02x02 - MP3s

[bunniefuu]

[electronic beeping, buzzing]

[indistinct chatter]

[narrator] It's October 2007.

One of the world's biggest bands,
Radiohead, makes a shocking announcement.

They're giving away
their new album, In Rainbows,

as an Internet download

on a pay-what-you-want basis.

It was one of the most exciting things
we've ever done, I think, actually.

[narrator] Why?

They know people are going
to illegally share their music anyway,

so why not try and beat them
at their own game?

Previous albums of yours
had been leaked on the Net.

Everything, even my record,
everything had been leaked.

[narrator] In 2007,

the music industry is in free fall,

all because of an innovation
from the previous decade,

the MP3.

A digital disruptor
that kick-starts the era of streaming

where we can now listen
to any music we choose,

whenever and wherever we want.

In 2021,

487 million people subscribe
to streaming services.

That's enough listeners
to fill Madison Square Garden

25,000 times over.

Every day,

60,000 new songs are released
on Spotify alone.

To check them all out,

you would have to listen
nonstop for 145 days.

That's 20 million new songs every year.

If they were released
as seven-inch vinyl singles

and piled on top of each other,

that's as high as the Statue of Liberty
stacked 129 times.

Streaming is big business,

about 61%
of the music industry's total revenue

of 23.1 billion US dollars.

Enough to buy a Gibson Flying V guitar

for nearly every person in New York City.

[guitar riffs]

The MP3 streaming revolution
has changed the music industry

and the way we listen to music forever,

but it's not working for everyone.

[man] It's all changed
in the last couple of years,

because people don't make
as much money out of records.

[narrator] What have we gained,

and what have we lost?

[high-pitched notes pulse]

[radio static crackles]

["In the Evening by the Moonlight,
Dear Louise" playing]

♪ When the summer day is dying
Dear Louise ♪

[woman] When this phonograph
first hit the market,

these things,
with their wax cylinder recordings,

altered forever the way
human beings enjoy themselves.

[narrator] Invented in 1887,

Thomas Edison's phonograph

means you no longer need musicians
to enjoy the sound of music.

[Edison] Mary had a little lamb
Its fleece was white as snow

And everywhere that Mary went
The lamb was sure to go

[narrator] But it's the record player,
arriving in 1930,

that really proves music
to everyone's ears.

[man] As recorded
in New Orthophonic high-fidelity sound,

Tchaikovsky's Romeo and Juliet
plays about 19 minutes.

[love theme from Romeo and Juliet
wobbles distortedly]

[narrator] With a vinyl record spinning
at 33 and a third revolutions per minute,

it's like an orchestra playing
in your living room.

[man] A new record
is stamped every few seconds.

We now have a master disc.

[narrator] Record stores are soon flooded
with everything from show tunes

to the great classical works.

The microgroove long-playing record
now began to dominate the market,

and with minor improvement,
it's been with us ever since.

[narrator] The record industry booms
through the '50s, '60s, and '70s,

thanks to a growing pantheon of artists

and their legions of adoring fans.

[upbeat rock and roll music playing]

[clicks, music stops]

But it's this little shiny disc
hitting the stores in late 1982

that provides the first clue
as to the huge changes to come.

The compact disc.

By the mid-'80s,
the CD brings music to the masses

by converting it to ones and zeros.

[beep]

Many see CDs as superior to vinyl,
and not just because they're so durable.

Let's give it the breakfast-time test.

Some honey.

Nice and sticky and runny.

Bit of coffee... to see it through.

Right, that should be it.
Let's see how it sounds.

[Trepak from The Nutcracker
plays perfectly]

Now, you can clearly hear
every note of the music,

free of hiss and scratches.

It has no noise. You know what noise is?

[narrator] In 1988,

CDs become the new standard
for listening to recorded music.

By 1993,

music industry revenue in America alone

soars to a high of $18 billion,

and 65% of that is from CD sales.

As the music industry grows fat
on revenue from CDs,

another digital revolution is underway,

the Internet.

[woman] Imagine a world
where every word ever written,

every picture ever painted,
and every film ever shot

could be viewed instantly in your home
via an information superhighway.

[narrator] Researchers
at the Fraunhofer Institute

in Munich, Germany,

are working on an exciting new idea

for this "information superhighway,"

to take the digital music files from a CD

and stream them
to a home computer over the Internet.

There's just one problem.

This is the '90s,
and Internet speeds are slow.

[dial-up tone]

Music files will have to be squeezed
by 90% for the idea to work.

In 1993, after four years
of dedicated work,

researcher Karlheinz Brandenburg
creates the MP3.

[Karlheinz] I was always trying to find
ways how to compress the music further.

Of course, there was
the normal way of doing it,

transform and quantization
and Huffman coding and all that.

Uh, but still, there was a hope
to find something else.

[narrator] How does he do it?

Through the weird science
of psychoacoustics.

Scientists have long known that
the human brain is not entirely reliable

at interpreting what we hear and see.

- [kitten mews]
- Take this image of a cat.

- [kitten mews]
- And now this one.

Notice any differences? No?

And yet the file size of the second image
has actually been reduced by 90%.

How?

Some of the color information
has been removed,

and its minute details have been
blurred and simplified.

But the brain still thinks
it's seeing a perfectly good picture,

filling in the imperfections.

Of course, if you go too far,
the image literally falls apart.

There, that's better.

This process, called lossy compression,
will change lives.

[cat meows deeply]

In years to come,

it will make it possible to stream
movies and shows across the Internet,

like the one you're watching right now.

[Netflix tudum plays]

But back in the mid-'90s...

[rewinding]

...lossy compression is used
to make song files smaller.

Now anyone with a home computer

can rip their CD collections
into huge libraries of MP3s.

[man] Down here on the campus,
it's really easy to see

thousands of MP3s
on, like, everybody's computers.

[narrator] Still, the music
is trapped inside your computer.

If only someone would invent a way
to move your MP3s onto a...

What it is, is a portable digital Walkman,

and all the songs
are stored in a microchip.

[narrator] Well, that doesn't take long.

Early MP3 players,
like this South Korean MPMan,

arrive in spring 1998,

capable of storing a whopping 12 songs.

But by October,

the Recording Industry
Association of America

unsuccessfully tries
to ban MP3 players in the USA.

It's as if they know
where this is all heading.

A huge disruption is about to occur,

courtesy of a pair of 19-year-old hackers

looking for a way to share
those little MP3 files over the Internet,

letting everyone have copies
of their music for free.

June 1999.

That's Northeastern University student
Shawn Fanning,

and this is his friend, Sean Parker,

the guy who ends up
as president of Facebook

and being played by Justin Timberlake.

Their innovative app works like this.

[reggae music playing]

Brenda rips her personal reggae collection
onto her PC,

and Bill has a thousand punk MP3s on his.

[punk music playing]

But Brenda and Bill get bored listening
to the same old music all the time.

In the old days, they would just go out
and buy a new record.

Fanning creates an app
that allows Brenda and Bill

and 80 million people like them

to connect their personal MP3 libraries

and download copies of each other's songs
to their own systems for free,

a concept called peer-to-peer sharing.

The app, called Napster,

becomes a global candy store
of free music overnight.

I would definitely describe it as my vice
for this past semester, you know.

I didn't go out to parties as much
or, you know, anything like that.

But instead, I'd just sit home
and, like, look at music.

[narrator] At campuses
like UC Berkeley in California,

Napster use becomes an epidemic.

[woman] We find, on average,

that 70 to 90% of their network bandwidth
is being used by peer-to-peer traffic.

[narrator] Napster gets so big so fast,
it grabs the attention

of one of the biggest heavy metal bands
in the world,

Metallica.

- [heavy metal music plays]
- And the monsters of rock are not happy.

We learned that all
our previously recorded copyright songs

were, via Napster,
available for anyone around the world

to download from the Internet
in a digital format known as MP3.

In fact, in a 48-hour period
where we monitored Napster,

over 300,000 users
made 1.4 million free downloads

of Metallica's music.

[narrator] It's no wonder drummer
and band cofounder Lars Ulrich is upset.

Metallica claims there are
almost 700,000 ill*gal downloads

of their songs every day.

Since Napster's launch in 1999,

that's roughly 150 million downloads,

which equates to a huge loss
of revenue for poor old Metallica.

For that amount,
they could afford 15 Learjets,

30 yachts...

[foghorn blares]

...or five million bottles of Jack Daniel's.

[woman] The court battle centers over
whether Napster could be held responsible

for what its patrons did.

[narrator]
Throughout the later legal battle

between Metallica and Napster,

Lars catches flack for standing
in the way of Internet freedom

and for, well,
being a spoiled, rich rock star.

[reporter] What's your beef
with Metallica then?

Why not let the people listen to music?

[narrator]
But to music industry observers,

it's obvious
that the primary use of Napster is piracy.

As more artists announce lawsuits,
it's game over.

In July of 2001,

Napster is shut down.

But the MP3 is here to stay.

[woman] The newer generation,
it will never occur to them

that once they have it for free,
that they need to go out

and buy it and compensate the writers.

[narrator] It's not like
ill*gal music sharing stops.

This wasn't software that was written
by a Nobel Prize winner.

This was written by a college kid,

and the... the technology,
that genie's out of the bottle.

[narrator] MP3 sharing and MP3 players
become a worldwide craze,

and the genius behind Apple, Steve Jobs,

watches with great interest.

We're introducing a product today,
and that product is called iPod.

iPod is an MP3 music player,

has CD-quality music,

but the biggest thing about iPod

is it holds a thousand songs.

Now, this is a quantum leap

because, for most people,
it's their entire music library.

This is huge.

[Tchaikovsky's 1812 Overture playing]

[narrator] To load up their iPods,

users are supposed
to import songs from Apple's iTunes,

which converts tracks
from legally bought CDs to MP3s.

But in practice,

vast libraries
of illegally downloaded MP3s

find their way onto the little devices,

and sales of Apple's MP3 player soar.

It's the cutest little thing
I've ever seen.

[narrator] In 2002,

Jobs strikes a deal
with the big record companies

to sell music online

using the next-generation MP3,

the, wait for it...

MP4.

- [bell dings]
- [audience cheers]

The iTunes Store hopes to make
digital-music downloads respectable,

selling songs legally.

But the public isn't buying it, literally.

MP3 sharing triggers a sharp fall
in record-industry revenues,

from a high in 1999 of $25.2 billion...

to $14.8 billion in just over a decade.

Sir Mick Jagger rings the alarm bells.

People only made money
out of records for a very small time.

There was a small period
where people did get paid.

And they got paid very handsomely,
and everyone made money,

but now that period is gone.

[narrator] But in Sweden,

another innovator is watching
the disaster unfold.

Daniel Ek,
a young Swedish tech entrepreneur,

comes up with a way to transform
the way digital music is sold and shared.



and what we're doing is essentially
taking those 95% that are ill*gal

and turning them into a legal environment
where the industry actually makes money.

[narrator] Ek thinks people will prefer
playing songs streamed from the Internet

without saving them as files,

and since MP3s come with a license fee,

he chooses a new, free compression format
called Vorbis for his app,

Spotify.

In Ek's vision for the industry,
you won't own any music at all.

You won't have to deal
with vinyl or CD collections

or even drives full of files.

You'll just rent the ability to listen
to whatever you want, when you want it,

on a subscription basis.

[Dance of the Sugar Plum Fairy
from The Nutcracker playing]

Well, we just believe
that people will care more

about access than ownership.

[narrator] Daniel Ek is right.

Launched in 2006,

within nine years,

Spotify boasts almost 90 million users,
more than Napster at its height.

And, proving it was a good idea,

in 2015,

Apple gets in on the game
and starts up its own streaming service.

And just like that,

streaming MP3s becomes
a part of our everyday lives.

But one major artist takes a stand
against the subscription model,

believing that music
should be owned, not rented.

Listening to Taylor Swift's back catalog
just got a bit more difficult.

The singer has removed all of her music
from the streaming service Spotify.

If I was in the position of Taylor,
I'd have done the same.

- [announcer] Jay-Z.
- [crowd cheering]

Nicki Minaj.

Rihanna.

[narrator] Other megastars move
to control access to their music,

launching a separate subscription service,

Tidal.

We wanna create a better service
and a better experience

for both fans and artists.

[narrator] Everyone is streaming,

but although you might dance
like no one is watching,

someone or something is.

[static crackling]

The streaming services
know exactly which songs you like

and when you hit the skip button.

Then algorithms take that data
and give you more of the music you like.

Sounds great, right?

But it also means you're less likely
to discover new, independent bands

that the algorithm isn't trying to sell.

And today,

countless pop songs are now being written

to fit the algorithm.

You might have noticed
that songs are getting shorter

and that they also tend
to start with the chorus.

That's the algorithm at work.

[metal clunks]

Despite accusations that streaming
could be blunting the edge of pop,

it's never been easier
to listen to any music you want.

And the streaming platforms,
especially Spotify,

explode in popularity.

Taylor Swift and even Jay-Z,

one of the founders
of the competing platform Tidal,

return to Spotify.

Thanks to the MP3 revolution

and, from it, the advent of streaming,

music industry profits rise
from their low point in 2011

of $14.8 billion

to a far healthier $23.1 billion in 2020.

Streaming may have saved
the music industry from collapse.

[electricity buzzes]

But what works for the industry
may not be working for musicians.

Unless you're Beyoncé, life is hard.

The only person getting screwed
is the artist.

And that's the way it always is.

The artist is the last one
to get treated fairly, you know?

[electronic buzzing, beeping]

[narrator] Today, record companies
generate enough revenue from streaming

to buy 8.3 million Gibson Flying Vs
every year...

[unenthusiastic riff plays]

...while artists on Spotify get
thousandths of a cent per play

and would need
nearly half a million streams

to buy even one Flying V guitar.

[guitar string twangs]

Before streaming,

bands could make money,
even with moderate record sales.

Nowadays,

they need to play live to make ends meet.

All well and good, until a pandemic hits.

I don't think no artist is happy
with how they're getting paid

from, you know,
the streaming platforms today.

The business is set up

for the corporations to make money
and the artists to just work.

[narrator] For now,
musicians are waiting to see

what new economic models emerge

from this brave new digital world.

We're kind of slowly adapting
and, you know, going with the flow

and, you know, just putting things out

like, um... little appetizers, you know?

[narrator] The wrestling match
between artists, labels,

and streaming services is ongoing,

but they will have to find a solution
that keeps everyone happy,

because streaming
isn't going anywhere soon.

Still, MP3s, the invention
that almost destroyed the music industry,

could now be showing it
a way towards the future.

[electronic music plays]