Appetite For Self-Destruction Part 11

Al Smith biography and anecdotes: Confidential source, confirmed by Smith.

"It was really a race against the clock": Author interview with Edward Felten.

"It ended up dying a grisly, painful death": Author interview with Rob Glaser.

Apple Computer employees watching SDMI carefully: Author interview with Talal Shamoon, who theorizes, "A lot of the plumbing in iTunes is definitely contemplated in SDMI. The iPod itself is very, very close to something that would comply with the [SDMI] portable device specifications." Apple didn't attend: Author interview with Cary Sherman, then general counsel of the RIAA. Sony Digital Clip: From Mossberg, Walter S., "Sony Digital Music Clip Is Cool, But Treats Users Like Potential Criminals," Wall Street Journal Wall Street Journal, March 2, 2000, p. B1. They could do a far better job: Paraphrasing from Levy, Stephen, The Perfect Thing: How the iPod Shuffles Commerce, Culture, and Coolness The Perfect Thing: How the iPod Shuffles Commerce, Culture, and Coolness (New York: Simon & Schuster, 2006), p. 53, as well as author interview with Jonathan Rubinstein. (New York: Simon & Schuster, 2006), p. 53, as well as author interview with Jonathan Rubinstein.

Chapter 5 20022003: How Steve Jobs Built the iPod, Revived His Company, and Took Over the Music Business Much detail about the Gulfstream IV jet incident comes from a 2,150-word, unpublished memoir by Paul Vidich, a prolific fiction writer and member of the Poets & Writers Poets & Writers board. "Do military jets fly that close to normal airplanes?": Author interview with Kevin Gage. board. "Do military jets fly that close to normal airplanes?": Author interview with Kevin Gage.

Detail about Brandon, the airport, and the police forces, as well as photo of police cars: From Pritchard, Dean, and Rod Nickel, "Hijack Scare Grounds Jet," Brandon Sun Brandon Sun, October 27, 2001, p. A1. Confirmation Gage is the figure in the photo with his hands up: Author interview with Gage.

"It was a trip" and "We're an old crowd": Author interview with Al Smith.

The talks were code-named "Digital Media X": Author interviews with Kevin Gage, Paul Vidich, Al Smith, and William J. Rad.u.c.h.el. Talks breaking down due to Sony Corp. problems with AAC format: Author interview with Gage.

There were other problems, too, Jobs-Idei tension, and "You know Steve, he has his own agenda": MacWorld MacWorld staff, "Apple 'a nightmare'-Sony CEO," staff, "Apple 'a nightmare'-Sony CEO," MacWorld U.K. MacWorld U.K., macworld.co.uk, March 11, 2003.

Al Smith...was caught in the middle: Author interview with Smith. "There was a certain sense that we have done 99 percent of this work": Author interview with Gage.

Barry SchulerSteve Jobs talks: Author interview with Schuler. Jobs's remarks to Paul Vidich on the phone: Author interview with Vidich.

Steve Jobs biography: From Young, Jeffrey S., and William L. Simon, Icon: Steve Jobs, The Greatest Second Act in the History of Business Icon: Steve Jobs, The Greatest Second Act in the History of Business (New York: Wiley, 2005), pp. 957. (New York: Wiley, 2005), pp. 957.

"f.u.c.k NIXON" detail: From Butcher, Lee, Accidental Millionaire: The Rise and Fall of Steve Jobs at Apple Computer Accidental Millionaire: The Rise and Fall of Steve Jobs at Apple Computer (Paragon House, 1988), p. 37. (Paragon House, 1988), p. 37.

"We didn't build the computer in a garage": Steve Wozniak quoted in Goodell, Jeff, "The Rise and Fall of Apple Inc.," Rolling Stone Rolling Stone, April 4, 1996, p. 51.

"Apple stopped creating": Steve Jobs quoted in Goodell, Jeff, "The Rise and Fall of Apple Inc., Part Two: The Techno Dreamers vs. the Marketing Pods," Rolling Stone Rolling Stone, April 18, 1996, p. 59. Jobs refused interview requests for this book.

Background on Saehan and MP3Man: From Levy, The Perfect Thing The Perfect Thing, p. 49. Depiction of Rio's attorneys: From author interview with Ron Moore, then general counsel for Diamond Multimedia. "We were a small company": Author interview with David Watkins.

"They were just shocked when they lost": Watkins interview.

"where the Mac was the center of your lifestyle" and early digital-music discussions at Apple: Author interview with Jonathan Rubinstein.

Background on Bill Kincaid: From Levy, The Perfect Thing The Perfect Thing, pp. 4849. Background on SoundJam: Ibid., pp. 4952.

"We got that to pretty much be the premiere MP3 player on the Mac": Author interview with Robin Casady.

Background on Nomad Jukebox: From Kahney, Leander, "Straight Dope on the iPod's Birth," Wired.com, October 17, 2006. "just awful": Author interview with Jonathan Rubinstein. Background on Tony Fadell: Author interview with Fadell.

"I basically stalled for a while": Author interview with Jonathan Rubinstein.

"We had a very s.e.xy player": Sim Wong Hoo quoted in Sloan, Paul, "What's Next for Apple: Steve Jobs Won't Ever Tell You-But We Will. Here's What a Trail of Intriguing Evidence Reveals About Where the World's Hottest Company Is Going," Business 2.0 Business 2.0, April 1, 2005, p. 68. Background on Tos.h.i.+ba drive and FireWire: From Levy, The Perfect Thing The Perfect Thing, pp. 56, 58. "Once I saw all those technologies": Author interview with Rubinstein.

Rubinstein, Fadell, and their teams building the iPod prototype and presenting it to Jobs: From Levy, The Perfect Thing The Perfect Thing, pp. 5862.

"These suppliers were like, 'Apple is calling, that's great'": Author interview with Tony Fadell.

Background on PortalPlayer: From Levy, The Perfect Thing The Perfect Thing, pp. 6468. "Apple wouldn't even show us what it looked like": Author interview with Paul Mercer.

Jobs was vague: From Levy, The Perfect Thing The Perfect Thing, pp. 6869. Vinnie Chieco's version of the iPod story: Author interview with Chieco.

Texas Instruments engineers and "It just looked cool cool": Author interview with Randy Cole.

Paul Vidich and Kevin Gage at Apple headquarters detail: Author interview with Gage.

"It was almost as if for the first time he was given an audience": Author interview with Vidich. Jobs's tirade and "It was kind of awkward": Author interview with Gage. "Steve, that's why we're here": Vidich quoted in Sloan, Business 2.0 Business 2.0, April 1, 2005, p. 68.

$399 and "Idiots Price Our Devices": From Burrows, Peter, "Show Time!: Just as the Mac Revolutionized Computing, Apple Is Changing the World of Online Music," Business Week Business Week, February 2, 2004, p. 56.

Paul Vidich and Roger Ames: Author interviews with Vidich and Ames.

"Sort of a mogul-to-mogul thing": Author interview with Jonathan Rubinstein. "He never reacted to Roger": Author interview with Kevin Gage.

"That's a great piece of software": Author interview with Roger Ames.

99-cents-per-song and "We were looking at a hook": Author interview with Paul Vidich.

Jim Caparro's opposition, breakdown of iTunes wholesale price, and "Ultimately, we could have constructed a far different deal": Author interview with Caparro. 172 Roger AmesDoug Morris conversation and "I don't think we're going to make a lot of money": Author interview with Ames.

"Of course, we have to rely on Steve Jobs": Author interview with Albhy Galuten. we have to rely on Steve Jobs": Author interview with Albhy Galuten.

Galuten went to Cupertino, negotiation detail: Ibid.

"We had all the leverage in the world" and "Doug called and said, 'Just close'": Ibid. "We just hit it off": Jimmy Iovine quoted in Levy, The Perfect Thing, The Perfect Thing, p. 151. p. 151.

Phil Wiser's Apple negotiations: Author interview with Wiser. "I don't think it was more than a fifteen-second decision in my mind": Andy Lack quoted in Leonard, Devin, "Songs in the Key of Steve," Fortune Fortune, May 12, 2003, p. 54. 174 Sony Corp.Sony Music politics and "We do not have any plans for such a product": From Rose, Frank, "The Civil War Inside Sony," Wired Wired, November 2003, p. 100.

"Now Sony Music was going and empowering Steve Jobs": Author interview with Phil Wiser.

"Our smaller market share turned out to be an a.s.set!": Steve Jobs quoted in Levy, The Perfect Thing The Perfect Thing, p. 150. Jobs told Albhy Galuten about $15 million to $30 million marketing budget: Author interview with Galuten. "A lot of people at Microsoft": Author interview with Hadi Partovi.

"I've said 'no' to all of them": Irving Azoff quoted in Tam, Pui-Wing, Bruce Orwall, and Anna Wilde Mathews, "Going Hollywood: As Apple Stalls, Steve Jobs Looks to Digital Entertainment-His New Online Music Service Faces Tough Compet.i.tion; Pixar's p.r.i.c.kly Disney Ties-Courting the Eagles, No Doubt," Wall Street Journal Wall Street Journal, April 25, 2003, p. A1. "The black iPod is something I coveted": Bono quoted in Levy, The Perfect Thing The Perfect Thing, p. 106. "Somebody finally got it right": Dr. Dre quoted in Leonard, Fortune Fortune, p. 54.

Ted Cohen and Apple battles: Author interview with Cohen. s.e.x Pistols details: From Monk, Noel, 12 Days on the Road: The s.e.x Pistols in America 12 Days on the Road: The s.e.x Pistols in America (Harper Paperbacks, 2002), pp. 132133. (Harper Paperbacks, 2002), pp. 132133.

"This industry has been in such a funk": Sheryl Crow quoted in Leonard, Fortune Fortune, May 12, 2003, p. 54.

In 2003, total iTunes sales and Apple revenue: From Wingfield, Nick, and Smith, Ethan, "Apple Sells Over 25 Million Songs on the Internet," Wall Street Journal Wall Street Journal, December 16, 2003, p. D5.

"People think we knew the iPod was just going to be a success": Author interview with Tony Fadell.

Vince Carter, d.i.c.k Cheney, Aaron Brown, George W. Bush using iPods: From Levy, The Perfect Thing The Perfect Thing, pp. 26, 2829, 31, 33.

Bob Dylan and David Bendeth quotes: From Levine, Robert, "The Death of High Fidelity," Rolling Stone, Rolling Stone, December 27, 2007, pp. 1518. December 27, 2007, pp. 1518.

sold more than 4 billion songs: NPD Group retail study, from apple.com.

Record executives privately started likening Apple to MTV: Confidential source.

"[Jobs's] stock went from $8 billion to $80 billion": Author interview with Roger Ames.

"He feels they got cheated": Confidential source.

"Stealing music is not [what's] killing music": Author interview with Robert Pittman. 181 "Who Let the Dogs Out?" vs. "Stacy's Mom": Author interview with Steve Greenberg.

Big Music's Big Mistakes, Part 7: The RIAA Lawsuits Charli Johnson background: From author interview with Johnson as well as Knopper, Steve, "RIAA Will Keep on Suing: The Music Industry Has Targeted 11,456 Illegal Downloaders-Has It Done Any Good?," Rolling Stone Rolling Stone, June 9,2005, p. 26.

More than 38,000: From RIAA, as of late 2008.

"But I know one thing": Scott Ba.s.sett quoted in Knopper, Steve, "261 Music Fans Sued: Record Biz Busts Everyday People," Rolling Stone Rolling Stone, October 16, 2003, p. 25. "My stomach is all turning": Brianna LaHara quoted in Mongelli, Lorena, "Music Pirate: N.Y. Girl, 12, Sued for Web Songs Theft," New York Post New York Post, September 9, 2003, p. 1.

"We knew that the press would find poster children as a result of this program": Cary Sherman quoted in Knopper, Rolling Stone Rolling Stone, October 16, 2003, p. 25. Settlement figures, from RIAA.

"These are very nasty one-sided cases": Author interview with Ray Beckerman.

BigChampagne.com peer-to-peer numbers courtesy of Eric Garland.

Roger Ames's opposition: Author interview with Hilary Rosen, confidential source, Leeds, Jeff, "Warner Strategy Set Pace for Action on Downloaders," Chicago Tribune Chicago Tribune, September 14, 2003, p. 9. Series of meetings in New York and Sony Music headquarters: Author interviews with three confidential sources.

"I think everybody was on board with the lawsuits": Rosen quoted in Knopper, Rolling Stone, Rolling Stone, June 9, 2005, p. 26. "Everyone felt like it was too bad": Confidential source, Ibid. Chelsea and Cindy Lundstrom, Ibid. June 9, 2005, p. 26. "Everyone felt like it was too bad": Confidential source, Ibid. Chelsea and Cindy Lundstrom, Ibid.

"It's effective-at trying to bully people": Jason Schultz quoted in Knopper, Steve, "RIAA's Campus Crackdown," Rolling Stone Rolling Stone, April 5, 2007, p. 15.

"It seems like the punishment is way disproportionate to the crime": Confidential source.

"The answer would have been so easy": Author interview with Thomas Middelhoff.

"The lawsuit stopped me from downloading music": Charli Johnson quoted in Knopper, Rolling Stone Rolling Stone, June 9, 2005, p. 26.

Chapter 6 20032007: Beating Up on Peer-to-Peer Services Like Kazaa and Grokster Fails to Save the Industry, Sales Plunge, and Tommy Mottola Abandons s.h.i.+p Raid on Phil Morle's home and office: Author interview with Morle.

60 million, including 22 million in the United States: From Woody, Todd, "The Race to Kill Kazaa: The Servers Are in Denmark. The Software Is in Estonia. The Domain Is Registered Down Under, the Corporation on a Tiny Island in the South Pacific," Wired Wired, February 2003, p. 104. Downloaded some 370 million times: From Rosenbush, Steve, "Skype: On the Block: The Web Phone Service Has Discussed a $3 Billion Deal with News Corp., but an IPO May Be the Most Likely Scenario," businessweek.com, August 10, 2005. [S]hadowed owner Bermeister, backpack cameras, and an $8 million mansion: From Montgomery, Garth, "When the Music Stops," The Age The Age, March 23, 2005, page number unknown. "It was a tough time": Author interview with Bermeister.

Kazaa background and "I hired actors to come here": From Woody, Wired Wired, February 2003, p. 104.

"21st-century piratical bazaar" and "the sheer magnitude of this haven for piracy is overwhelming and unknowable": From Metro-Goldwyn-Mayer Studios Inc. et al. vs. Grokster Ltd. et al. Metro-Goldwyn-Mayer Studios Inc. et al. vs. Grokster Ltd. et al., US District Court, Central District of California, October 2, 2001.

Niklas Zennstrom and Ja.n.u.s Friis background: From Woody, Wired, Wired, February 2003, p. 104, and "How Skype and Kazaa Changed the Net," BBC News, June 17, 2005 (how they met at a British telecom). February 2003, p. 104, and "How Skype and Kazaa Changed the Net," BBC News, June 17, 2005 (how they met at a British telecom).

Nikki Hemming background, including Segaworld and $60 million loss: From Montgomery, The Age The Age, March 23, 2005, page number unknown. "She has done things the hard way": Author interview with Phil Morle.

"We are a utility": Nikki Hemming quoted in Johnston, Chris, "Pirate Queen: Cyber-boss Nikki Hemming Is Defiant. Her Landmark Case Against Hollywood and the Music Industry Will Be a b.l.o.o.d.y Battle. But She Says She'll Win," The Age, The Age, March 5, 2003, page number unknown. "I knew the powers of peer-to-peer": Author interview with Mick Liubinskas. March 5, 2003, page number unknown. "I knew the powers of peer-to-peer": Author interview with Mick Liubinskas.

Jeff Ayeroff and melting users' iPods: Author interview with Eric Garland. Confirmed by Ayeroff, although his recollection of the exchange is slightly different, per the footnote in the chapter.

"Shawn Fanning was genuinely a kid with a great idea": Author interview with Cary Sherman. "These were p.o.r.nographers and bad guys": Confidential source.

543 peer-to-peer file t.i.tles having to do with child p.o.r.nography: From US General Accounting Office, GAO-03-351, report to the Chairman and Ranking Minority Member, Committee on Government Reform, House of Representatives, "File-Sharing Programs: Peer-to-Peer Networks Provide Ready Access to Child p.o.r.nography," February 2003, p. 1.

"As a guy in the record industry and as a parent": Andrew Lack quoted in Hansell, Saul, "Aiming at p.o.r.nography to Hit Music Piracy," New York Times New York Times, September 7, 2003, p. 1. "It was one of the big propaganda positions": Author interview with Phil Morle.

"Being an old press guy": Author interview with Wayne Rosso. "[T]he best music file-sharing service": From Chamy, Michael, "I Want My MP3s: Audiogalaxy, Austin's Onetime File-Sharing Supernova," Austin Chronicle Austin Chronicle, January 31, 2003, p. 50. Merhej's next project, based on the same peer-to-peer platform and software, was FolderShare, which he sold to Microsoft in 2005. He works for Microsoft to this day.

"on a gigantic scale" and other background on Grokster case: From US Supreme Court, Metro-Goldwyn-Mayer Studios Inc. et al. vs. Grokster Ltd. et al. Metro-Goldwyn-Mayer Studios Inc. et al. vs. Grokster Ltd. et al., June 27, 2005.

"I've been cautioning people in the industry": Author interview with Hilary Rosen, 2005.

File-sharing numbers from BigChampagne.com.

"Kazaa lost": Author interview with Eric Garland.

MediaDefender charged major labels $4,000 to protect an alb.u.m and $2,000 for a track: From leaked MediaDefender emails and Paul, Ryan, "Leaked Media Defender E-mails Reveal Secret Government Project," arstechnica.com, September 16, 2007. "[T]he online guard dog of the entertainment world" and MediaDefender revenues: From Roth, Daniel, "The Pirates Can't Be Stopped," Conde Nast Portfolio Conde Nast Portfolio, February 2008, p. 98. "The hope is, you make the experience so poor": Author interview with Cory Llewellyn.

"In the beginning, I had no motivation against Monkey Defenders" and background on "Ethan": From Roth, Daniel, Conde Nast Portfolio Conde Nast Portfolio, February 2008, p. 98. Details of Ethan's hack into MediaDefender email accounts: Author interview with "Forrest F.," who helped circulate the emails via the Pirate Bay.

"This is a stupid industry": Author interview with Peter Sunde. Details about the Pirate Bay's role in leaking the MediaDefender emails, from Roth, Daniel, Conde Nast Portfolio Conde Nast Portfolio, February 2008, p. 98. Sum 41 and Timbaland t.i.tles: From leaked emails, posted on mediadefender.com, as of January 2008. "This is really f.u.c.ked," Randy Saaf's email quoted in Roth, Ibid.

ArtistDirect purchase of MediaDefender and founder salaries: Ibid.

"Whenever you brought up something like Napster": Author interview with Cory Llewellyn.

Offspring promotion: Author interview with Jim Guerinot.

Don Ienner receptive to internet marketing and "Whatever it takes": Confidential source. "War meetings" and "We devise a plan of attack": Ienner quoted in Philips, Chuck, "Pa.s.sion for Music Drives Columbia Chief to Make Plenty of Industry Noise," Los Angeles Times Los Angeles Times, January 29, 2001, p. C1.

"Certainly, that was the att.i.tude of majors across the board": Author interview with Mark Williams.

Robin Bechtel background: Author interview with Bechtel, and Bechtel, Robin, "The Internet Is a Fad: How the World Wide Web Changed Music," Flaunt Flaunt, May 2007, pp. 9497.

"I basically built Creed's online fan base one fan at a time": Author interview with Syd Schwartz.

"Show her a brick wall": Author interview with Ty Braswell.

"When YouTube came up": Author interview with Robin Bechtel.

"The funny part is we don't get paid anything for it": Author interview with Jamie Kitman, 2006. Panic! at the Disco using YouTube: From Hanc.o.c.k, Noelle, "YouTube Rocks," Rolling Stone Rolling Stone, July 13, 2006, p. 40. Justin Timberlake using YouTube: Author interview with Timberlake's manager, Johnny Wright, 2006. Universal, too, would find gold: From Graham, Jefferson, "Q&A with Universal Music's Rio Caraeff." USA Today USA Today, October 2, 2007, p. B2.

"We've had relations.h.i.+ps with [the labels] since the beginning of Mys.p.a.ce": Author interview with Chris DeWolfe.

"When we started out in 2002": Author interview with Martin Stiksel.

"If a record wasn't selling": Author interview with Randy Sosin.

Jessica Simpson party and "He did spend a ton of money": Author interview with Barbara O'Dair.

Sony lost $132 million: From Eaton, New York New York, March 3, 2003, p. 42. Alb.u.m sales and market share figures from Nielsen SoundScan.