Inside Job

Inside Job: Piracy in the Music Industry (Part 1)

13 September 2009

In hearings held before the US Congress, European parliaments and a legion of industry panels over the years, one of the most alarming war stories of the battle against online music pirates is the tale of the track that's leaked before it's official release.

A number of tracks have suffered this fate in recent years. Just last week, Jay-Z announced he was moving forward the release date for The Blueprint 3 after online leaks had supposedly ruined his label's marketing plan (though that link, of course, and this story you're reading now are acting as a form of advanced publicity. Jay-Z himself commented on the leak by saying fans should "enjoy" what he interpreted as a "preview".)

What's rarely stated, however, is how exactly music that theoretically no one but the artist and his label should have are getting leaked to start with. Certainly music fans and The Pirate Bay aren't to blame. Many have pointed a finger at advance copies made available to music reviewers, radio stations, DJs and other industry insiders (about which we'll have more to say shortly).

Without insiders, pre-release leaks wouldn't exist. But it's not often talked about. From private conversations with labels, producers, artists and agents, I know it's every bit as significant to their bottom line as the "ordinary" piracy of tracks legitimately purchased by consumers after their release. But maybe it's not PR-friendly for the industry to point the finger of blame over the issue straight back at the industry itself.

A couple of ongoing legal cases this week, however, have pushed the issue of piracy by the music industry itself to the forefront.

One of the major piracy groups which specialized in pre-release leaks, DV8, was broken up back in June in the UK as members were picked up by City of London Police. On Friday, the p2p news site reported that a "label executive" was picked up in conjunction with the case "in late August". Unfortunately, their report relies on unnamed sources, but this paragraph in particular spells out why industry insiders are the indispensible cornerstone of pre-release leaks:

DV8, like many release groups, specialized in pre-release piracy - in this case the publication of music on the Internet before official release dates… In order to put the material on to the Internet in this way, Scene groups and individual uploaders need contacts somewhere in the supply chain, so-called industry insiders who act as suppliers for pre-release material. In the case of the OiNK uploaders, they had simply purchased CDs legitimately from online retailers who shipped products a day or two early, possibly in error. But to have the really juicy leaks, people more deeply involved in the supply chain can prove invaluable. (emphasis added)

And in an unrelated case back in the United States, last Wednesday the Feds swooped down on what they claimed were the ringleaders of Rabid Neurosis, or RNS, a piracy ring relying on "music industry insiders" for their wares - and according to some, the originators of the MP3 file sharing scene back in the late 1990s.
According to the Federal indictment filed September 9, 2009 in the Eastern District of Virginia:

In addition to being a piracy group, RNS was a "pre-release group"; that is, the group was often the original source or "first-provider" of pirated music that was distributed on the Internet. Members of RNS sought to acquire digital copies of songs and albums before their commercial release in the United States. The supply of pre-release music was often provided by music industry insiders, such as employees of compact disc manufacturing plants, radio stations, and retailers, who typically receive advance copies of music prior to its commercial release. (emphasis added)

We're still sorting through indictment, but so far it seems to be a fascinating lil exposé on how a song makes it from the CD pressing plant to the blogs - basically, just like legitimate music industry distribution, from insiders to the public. More to come.

posted sep 13 by terry matthew in news, piracy, rns, dv8

Inside Job: Meet the Pirates (Part 2)

14 September 2009

The Feds took down piracy crew Rabid Neurosis, or RNS, last week. According to most reports, RNS had retreated underground in early 2007, when the group was publicly fingered for uploading Eminem's album Encore more than a month before it was due to hit the shops. But for close to a decade, they were responsible for uploading an estimated 6,000 albums+ per year and were behind the pre-release leak of hundreds of tracks.

How did they get them? Simple: at least one of the members worked in a peripheral but crucial link in the music industry's distribution chain.


It's interesting to dwell on the history of RNS, if only because the structure worked out by the founders in the late 1990s is the same way pirated music gets to the "average" downloader today.
It's amazing that few people who are actually in the industry understand how this works. Often, they see a link to one of their songs on a blog and assume that the same person ripped it, uploaded it and posted the link. In reality - then as now - as many as a hundred people may have had a hand in getting that single song to "market", so to speak.

The MP3, as we came to know it, was developed at the Fraunhofer Society for the Advancement of Applied Research. The first MP3 encoder, l3enc, was released on July 7, 1995, and the filename extension ".mp3" designated a week later.

It took about two years for MP3s to become widely used. In 1997, Winamp was released. This dovetailed nicely with the explosion in commercial usage of the internet, which made home computers something more than a box for playing games and writing book reports.

Because of the new MP3 format, music could now be compressed down to as little as 1 or 2 megabytes. When the hippest nerd in your neighborhood owned a blazingly fast 56k dial-up modem, things like that mattered.

Rabid Neurosis (RNS) grew out of the warez trading subculture on IRC and was one of the original (if not the original) MP3 trading crews. A crew usually formed as a result of internet politics - ostracism, infighting or simply elitism, and was typically considered legit once they controlled their own FTP server. In the beginning, this served as a distribution point to specially invited members. Later, RNS controlled several FTP servers, with known members gaining access to a special RNS-only server which contained all of their accumulated trophies of MP3s.

Other IRC denizens were rewarded with access to the RNS guest FTP servers. Still later, "couriers" were rewarded with limited RNS privileges for uploading RNS-ripped files on sites across the world.


All of this was free. Why did they do it? Because they could. The indictment against the leaders of RNS makes much of the "personal benefit" members derived from access to their private RNS-only FTP server, but that's legalspeak to secure hefty fines for copyright infringement during the penalty stage if the defendants are found guilty.
In truth, anthropologists and other social-types have written an incredible amount about subcultures and the reward mechanisms that surface in every group, whether it's a Fortune 500 company or a church bingo club. If the average pirate receives a vicarious thrill from providing free MP3s and seeming "in the know" to his peers, to organized crews like RNS the reward/reputation benefits must have felt like a hit of angel dust to the back of the brain.

And rewards really don't work without some form of competition. By 1999, the RNS was in a hilariously insipid but nonetheless ferocious battle with other crews such as apocalypse (sic) Production Crew (aPC) over who could upload more music, with better quality sound, and before anyone else - and often before the record companies, too. Sometimes, the crews made "peace treaties" with each other (srs bznz, amirite?), but were rocked by the same betrayals and petty squabbles that lead to wars in any subculture that takes itself 1000 times more seriously than anyone else does. This is a message from the RNS leader ("AlCapone" - still srs bznz) from the year 2000, which sounds like it could be written by any angry 17 year old pissed off that his favorite band is selling out:

a letter to the scene
I am deeply saddened by the current state of the so called scene as we know it, a few years ago it started off with cda, dac, rns, and a few other groups, back then it was ripping single tracks and putting them up in 1.44m rar/zips, putting them all on one site (World Domination, thanks to Nitecrew & Greaser) and it was only for the tracks that people wanted… enough with reminiscing, I have had the privelege of being able to watch it from a birds eye view for the past year now, and the scene went from sugar to shit over the past 4 years, now all it's about it see what we can put up on the sites, doesn't matter how many tries, doesn't matter if anyone is going to ever download it, nothing matters except that it's new and people can brag about it, I'm not saying we haven't contributed to this, but it's the scene that's made it this way, everyone has tried to convert the mp3 scene into the warez scene, and brought the same damn attitudes, same 0day bullshit , same fucking lameness that made the warez scene so gay, and nobody gives a fuck about it, well, honestly, I can't say I'm impressed on how the newer people to the scene have made it such a fucked up place to contribute to. Quit with the bullshit, just all of you shut the fuck up, anyone who is putting anything besides a review of the cd in the notes section, please, do everyone a favor and just take your tongues and slam them in the trunk of a car, most of the people who are talking shit don't even know where the scene originated, or care. I know this won't affect many people, nor should it, too busy with the bullshit to actually take a look at what terrible shape the scene is in. I used to take part in this fun, but it's not until you take a break, take a breath, and then take a look at it before you realize what a circle of bullshit has been created.

- Al Capone, President of RNS from 97-99, council member since 96, member for the rest of the scene's life, one of the major 'founders' of the scene as you know it.

rns would like to thank all of its helpers over the years, all of the people who have contributed to us in many ways, you are not forgotten, and your help is much appreciated. to those who hate us, why are you here? we are in this game for the love of music not for the competition unlink some other ghetto group out there with big ego's *hint hint* expect the best out of us for the y2k, for we will never die.


It was at the RNS servers that most of their MP3s started their dissemination down to the masses. From the RNS-only server, they were distributed to the RNS guest servers, and from there proliferated to other FTP sites, IRC channels, BBSs and USENET groups. The end user usually saw the "RNS" appended to the filename without having a clue what it meant, but those in the scene knew.
Now, the "end user" in 1998 was really a pretty small pool of individuals. Most of these things like FTP and IRC and BBC and USENET were beyond the reach of the average AOL subscriber. Their outré nature meant that you really had to learn a few computer protocols if you really wanted to sink your teeth into the soundtrack to Titanic (the best selling album of 1998, doncha know?)

Time being money, it was much easier to just suck it up and throw down 13 bucks at Sam Goody for the right to experience Celine Dion's voice stripping a layer of your skin off.

And then something new came along: Napster. You didn't need to call Tech Support to find out your news server's IP address or learn how to join and unpack multi-segmented ZIP files. You double clicked on the Napster client and, magically, thousands upon thousands of files appeared.

Napster became the new terminal - the final distribution point where the average downloader found his "free" music. The names change but it's not much different today. In the late '90s it was Napster. In the early '00s, Kazaa. Then BitTorrent. And finally, around 2004, the explosion in blogging and sudden proliferation of cheap or free upload services like RapidShare made the blog the final link in the chain, from elite pirate crews like RNS on down to the average guy behind a computer.


But we've jumped ahead of ourselves. RNS members were just teenage geeks (and we know today that they were indeed teenagers). How did they obtain and upload full albums months ahead of their official release?
They could only be obtained from someone in the music industry itself. And the industry knew this. Unfortunately, they concentrated their attention on what they thought were the most obvious suspects, the real culprits went undetected and the pre-release leaks went on for years.

The first suspects were music reviewers for trade and general circulation publications. These people are often the biggest music fans and collectors that there are, and are typically poorly paid when they're paid at all. Others suspected radio DJs as supplying RNS and other pirate crews with pre-release leaks. Contrary to popular belief, radio DJs are damn near as poorly paid as music reviewers.

The presumption of guilt upon reviewers and DJs has drastically changed the way the music industry releases promos, probably to the detriment of the health of the industry overall. Promos are often sent simultaneously with the public release to stores, depressing pre-sale hype. There's even a label out there which runs a massively popular digital download store that, at least as of a year ago, sent out their promos on special copy-protected CDs (which I discovered as I tried to play the CD in iTunes, as I no longer really use my stereo. It came out as a searing blast of white noise.)

The industry's paranoid precautions had little effect on RNS, because music reviewers and radio employees weren't the ones leaking the tracks.

Two members of RNS (only one is identified in the indictment) worked in a hiliariously low-glamour but crucial point in the industry's distribution chain: a CD manufacturing plant. From last week's Federal indictment against Bennie Glover (aka "Adeg"):

GLOVER, along with another RNS member who used the nicknames "St. James" and "Jah Jah," worked for a compact disc production plant in Grover, North Carolina that produced music albums for, among others, Universal Music Group. GLOVER and "St. James" acquired many albums during the course of the conspiracy, including nearly all the major rap (and some pop/rock) pre-release albums, and provided them by various means to CASSIM weeks or often months prior to their commercial release.

Glover and his pal "St. James" weren't the only ones, of course. Sometimes the CDs were legitimately purchased by RNS members overseas, before the official American release date (the industry practice of a staggered release has since been discontinued). But more often, it was folks like these - low-wage or low-glamour employees at warehouses, duplication plants, studios and the like - that completely changed and nearly destroyed the music industry.

posted sep 14 by terry matthew in news, piracy, rns, dv8

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