Appetite For Self-Destruction Part 12

Mottola's $4 million mansion and marriage to Thalia: From Eaton, New York New York, March 3, 2003, p. 42.

Mottola-Stringer relations.h.i.+p: Ibid.

"Tommy didn't 'manage up' well": Confidential source.

"Why the f.u.c.k am I dealing with this guy?": From Eaton, New York New York, March 3, 2003, p. 42.

"The Tommy-Donnie-Mich.e.l.le management structure": Author interview with Jim Guerinot.

Sony Music shrinking and employee numbers: From a.n.a.lysis of Securities and Exchange Commission reports from Sony, Vivendi Universal, EMI, and Warner, 2000 to 2004, compiled by Bill Werde and Charley Rogulewski. Used with permission.

"icon of the music industry": Press release quoted in Eaton, New York New York, March 3, 2003, p. 42. "It was the end of an era": Confidential source.

"We speak the same language": Howard Stringer quoted in Smith, Ethan, "Two Cost-Cutting TV Executives Will Run Music Monolith," Wall Street Journal Wall Street Journal, November 7, 2003, p. B1.

AOL Time Warner-Bertelsmann merger talks: From Peers, Martin, "Bertelsmann, AOL Continue Music-Deal Talks," Wall Street Journal Wall Street Journal, September 18, 2003, p. B8. New York airport meeting: From Smith, Ethan, Wall Street Journal Wall Street Journal, November 7, 2003, p. B1.

30 percent combined market share: Calculations based on Nielsen SoundScan data.

"One side of the room was Clive and his people": Author interview with Joe DiMuro.

Sony employees' skepticism of Smellie: Confidential source.

Andrew Lack's peer-to-peer ideas and "Andy was the key mover and shaker": Author interview with Wayne Rosso.

Publicists...watched budgets: From author interview with Lisa Markowitz, then-Epic publicity executive.

EMI plant closings: From Timmons, Heather, "EMI to Cut Artist Roster and Close 2 CD Plants," New York Times New York Times, April 1, 2004, p. W1. Cinram International purchase of Warner manufacturing: From "AOL Time Warner Agrees to Sell Its DVD/CD Manufacturing and Physical Distribution Businesses to Cinram International for $1.05 Billion," AOL Time Warner news release, July 18, 2003. Glenayre buying Universal plants and warehouses: From "Glenayre Announces Acquisition Agreements," Glenayre Technologies news release, May 9, 2005. Entertainment Distribution Company posts $11.4 million loss: From company earnings conference call transcript, August 7, 2007.

"Darwinian evolution took hold": Author interview with Jim Caparro. DVD sales: From Digital Entertainment Group. Blu-ray's possible impact on Terre Haute plant: From "Sony May Be Expanding Terre Haute Operations," Tribune-Star Tribune-Star, Terre Haute, Indiana, January 7, 2008, verified by Jim Frische.

Label spending on videos and "It's a very precarious and somewhat unfortunate development": Author interview with Randy Sosin. 209 mathematics of indie promotion: From Boehlert, Salon Salon, June 25, 2002.

"Costs start becoming more of a consideration": Author interview with Jeff McClusky. Clear Channel's 1,225 stations and reversal on indie promotion: From Boehlert, Salon Salon, June 25, 2002. "We were too greedy": Author interview with Bill Scull.

Eliot Spitzer's payola investigation, including Audioslave and J. Lo details and Epic email detail: From Knopper, Steve, "Payola Probe Rocks Biz," Rolling Stone Rolling Stone, August 25, 2005, p. 12.

"condoned or partic.i.p.ated in pay-to-play" and details about Don Ienner and Charlie Walk in Los Angeles Times Los Angeles Times investigation: From Duhigg, Charles, "Hitmakers Implicated in 'Pay for Play' Plans; Investigators Looking into the Corruption Charges Found Evidence Against Two Sony BMG Senior Executives, Sources Say," investigation: From Duhigg, Charles, "Hitmakers Implicated in 'Pay for Play' Plans; Investigators Looking into the Corruption Charges Found Evidence Against Two Sony BMG Senior Executives, Sources Say," Los Angeles Times Los Angeles Times, December 4, 2005, p. A1.

Ashley Alexandra Dupre receiving more than $206,000 via Mys.p.a.ce song downloads: From Lemire, Jonathan, "Hooker's an Online Hit-to the Tune of $200G," New York Daily News New York Daily News, March 15, 2008.

Radio & Records 2006 "adds" data: Courtesy of the magazine and John f.a.got. "Songs aren't just getting on the radio as quickly as they did before": Author interview with Doug Podell, 2006. "The labels are scrambling": Confidential source, 2006. 2006 "adds" data: Courtesy of the magazine and John f.a.got. "Songs aren't just getting on the radio as quickly as they did before": Author interview with Doug Podell, 2006. "The labels are scrambling": Confidential source, 2006.

Tower Records bankruptcy background and "We happened to be funny-looking": From Knopper, Steve, "Tower Records Shuts Its Doors," Rolling Stone Rolling Stone, November 2, 2006, p. 16.

"I lost a lot of money in Argentina and Mexico": Author interview with Russ Solomon, 2006. "Russ Solomon didn't believe in digital music": Author interview with Lisa Amore.

Wal-Mart cutting shelf s.p.a.ce by 20 percent, and label sources predicting another 20 percent in 2008: From Knopper, Steve, "Wal-Mart Demands CD-Price Cut," Rolling Stone Rolling Stone, April 3, 2008, p. 16.

"the worst business...in the most challenged sector": EMI internal email from Guy Hands, provided by confidential source. "Bloodbath": Confidential source.

Bronfman, Messier, and Seagram: From Smith, Ethan, and Martin Peers, "Cost Cutting Is an Uphill Fight at Warner Music," Wall Street Journal Wall Street Journal, May 24, 2004, p. B1. $42 billion sale price: From "Music Tyc.o.o.n Continues to Deal in Entertainment Industry," Sunday Business Sunday Business, London, circulated on Knight Ridder Tribune Business News wire service, November 30, 2003. Family fortune dropping from $6.5 billion to $3 billion: From Adler, Stephen J., "Facing the Digital Music," Business Week Business Week, May 22, 2006, p. 64. "I remember my mother saying as I was a kid": Author interview with Edgar Bronfman Jr.

"Technology allows more people to get more music": Author interview with Edgar Bronfman Jr.

Warner Music laid off 400 employees: From Christman, Ed, "Taking Stock," Billboard Billboard, May 19, 2007, p. 11. Leigh l.u.s.t background: Confidential source. "This industry is like George W. Bush": Author interview with Steve Gottlieb. Lyor Cohen and Edgar Bronfman Jr. salaries: From Warner Music Group Corp. Schedule 14A filing with Securities and Exchange Commission, January 25, 2008.

Jimmy Iovine background and "if you bring somebody tea one hundred times": From Trachtenberg, Jeffrey A., "Jimmy Iovine Spins More Gold at Interscope," Wall Street Journal Wall Street Journal, February 22, 1996, p. B1. "You don't want to make house music house music": Confidential source.

Ted Field and $15 million: From Roberts, Johnnie L., "Field Marshal: The Man Behind Gangsta Rap Is Mild-Mannered, Old-Money, and Into Politics. Is Interscope Records' Ted Field a Menace to Society?" Newsweek Newsweek, February 10, 1997, p. 44. Marion "Suge" Knight and Death Row Records background, including Knight's affiliation with the Bloods: From Boucher, Geoff, "Suge's Next Act? The Rap Mogul's Empire Has Dwindled, but He Sees Only Possibilities," Los Angeles Times Los Angeles Times, December 4, 2002, p. E1.

"He did a deal with the devil": Confidential source.

"Many people say these [record] companies are a bunch of ugly ducklings": Author interview with Doug Morris, 2005.

Revenue estimates from TV, movie, and video game licenses: From Goodman, Fred, "Rock's New Economy: Making Money When CDs Don't Sell," Rolling Stone Rolling Stone, May 29, 2008, pp. 2224. Guitar Hero Guitar Hero and and Rock Band Rock Band sales: From Halperin, s.h.i.+rley, "Rock Game Nation," sales: From Halperin, s.h.i.+rley, "Rock Game Nation," Entertainment Weekly Entertainment Weekly, September 5, 2008, pp. 3840.

Worldwide ringtone revenues: From Juniper Research. Will.i.am hiring engineers: From author interview with will.i.am, 2006.

Jay-Z's $10 million salary as president of Def Jam: From Leeds, Jeff, "Jay-Z to Quit His Day Job as President of Def Jam," New York Times New York Times, December 25, 2007, p. C3.

"Going into a major record label": Author interview with Jamie Kitman. Labels' 5,000 layoffs: From Eliscu, Jenny, "Labels' Unhappy Holiday," Rolling Stone Rolling Stone, January 24, 2008, pp. 910.

Details on Simon Baeycrtz, Robert Wieger, and Barry Feldman: From Knopper, Steve, "Rock & Roll Refugees," rollingstone.com, July 22, 2008.

Debbie Southwood-Smith background and quotes: Author interview with Southwood-Smith.

Big Music's Big Mistakes, Part 8: Sony BMG's Rootkit "software that tricks an operating system": From Roush, Wade, "Inside the Spyware Scandal: When Sony BMG Hid a 'Rootkit' on Their CDs, They Spied on You and Let Hackers into Your Computer. What Were They Thinking?" Technology Review Technology Review, May 2006, pp. 4857. Sony BMG released 4.7 million CDs containing rootkits, and 52 t.i.tles: From Smith, Ethan, "Sony BMG Pulls Millions of CDs Amid Antipiracy-Software Flap; Recall Could Dent Sales of Artists and Retailers During Key Holiday Season," Wall Street Journal Wall Street Journal, November 17, 2005, p. D5.

"My sister and I will no longer buy any Sony products": Quoted in Zeller, Tom Jr., Railing at Sony BMG, Disguised as a Review," New York Times New York Times, November 21, 2005, p. C3. "Most people, I think, don't even know what a rootkit is": Thomas Hesse on National Public Radio broadcast, quoted in Mitch.e.l.l, Dan, "The Rootkit of All Evil," New York Times New York Times, November 19, 2005, p. C5.

"It was the highest debut of Neil's career": Rick Rubin quoted in Hirschberg, Lynn, "The Music Man," New York Times Magazine New York Times Magazine, September 2, 2007, pp. 2650.

"It seemed to us that the record was just tainted": Author interview with Ethan Iverson.

"If you shed a tear for every dollar spent": Author interview with Talal Shamoon.

"That's why the technology was used" and "something deep": Confidential source.

Security experts quoted in Technology Review Technology Review: From Roush, Technology Review Technology Review, May 2006, pp. 4857.

SunnComm recollections and "It took our revenue stream right out from under us": Author interview with Bill Whitmore.

Blaming Thomas Hesse and Michael Smellie: Confidential source. "When we found out the Neil Diamond record had rootkit technology": Author interview with Steve Greenberg.

Recall costing $2 million to $4 million: From Smith, Wall Street Journal Wall Street Journal, November 17, 2005, p. D5. Fifteen cla.s.s-action suits, $50 million settlement: Estimate in Smith, Ethan, "Sony BMG Agrees to Settle 15 Suits Over CD Software," Wall Street Journal Wall Street Journal, December 30, 2005, p. A14. "They don't do it anymore": Author interview with Steve Greenberg.

Chapter 7 The Future: How Can the Record Labels Return to the Boom Times? Hint: Not by Stonewalling New High-tech Models and Locking Up the Content Eric Nicoli background: From Martinson, Jane, "Eric Nicoli: Music Boss Who Went from Choc to Rock," The Guardian The Guardian, January 27, 2006, p. 31.

"In all of our research": Eric Nicoli quoted in EMI news conference, audio webcast from April 2, 2007; other details about the press conference come from this source.

Barney Wragg background: Author interview with Wragg.

"I realized that as an industry we'd kind of been smoking crack": Ibid.

a.n.a.lysis of EMI struggles: Paraphrased from author interview with Ty Braswell.

Barney Wragg did research and worked with Steve Jobs and Eddy Cue: From author interview with Wragg.

"In a moment of desperation": Confidential source.

Eric Nicoli's spending: From Dugan, Emily, "Money to Burn: How EMI's Profligate Bosses Filled a House with 20,000 Worth of Candles," The Independent The Independent, November 30, 2007, p. 27.

Wragg...leaving the company for reasons he wouldn't divulge: Author interview with Wragg.

Steve Jobs's manifesto and quotes: From Jobs, Steve, "Thoughts on Music," apple.com, February 6, 2007.

"My instinct is it will beef up the digital sales pretty significantly": Author interview with Ian Rogers.

"spreadsheet that plays music": Ian Rogers quoted in "Convenience Wins, Hubris Loses and Context vs. Context, a Presentation for Some Music Industry Friends," October 6, 2007, blog post, fistfulayen.com "All the stuff we've been saying": Author interview with Ian Rogers.

"Digital isn't the future-it's today": Author interview with Tom Corson. Alicia Keys list of formats: Provided by BMG.

Ringtone revenues: From BMI. "We see no sign of it slowing down right now": Author interview with Rio Caraeff, 2006.

"You're doing it for the person who's in the mall and their phone rings": Author interview with will.i.am, 2006.

Edgar Bronfman Jr. speech, including Baek Ji Young and SK Telecom: From Convergence 2.0 Symposium keynote address, September 17, 2007, transcript.

Ricky Martin detail: Confidential source. Juanes promotion: From Cobo, Leila, and Ayala Ben-Yehuda, "Digital Business Heats Up for Latin Music," Reuters/ Billboard Billboard, December 17, 2007. "It is a huge, huge, huge piece of the business": Confidential source.

Jupiter Research and M:Metrics studies: From Morrison, Dianne See, "WMG Reports Fall in Ringtone Sales; Mobile Remains Soft, mocoNews mocoNews, February 7, 2008. "It doesn't seem like anything that's going to have a long-term sustained growth": Author interview with Peter Paterno, 2006. "People say, 'Ringtones are fas.h.i.+on'": Author interview with Mark Donovan.

"I don't think the research indicates": Confidential source.

"It's mind-blowing-I'm listening to music constantly": Rick Rubin quoted in Hiatt, Brian, "Biz Bets on Subscriptions," Rolling Stone Rolling Stone, December 13, 2007, pp. 1718.

"If you're a ma.s.sive music fan": Author interview with Ted Cohen. Total Music detail: From "Universal Music Takes On iTunes: Universal Chief Doug Morris Is Enlisting Other Big Music Players for a Service to Challenge the Jobs Juggernaut," Business Week, Business Week, October 22, 2007. October 22, 2007.

Steve Jobs may be coming around to subscriptions: From Hiatt, Rolling Stone Rolling Stone, December 13, 2007, pp. 1718.

Description of The Long Tail The Long Tail theories: From Anderson, Chris, theories: From Anderson, Chris, The Long Tail: Why the Future of Business Is Selling Less of More The Long Tail: Why the Future of Business Is Selling Less of More (New York: Hyperion, 2006). "I pa.s.sed out twenty copies of Chris's book": Author interview with Erin Yasgar. (New York: Hyperion, 2006). "I pa.s.sed out twenty copies of Chris's book": Author interview with Erin Yasgar.

"You want to take a record label profitable quickly?": Author interview with Terry McBride.

Rhapsody/iTunes percentages from NPD Group study: Cited in Hiatt, Rolling Stone Rolling Stone, December 13, 2007, pp. 1718. "It's getting better": Author interview with Terry McBride.

BitTorrent, discussions with movie and record companies: Author interview with Ashwin Navin.

"The music companies were just paralyzed": Ibid.

Some 2,700 music retailers have closed since 2003: From the Almighty Inst.i.tute of Music Retail. "We're trying to reposition the business": Simon Wright quoted in "Steep Rent Forces Closure of LA-area Virgin Megastore," a.s.sociated Press, December 27, 2007.

Radio listeners.h.i.+p: From Arbitron.com.

"It's going to be difficult to make a lot of money": Author interview with Joe Smith.

Paramore deal and "You have to sacrifice to get somewhere": From Knopper, Steve, "Reinventing Record Deals," Rolling Stone Rolling Stone, November 29, 2007, p. 13.

"Say I was considering being the sole investor": Author interview with Steve Greenberg.

"It gives the label more incentive to work hard": Author interview with Chris Black.

"They're going to have to use 360 deals": Author interview with Chris Lighty.

Aimee Mann detail and "A lot of artists don't realize how much money they could make": From Byrne, David, "The Fall and Rise of Music: The CD? It's Dead," Wired, Wired, January 2008, pp. 124129. January 2008, pp. 124129.

"It's easy to see why bands would resist": Jamie Kitman quoted in Knopper, Rolling Stone Rolling Stone, November 29, 2007, p. 13. "My knee-jerk reaction would be 'no way'": Jordan Kurland quoted in Ibid.

Jim Griffin's tax-the-ISP plan, as well as Paul McGuinness quote (from speech) and Gary Stiffelman quote: From Knopper, Steve, "Best Plan to Save the Record Biz: Bill the ISPs, Make File-Sharing Legal," Rolling Stone Rolling Stone, May 1, 2008, p. 51.

"A day that will live in infamy": From Peisner, David, "The October Surprise," SPIN SPIN, January 2008, pp. 8286.

Radiohead quotes and comScore numbers: From Binelli, Mark, "The Future According to Radiohead," Rolling Stone Rolling Stone, January 23, 2008, p. 57.

"I'm truly saddened because I think music has been devalued": Trent Reznor quoted in Westhoff, Ben, "Trent Reznor and Saul Williams Discuss Their New Collaboration, Mourn OiNK," newyork.com, October 30, 2007.

"You see these articles about the disaster in the music business": James Mercer quoted in Peisner, SPIN SPIN, January 2008, pp. 8286.

David Byrne and Nonesuch: From Byrne, Wired Wired, January 2008, pp. 124129.

"The mixtapes were obviously very concerning": From Serpick, Evan, "How Lil Wayne became a Superstar," Rolling Stone Rolling Stone, June 26, 2008, p. 15.

"The idea of fighting it seems kind of silly": Author interview with Mac McCaughan.

Doug Morris's salary: From Vivendi S.A. Form 20-F filing with US Securities and Exchange Commission, June 29, 2006.

"If I could just make records and work with artists": Author interview with Mark Williams.

Guy Hands information and quotes: From Langley, William, "Profile: Guy Hands," telegraph.co.uk, January 20, 2008.

"The recorded music market has been declining and may continue to decline": From Vivendi S.A., Form 20-F, US Securities and Exchange Commission, June 29, 2006.

Ahmet Ertegun anecdote: From Dannen, Hit Men Hit Men, p. 252.

Doug Morris's retelling and "the truth is, that's what it's all about": Author interview with Morris, 2005.