasm for Napster, he had not attended the meeting after the Grammys, and he had no personal interest in taking a stake in the Fannings’ revenue-free “business.” Before Napster, he had regarded the mp3 as an annoyance, if he ever thought of it at all. He was a music guy, not a technology guy, and for a long time he stubbornly refused to acknowledge it might impact his industry. His job was to make hits, and when he looked at the mp3, he didn’t see how it could help him do that.
But Napster took file-sharing from the underground to the mainstream, and for Morris this was simple thievery, conducted on an unprecedented scale. The Napster user base was criminal, and so, by extension, was the company itself, seeking to profit from an illegal trade in copyrighted material that was the rightful property of Universal Music Group. He had been down this road before with cassette tape trading, and he began to see how this new technology presented an existential threat to the business model of the 14-dollar compact disc.
The most obvious idea was to create a legal paid alternative. Bronfman was bullish on the future of digital tech and, at Seagram, began directing capital toward a wide variety of ideas. The company’s annual report from 2000 sounded like the mission statement from a venture capital firm: “Our investments include internal infrastructure, which includes hardware and software that will allow the music business to be conducted over the Internet, such as bluematter.com and Jimmy and Doug’s Farm Club, as well as investments in GetMusic, ARTISTdirect, InterTrust Technologies, ReplayTV, eritmo .com and others.”
It was a list of busts. Within five years, most of the ventures would no longer exist, and the surviving stragglers would have no meaningful impact. Morris—and Bronfman, and dozens of other corporate executives throughout the entertainment industry and beyond—had fallen victim to the promises of the dot-com hucksters.
Rosen alone could see where the music industry stood. In repeated conversations, Morris doggedly insisted that his tech investments would obsolesce Napster. Rosen tried to disabuse him of this notion—at first patiently, then, as time went on, with an increasing sense of exasperation. She could see that Morris was operating in a world he didn’t really understand, and she felt he wasn’t listening to reason. Just as it was in music, tech was about talent, and Morris, overseeing a confusing panoply of competing, overlapping ventures from an office on the wrong side of the country, didn’t have it.
The most damning example was his enthusiasm for Pressplay, an online music store that Morris would sink tens of millions of dollars into developing. The venture was a coproduction between Universal and Sony, and the cooperation between these former rivals led Morris to be bullish, despite the store’s complicated licensing structure and limited selection. On several occasions he told Rosen to stop talking to Napster, to stop negotiating with the Fannings, to stop worrying so much, because he had something that would “make it all go away.” In later years, Pressplay would be a reliable starting point for listicles of the “Top All-Time Tech Busts.”
Rosen was in a tough position. She understood the industry’s future better than any of the CEOs, except perhaps Middelhoff. But ultimately, these men were her bosses, and while on conference calls she privately objected and pushed for accommodation with the Fannings, in public she was forced to act as the music business’s hatchet woman.
The first stage was to get law enforcement involved. Rosen and her antipiracy team had regular conversations with the Department of Justice, trying to convince them to go after the more brazen profiteers like mp3.com and Napster. This proved difficult. The music industry was not well liked on Capitol Hill. The record execs had stood their ground against Tipper Gore and Bill Bennett, and won decisive battles, but those victories had left the congressmen—and their wives—looking like humorless scolds. Even among liberals, the attitude on Capitol Hill was not favorably predisposed toward the record labels.
Other sectors of the entertainment industry had much more influence. The movie industry in particular was well represented. This was largely due to the work of Rosen’s movie business counterpart, Jack Valenti, the longtime head of the Motion Picture Association of America. Valenti was a legend on Capitol Hill, at least in part because he had bowed to the demands of the culture police and instituted a self-regulatory rating system for movies. Valenti’s rating system was deeply flawed—at times it was incomprehensible—but it kept the industry in good standing on Capitol Hill, and for Hollywood, at least, the sacrifice of artistic integrity was worth it.
To its everlasting credit, the recording industry refused to make this compromise. Ratings systems had an undeniable effect on culture, determining what kinds of product got made, and for how much, and what they featured. Executives like Morris recoiled at the idea of a secret council of humorless nincompoops deciding the proper age to first listen to the Beatles—or 2 Live Crew, for that matter. Morris had personally championed the First Amendment rights of his artists with enthusiasm, sometimes at great personal cost. Perhaps it was difficult to disentangle his personal ideology from his economic incentives, but that only made his defense all the more sincere.
But for his principles he would be made to suffer. Congress had failed to protect the teenager from the moral depredations of the music industry; now it was disinclined to protect the music industry from the file-sharing of the teenager. The elected officials tended to be forthright about their motivations in this regard. In repeated conversations with Morris’ lieutenants, they made clear that their constituencies generally supported file-sharing and generally opposed the aggressive enforcement of copyright law. Like the “blue laws” against sodomy, the guarantees of intellectual property protection were in danger of obsolescence—on the books, but unenforced. Although he was not a lobbyist, Harvey Geller, Universal’s chief litigator, met occasionally with members of Congress and pushed the case for stricter enforcement against the file-sharers. He was told, repeatedly, that such a move would likely cost votes. “Politicians pander to their constituents,” Geller would later say, describing these encounters. “And there were more constituents stealing music than constituents selling it.”
Other industries did not face this problem. The movie business put the FBI’s antipiracy warning on every videotape they shipped—but they had Valenti. The publishing industry churned out at least as much filth each year as the musicians did—but they also offered big book advances to retiring politicians. The software manufacturers had enjoyed the benefits of numerous Department of Justice antipiracy campaigns—but many of them secretly collaborated with the NSA. The music industry stood alone in its defiant refusal to cooperate, and now it found itself abandoned by the state. If it wanted to enforce its intellectual property rights, it would have to do so on its own.