1
00:00:06,040 --> 00:00:08,040
[electronic beeping, buzzing]

2
00:00:08,120 --> 00:00:09,440
[indistinct chatter]

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00:00:12,160 --> 00:00:14,080
[narrator] It's October 2007.

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00:00:14,800 --> 00:00:19,520
One of the world's biggest bands,
Radiohead, makes a shocking announcement.

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{\an8}They're giving away
their new album, In Rainbows,

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{\an8}as an Internet download

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{\an8}on a pay-what-you-want basis.

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{\an8}It was one of the most exciting things
we've ever done, I think, actually.

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[narrator] Why?

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

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

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Previous albums of yours
had been leaked on the Net.

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Everything, even my record,
everything had been leaked.

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[narrator] In 2007,

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the music industry is in free fall,

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all because of an innovation
from the previous decade,

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the MP3.

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A digital disruptor
that kick-starts the era of streaming

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where we can now listen
to any music we choose,

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whenever and wherever we want.

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In 2021,

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487 million people subscribe
to streaming services.

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That's enough listeners
to fill Madison Square Garden

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25,000 times over.

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Every day,

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60,000 new songs are released
on Spotify alone.

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To check them all out,

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you would have to listen
nonstop for 145 days.

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That's 20 million new songs every year.

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If they were released
as seven-inch vinyl singles

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and piled on top of each other,

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

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Streaming is big business,

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about 61%
of the music industry's total revenue

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of 23.1 billion US dollars.

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Enough to buy a Gibson Flying V guitar

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for nearly every person in New York City.

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[guitar riffs]

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The MP3 streaming revolution
has changed the music industry

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and the way we listen to music forever,

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but it's not working for everyone.

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

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{\an8}because people don't make
as much money out of records.

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[narrator] What have we gained,

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and what have we lost?

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[high-pitched notes pulse]

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[radio static crackles]

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{\an8}["In the Evening by the Moonlight,
Dear Louise" playing]

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{\an8}♪ When the summer day is dying
Dear Louise ♪

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[woman] When this phonograph
first hit the market,

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these things,
with their wax cylinder recordings,

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altered forever the way
human beings enjoy themselves.

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[narrator] Invented in 1887,

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Thomas Edison's phonograph

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

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{\an8}[Edison] Mary had a little lamb
Its fleece was white as snow

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{\an8}And everywhere that Mary went
The lamb was sure to go

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{\an8}[narrator] But it's the record player,
arriving in 1930,

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{\an8}that really proves music
to everyone's ears.

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

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Tchaikovsky's Romeo and Juliet
plays about 19 minutes.

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[love theme from Romeo and Juliet
wobbles distortedly]

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

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

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

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We now have a master disc.

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

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to the great classical works.

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

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

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

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thanks to a growing pantheon of artists

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and their legions of adoring fans.

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[upbeat rock and roll music playing]

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[clicks, music stops]

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{\an8}But it's this little shiny disc
hitting the stores in late 1982

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{\an8}that provides the first clue
as to the huge changes to come.

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{\an8}The compact disc.

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

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by converting it to ones and zeros.

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[beep]

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

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Let's give it the breakfast-time test.

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Some honey.

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Nice and sticky and runny.

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Bit of coffee… to see it through.

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

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[Trepak from The Nutcracker
plays perfectly]

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

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free of hiss and scratches.

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It has no noise. You know what noise is?

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[narrator] In 1988,

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CDs become the new standard
for listening to recorded music.

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{\an8}By 1993,

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{\an8}music industry revenue in America alone

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soars to a high of $18 billion,

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and 65% of that is from CD sales.

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As the music industry grows fat
on revenue from CDs,

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another digital revolution is underway,

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the Internet.

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{\an8}[woman] Imagine a world
where every word ever written,

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{\an8}every picture ever painted,
and every film ever shot

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

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[narrator] Researchers
at the Fraunhofer Institute

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in Munich, Germany,

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are working on an exciting new idea

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for this "information superhighway,"

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to take the digital music files from a CD

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and stream them
to a home computer over the Internet.

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There's just one problem.

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

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[dial-up tone]

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

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{\an8}In 1993, after four years
of dedicated work,

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{\an8}researcher Karlheinz Brandenburg
creates the MP3.

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

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

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transform and quantization
and Huffman coding and all that.

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

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[narrator] How does he do it?

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Through the weird science
of psychoacoustics.

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

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at interpreting what we hear and see.

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

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-[kitten mews]
-And now this one.

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Notice any differences? No?

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{\an8}And yet the file size of the second image
has actually been reduced by 90%.

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{\an8}How?

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Some of the color information
has been removed,

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and its minute details have been
blurred and simplified.

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

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filling in the imperfections.

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

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There, that's better.

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This process, called lossy compression,
will change lives.

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[cat meows deeply]

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In years to come,

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

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like the one you're watching right now.

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[Netflix tudum plays]

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But back in the mid-'90s…

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[rewinding]

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…lossy compression is used
to make song files smaller.

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Now anyone with a home computer

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can rip their CD collections
into huge libraries of MP3s.

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

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

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

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

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{\an8}What it is, is a portable digital Walkman,

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{\an8}and all the songs
are stored in a microchip.

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

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Early MP3 players,
like this South Korean MPMan,

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arrive in spring 1998,

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capable of storing a whopping 12 songs.

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But by October,

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the Recording Industry
Association of America

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unsuccessfully tries
to ban MP3 players in the USA.

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

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A huge disruption is about to occur,

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courtesy of a pair of 19-year-old hackers

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

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letting everyone have copies
of their music for free.

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{\an8}June 1999.

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{\an8}That's Northeastern University student
Shawn Fanning,

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and this is his friend, Sean Parker,

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the guy who ends up
as president of Facebook

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and being played by Justin Timberlake.

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Their innovative app works like this.

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[reggae music playing]

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Brenda rips her personal reggae collection
onto her PC,

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and Bill has a thousand punk MP3s on his.

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[punk music playing]

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

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

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Fanning creates an app
that allows Brenda and Bill

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and 80 million people like them

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to connect their personal MP3 libraries

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

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a concept called peer-to-peer sharing.

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{\an8}The app, called Napster,

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00:10:16,120 --> 00:10:19,840
{\an8}becomes a global candy store
of free music overnight.

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00:10:21,600 --> 00:10:25,680
I would definitely describe it as my vice
for this past semester, you know.

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00:10:25,760 --> 00:10:29,440
I didn't go out to parties as much
or, you know, anything like that.

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

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[narrator] At campuses
like UC Berkeley in California,

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00:10:36,160 --> 00:10:38,200
Napster use becomes an epidemic.

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[woman] We find, on average,

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

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

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

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00:10:54,040 --> 00:10:55,000
Metallica.

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

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We learned that all
our previously recorded copyright songs

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00:11:01,440 --> 00:11:05,240
{\an8}were, via Napster,
available for anyone around the world

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00:11:05,320 --> 00:11:09,160
{\an8}to download from the Internet
in a digital format known as MP3.

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00:11:09,240 --> 00:11:12,720
In fact, in a 48-hour period
where we monitored Napster,

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00:11:12,800 --> 00:11:18,320
over 300,000 users
made 1.4 million free downloads

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00:11:18,400 --> 00:11:19,720
of Metallica's music.

200
00:11:20,400 --> 00:11:24,920
[narrator] It's no wonder drummer
and band cofounder Lars Ulrich is upset.

201
00:11:26,440 --> 00:11:30,280
Metallica claims there are
almost 700,000 illegal downloads

202
00:11:30,360 --> 00:11:32,120
of their songs every day.

203
00:11:33,360 --> 00:11:36,040
Since Napster's launch in 1999,

204
00:11:36,120 --> 00:11:38,920
that's roughly 150 million downloads,

205
00:11:39,440 --> 00:11:43,360
which equates to a huge loss
of revenue for poor old Metallica.

206
00:11:44,240 --> 00:11:47,560
For that amount,
they could afford 15 Learjets,

207
00:11:48,080 --> 00:11:48,920
30 yachts…

208
00:11:49,000 --> 00:11:50,000
[foghorn blares]

209
00:11:50,080 --> 00:11:52,440
…or five million bottles of Jack Daniel's.

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00:11:54,840 --> 00:11:58,640
{\an8}[woman] The court battle centers over
whether Napster could be held responsible

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00:11:58,720 --> 00:12:00,240
{\an8}for what its patrons did.

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00:12:00,920 --> 00:12:02,600
[narrator]
Throughout the later legal battle

213
00:12:02,680 --> 00:12:04,960
between Metallica and Napster,

214
00:12:05,040 --> 00:12:08,880
Lars catches flack for standing
in the way of Internet freedom

215
00:12:08,960 --> 00:12:12,400
and for, well,
being a spoiled, rich rock star.

216
00:12:12,480 --> 00:12:15,120
[reporter] What's your beef
with Metallica then?

217
00:12:15,200 --> 00:12:17,720
Why not let the people listen to music?

218
00:12:18,320 --> 00:12:20,080
[narrator]
But to music industry observers,

219
00:12:20,160 --> 00:12:23,840
it's obvious
that the primary use of Napster is piracy.

220
00:12:25,320 --> 00:12:29,000
As more artists announce lawsuits,
it's game over.

221
00:12:29,800 --> 00:12:31,920
In July of 2001,

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00:12:32,000 --> 00:12:34,040
Napster is shut down.

223
00:12:35,280 --> 00:12:37,520
But the MP3 is here to stay.

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00:12:38,560 --> 00:12:41,480
[woman] The newer generation,
it will never occur to them

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00:12:42,080 --> 00:12:44,920
{\an8}that once they have it for free,
that they need to go out

226
00:12:45,000 --> 00:12:47,440
{\an8}and buy it and compensate the writers.

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00:12:48,520 --> 00:12:51,520
[narrator] It's not like
illegal music sharing stops.

228
00:12:52,120 --> 00:12:54,760
This wasn't software that was written
by a Nobel Prize winner.

229
00:12:54,840 --> 00:12:57,000
{\an8}This was written by a college kid,

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{\an8}and the… the technology,
that genie's out of the bottle.

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00:13:01,960 --> 00:13:07,160
[narrator] MP3 sharing and MP3 players
become a worldwide craze,

232
00:13:07,240 --> 00:13:10,160
and the genius behind Apple, Steve Jobs,

233
00:13:10,240 --> 00:13:12,080
watches with great interest.

234
00:13:13,120 --> 00:13:16,840
We're introducing a product today,
and that product is called iPod.

235
00:13:16,920 --> 00:13:20,000
{\an8}iPod is an MP3 music player,

236
00:13:20,080 --> 00:13:22,040
{\an8}has CD-quality music,

237
00:13:22,120 --> 00:13:24,720
but the biggest thing about iPod

238
00:13:24,800 --> 00:13:27,200
is it holds a thousand songs.

239
00:13:27,280 --> 00:13:28,880
Now, this is a quantum leap

240
00:13:28,960 --> 00:13:33,120
because, for most people,
it's their entire music library.

241
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This is huge.

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00:13:34,120 --> 00:13:37,160
[Tchaikovsky's 1812 Overture playing]

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00:13:37,240 --> 00:13:39,000
[narrator] To load up their iPods,

244
00:13:39,080 --> 00:13:42,600
users are supposed
to import songs from Apple's iTunes,

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00:13:42,680 --> 00:13:46,960
which converts tracks
from legally bought CDs to MP3s.

246
00:13:48,040 --> 00:13:49,480
But in practice,

247
00:13:49,560 --> 00:13:53,000
{\an8}vast libraries
of illegally downloaded MP3s

248
00:13:53,080 --> 00:13:55,400
find their way onto the little devices,

249
00:13:55,480 --> 00:13:58,960
and sales of Apple's MP3 player soar.

250
00:13:59,880 --> 00:14:01,560
It's the cutest little thing
I've ever seen.

251
00:14:01,640 --> 00:14:03,360
{\an8}[narrator] In 2002,

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00:14:03,440 --> 00:14:06,480
{\an8}Jobs strikes a deal
with the big record companies

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00:14:06,560 --> 00:14:08,080
to sell music online

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00:14:08,160 --> 00:14:10,720
using the next-generation MP3,

255
00:14:10,800 --> 00:14:12,080
the, wait for it…

256
00:14:14,440 --> 00:14:15,920
MP4.

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00:14:16,000 --> 00:14:17,880
-[bell dings]
-[audience cheers]

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00:14:18,920 --> 00:14:23,600
{\an8}The iTunes Store hopes to make
digital-music downloads respectable,

259
00:14:23,680 --> 00:14:25,480
{\an8}selling songs legally.

260
00:14:26,040 --> 00:14:29,120
But the public isn't buying it, literally.

261
00:14:32,840 --> 00:14:37,200
MP3 sharing triggers a sharp fall
in record-industry revenues,

262
00:14:37,720 --> 00:14:41,640
from a high in 1999 of $25.2 billion…

263
00:14:44,240 --> 00:14:47,560
to $14.8 billion in just over a decade.

264
00:14:51,840 --> 00:14:54,160
Sir Mick Jagger rings the alarm bells.

265
00:14:55,360 --> 00:14:58,400
People only made money
out of records for a very small time.

266
00:14:58,480 --> 00:15:01,400
There was a small period
where people did get paid.

267
00:15:02,360 --> 00:15:05,320
And they got paid very handsomely,
and everyone made money,

268
00:15:05,400 --> 00:15:06,640
but now that period is gone.

269
00:15:07,200 --> 00:15:08,480
{\an8}[narrator] But in Sweden,

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00:15:08,560 --> 00:15:12,040
{\an8}another innovator is watching
the disaster unfold.

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00:15:12,640 --> 00:15:16,000
Daniel Ek,
a young Swedish tech entrepreneur,

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00:15:16,080 --> 00:15:20,560
comes up with a way to transform
the way digital music is sold and shared.

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00:15:21,800 --> 00:15:24,640
95% of all downloads were illegal,

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00:15:24,720 --> 00:15:28,440
and what we're doing is essentially
taking those 95% that are illegal

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00:15:28,520 --> 00:15:33,240
and turning them into a legal environment
where the industry actually makes money.

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00:15:34,160 --> 00:15:38,200
[narrator] Ek thinks people will prefer
playing songs streamed from the Internet

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00:15:38,280 --> 00:15:40,280
without saving them as files,

278
00:15:40,360 --> 00:15:43,000
and since MP3s come with a license fee,

279
00:15:43,080 --> 00:15:48,160
he chooses a new, free compression format
called Vorbis for his app,

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00:15:48,720 --> 00:15:49,800
Spotify.

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00:15:51,880 --> 00:15:55,440
{\an8}In Ek's vision for the industry,
you won't own any music at all.

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00:15:55,960 --> 00:15:58,560
{\an8}You won't have to deal
with vinyl or CD collections

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00:15:58,640 --> 00:16:00,880
or even drives full of files.

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00:16:01,440 --> 00:16:05,800
You'll just rent the ability to listen
to whatever you want, when you want it,

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00:16:05,880 --> 00:16:07,480
on a subscription basis.

286
00:16:07,560 --> 00:16:09,800
[Dance of the Sugar Plum Fairy
from The Nutcracker playing]

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00:16:09,880 --> 00:16:11,880
Well, we just believe
that people will care more

288
00:16:11,960 --> 00:16:13,400
about access than ownership.

289
00:16:14,400 --> 00:16:16,280
[narrator] Daniel Ek is right.

290
00:16:16,360 --> 00:16:17,840
Launched in 2006,

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00:16:17,920 --> 00:16:19,000
within nine years,

292
00:16:19,080 --> 00:16:24,160
{\an8}Spotify boasts almost 90 million users,
more than Napster at its height.

293
00:16:24,680 --> 00:16:26,720
{\an8}And, proving it was a good idea,

294
00:16:27,240 --> 00:16:28,720
{\an8}in 2015,

295
00:16:28,800 --> 00:16:32,480
Apple gets in on the game
and starts up its own streaming service.

296
00:16:33,720 --> 00:16:34,920
{\an8}And just like that,

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00:16:35,000 --> 00:16:38,400
streaming MP3s becomes
a part of our everyday lives.

298
00:16:39,640 --> 00:16:44,160
But one major artist takes a stand
against the subscription model,

299
00:16:44,240 --> 00:16:47,280
believing that music
should be owned, not rented.

300
00:16:48,120 --> 00:16:52,200
Listening to Taylor Swift's back catalog
just got a bit more difficult.

301
00:16:52,280 --> 00:16:56,320
The singer has removed all of her music
from the streaming service Spotify.

302
00:17:04,800 --> 00:17:07,240
{\an8}If I was in the position of Taylor,
I'd have done the same.

303
00:17:07,320 --> 00:17:08,920
{\an8}-[announcer] Jay-Z.
-[crowd cheering]

304
00:17:09,000 --> 00:17:10,680
{\an8}Nicki Minaj.

305
00:17:10,760 --> 00:17:11,680
{\an8}Rihanna.

306
00:17:12,320 --> 00:17:16,000
{\an8}[narrator] Other megastars move
to control access to their music,

307
00:17:16,080 --> 00:17:18,240
{\an8}launching a separate subscription service,

308
00:17:18,320 --> 00:17:19,160
{\an8}Tidal.

309
00:17:20,240 --> 00:17:23,720
{\an8}We wanna create a better service
and a better experience

310
00:17:23,800 --> 00:17:25,600
{\an8}for both fans and artists.

311
00:17:25,680 --> 00:17:27,520
{\an8}[narrator] Everyone is streaming,

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00:17:27,600 --> 00:17:30,720
{\an8}but although you might dance
like no one is watching,

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00:17:30,800 --> 00:17:32,720
someone or something is.

314
00:17:34,600 --> 00:17:36,080
[static crackling]

315
00:17:36,160 --> 00:17:39,480
The streaming services
know exactly which songs you like

316
00:17:40,000 --> 00:17:41,920
and when you hit the skip button.

317
00:17:42,440 --> 00:17:46,440
Then algorithms take that data
and give you more of the music you like.

318
00:17:47,040 --> 00:17:48,400
Sounds great, right?

319
00:17:49,480 --> 00:17:53,480
But it also means you're less likely
to discover new, independent bands

320
00:17:53,560 --> 00:17:56,160
that the algorithm isn't trying to sell.

321
00:17:56,240 --> 00:17:57,320
And today,

322
00:17:57,400 --> 00:17:59,480
countless pop songs are now being written

323
00:17:59,560 --> 00:18:01,080
to fit the algorithm.

324
00:18:02,040 --> 00:18:04,600
You might have noticed
that songs are getting shorter

325
00:18:04,680 --> 00:18:07,240
and that they also tend
to start with the chorus.

326
00:18:07,760 --> 00:18:09,760
That's the algorithm at work.

327
00:18:10,400 --> 00:18:12,280
[metal clunks]

328
00:18:14,240 --> 00:18:18,520
Despite accusations that streaming
could be blunting the edge of pop,

329
00:18:18,600 --> 00:18:21,800
it's never been easier
to listen to any music you want.

330
00:18:22,800 --> 00:18:26,200
And the streaming platforms,
especially Spotify,

331
00:18:26,280 --> 00:18:28,040
explode in popularity.

332
00:18:28,560 --> 00:18:31,200
Taylor Swift and even Jay-Z,

333
00:18:31,280 --> 00:18:34,280
one of the founders
of the competing platform Tidal,

334
00:18:34,360 --> 00:18:35,520
return to Spotify.

335
00:18:37,720 --> 00:18:39,640
Thanks to the MP3 revolution

336
00:18:39,720 --> 00:18:42,080
and, from it, the advent of streaming,

337
00:18:42,600 --> 00:18:45,880
{\an8}music industry profits rise
from their low point in 2011

338
00:18:45,960 --> 00:18:47,960
{\an8}of $14.8 billion

339
00:18:48,880 --> 00:18:53,120
{\an8}to a far healthier $23.1 billion in 2020.

340
00:18:54,840 --> 00:18:58,440
{\an8}Streaming may have saved
the music industry from collapse.

341
00:18:58,520 --> 00:19:00,520
[electricity buzzes]

342
00:19:01,720 --> 00:19:06,080
But what works for the industry
may not be working for musicians.

343
00:19:06,160 --> 00:19:09,000
Unless you're Beyoncé, life is hard.

344
00:19:09,960 --> 00:19:11,760
{\an8}The only person getting screwed
is the artist.

345
00:19:11,840 --> 00:19:13,160
{\an8}And that's the way it always is.

346
00:19:13,240 --> 00:19:16,160
{\an8}The artist is the last one
to get treated fairly, you know?

347
00:19:16,240 --> 00:19:17,920
[electronic buzzing, beeping]

348
00:19:18,000 --> 00:19:22,200
[narrator] Today, record companies
generate enough revenue from streaming

349
00:19:22,280 --> 00:19:26,680
to buy 8.3 million Gibson Flying Vs
every year…

350
00:19:26,760 --> 00:19:28,160
[unenthusiastic riff plays]

351
00:19:28,240 --> 00:19:32,520
…while artists on Spotify get
thousandths of a cent per play

352
00:19:33,960 --> 00:19:36,360
and would need
nearly half a million streams

353
00:19:36,440 --> 00:19:38,840
to buy even one Flying V guitar.

354
00:19:38,920 --> 00:19:40,120
[guitar string twangs]

355
00:19:40,200 --> 00:19:41,560
Before streaming,

356
00:19:41,640 --> 00:19:45,000
bands could make money,
even with moderate record sales.

357
00:19:45,080 --> 00:19:46,040
Nowadays,

358
00:19:46,600 --> 00:19:49,200
{\an8}they need to play live to make ends meet.

359
00:19:49,280 --> 00:19:52,160
{\an8}All well and good, until a pandemic hits.

360
00:19:54,520 --> 00:19:58,840
{\an8}I don't think no artist is happy
with how they're getting paid

361
00:19:58,920 --> 00:20:01,160
{\an8}from, you know,
the streaming platforms today.

362
00:20:01,240 --> 00:20:02,320
The business is set up

363
00:20:02,840 --> 00:20:06,120
for the corporations to make money
and the artists to just work.

364
00:20:06,720 --> 00:20:09,240
[narrator] For now,
musicians are waiting to see

365
00:20:09,320 --> 00:20:11,120
what new economic models emerge

366
00:20:11,200 --> 00:20:13,480
from this brave new digital world.

367
00:20:14,160 --> 00:20:17,960
{\an8}We're kind of slowly adapting
and, you know, going with the flow

368
00:20:18,040 --> 00:20:20,280
{\an8}and, you know, just putting things out

369
00:20:20,360 --> 00:20:23,280
{\an8}like, um… little appetizers, you know?

370
00:20:23,360 --> 00:20:26,760
[narrator] The wrestling match
between artists, labels,

371
00:20:26,840 --> 00:20:28,640
and streaming services is ongoing,

372
00:20:29,320 --> 00:20:33,000
but they will have to find a solution
that keeps everyone happy,

373
00:20:33,640 --> 00:20:36,520
because streaming
isn't going anywhere soon.

374
00:20:36,600 --> 00:20:41,880
Still, MP3s, the invention
that almost destroyed the music industry,

375
00:20:41,960 --> 00:20:44,800
could now be showing it
a way towards the future.

376
00:20:45,720 --> 00:20:47,720
[electronic music plays]