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Peer-To-Peer News - The Week In Review - June 15th, ’19
June 15th, 2019
Minnesota Lawyer Sentenced to 14 Years for Copyright Porn Scheme
A federal judge on Friday sentenced a Minneapolis lawyer to 14 years in prison for running a porn-related scheme.
Paul Hansmeier was convicted of running the multi-million-dollar fraud scheme from 2011 to 2014. Prosecutors allege Hansmeier extracted settlements from hundreds of people who feared being exposed as pornography consumers.
U.S. District Judge Joan Ericksen told Hansmeier it was "almost incalculable how much your abuse of trust has harmed the administration of justice," the Minneapolis Star Tribune reported.
Ericksen complimented Hansmeier for being "smarter than all get out," then criticized him for taking advantage of the courts in his scheme to spread pornography on the internet so he could cajole people who downloaded it into paying settlements to avoid facing lawsuits.
Prosecutors said when Hansmeier was challenged by judges around the country, he blamed other lawyers who were hired to file lawsuits on his behalf, lied to the courts about his own involvement and ordered evidence to be destroyed.
Assistant U.S. Attorney Benjamin Langner noted that the case was being watched by people around the country. He asked for a term of 12.5 years, in part to act as a deterrent to others.
"The way he abused the court to line his pockets is outrageous," Langner said. "And when he got caught, his conduct got worse."
Hansmeier's co-defendant, former Chicago lawyer John Steele, pleaded guilty earlier. Steele cooperated in the case and awaits sentencing in July.
Federal investigators concluded that Hansmeier and Steele collected $6 million in fraudulent legal settlements from 2010 through 2013. But because of problems in proving the elements of a crime required for conviction, the government limited the amount of recommended restitution that Hansmeier should pay to more than $1.5 million, payable to 704 victims who had paid settlements after April 1, 2011.
That date was selected because it's when Hansmeier had his brother, Peter Hansmeier, uploaded a pornographic video to a file-sharing site called Pirate Bay, FBI Special Agent Jared Kary said.
Peter Hansmeier also cooperated and was not charged in the scheme.
Manny Atwal, Paul Hansmeier's attorney, objected to the recommended restitution amount because investigators were unable to say precisely who downloaded which movie. She asked that Hansmeier's sentence be limited to just over 7 years in prison.
Paul Hansmeier pleaded guilty in August to conspiracy to commit mail and wire fraud, and conspiracy to commit money laundering. But he reserved the right to withdraw the plea if he's successful in appealing a denial of his earlier motion to dismiss the complaint. That appeal is pending.
The judge ordered Paul Hansmeier to pay $1.5 million in restitution. While the amount of money is significant, she said, "that's not even a major part of the harm" he'd done with his scheme.
"The major harm here is what happens when a lawyer acts as a wrecking ball," Ericksen said.
Before sentencing, Paul Hansmeier said he is "looking forward at long last to put this whole mess behind me."
Kim Dotcom Fights US Extradition in New Zealand's Top Court
Internet entrepreneur Kim Dotcom and three of his former colleagues on Monday took their fight against being extradited to the U.S. to New Zealand's top court.
The Supreme Court began hearing arguments in the seven-year-old case after Dotcom and the others lost several previous court rulings.
But even if the men lose their latest appeal, they have legal options which could keep their case alive in the New Zealand court system and delay any extradition for several more years.
U.S. authorities in 2012 shut down Dotcom's file-sharing website Megaupload and filed charges of conspiracy, racketeering and money laundering. If found guilty, the men could face decades in prison.
Megaupload was once one of the internet's most popular sites. U.S. prosecutors say it raked in at least $175 million, mainly from people using it to illegally download songs, television shows and movies.
Ira Rothken, one of Dotcom's lawyers, said in an interview that if anyone did something illegal in relation to Megaupload, it was the users.
"This case is all about trying to hold Megaupload and Kim Dotcom and the others responsible for the acts of users," Rothken said. "And we're saying you can't do that. You can't do that in the United States and you can't do that in New Zealand."
The Supreme Court has scheduled five days to hear the appeal. After that, it could take them several months to issue their decision.
Should the Supreme Court uphold the earlier court rulings and find the men are eligible for extradition, then New Zealand's Justice Minister Andrew Little would need to make the final decision on whether the extraditions should proceed. And Little's decision could also be appealed in the courts.
Dotcom, who was arrested in 2012 during a dramatic police raid on his mansion and incarcerated for a month, was released on bail more than seven years ago.
In addition to Dotcom, who founded Megaupload and was its biggest shareholder, the U.S. is also seeking to extradite former Megaupload officers Mathias Ortmann, Bram van der Kolk and Finn Batato. The indictment was filed in the U.S. District Court in eastern Virginia.
Dotcom did not attend Monday's hearing, although the other three men did. Rothken said Dotcom was at his home in Queenstown and was being kept informed of developments.
Dotcom said his wife was helping the defense team.
"My wonderful wife Elizabeth has graduated law school to become a lawyer this year and today she's fighting alongside my legal team for our future," Dotcom wrote on Twitter. "Frankly if it wasn't for Liz I don't think I could have made it this far."
Texas Can Steal Your Photos Without Paying for ‘Takings’: Court
Photographers were just dealt a big legal blow this week after a Texas state appeals court ruled that the state can infringe upon copyright without risking punishment under the state’s or federal government’s “takings” clause.
The copyright infringement battle is being waged between Houston photographer Jim Olive and the University of Houston, a public university.
It all started when Olive, who’s known for his photos shot out of open helicopters, found one of his aerial photos (titled “The Cityscape”) of the Houston skyline being used by the university on its website to promote its C.T. Bauer College of Business. The photographer then sent the university a bill for $41,000 — $16,000 for the usage and $25,000 for removing his copyright credit.
The university quickly took down the photo but only offered Olive $2,500 for the unauthorized usage.
After Olive sued the university, the university pushed for the case to be dismissed because the public institution has sovereign immunity, which protects state government entities from a variety of lawsuits. Olive’s side responded by arguing that the copyright infringement was an unlawful “taking” under the state’s constitution, which prohibits the government from taking private property without adequately compensating the owner.
A lower court previously ruled that Olive can proceed with his copyright infringement lawsuit, but now the Court of Appeals for the First District of Texas has overturned that ruling.
“Even if the government sets itself up as a competitor by producing a copyrighted work, there probably is not good reason to conclude automatically that the copyright has been ‘taken,'” the three-judge panel cites in its ruling. “The copyright holder can still exclude all private competitors even as the government pirates the entirety of his work.”
“[W]e hold that the Olive’s takings claim, which is based on a single act of copyright infringement by the University, is not viable,” the ruling continues. “This opinion should not be construed as an endorsement of the University’s alleged copyright infringement, and as discussed, copyright owners can seek injunctive relief against a state actor for ongoing and prospective infringement.
“Instead, in the absence of authority that copyright infringement by a state actor presents a viable takings claim […] we decline to so hold.”
The NPPA notes that the US Congress passed the Copyright Remedy Clarification Act (CRCA) decades ago to prevent states from having governmental immunity from copyright claims, but some appeals courts have held that CRCA goes beyond Congress’ powers and have therefore struck it down as unconstitutional. The matter will likely go before the Supreme Court (in Allen v. Cooper) sometime in 2020.
“The Texas ruling affects more than just photographers,” NPPA writes in response to this week’s ruling. “It appears that a state entity could engage in broad piracy without being accountable.”
“It just doesn’t seem fair to me,” Olive tells the Houston Chronicle. “With this, they can just run rampant over copyright and take intellectual property with impunity.”
What Aladdin—And Napoleon—Teach Us About Copyright
A whole new Aladdin is back at movie theaters. We went to see it last week. It's got some amazing Bollywood-style dance scenes, a resplendent palace, and the best magic carpet rides over Agrabah that money (and Industrial Light and Magic) can provide. At about 56% approval, Rotten Tomatoes didn't love it, but we enjoyed it, maybe because we were watching it with one eye on the dancing and one eye on economics, intellectual property rights, and history.
In all, it cost $183 million to make. And, partly thanks to Disney's lobbying efforts, the Disney corporation will control the rights to this film for 95 years. That's because Disney has long been a major political force in the fight to lengthen copyright. In past decades, Congress has approved copyright extensions just when the copyright to Mickey Mouse was about to expire. The 1998 Copyright Term Extension Act is pejoratively nicknamed the Mickey Mouse Protection Act.
As Disney will argue, you don't want intellectual property law to be too permissive, or there will be little incentive to create new music or movies. But, when copyright is too broad and strong, the consumer loses out. Great stories and characters can't enter the public domain, which makes it harder to riff on old ideas. Like many of Disney's products, Aladdin itself is a remix of an old story, one well out of reach of modern copyright laws.
These are the kinds of arguments that cropped up last year when Congress considered the Music Modernization Act. Also, when the TPP trade agreement was negotiated, convincing other countries to adopt American copyright law of life of the creator plus 70 years was a sticking point in negotiations.
A Long History
But who's right? How long should copyright be? Some data comes from a surprising person: Napoleon Bonaparte. When Napoleon invaded Italy in 1796, he created French-controlled regions of northern Italy that included Milan and Venice. And in 1801, French copyright law was brought to these areas. Artists now had rights to their work for their lifetime, plus 10 years. But most other Italian regions—like those containing Rome and Naples—did not pass copyright laws until decades later.
Economists Michela Giorcelli and Petra Moser at UCLA and NYU dug through records of 2,598 Italian operas across eight Italian states between 1770 and 1900. They found that, prior to 1801, each Italian state would, on average, produce fourteen new operas a decade. Venetia produced a little less than this. But after copyright was introduced to Venetia, the region's opera production ramped up to 34 a decade. Venice, with Milan, became a world-leading hub for opera composition. Giorcelli and Moser estimate that, overall, Napoleon's introduction of copyright led to a 150 percent increase in the number of operas composed each year. (Freakonomics, by the way, had a fun segment with Moser telling her story in March.)
The Demanding Composers
Composers could demand royalties from their works if they were performed by other theaters. Operas became better financed, and composers, who might have in the past emigrated to places like Paris, decided to remain. Copyright boosted creativity.
Eventually Italian states lengthened copyright periods to the duration of a composer's life plus 30 years. Giorcelli and Moser find that extending copyright to life plus 30 years produces, on average, one more opera a year in each state. But there might be a turning point if copyright is too long: they find that going further to life plus 40 years may actually decrease the number of new operas produced. This suggests American copyright lengths could be too long.
Maybe you've heard the song from the opera Rigoletto, "La Donna è Mobile." You might have heard it in advertisements selling body spray, tomato paste, chocolate or Doritos. It's more than just a classic, it's also the kind of opera that might not have been made if not for copyright. In this case, life of the composer plus 30 years.
Rigoletto was composed by Giuseppe Verdi in Venice in 1851, half a century after Napoleon's invasion had paved the way for strong copyright. Verdi intentionally chose grand, challenging source material, and took a risk by parodying a womanizing King. The opera soon entered the theater circuit, with each performance incurring a fee to Verdi and his publisher of about 400 francs. That was a lot back then. Thanks to these royalties, Verdi's ambitious, risky bet paid off. And, with about $600 million in gross earnings in just over two weeks, so too has the new Aladdin. Merci, Napoleon.
Opera, Brave, Vivaldi to Ignore Chrome's Anti-Ad-Blocker Changes, Despite Shared Codebase
Other browser makers don't seem to be on board with Google's decision to neuter its extensions API, and essentially, ad blockers.
Despite sharing a common Chromium codebase, browser makers like Brave, Opera, and Vivaldi don't have plans on crippling support for ad blocker extensions in their products -- as Google is currently planning on doing within Chrome.
The three browsers makers have confirmed to ZDNet, or in public comments, of not intending to support a change to the extensions system that Google plans to add to Chromium, the open-source browser project on which Chrome, Brave, Opera, and Vivaldi are all based on.
The Manifest V3 scandal
Google announced plans to modify the Chromium extension system last October when the browser maker said it would develop a new set of standards -- collectively known as Manifest V3 -- that will modify how extensions work on top of the Chromium codebase.
It took extension developers a few months to understand how intrusive the Manifest V3 modifications were, but they did eventually realize that Google was planning to replace one of the main technology through which extensions interacted with website requests, in favor of one that was far inferior.
Initially, it was thought that extensions which provided ad-blocking services would be the ones impacted the most, but it was later also discovered that extensions for antivirus products, parental control enforcement, and various privacy-enhancing services were also affected.
Users protested against Google's decision, and the company came under heavy criticism from the public -- with many users accusing it of trying to sabotage ad-blocking extensions that were cutting into Google's advertising business profits.
Google backtracked on the change a month later, in mid-February, but it appears that the promise to keep the old extension technology intact was just a lie.
At the end of May, Google made a new announcement in which it said that the old technology that ad blockers were relying on would only be available for Chrome enterprise users, but not for regular users.
This time, Chrome developers seem intent on plowing through with their decision, with the Manifest V3 changes being scheduled to go live in January 2020, when ad blocker extensions would see their ability to block ads greatly diminished.
The move has angered Chrome users beyond belief, with many vowing to switch browsers, and many setting their eyes on Firefox, whose developers have been working to transform and rebrand the former fan-favorite into a privacy-first product.
But Google's planned Manifest V3 changes are being added to the Chromium base, meaning they'll also likely impact other Chromium-based browsers as well.
In an email to ZDNet on Friday, Brendan Eich, CEO of Brave Software, said the Brave browser plans to support the old extension technology that Google is currently deprecating.
"To respond on the declarativeWebRequest change (restricting webRequest in full behind an enterprise policy screen), we will continue to support webRequest for all extensions in Brave," Eich told ZDNet.
In addition, Brave itself supports a built-in ad blocker, that users can utilize as an alternative to any extension.
Furthermore, Eich told ZDNet that Brave would continue to support uBlock Origin and uMatrix, the two extensions developed by Raymond Hill, the Chrome extension developer who's been highlighting Google's plans to sabotage Chrome ad blockers for the past months.
ZDNet also received a similar statement from Opera, another browser vendor which uses the Chromium codebase.
"We might also consider keeping the referenced APIs working, even if Chrome doesn't, but again, this is not really an issue for the more than 300 million people who have chosen Opera," an Opera spokesperson told us.
This is because, just like Brave, Opera also ships with a built-in ad blocker.
"All the Opera browsers, both on mobile and PC, come with an ad blocker that users can choose to enable," the spokesperson said. "This means that Opera users aren't really exposed to these changes - unlike users of most other browsers."
Further, this ad blocker is very configurable because it also allows users to import custom domain lists, so users can block any advertising domain they want, giving them full control of what types of ads they can see, or not.
Vivaldi, another pretty popular Chromium-based browser, published a blog post on Monday affirming its support for giving users a choice -- even if the company has not yet decided how it will proceed.
"How we tackle the API change depends on how Google implements the restriction," said Petter Nilsen, Senior Developer at Vivaldi.
"Once the change is introduced to Chromium, believe me when I say that there are many, many possible scenarios. Restoring the API could be one of them. We've restored functionality before," Nilsen said.
"If the API is removed altogether and no decent alternative is implemented, we might look into creating a limited extensions store.
"The good news is that whatever restrictions Google adds, at the end we can remove them. Our mission will always be to ensure that you have the choice," Nilsen added.
The only major browser maker who did not respond to our request for comment on this issue was Microsoft.
The company announced last year it was ditching its proprietary EdgeHTML browser engine for a Chromium port of Edge, which is currently in public testing.
Microsoft's plans in regards to Google's Manifest V3 changes are currently unknown.
UK Porn Block is Privacy Timebomb, New Report Warns
Identity checks for pornographic websites will be introduced in the UK in July
New age restrictions on pornography that are set to come into effect in the UK next month are a “privacy timebomb”, a new report has warned.
The identity checks needed to stop under-18s from visiting pornographic websites will force any commercial provider of online pornography to carry out “robust” checks on their users to ensure they are adults.
But research by privacy watchdog Open Rights Group describes the data protection in place to protect consumers is “vague, imprecise and largely a ‘tick box’ exercise”.
The age verification measures will be introduced on 15 July but a recent YouGov poll showed that 76 per cent of the British public is unaware of the ID checks being introduced.
“With one month until rollout, the UK porn block is a privacy timebomb,” the report stated.
Amazon's Helping Police Build a Surveillance Network with Ring Doorbells
Its popular Ring smart doorbells mean more cameras on more doorsteps, where surveillance footage used to be rare.
If you're walking in Bloomfield, New Jersey, there's a good chance you're being recorded. But it's not a corporate office or warehouse security camera capturing the footage -- it's likely a Ring doorbell made by Amazon.
While residential neighborhoods aren't usually lined with security cameras, the smart doorbell's popularity has essentially created private surveillance networks powered by Amazon and promoted by police departments.
Police departments across the country, from major cities like Houston to towns with fewer than 30,000 people, have offered free or discounted Ring doorbells to citizens, sometimes using taxpayer funds to pay for Amazon's products. While Ring owners are supposed to have a choice on providing police footage, in some giveaways, police require recipients to turn over footage when requested.
Ring said Tuesday that it would start cracking down on those strings attached.
"Ring customers are in control of their videos, when they decide to share them and whether or not they want to purchase a recording plan. Ring has donated devices to Neighbor's Law Enforcement partners for them to provide to members of their communities," Ring said in a statement. "Ring does not support programs that require recipients to subscribe to a recording plan or that footage from Ring devices be shared as a condition for receiving a donated device. We are actively working with partners to ensure this is reflected in their programs."
While more surveillance footage in neighborhoods could help police investigate crimes, the sheer number of cameras run by Amazon's Ring business raises questions about privacy involving both law enforcement and tech giants. You might recognize Amazon as a place to get cheap deals with one-day shipping, but critics have pointed out the retail giant's ventures with law enforcement, like offering facial recognition tools.
But those cameras benefit several groups: Police can gather more video footage, while Amazon can charge new Ring owners up to $3 a month for subscription fees on the smart doorbells. Residents, meanwhile, get some peace of mind, particularly with the Neighbors app, essentially a social network sharing camera feeds.
"Our township is now entirely covered by cameras," said Captain Vincent Kerney, detective bureau commander of the Bloomfield Police Department. "Every area of town we have, there are some Ring cameras."
Bloomfield's police department did not receive any free cameras from Ring, but the camera was already popular in the town of roughly 50,000 people.
More than 50 local police departments across the US have partnered with Ring over the last two years, lauding how the Amazon-owned product allows them to access security footage in areas that typically don't have cameras -- on suburban doorsteps.
But privacy advocates argue this partnership gives law enforcement an unprecedented amount of surveillance.
"What we have here is a perfect marriage between law enforcement and one of the world's biggest companies creating conditions for a society that few people would want to be a part of," said Mohammad Tajsar, staff attorney at the ACLU of Southern California.
Ring also referred to this blog post on how it handles privacy concerns with police partnerships.
"Our customers and Neighbors app users place their trust in us to help protect their homes and communities and we take that responsibility incredibly seriously," the company said.
How Neighbors works
Amazon bought Ring in 2018 for a reported $1 billion, and the maker of smart doorbells and security cameras helped expand the retail giant's smart homes push.
That happened amid a surging consumer interest in newly internet-connected devices, from lightbulbs and TVs to security cameras. Outside of Amazon, companies like Nest, which Google bought for $3.2 billion in 2014, also offer security cameras for homes. Strategy Analytics expected more than 3.4 million video doorbells would be sold in 2018.
Ring had been courting local police departments even before Amazon acquired it. Police are mostly interested in Ring's Neighbors app, a free download that serves as a place where people can share, view and comment on crime information in their neighborhood, as well as upload video clips from Ring doorbells. Then police court the public to buy Ring.
"We're encouraging residents of Mountain Brook to purchase that type of technology and work with the app," said Ted Cook, the police chief in Mountain Brook, Alabama. "We see it as trying to create a digital neighborhood watch."
When police partner with Ring, they have access to a law enforcement dashboard, where they can geofence areas and request footage filmed at specific times. Law enforcement can only get footage from the app if residents choose to send it. Otherwise, police need to subpoena Ring.
Police said the app has helped them solve crimes since residents usually send in footage of thieves on their steps stealing packages, or a suspicious car driving through the neighborhood.
Those residents can feel more secure becaue the program offers a direct line to police.
"Someone who is investing in this Ring is obviously concerned about their safety and their property," said Eric Piza, an associate professor at John Jay College of Criminal Justice. "It seems like a fair trade-off. They are probably perfectly fine with police being able to look at the street view outside their house."
Despite its benefits, the relationship between police departments and Ring raises concerns about surveillance and privacy, as Amazon is working with law enforcement to blanket communities with cameras.
Ring has had its own privacy concerns. The Information reported last December that workers in Ukraine watched videos on its public app without customers knowing. In a statement to TechCrunch following the report, the company said, "we take the privacy and security of our customers' personal information extremely seriously."
"Essentially, we're creating a culture where everybody is the nosy neighbor looking out the window with their binoculars," said Dave Maass, a senior investigative researcher at the Electronic Frontier Foundation. "It is creating this giant pool of data that allows the government to analyze our every move, whether or not a crime is being committed."
Put a Ring on it
On a heat map of Bloomfield, there are hardly any spots in the New Jersey township out of sight of a Ring camera.
The smart doorbells were already popular within the community, Kerney said, and it made sense to partner with Ring for the law enforcement dashboard. Now, on top of those cameras being on seemingly every block, police could request footage from residents just from a tap on a phone.
It's a massive jump from how much surveillance footage the Bloomfield police department had access to before Ring came into town.
Kerney said he had started a volunteer surveillance registration in 2017. Any place that had security cameras could sign up and provide footage to police.
There were about 442 places that registered, Kerney recalled. It was mostly businesses, since many private homes didn't have security cameras then. But it's a drop in the bucket compared with the network Ring has.
"There's probably 10 times as many Ring cameras as we have anything else," he said.
Part of the massive adoption is due to how popular products like Ring and Google's Nest have made surveillance systems. They're not just for businesses anymore: The market for smart home security cameras is expected to surpass $9.7 billion by 2023.
"Generally, most people don't have big-time surveillance systems in their home," Kerney said. "But something simple like Ring, where you just plug it in? People will go for that."
Police departments are piggybacking on Ring's network to build out their surveillance networks.
In Hampton, Virginia, police received 15 free Ring cameras after partnering with the company in March. The police department is still figuring out what neighborhoods they're going to distribute those cameras to.
Part of that includes working with the crime analysis unit to determine which blocks could use these cameras the most, said Ashley Jenrette, a Hampton police public information officer.
Paying the price
Ring helps police avoid roadblocks for surveillance technology, whether a lack of funding or the public's concerns about privacy.
"If the police department had to go and create a plan of where it was going to put all the cameras in the neighborhood, how much it was going to cost, and take it to the city council, maybe there would be some debate," the EFF's Maass said. "There's a reason we push for ordinances that require police department seek city council approval before they acquire any surveillance technology."
Multiple cities have laws requiring a public process to debate how police use and buy surveillance technology. Community activists fight back against tools like facial recognition and automated license plate readers.
But when police and Amazon convince private residents to buy these cameras, it's essentially circumventing that process while saving the city money. Ring cameras can cost between $99 and $500.
"We don't have security cameras citywide," Cook said. "Essentially, this has the ability of creating security camera technology citywide. We're asking citizens to participate, to purchase it on their own."
Some police departments do more than just ask. Police in Indiana, New Jersey, California and other states have offered discounts for Ring cameras, sometimes up to $125. In some cases, those discounts come from taxpayer money.
"Part of the problem is that the public is financially subsidizing invasions of their own privacy in their communities when they do this," Tajsar said.
In April, the city of Hammond, Indiana, announced it had $37,500 in funds to subsidize Ring devices -- half of which came from Ring. The other $18,750 came from the city, said Steve Kellogg, Hammond police's public information officer.
The city had 500 cameras, and in about a week, they were all sold. The city government ran more discounted programs, Kellogg said, putting out more than 600 Ring cameras in the city.
"There will be more cameras on the streets," Kellogg said. "It's really a no-brainer."
Other cities will do giveaways, either in raffles or as rewards for crime tips, as the Southern California city of El Monte did.
While police need to ask for permission to get footage, a giveaway in Houston ensured that law enforcement would get any videos it needed. In its giveaway post last March, Houston police wrote in its requirements that winners would agree to give Houston police access to the cameras when it's requested.
"This model is the most disturbing because they're basically commandeering people's homes as surveillance outposts for law enforcement," Tajsar said.
Houston police didn't respond to requests for comment. Ring said that it doesn't support this model and that it was reaching out to police partners to make sure this wasn't a requirement for Ring giveaways.
It's unlikely that police departments will run out of cameras. In several cities, for every 20 people who sign up for the app, Ring donates one camera. It's why some police departments have been pushing for more residents to sign up.
Police promoting the cameras also helps Amazon's profits. Even when Ring is giving the cameras away for free or providing subsidies, it quickly finds a return on its investment.
You don't have to have a Ring subscription, but it's the only way you can store footage recorded from the camera. The cheapest plan starts at $3 a month. Even when Amazon donated $18,750 to Hammond's subsidy program, it could make all of that back in less than a year with 600 new subscriptions.
"As policing becomes more technology-driven, we have this new issue of police acting in the interest of commercial enterprises," Piza said.
Even though Bloomfield is peppered with Ring cameras, people haven't been flooding police with footage from their doorbells, Kerney said.
He's sent about 10 requests in the last two weeks, tied to thefts, burglaries and stolen cars, but most of them have gone unanswered, the detective bureau commander said.
When people in the Neighbors app aren't being responsive, police will take to the streets and start knocking on doors asking for footage in person. People are a lot more cooperative when an officer is at their doorsteps asking for Ring footage, he said. Civil advocates argue that people don't really have a choice.
"You change how you drive when you see a cop driving next to you. What if a cop shows up at your door and asks you for something?" Tajsar said. "Even if you're the biggest civil libertarian, you will feel compelled to turn that footage over."
And Ring isn't limited to Amazon's own technology, more tech-savvy police departments have found.
While Ring faced backlash last December when it was considering facial recognition for the doorbell cameras, police are capable of using the footage provided by residents with their own algorithms.
Depending on how the Ring camera is set up, it can capture motion on the streets, like cars passing by. Kellogg noted that Hammond uses automated license plate readers and could use footage from Ring cameras to track down vehicles.
Police can enter details on a car captured in Ring footage, search in the license plate reader system, and figure out the car's owner and address, he added.
"That's something that's unheard of," Kellogg said. "With Ring now picking up any motion in vehicles, maybe we won't catch someone ringing the doorbell, but if it drives by, Ring turns on and captures that vehicle."
Residents may not be aware of that when they turn the footage over. The requests for Ring videos often come in the Neighbors app just asking for evidence related to reported incidents, with no details on what the clips will be used for.
"If the public are going to share this footage with the police, they need to know what it's going to be used for," Maass said.
John Stankey’s Challenge: Making AT&T’s $100 Billion Bet on Time Warner Pay Off
• AT&T pays more than $100 billion for Time Warner, leaving it with a debt load that one analyst describes as “terrifying.” It’s a bet-the-company move.
• AT&T veteran John Stankey, who took over as WarnerMedia CEO a year ago, is in charge of making the bet work by getting to 70 million subscribers for WarnerMedia’s upcoming streaming service.
• Stankey would like to aggregate his streaming service with others and blend it with DirecTV Now for a more robust product in the future, sources say.
• He describes his biggest challenge as breaking down a culture of silos within the old Time Warner.
AT&T’s WarnerMedia CEO John Stankey made a promise to his wife, Shari. He’d received episodes of the last season of “Game of Thrones” in advance. But he wouldn’t watch. Instead, he’d watch with her, in real time, at home — including the finale.
“No big party,” said Stankey last week from the 46th floor of his brand-new, three-day-old Hudson Yards office in Manhattan. “I made a commitment.”
Perhaps the reason Stankey was so relaxed about watching “Game of Thrones” was that he’d already won the real-life version — WarnerMedia’s iron throne. And Stankey hasn’t wasted any time enacting new rules of the land or dismissing those who disagreed.
“You go in hoping for the best — hoping people will want to subscribe to the new direction and stay,” Stankey said. “It’s the nature of the M&A game.”
The “new direction” Stankey’s talking about is a systematic reorganization of Time Warner, renamed WarnerMedia last year. The goal is to realign the company with the future of media consumption. The foundation of his bet is a new streaming service that merges all three divisions of the old Time Warner — Warner Bros., Turner and HBO. To create his vision, Stankey believes he needs to get everyone working toward a common directive — getting 70 million subscribers paying for the yet-to-be-named streaming platform.
Failing could be catastrophic. AT&T’s debt load is nearly $200 billion — making it the largest corporate debt issuer in the world. Veteran telecommunications analyst Craig Moffett calls that amount “terrifying.”
“Media has moved into an environment where scale is essential,” Stankey said, citing Disney’s $71.9 billion deal for Fox’s assets (and divestiture of Sky to Comcast) and CBS’s likely upcoming merger with Viacom as other examples of media companies seeking bigger balance sheets with more assets under management. “Somebody in the legacy media space will build a platform of scale and get to 70 million to 80 million subscribers. We’d like it to be us. If you keep the cultures separate, you’ll never get the benefits the three together bring.”
The perils of change
Nearly one year ago, after a prolonged fight against the Department of Justice, AT&T and Stankey got control of a sprawling media company that’s really three major media companies in one: The legendary Warner Bros. production studio, founded in 1923; Turner Broadcasting, named for media mogul Ted Turner, which merged cable stations including CNN, TBS and TNT with Time Warner in 1996; and HBO, founded in 1972 by Charles Dolan and sold to Time Inc. as the first national cable channel.
The first year of Stankey’s tenure has been dominated by headlines of former Time Warner executives leaving their jobs. First CEO Jeff Bewkes stepped away in June, along with Turner CEO John Martin. Then, after the DOJ lost its legal challenge and AT&T was free to merge Time Warner as it saw fit, the departures accelerated. HBO CEO Richard Plepler resigned in February. Several weeks later, Warner Bros. Entertainment CEO Kevin Tsujihara exited amid an inappropriate relationship with an actress.
To sum that up, those are the three CEOs of Time Warner’s major divisions and the CEO of Time Warner itself — all gone less than a year after AT&T’s acquisition.
Stankey’s leadership style has also rubbed some people the wrong way.
At least two current midlevel executives who are still at WarnerMedia haven’t met Stankey at all since he became CEO last year, according to people familiar with the matter. There’s been little internal explanation of what Stankey thinks of certain WarnerMedia divisions and their broader roles within the company and the streaming service, the people said.
Stankey has also caught employees off guard by being too public with ideas that weren’t fully baked.
Last year, Stankey unveiled a three-tiered streaming service at AT&T’s analyst day — an inexpensive movie-only service, a premium service with original programming and popular films, and a third service that bundles the first two and adds library content from WarnerMedia.
Several WarnerMedia executives said privately after the event they’d found out about the three-tiered idea for the first time either that day or just a few days earlier. Moreover, Stankey has since nixed the entire concept after being persuaded by those at the company that the offering is too confusing for consumers. While Stankey’s change of heart shows he can listen and shift gears, publicly disclosing a sweeping new plan only to eliminate the entire strategy months later isn’t an ideal start for a new CEO.
Stankey is aware of the confusion that comes with transition. WarnerMedia leadership sends a memo out every Wednesday that explains changes and why they’re happening, titled “WarnerMedia: Keeping You Informed.” Stankey has also participated in nearly a dozen breakfasts at offices around the country where employees can sign up to attend and ask him questions. Just last week, Stankey answered questions about the future of the company for an internal WarnerMedia podcast, according to a person familiar with the matter.
Still, the departures and transitions have led current and past employees to wonder about what, exactly, Stankey and AT&T CEO Randall Stephenson are doing. Rapidly eliminating leaders is what a company does when it buys a distressed or underperforming asset. AT&T paid $104 billion including debt for Time Warner — a 35% premium to where Time Warner was trading when Bloomberg first broke news of the deal.
That premium, said Stankey, is precisely why AT&T is making drastic changes.
“If things don’t change, then why did the transaction occur?” Stankey said. “If you pay a premium, something has to change the trajectory of the cash flows that were not paying that premium. Some people say I didn’t sign up for that, I signed up for this. It’s important to recognize when an individual hasn’t bought into the change and say, OK, we need to find someone who can commit to this.”
Breaking down silos
Some have speculated about a culture clash between stodgy telephone company AT&T and lavish media company Time Warner.
That’s not what’s happening, said Stankey.
“I believe some in the media are spending a lot of time between what is the culture between AT&T and Time Warner,” said Stankey. “It’s not that there aren’t differences around that, but we spend far and away more time on getting three very strong cultures within Time Warner to work together.”
For decades, Time Warner has successfully operated in silos, Stankey said, with Warner Bros., Turner and HBO all executing independently. That structure worked because Warner Bros.′ business of content production has operated separately from Turner’s cable distribution deals, which have also been separate from HBO’s premium content strategy.
That doesn’t make sense anymore, Stankey said.
“I have absolutely no concern about producing content at scale,” Stankey said. “But that incredible capability to produce content needs to be paired with some different skills than a traditional, largely wholesale media company has inherent in their business.”
Stankey’s focus has been getting HBO, Turner and Warner Bros. to work together to create a streaming service that will define the new WarnerMedia. That service is set to debut in a beta version at the end of the year and formally in the first quarter of 2020.
To get there requires daily collaboration across the board — creatives at Warner Bros. working with HBO and Turner executives, employees working on selling ads against a unified streaming product instead of individual cable networks, and technology developers focusing on a common user experience for all Warner properties.
He has a built-in advantage to get to 70 million subscribers: HBO already has 35 million U.S. customers that have access to HBO Go — the application used by subscribers to a traditional pay-TV package — or HBO Now, the cord-cutters’ version. Disney is also launching its own streaming product. However, it will have to start from scratch.
Stankey won’t force customers to switch from HBO Go or HBO Now to the company’s new streaming service. But the idea is to make a product that’s so compelling customers would have to be silly to keep using their antiquated HBO-only service.
The details are still a work in progress. While Stankey wouldn’t comment on details, people familiar with the matter said the product will initially launch as a subscription-only service for about $15 to $18 per month. That’s similar to HBO Now, which is $14.99 per month. Instead of just getting HBO, consumers will also (eventually) get access to Cinemax, Warner Bros.′ owned content, such as all of the DC comics films and TV shows ( “Batman,” “Wonder Woman,” “Aquaman,” etc.) and popular 1990s shows such as “Friends” and “ER.” That’s a lot of extra content for little extra money.
In time, there will be a livestreaming aspect of the service for CNN and sports content, said Stankey. TNT and TBS own rights to a number of major sports, including the NBA and NCAA basketball during March Madness. Like Netflix, Disney+, Amazon Prime Video and others, WarnerMedia will also create new originals for the service.
The service will initially be subscription-only but will add a discounted ad-supported version once the platform is stable and an audience is built up, the people said.
But AT&T’s plan won’t stop at just making a popular streaming service. If AT&T is able to gain scale — 70 million subscribers — the WarnerMedia streaming service would then consider letting other streaming services latch on, according to people familiar with the matter.
In other words, AT&T would become an aggregator of aggregated streaming services, based on future deals with to-be-determined economic arrangements. This would give AT&T added heft in its fight to be one of the handful of streaming services that are seen as must-haves amid the dozens and dozens in the market.
“Customers want a broad choice,” Stankey said. “I do believe it will take multiple providers to satisfy customers.”
In addition, AT&T eventually plans to merge its DirecTV Now service with its WarnerMedia streaming service, giving customers a more robust TV offering than anything on the market, the people said. A combined product with a common search and user interface — which, like the standalone streaming service, could also come bundled at a discount with an AT&T wireless subscription — would give customers access to live pay-TV streaming channels and Warner’s library and originals, all in the same ecosystem.
The combination of Warner’s library, Warner originals, live linear channels and other aggregated streaming products may keep customers from leaving AT&T’s platform — the desire of every media company. That product may also help stop the bleeding for DirecTV Now, which has lost nearly 20% of its subscribers in the last six months amid rising prices and rival competition.
The plan to get to 70 million
Stankey’s view of the future media world is four or five streaming services dominating the landscape. WarnerMedia needs to be one of those, he said. Netflix and Disney are almost certain to be two of the others, he said. The goal isn’t to be No. 1 — it’s just to be one of the five families.
AT&T’s biggest unforeseen challenge with Time Warner has been the DOJ’s decision to sue to block the merger. AT&T announced its agreement to buy Time Warner in 2016 but didn’t emerge with full, no-strings-attached control of the company until February 2018, when the DOJ lost its appeal to block the deal.
That delay erased what would have been a significant first-mover advantage over Disney and others in the race to get 70 million streaming service subscribers. Disney said in April it estimated Disney+ would have 60 million to 90 million subscribers by 2024.
Stankey plans to add subscribers by starting with HBO and hitting more underserved demographics. HBO isn’t a brand that resonates with families and young kids, aside from “Sesame Street,” he said. It also hasn’t targeted young and middle-aged women.
“Our goal is to build out new demographics by adding libraries,” he said. “I can go to [Warner Bros. TV head] Peter Roth and to our creative stable and say ‘I need three original series that’s going to meet this particular demo.’ You need breadth of selection. That’s also why you want to be both subscription and ad-supported. Customers still want 300 episodes of a sitcom. You’re probably not going to get it unless you’re able to do both.”
But will Warner’s deep library of shows and movies plus untested originals be enough to move the needle? Or will customers wait for Warner’s other assets, such as live sports, to be added to the service?
Paying a dollar or two more for an “HBO Max”-like service with Warner’s library and new original content is an obvious benefit to subscribers over just paying $15 for HBO, said BTIG media analyst Rich Greenfield. The question is whether TV distributors, such as Comcast and Charter, will help HBO market the new streaming application when it’s a clear competitor to the traditional pay-TV bundle. Cable operators have long helped HBO market its products, including HBO Go, because they were only available as authenticated services — products that come with a cable subscription.
“Netflix spends $2.5 billion on marketing,” Greenfield said. “What is AT&T prepared to spend?”
One thing is for sure: Don’t expect WarnerMedia’s streaming product to be called “Warner+.” This won’t be an add-on service. It’s a bet-the-company mission.
Unlike Disney, which views its $6.99 streaming service as a companion product to traditional pay-TV, Stankey comes at the new media world from a different angle. Disney is incentivized to stay away from complete disruption of the traditional cable bundle because it already gets about $20 per household from ESPN, ABC and its other networks, he said. WarnerMedia, on the other hand, doesn’t have ESPN and thus has to build a more compelling streaming service. That puts more pressure on delivering premium original programming.
“We need to maintain a higher degree of quality for the aggregate offering than what you might see on Netflix or Amazon and find a middle spot between those two in terms of volume,” said Stankey. “I believe we have a good white space to go to.”
That’s also why losing Plepler as HBO’s CEO was such a big blow, said Jason Hirschhorn, CEO of Redef Media.
“They should have kept him there,” Hirschhorn said. “He has the greatest track record ever. That didn’t happen by accident.”
The new world order
Stankey is not a media guy. He is a phone company guy. But even more than that, he is a businessman.
Those who know him describe him as extremely smart, an excellent operator and possessing a dry sense of humor. Stankey called himself “intellectually curious” and enjoys getting into the weeds of the businesses he owns and operates.
He graduated with a B.A. in finance from Loyola Marymount University. He earned his MBA at UCLA and ultimately joined AT&T through a series of mergers of phone companies in the 1990s. While at AT&T, he’s held positions including president and CEO of AT&T Business Solutions, president and CEO of AT&T Operations, group president of Telecom Operations, chief technology officer, chief information officer, and chief of strategy.
“Stankey has a telco background, and he’s thinking about the full media stack,” said Hirschhorn. “Content is just a part of a media company. Those that figure out the tech and the content — the hybrid — will be the winner.”
Stankey has been through eight significant consolidations at AT&T — most recently helping to quarterback AT&T’s 2015 $67 billion DirecTV acquisition. His previous experience gives him optimism that new people in leadership positions can rise to the occasion.
Knocking down cultural barriers that have existed for decades won’t be easy and is fraught with challenges. The effort will be led by Stankey and his new deputies, ex-NBC Entertainment and Showtime head Robert Greenblatt, who will be in charge of WarnerMedia’s content and building the streaming service, as well as CNN chief Jeff Zucker, now chairman of WarnerMedia News and Sports, and Gerhard Zeiler, who will oversee affiliate sales of programming and advertising.
Beyond Time Warner’s top executives, within HBO — no doubt the jewel of Time Warner — division executives such as HBO president of global distribution Bernadette Aulestia, senior VP of digital products Rebekka Rockafeller, executive vice president and senior VP of digital products and chief architect Gilman Wong, president and chief revenue officer Simon Sutton and chief digital officer Diane Tryneski have all recently left the company. Brad Bentley, who had been leading WarnerMedia’s direct-to-consumer streaming video group, is leaving just six months after taking the job.
But not everyone at Time Warner has departed. HBO president of programming Casey Bloys remains. Kevin Reilly, who ran Turner Broadcasting, is now the content chief for the new streaming service. Toby Emmerich, the chairman of Warner Bros. Pictures Group, has been with the company since 1992. Peter Roth has been with Warner since 1999 and was named president and chief content officer of the Warner Bros. TV Group in 2013.
Stankey is still looking for a new Warner Bros. chief to replace Tsujihara and is considering both internal and external candidates, including some people from outside of the movie and TV business, he said.
Any sports fan can tell you that it’s not typical for a team with a new coach and a lot of new players to succeed right away. The goal is to gel over time.
But Time Warner has already gone through one disastrous merger — AOL’s $162 billion acquisition in 2000. That deal has been studied in business schools as one of the worst examples of M&A of all time.
It will be up to Stankey to make sure history doesn’t repeat itself.
Disclaimer: Comcast owns NBCUniversal, the parent company of CNBC.
The Day the Music Burned
It was the biggest disaster in the history of the music business — and almost nobody knew. This is the story of the 2008 Universal fire.
1. ‘The Vault Is on Fire’
The fire that swept across the backlot of Universal Studios Hollywood on Sunday, June 1, 2008, began early that morning, in New England. At 4:43 a.m., a security guard at the movie studio and theme park saw flames rising from a rooftop on the set known as New England Street, a stretch of quaint Colonial-style buildings where small-town scenes were filmed for motion pictures and television shows. That night, maintenance workers had repaired the roof of a building on the set, using blowtorches to heat asphalt shingles. They finished the job at 3 a.m. and, following protocol, kept watch over the site for another hour to ensure that the shingles had cooled. But the roof remained hot, and some 40 minutes after the workers left, one of the hot spots flared up.
The fire moved quickly. It engulfed the backlot’s famous New York City streetscape. It burned two sides of Courthouse Square, a set featured in “Back to the Future.” It spread south to a cavernous shed housing the King Kong Encounter, an animatronic attraction for theme-park visitors. Hundreds of firefighters responded, including Universal Studios’ on-site brigade. But the fire crews were hindered by low water pressure and damaged sprinkler systems and by intense radiant heat gusting between combustible structures.
Eventually the flames reached a 22,320-square-foot warehouse that sat near the King Kong Encounter. The warehouse was nondescript, a hulking edifice of corrugated metal, but it was one of the most important buildings on the 400-acre lot. Its official name was Building 6197. To backlot workers, it was known as the video vault.
Shortly after the fire broke out, a 50-year-old man named Randy Aronson was awakened by a ringing phone at his home in Canyon Country, Calif., about 30 miles north of Universal City, the unincorporated area of the San Fernando Valley where the studio sits. Aronson had worked on the Universal lot for 25 years. His title was senior director of vault operations at Universal Music Group (UMG). In practice, this meant he spent his days overseeing an archive housed in the video vault. The term “video vault” was in fact a misnomer, or a partial misnomer. About two-thirds of the building was used to store videotapes and film reels, a library controlled by Universal Studios’s parent company, NBCUniversal. But Aronson’s domain was a separate space, a fenced-off area of 2,400 square feet in the southwest corner of the building, lined with 18-foot-high storage shelves. It was a sound-recordings library, the repository of some of the most historically significant material owned by UMG, the world’s largest record company.
Aronson let the phone call go to voice mail, but when he listened to the message, he heard sirens screaming in the background and the frantic voice of a colleague: “The vault is on fire.”
Aronson dressed and steered his car to Interstate 5. A few minutes later, the air picked up a harsh scent: the acrid odor of the fire, riding the early-morning breeze into Santa Clarita, roughly 20 miles from the backlot. Aronson sped south. When he turned onto the Hollywood Freeway, he saw clouds of greenish-black smoke pouring into the sky. It was 5:45 a.m. when he gained access to the lot and made his way to the vault.
There, he found an inferno. Fire was blasting out of the building as if shot from giant flamethrowers. The heat was extraordinary. There were at least a dozen fire engines ringing the vault, and as Aronson looked around he noticed one truck whose parking lights seemed to be melting.
The vault lay near Park Lake, a man-made body of water that appeared in the classic B-movie “Creature From the Black Lagoon.” Fire crews began drafting water from the lake. They rained water from the tops of ladders; they doused the building with foam fire retardant. These efforts proved futile. “It was like watching molten lava move through the building,” Aronson remembers. “Just a huge blob of fire that flowed and flowed.”
Before long, firefighters switched tactics, using bulldozers to knock down the burning warehouse and clear away barriers to extinguishing the fire, including the remains of the UMG archive: rows of metal shelving and reels of tape, reduced to heaps of ash and twisted steel. Heavy machinery was still at work dismantling the building as night fell. The job was finished in the early morning of June 2, nearly 24 hours after the first flames appeared.
The fire made news around the world, and the destruction of the video vault featured prominently in the coverage. But nearly all news outlets characterized the vault fire as a close call, in which worst cases were averted. The New York Times reported that “a vault full of video and television images” had burned up, but added that “in no case was the destroyed material the only copy of a work,” a claim attributed to Universal Studios officials. Subsequent articles focused on the fire’s impact on film festivals, which relied on prints from Universal’s library. But journalists moved on from the story, and there has never been a full accounting of film and video losses in the fire.
The Times’s report was typical in another way: It contained no mention of a music archive in the devastated warehouse. The confusion was understandable. Universal Studios Hollywood was a movie backlot, not a record-company headquarters. What’s more, a series of mergers and acquisitions had largely severed the ties between Universal’s film and music businesses. In 2004, Universal Studios was purchased by General Electric and merged with G.E.’s television property, NBC, to become NBCUniversal; UMG was cast under separate management, and in 2006 fell wholly under the ownership of Vivendi, the French media conglomerate. When the fire struck in June 2008, UMG was a rent-paying tenant on NBC Universal’s lot.
One of the few journalists to note the existence of the UMG archive was Nikki Finke, the entertainment-industry blogger and gadfly. In a Deadline.com post on the day of the fire, Finke wrote that “1,000’s of original ... recording masters” might have been destroyed in the warehouse, citing an anonymous source. The next day Finke published a “clarification,” quoting an unnamed representative from the record company: “Thankfully, there was little lost from UMG’s vault. A majority of what was formerly stored there was moved earlier this year to our other facilities. Of the small amount that was still there and waiting to be moved, it had already been digitized so the music will still be around for many years to come.” The same day, in the music trade publication Billboard, a UMG spokesperson again pushed back against the idea that thousands of masters were destroyed with a more definitive denial: “We had no loss.”
These reassuring pronouncements concealed a catastrophe. When Randy Aronson stood outside the burning warehouse on June 1, he knew he was witnessing a historic event. “It was like those end-of-the-world-type movies,” Aronson says. “I felt like my planet had been destroyed.”
The archive in Building 6197 was UMG’s main West Coast storehouse of masters, the original recordings from which all subsequent copies are derived. A master is a one-of-a-kind artifact, the irreplaceable primary source of a piece of recorded music. According to UMG documents, the vault held analog tape masters dating back as far as the late 1940s, as well as digital masters of more recent vintage. It held multitrack recordings, the raw recorded materials — each part still isolated, the drums and keyboards and strings on separate but adjacent areas of tape — from which mixed or “flat” analog masters are usually assembled. And it held session masters, recordings that were never commercially released.
UMG maintained additional tape libraries across the United States and around the world. But the label’s Vault Operations department was managed from the backlot, and the archive there housed some of UMG’s most prized material. There were recordings from dozens of record companies that had been absorbed by Universal over the years, including several of the most important labels of all time. The vault housed tape masters for Decca, the pop, jazz and classical powerhouse; it housed master tapes for the storied blues label Chess; it housed masters for Impulse, the groundbreaking jazz label. The vault held masters for the MCA, ABC, A&M, Geffen and Interscope labels. And it held masters for a host of smaller subsidiary labels. Nearly all of these masters — in some cases, the complete discographies of entire record labels — were wiped out in the fire.
The scope of this calamity is laid out in litigation and company documents, thousands of pages of depositions and internal UMG files that I obtained while researching this article. UMG’s accounting of its losses, detailed in a March 2009 document marked “CONFIDENTIAL,” put the number of “assets destroyed” at 118,230. Randy Aronson considers that estimate low: The real number, he surmises, was “in the 175,000 range.” If you extrapolate from either figure, tallying songs on album and singles masters, the number of destroyed recordings stretches into the hundreds of thousands. In another confidential report, issued later in 2009, UMG asserted that “an estimated 500K song titles” were lost.
The monetary value of this loss is difficult to calculate. Aronson recalls hearing that the company priced the combined total of lost tape and “loss of artistry” at $150 million. But in historical terms, the dimension of the catastrophe is staggering. It’s impossible to itemize, precisely, what music was on each tape or hard drive in the vault, which had no comprehensive inventory. It cannot be said exactly how many recordings were original masters or what type of master each recording was. But legal documents, UMG reports and the accounts of Aronson and others familiar with the vault’s collection leave little doubt that the losses were profound, taking in a sweeping cross-section of popular music history, from postwar hitmakers to present-day stars.
Among the incinerated Decca masters were recordings by titanic figures in American music: Louis Armstrong, Duke Ellington, Al Jolson, Bing Crosby, Ella Fitzgerald, Judy Garland. The tape masters for Billie Holiday’s Decca catalog were most likely lost in total. The Decca masters also included recordings by such greats as Louis Jordan and His Tympany Five and Patsy Cline.
The fire most likely claimed most of Chuck Berry’s Chess masters and multitrack masters, a body of work that constitutes Berry’s greatest recordings. The destroyed Chess masters encompassed nearly everything else recorded for the label and its subsidiaries, including most of the Chess output of Muddy Waters, Howlin’ Wolf, Willie Dixon, Bo Diddley, Etta James, John Lee Hooker, Buddy Guy and Little Walter. Also very likely lost were master tapes of the first commercially released material by Aretha Franklin, recorded when she was a young teenager performing in the church services of her father, the Rev. C.L. Franklin, who made dozens of albums for Chess and its sublabels.
Virtually all of Buddy Holly’s masters were lost in the fire. Most of John Coltrane’s Impulse masters were lost, as were masters for treasured Impulse releases by Ellington, Count Basie, Coleman Hawkins, Dizzy Gillespie, Max Roach, Art Blakey, Sonny Rollins, Charles Mingus, Ornette Coleman, Alice Coltrane, Sun Ra, Albert Ayler, Pharoah Sanders and other jazz greats. Also apparently destroyed were the masters for dozens of canonical hit singles, including Bill Haley and His Comets’ “Rock Around the Clock,” Jackie Brenston and His Delta Cats’ “Rocket 88,” Bo Diddley’s “Bo Diddley/I’m A Man,” Etta James’s “At Last,” the Kingsmen’s “Louie Louie” and the Impressions’ “People Get Ready.”
The list of destroyed single and album masters takes in titles by dozens of legendary artists, a genre-spanning who’s who of 20th- and 21st-century popular music. It includes recordings by Benny Goodman, Cab Calloway, the Andrews Sisters, the Ink Spots, the Mills Brothers, Lionel Hampton, Ray Charles, Sister Rosetta Tharpe, Clara Ward, Sammy Davis Jr., Les Paul, Fats Domino, Big Mama Thornton, Burl Ives, the Weavers, Kitty Wells, Ernest Tubb, Lefty Frizzell, Loretta Lynn, George Jones, Merle Haggard, Bobby (Blue) Bland, B.B. King, Ike Turner, the Four Tops, Quincy Jones, Burt Bacharach, Joan Baez, Neil Diamond, Sonny and Cher, the Mamas and the Papas, Joni Mitchell, Captain Beefheart, Cat Stevens, the Carpenters, Gladys Knight and the Pips, Al Green, the Flying Burrito Brothers, Elton John, Lynyrd Skynyrd, Eric Clapton, Jimmy Buffett, the Eagles, Don Henley, Aerosmith, Steely Dan, Iggy Pop, Rufus and Chaka Khan, Barry White, Patti LaBelle, Yoko Ono, Tom Petty and the Heartbreakers, the Police, Sting, George Strait, Steve Earle, R.E.M., Janet Jackson, Eric B. and Rakim, New Edition, Bobby Brown, Guns N’ Roses, Queen Latifah, Mary J. Blige, Sonic Youth, No Doubt, Nine Inch Nails, Snoop Dogg, Nirvana, Soundgarden, Hole, Beck, Sheryl Crow, Tupac Shakur, Eminem, 50 Cent and the Roots.
Then there are masters for largely forgotten artists that were stored in the vault: tens of thousands of gospel, blues, jazz, country, soul, disco, pop, easy listening, classical, comedy and spoken-word records that may now exist only as written entries in discographies.
Today Universal Music Group is a Goliath, by far the world’s biggest record company, with soaring revenues bolstered by a boom in streaming music and a market share nearly double that of its closest competitor, Sony Music Entertainment. Last year, Vivendi announced a plan to sell up to 50 percent of UMG. The sale is the talk of the music business; rumored potential buyers include Apple, Amazon and the Chinese conglomerate Alibaba. The price tag is expected to be hefty: In January, Deutsche Bank raised its valuation of UMG to more than $33 billion.
The label’s dominance rests in large part on its roster of current chart toppers — stars like Drake, Taylor Swift and Ariana Grande. But UMG’s reputation is also based on the great swaths of music history it owns, a canon that includes Frank Sinatra, the Beatles, Queen and many more artists and labels whose catalogs came under the UMG umbrella during decades of acquisition and consolidation. A key part of that legacy — the originals of some of the company’s most culturally significant assets — went up in smoke in 2008.
The vault fire was not, as UMG suggested, a minor mishap, a matter of a few tapes stuck in a musty warehouse. It was the biggest disaster in the history of the music business. UMG’s internal assessment of the event stands in contrast to its public statements. In a document prepared for a March 2009 “Vault Loss Meeting,” the company described the damage in apocalyptic terms. “The West Coast Vault perished, in its entirety,” the document read. “Lost in the fire was, undoubtedly, a huge musical heritage.”
2. The Truest Capture
The recordings that burned up in the Universal fire — like the songs that are blasting from car windows on the street outside your home, like all the records that you or I or anyone else has ever heard — represent a wonderment that we have come to take for granted. For most of human history, every word spoken, every song sung, was by definition ephemeral: Air vibrated and sound traveled in and out of earshot, never to be heard again. But technology gave humanity the means to catch sounds, to transform a soprano’s warble, a violin’s trill, Chuck Berry’s blaring guitar, into something permanent and repeatable, a sonic artifact to which listeners can return again and again.
The act of listening again has defined music culture for a century. It is also the basis of the multibillion-dollar record industry. Today a stupefying bounty of recordings is available on streaming audio services, floating free of the CDs, LPs and other delivery systems that once brought them to audiences. The metaphors we use to describe this mass of digitized sound bespeak our almost mystical sense that recorded music has dematerialized and slipped the bonds of earth. The Cloud. The Celestial Jukebox. Something close to the entire history of music hovers in the ether, waiting to be summoned into our earbuds by a tap on a touch-screen.
This is the utopian tale we tell ourselves, at least. In fact, vast gaps remain between the historical corpus of recorded music and that which has been digitized. Gerald Seligman, executive director of the National Recording Preservation Foundation, a nonprofit organization affiliated with the Library of Congress, estimated in 2013 that less than 18 percent of commercial music archives had been transferred and made available through streaming and download services. That figure underscores a misapprehension: the assumption that the physical relics of recorded sound are obsolete and expendable. “It feels as if music has evolved beyond the reach of objects,” says Andy Zax, a Grammy-nominated producer and writer who works on reissued recordings. “In fact we are as dependent on irritating physical stuff as we ever were.”
The objects in question are master recordings: millions of reels of magnetic tape, stored in libraries like the one that occupied the backlot vault. These archives hold other masters of various vintages: the lacquer, glass and metal masters that predated tape, and disk drives and digital tapes from the past few decades. They comprise, as Zax said at a music conference, “a bewildering array of formats: albums, singles, demos ... the entire careers of artists we know everything about and artists we know nothing about. ... The future of all of the recorded music that we have ever heard — and, for that matter, all of the recorded music that we haven’t heard yet — depends on our ability to maintain these artifacts.”
It is sonic fidelity, first and foremost, that defines the importance of masters. “A master is the truest capture of a piece of recorded music,” said Adam Block, the former president of Legacy Recordings, Sony Music Entertainment’s catalog arm. “Sonically, masters can be stunning in their capturing of an event in time. Every copy thereafter is a sonic step away.”
This is not an academic point. The recording industry is a business of copies; often as not, it’s a business of copies of copies of copies. A Spotify listener who clicks on a favorite old song may hear a file in a compressed audio format called Ogg Vorbis. That file was probably created by converting an MP3, which may have been ripped years earlier from a CD, which itself may have been created from a suboptimal “safety copy” of the LP master — or even from a dubbed duplicate of that dubbed duplicate. Audiophiles complain that the digital era, with its rampant copy-paste ethos and jumble of old and new formats, is an age of debased sound: lossy audio files created from nth-generation transfers; cheap vinyl reissues, marketed to analog-fetishists but pressed up from sludgy non-analog sources. “It’s the audio equivalent of the game of ‘Telephone,’ ” says Henry Sapoznik, a celebrated producer of historical compilation albums. “Who really would be satisfied with the sixth message in?”
The remedy is straightforward: You go back to the master. This is one reason that rereleases of classic albums are promoted as having been painstakingly remastered from the original tapes. It’s why consumers of new technologies, like CDs in the 1980s, are eager to hear familiar music properly recaptured for the format. Right now, sound-savvy consumers are taking the next leap forward into high-resolution audio, which can deliver streaming music of unprecedented depth and detail. But you can’t simply up-convert existing digital files to higher resolution. You have to return to the master and recapture it at a higher bit rate.
But the case for masters extends beyond arguments about bit depth and frequency ranges audible only to dogs. It enters the realms of aesthetics and phenomenology. Simply put, the master of a recording is that recording; it is the thing itself. The master contains the record’s details in their purest form: the grain of a singer’s voice, the timbres of instruments, the ambience of the studio. It holds the ineffable essence that can only truly be apprehended when you encounter a work of art up-close and unmediated, or as up-close and unmediated as the peculiar medium of recorded sound permits. “You don’t have to be Walter Benjamin to understand that there’s a big difference between a painting and a photograph of that painting,” Zax said in his conference speech. “It’s exactly the same with sound recordings.”
The comparison to paintings is instructive. With a painting, our task as cultural stewards is to hang the thing properly, to keep it away from direct sunlight, to guard it from thieves. A painting must be maintained and preserved, but only in rare cases will a technological intervention improve our ability to see the artwork. If you were to stand before the Mona Lisa in an uncrowded gallery, you would be taking in the painting under more or less ideal circumstances. You will not get a better view.
In the case of a recording, a better view is possible. With recourse to the master, a recording’s “picture” can, potentially, be improved; the record can snap into sharper focus, its sound and meaning shining through with new clarity and brilliance. The reason is a technological time lag: For years, what people were able to record was of greater quality than what they were able to play back. “Most people don’t realize that recording technology was decades more sophisticated than playback technology,” Sapoznik says. “Today, we can decode information off original recordings that was impossible to hear at any time before.”
The process of revisiting and decoding can transfigure the most familiar music. In May 2017, a new box set of the Beatles’ “Sgt. Pepper’s Lonely Hearts Club Band” was released to mark the album’s 50th anniversary. “Sgt. Pepper’s” is one of the most famous recordings in history, but the version most listeners know is the stereo mix, which was of secondary importance to the Beatles, their producer George Martin and his engineer, Geoff Emerick. It was the mono mix that consumed the Beatles’ attention, and it is to those materials that the box set’s producer, Martin’s son Giles, returned, creating a fresh stereo mix from the mono masters. “The job was to strip back layers, to get back to that original sound and intent,” he says. “The detail we can garner from the mix compared to what they could have done 50 years ago is fantastic.”
The result is a vivid new “Sgt. Pepper’s.” In certain quarters, the album has been regarded as twee, but Giles Martin’s mix reveals a burlier rock ’n’ roll record. The box set opens new vistas on the album’s themes and adds force to its pathos. The opus “A Day in the Life” sounds more ominous than ever, a portent of late ’60s chaos, of the storm gathering on the other side of the Summer of Love. These epiphanies would not have been possible without masters. “Working without the master tapes,” Martin says, “would be like a chef having to use precooked food.”
The “Sgt. Pepper’s” masters are kept in a secure location in London. The tape boxes are marked with recording notes that helped guide Martin’s mixing decisions. The tapes themselves feature additional recordings — alternate versions, overdubs, studio chatter — that were included on the rerelease. Tens of millions of copies of “Sgt. Pepper’s” have been sold over the years; it may seem precious to place special value on the original of a record that is so well known and ubiquitous. But the masters in the London archive are unique. They have greater fidelity than any copy of “Sgt. Pepper’s” that is out in the world. They have more documentation than any version anywhere. And the masters contain more Beatles music too.
The same is surely true of many masters destroyed in the Universal fire. John Coltrane and Patsy Cline music has not vanished from the earth; right now you can use a streaming service to listen to Coltrane and Cline records whose masters burned on the backlot. But those masters still represent an irretrievable loss. When the tapes disappeared, so did the possibility of sonic revelations that could come from access to the original recordings. Information that was logged on or in the tape boxes is gone. And so are any extra recordings those masters may have contained — music that may not have been heard by anyone since it was put on tape.
There is another defining characteristic of masters — the “Sgt. Pepper’s” tapes, the tapes stacked on the shelves of Building 6197 and countless other masters as well. They are corporate assets. In 2019, most commercial recordings from the past century-plus are controlled by three gigantic record companies: UMG, Sony and Warner Music Group. These “big three” labels get to exploit this material for profit. But they are also the warehousers of millions of cumbersome master recordings. They’re in the storage business.
That task is expensive and complex, and if the past is an indication, it may be a job for which record companies are ill suited. The Universal fire brought losses on an unprecedented scale, but it was only the most recent disaster to strike the masters holdings of American record labels. These disasters include not only events like fires but also instances of neglect and even willful destruction by the labels themselves, a hair-raising history that reaches back to the beginnings of the music business.
Today industry professionals familiar with archiving practices question the big three labels’ commitment to preservation. (A number of these insiders, including individuals with knowledge of the backlot fire, spoke on condition of anonymity, concerned they could face professional consequences with UMG and other labels.) One audio specialist said: “Labels need to see payoff: ‘We have a release next year from this artist.’ But as far as, ‘We have this inventory on the shelves, let’s preserve it’ — that’s not the attitude. An old recording that’s deteriorating on the shelf is not causing alarm.”
The result is a crisis, a slow-motion assault on our musical heritage that is poorly understood by many within the record industry, to say nothing of the public at large. Had a loss of comparable magnitude to the Universal fire occurred at a different cultural institution — say, the Metropolitan Museum of Art — there might have been wider awareness of the event, perhaps some form of accountability. Yet the conservation mission faced by record labels may be no less vital than those of museums and libraries. Recorded music is arguably America’s great artistic patrimony, our supreme gift to world culture. How should it be safeguarded? And by whom?
3. An Open Secret
I met Randy Aronson for the first time on a spring day in 2016. He was living in the same three-bedroom house where he had been jolted awake by a phone call on the morning of the fire. It was a small house, and it was a full one, occupied by Aronson and his wife, one of their two adult daughters, the daughter’s boyfriend, three dogs and a cat.
As a young man, Aronson did some acting, and he recently returned to the stage, starring in a community-theater comedy about the 1930s golden age of radio. Aronson has the look of a guy who can do a good screwball turn. He is tall and husky, with an elastic face and eyes that hold a gleam. When I arrived at his house, he led me into the living room, where I noticed a BB gun. “There are coyotes around here,” he said. “I don’t shoot at them — I shoot around them.” Aronson was adopted as an infant. His father worked as a repairman for the Otis Elevator Company for 35 years. “That’s where I got my loyalty to one company,” Aronson said. “I know that sounds funny, under the circumstances.”
In January 2016, Aronson lost his job at UMG. He had continued to direct the company’s vault operations following the fire, overseeing approximately 1.5 million master tapes that UMG maintained in storage facilities around the United States. He said he was never given a reason for his dismissal but chalks it up to differences of “archiving philosophy.” “I wasn’t speaking their language,” he said.
I sought out Aronson more than a year after learning about the vault fire. His account of events and knowledge of the vault’s contents confirmed the picture that had emerged from my review of legal documents and UMG’s internal records. Aronson admits he would not have consented to interviews were he still with UMG. But he insists he is not motivated by animus toward the company. He agreed to talk, he said, because he hopes the story of the fire will lead to a broader conversation about preservation. He expressed anxiety about his job prospects in light of his participation in this article. “I am a man of strong convictions on what I think is proper storage and preservation standards of music tape,” he wrote in an email in 2016. “I am also a 58-year-old man who is seeking employment with one of the few remaining music companies.”
There’s no mistaking Aronson’s strong convictions, and strong emotions, about the Universal fire. In dozens of conversations and email exchanges, he described the event as a personal trauma. “Sometimes I forget that there was life before the fire,” he said. “Even now, it gets me choked up, thinking about all those tapes.”
The fate of all those tapes has been an open secret for years. It hides in plain sight on the internet, popping up on message boards frequented by record collectors and audio engineers. In a 2014 interview, Richard Carpenter, one-half of the superstar 1970s duo the Carpenters, stated that masters for the group’s multimillion-selling A&M albums were lost on the backlot. “A lot of those masters ... they went up in the fire at Universal,” Carpenter said. References to the loss of Decca and Chess masters in the fire appeared more than three years ago in the Wikipedia entry for Universal Studios Hollywood and were still on the page at the time of this writing.
Yet the news has never reached the broader public. In part, this represents a triumph of crisis management. In the days following the fire, officials at UMG’s global headquarters in Santa Monica, Calif., and in New York scrambled to spin and contain press coverage.
In an email sent to UMG executives and P.R. staff members on June 3, 2008, Peter LoFrumento, the company’s spokesman, reported on efforts to downplay the story, attaching articles from The New York Times, The New York Daily News and The Los Angeles Times that reflected UMG’s account of events. The officials copied on the email included Zach Horowitz, UMG’s president and chief operating officer. Horowitz, who has since left the company, declined to comment for this article.
“We stuck to the script about physical backups and digital copies,” LoFrumento wrote in the email. The company, he claimed, had steered Jon Healey, a Los Angeles Times writer, toward a more favorable view: “We were able to turn Healey around on his L.A. Times editorial so it’s not a reprimand on what we didn’t do, but more of a pat on the back for what we did.” That editorial, published in the paper’s June 3 edition, offered comforting news: “At this point, it appears that the fire consumed no irreplaceable master recordings, just copies.”
Other newspaper accounts described damage to master recordings by little-known artists, whose names may have been cherry-picked by UMG in an effort to downplay the gravity of the loss. A New York Times article on June 3 cited recordings by “pop singers Lenny Dee and Georgie Shaw” as examples of the “small number of tapes and other material by ‘obscure artists from the 1940s and ’50s’ ” that were affected by the fire. The Times ascribed these assertions to a UMG spokesman. The Daily News article also invoked the loss of “original recordings from organ virtuoso Lenny Dee and 1950s hitmaker Georgie Shaw.” A possible explanation for the highlighting of Dee and Shaw comes from Aronson: He says that a UMG executive asked him, the day after the fire, for the names of “two artists nobody would recognize,” to be furnished to journalists seeking information on lost recordings.
That same June 3 Daily News article included a direct quotation from LoFrumento: “In one sense it was a loss. In another, we were covered,” he said. “It had already been digitized, so the music will still be around for many years.” The claim about digital backups, which was reported by other news outlets, also seems to have been misleading. It is true that UMG’s vault-operations department had begun a digitization initiative, known as the Preservation Project, in late 2004. But company documents, and testimony given by UMG officials in legal proceedings, make clear that the project was modest; records show that at the time of the fire approximately 12,000 tapes, mostly analog multitracks visibly at risk of deterioration, had been transferred to digital storage formats. All of those originals and digital copies were stored in a separate facility in Pennsylvania; they were not the items at issue in the fire. The company’s sweeping assurance that “the music” had been digitized appears to have been pure spin. “The company knew that there would be shock and outrage if people found out the real story,” Aronson says. “They did an outstanding job of keeping it quiet. It’s a secret I’m ashamed to have been a part of.”
Doug Morris, UMG’s chairman and chief executive at the time of the fire, declined to comment for this article; he left the company in 2010. In a statement provided to The New York Times last month, a current UMG spokesman said that the company was unable to comment on the 2008 fire. “In this case, there are constraints preventing us from publicly addressing some of the details of the fire that occurred at NBCUniversal Studios’ facility more than a decade ago,” the statement read. “However, in the intervening years, UMG has made significant investments — in technology, infrastructure and by employing the industry’s foremost experts — in order to best preserve and protect these musical assets and to accelerate the digitization and subsequent public availability of catalog recordings.”
Back in 2008, UMG undoubtedly feared the public embarrassment that news of the losses could bring. But Aronson and others suggest that UMG was especially concerned about repercussions with the artists, and the estates of artists, whose recordings were destroyed.
Record contracts are notoriously slanted in the favor of labels, which benefit disproportionately from sales and, in most cases, hold ownership of masters. For decades, standard artists’ contracts stipulated that recordings were “work for hire,” with record companies retaining control of masters in perpetuity. It is a paradox of the record business: Labels have often been cavalier about physically safeguarding masters, but they are zealous guardians of their ownership and intellectual-property rights.
Certain musicians, usually big stars, negotiate ownership of masters. (“If you don’t own your masters, your master owns you,” quipped Prince in 1996, at the height of a high-profile standoff with Warner Brothers.) It is unclear how many of the artists whose work was lost in the Universal vault had ownership of their physical masters, or were seeking it. But by definition, artists have a stake in the intellectual property contained on those masters, and many artists surely expected UMG to safeguard the material for potential later use. Had word of the fire’s toll emerged, many of the biggest names in pop music, and many profitable artist estates, would have learned that UMG had lost core documents their catalogs rest on — a source for everything from potentially lucrative reissues to historical preservation to posthumous releases. That scenario could have exposed UMG to a storm of questions, threats and reputational damage from across the industry.
But in the decade since the fire, UMG has faced little apparent blowback from artists or their representatives. It is probable that musicians whose masters were destroyed have no idea that a vault holding UMG masters had burned down. (A UMG spokesperson, asked if there has been any systematic effort to inform artists of the losses, said the company “doesn’t publicly discuss our private conversations with artists and estates.”)
The closest UMG came to a public imbroglio may have been in 2010, when, Aronson says, he was sent on an unusual business trip to Pennsylvania. He had been told by a UMG executive that one of the most powerful men in the music industry, Irving Azoff, was asking questions about the loss of Steely Dan masters in the fire. Azoff, the former chairman of MCA Inc., is now the chairman and chief executive of Azoff MSG Entertainment, a live entertainment conglomerate, as well as the “supermanager” chairman of Full Stop Management, whose roster of clients includes Steely Dan and the Eagles. A quarrel with Azoff was an unwelcome prospect. Luckily, the tapes he was concerned about, multitrack masters of Steely Dan’s first releases, turned out to have been moved to UMG’s Pennsylvania tape vault before the fire.
Azoff sent Elliot Scheiner, a celebrated record producer and mixer who had worked with Steely Dan, to confirm the tapes were intact. Aronson accompanied Scheiner to the Pennsylvania facility, the tapes were pulled, the matter was dropped. (Asked about this incident, both Azoff and Scheiner declined to comment.) In fact, UMG documents suggest that Steely Dan masters — different tapes than those sought by Azoff — were in Building 6197 when the fire hit. According to Aronson, these likely included certain album masters, as well as multitrack masters holding outtakes and unreleased material. “Those songs,” Aronson says, “will never be heard again.”
UMG avoided bad publicity, but in the months after the fire, the feelings of shock and chagrin remained acute for Aronson and his vault operations colleagues. As for senior executives, it is unclear how engaged they were in the questions debated, and the decisions made, in the fire’s aftermath. “I got the sense they felt the less top executives knew, the less accountable they’d be,” Aronson says. “I felt I was being shielded from top execs and carted in for insurance and legal meetings.”
There were many such meetings. In December 2009, UMG filed a lawsuit against NBCUniversal, its former landlord at the vault, seeking compensatory damages for losses suffered in the fire. (Much of what we know about the event comes from depositions and documents that emerged from this litigation.) The suit claimed that NBCUniversal, which leased the backlot vault to UMG, “breached their duty of care,” resulting in the destruction of the warehouse and its contents. Legal wrangling ensued for more than three years, until February 2013, when UMG dropped the suit and the parties settled for an undisclosed sum. (Spokespeople for UMG and NBCUniversal declined to comment.)
The position staked out by UMG in the lawsuit was the opposite of that in its public statements. Rather than minimizing the fire’s impact, the company sought to prove the gravity of the event and the loss incurred. Aronson’s knowledge of the fire’s toll made him valuable to that cause. He was deposed multiple times and asked by UMG lawyers to submit declarations to the court on four occasions. “Although it was never said to me, I was certain that they loved my candor for legal reasons,” Aronson says. “I was the perfect counter to news releases that said the whole thing was a minor event.”
4. Cathedral of Sounds
The history of music-archiving misfortunes extends far beyond UMG’s ruined vault. It stretches back decades and encompasses nearly every significant record label. That history was detailed by a journalist, Bill Holland, in a two-part exposé, published in Billboard in July 1997. Holland revealed the loss and destruction of “untold numbers of recordings, old and not so old.” Record companies have tossed masters in bulk into dumpsters and buried them in landfills. During World War II, labels donated metal parts masters to salvage drives. Three decades later, employees of CBS Records carved up multitrack masters with power saws so the reels could be sold to scrap metal dealers.
Catalog material by top stars sometimes suffered the same fate as obscure recordings. Holland discovered that a purge of multitracks at RCA in the 1970s included tapes by the best-selling act in the label’s history, Elvis Presley. Countless more recordings have been lost to shoddy storage practices. Tapes have been mislabeled, misplaced and misfiled; tapes have been marooned on high shelves in disorderly warehouses, left at loading docks, abandoned at shuttered recording studios. In 1972, decades before the Universal inferno, a fire struck an MGM Records warehouse. Holland reported that masters for MGM and the jazz label Verve were damaged or destroyed in the fire and in the months following, when surviving recordings were kept in an open shed.
The preservation laxities were dictated by what seemed at the time to be common sense. For decades, the music industry was exclusively a business of now, of today’s hot release, of this week’s charts — of hits, not history. “Nobody cared about catalog,” says an industry veteran. “Stuff that was five years old might as well have been 1,000 years old.”
One insider said, “Most senior executives in the record business have no understanding of what masters are, why you need to store them, what the point of them is.” Crucially, masters were not seen as capable of generating revenue. On the contrary: They were expensive to warehouse and therefore a drain on resources. To record-company accountants, a tape vault was inherently a cost center, not a profit center.
These attitudes prevailed even at visionary labels like Atlantic Records, which released hundreds of recordings by black artists beginning in the late 1940s. In his Billboard exposé, Holland mentioned a 1978 fire in an “Atlantic Records storage facility in Long Branch, N.J.” Holland did not reveal that the “facility” was the former home of Vogel’s Department Store, owned by the family of Sheldon Vogel, Atlantic’s chief financial officer. Late in the 1970s, Vogel told me, Ahmet Ertegun, Atlantic’s president, complained about tapes cramming the label’s Manhattan office. Vogel suggested moving the material to the empty Long Branch building.
Vogel was on vacation on Feb. 8, 1978, when he learned the building had burned down. The 5,000-plus lost tapes comprised nearly all of the session reels, alternate takes and unreleased masters recorded for Atlantic and its sublabels between 1949 and 1969, a period when its roster featured R.&B., soul and jazz luminaries, including Aretha Franklin, Ray Charles, John Coltrane and Ornette Coleman. Today the importance of those tapes is self-evident: thousands of hours of unheard music by some of history’s greatest recording artists. But to Atlantic in 1978, the tapes were a nuisance. According to Vogel, Atlantic collected “maybe a couple of million dollars” in insurance on the destroyed masters. It seemed like a good deal.
“We thought, Boy, what a windfall,” Vogel says. “We thought the insurance was worth far more than the recordings. Eventually, the true value of those recordings became apparent.”
When Randy Aronson began working as a music archivist in the mid-1980s, he had no idea what a master was. He grew up in central Los Angeles and, like many L.A. kids, his ambition was to get into show business. He did some theater during the years he attended college and continued acting into his early 20s, performing in dinner theater while making ends meet with odd jobs.
In 1983, when he was 25, Aronson took a full-time position on the Universal Studios lot, in the mailroom. To work on the lot was to bask in Hollywood history and Hollywood kitsch. The site was opened in 1915 in a rural stretch of northern Los Angeles. Gradually, that pastoral site became the lot, a bustling maze of offices, sets and soundstages. In 1958, the Music Corporation of America (MCA Inc.) bought the lot from Universal Pictures. In 1964, MCA executives, seeking a new source of revenue, developed a studio tour, which soon expanded into a full-fledged amusement park, with rides and attractions.
After two years in the mailroom, Aronson sought new work on the lot. In the spring of 1985, he got a temporary position in the tape vault of MCA Records, the music conglomerate that would later be renamed Universal Music Group. It wasn’t a glamorous gig. The archive was huge and poorly organized, with thousands of tapes misshelved or improperly labeled. Aronson’s task was to impose order on the chaos.
He had no previous experience with preservation work; he was fuzzy on the basics of sound recording. He learned, he says, “tape by tape.” Aronson was a rock fan with a deep appreciation for the musical past. He was tickled when he stumbled on tapes for favorite albums, like the Mamas and the Papas’ “If You Can Believe Your Eyes and Ears.” The work was tedious, but Aronson had a strong sense of mission and of his own good fortune. When he arrived at the vault each day, he had the feeling he was entering a cathedral stocked with relics.
Less than a year after taking the temp job, Aronson was asked to run the archive. It was a period of sea change in the music industry. In the early 1980s, the first compact discs had appeared in American record stores. Over the next decade and a half, CDs would turbocharge the business, a run that climaxed in 1999, when revenue from recorded music in the United States reached $14.6 billion. LPs had dominated for more than 30 years, but the arrival of CDs encouraged listeners to replace record collections at huge markups, paying up to three times the price for an old album in a crisp new format. The avidity with which consumers snatched up even poor-quality CD reissues was a revelation: proof that catalogs could be cash cows.
The result was a reissue boom. Master tapes were essential to this new line of business. But at the MCA vault, Aronson and his colleagues faced challenges, the consequences of archiving failures dating back decades. Aronson grew accustomed to finding gaps in the collection, “tapes that should have been there and were not,” he says.
The vault facility itself was problematic. MCA’s music tapes were stored on the ground floor of the film-archive building. The temperature in the vault was 35 degrees Fahrenheit, the correct conditions for storing film, but too cold for music tapes. When masters were pulled and transported to recording studios, they emerged from the frigid vault into the Southern California heat. Aronson received reports that tapes were arriving at studios in bad shape, cracked and crumbling.
By 1990, MCA’s music archive had moved to a new home on the backlot: Building 6197, a big metal shack that had been built to store theme-park souvenirs. A new concrete foundation was poured to accommodate a heavy load of tapes, and HVAC systems were installed. Yet problems persisted. The inventory was still kept on 5 x 7 cards, and the checkout system involved scrawled notes in three-ring binders. “We got the vault to a point where it was well organized,” Aronson says. “But it wasn’t well inventoried. It was hard to sell a return-on-investment on an inventory. It was not a company priority.” Without a proper inventory, MCA had only a vague idea of what was, and wasn’t, in its archive. “When someone asked for a tape, we’d look on the shelf and see if it was there,” Aronson says. “If it wasn’t, we knew we had a problem.”
Soon, new concerns arose. In the fall of 1990, a Universal Studios security guard started a fire that whipped across the backlot, causing an estimated $25 million in damage. (The guard was convicted of arson.) The fire reached the doorstep of Building 6197, but firefighters beat back the flames. Aronson began to reconsider the prudence of maintaining a tape library on the studio backlot.
“For a long time, I was seduced by the lot,” Aronson says. “It was like being in Narnia. I saw Arnold Schwarzenegger in a dress smoking a cigar. There were camels and elephants walking past. I was so in love with being on the lot, I hadn’t thought through the dangers.”
Five large fires had hit the backlot in the years between the studio’s founding and the arson incident. In 1997, another major fire was ignited by an overturned set light. There were pyrotechnic materials on the backlot, used in films and featured in tourist attractions. “The King Kong ride had explosions, all day every day,” Aronson says. “Flames shooting up. Right next door to the vault.”
In addition to the backlot archive, UMG had tape collections in Pennsylvania, outside Nashville, in upstate New York and in a separate location in Los Angeles. Over the years, the company’s masters holdings grew as mergers and acquisitions brought new labels — and new tape libraries — into MCA’s portfolio. In 1995, the Seagram Company acquired an 80 percent interest in MCA Inc.; the following year, MCA’s music division was renamed Universal Music Group. Seagram purchased PolyGram Records in December 1998 and soon merged it with UMG, adding several hundred thousand masters to the company’s archives. Most PolyGram masters — including material released on such sublabels as Mercury, Island and Motown — were housed in a rented warehouse in Edison, N.J.
One day in May 2004, Aronson got a call from a colleague. A crisis was unfolding at the New Jersey warehouse. According to depositions in UMG’s later litigation with NBCUniversal, an accident in the warehouse space directly above UMG’s tape vault resulted in a broken water main. Aronson flew to New Jersey, where he learned that the upstairs tenant, a food-service company, had loaded too many pallets of salad dressing into its storage hold, caving in the ceiling above the UMG vault and rupturing a pipe as it crashed down. At the warehouse, Aronson beheld a gory scene: collapsed Sheetrock, dangling electricity lines, hundreds of shattered salad-dressing bottles and a foot of water flooding a vault that held 350,000 master tapes, including the entire Motown catalog. The destruction of all those masters was averted only by quick action: a rescue-and-restoration effort which, according to Aronson, cost $12 million and entailed the hiring of a dozen trucks equipped with 53-foot refrigerated trailers to freeze-dry wet tapes.
Even more than the 1990 backlot fire, the New Jersey incident shook Aronson’s assumptions about how, and where, UMG should secure its masters. Aronson says he urged UMG to abandon the backlot, shifting the recordings to a safer location. Eventually, Aronson says, a compromise was reached: Most of the session reels and multitracks stored on the backlot, about 250,000 tapes, were moved to the archive in Pennsylvania. This left approximately 120,000 masters — 175,000, if you accept Aronson’s estimate — in Building 6197. These were the recordings that burned on June 1, 2008.
“I get why there was a feeling of safety,” Aronson says. “We had our own fire department. But still I look back on it and I wonder: What the [expletive] was anybody thinking putting a tape vault in an amusement park?”
5. Deep Catalog
On May 27, 2010, a group of celebrities, politicians and Universal Studios officials appeared at a news conference on the Universal backlot to mark the reopening of New York Street. The speakers, including Gov. Arnold Schwarzenegger of California and the president of Universal Studios, Ron Meyer, praised the firefighters who had battled the 2008 inferno and rhapsodized about the rebuilt set. The name given by Universal to its rebuilding effort struck a heady note of regeneration and renewal: The Phoenix Project.
A year and a half earlier, Universal Music Group embarked on its own recovery project. In an apparent coincidence, the program’s nickname was nearly identical to the one chosen by its former sister company. But UMG’s Project Phoenix would not culminate in a splashy ceremony; no gleaming tape vault would rise from the ashes. In the decade-plus since the fire, UMG has shifted many of its masters into the hands of third parties. This is typical of the record industry at large: In the 21st century, the job of archiving major labels’ masters has largely been outsourced.
UMG began Project Phoenix in October 2008. The plan was to gather duplicates of recordings whose masters were lost. Those copies would then be digitally transferred to reconstitute the lost archive — albeit in sonically inferior form, with recordings generations removed from the true masters. UMG undertook a global hunt, searching for safety copies and other duplicates at a variety of locations in the United States and abroad. The project lasted two years and, by Aronson’s estimate, recovered perhaps a fifth of what had been lost. The recordings were transferred to Linear Tape-Open, or LTO, a tape format used for archiving digital data. Copies were placed in storage holds on both coasts: at an underground vault in Boyers, Pa., and a high-rise facility in Hollywood. Both vaults are run by Iron Mountain, the global information-management and storage giant.
UMG is not alone in its reliance on the multibillion-dollar company. Founded in 1951 under the name Iron Mountain Atomic Storage Corporation, the company initially catered to the warehousing needs of American businesses and to Cold War anxieties, promising to secure documents in a nuclear attack. By the 1980s, its warehouses and subterranean vaults held paperwork and assets for private concerns and public institutions, from banks to corporations to the federal government, which remains a major client.
Today several of the company’s nearly 1,500 facilities are devoted to entertainment assets. Warner Music Group stores hundreds of thousands of master recordings in Iron Mountain’s Southern California facilities, and nearly all of Sony Music Entertainment’s United States masters holdings — more than a million recordings — are reportedly kept in Iron Mountain warehouses in Rosendale, N.Y. The Boyers, Pa., facility where UMG keeps most of its United States masters is a 1.7-million-square-foot former limestone mine. The facility offers optimal archive conditions, climate control and armed guards.
For labels, Iron Mountain is a one-stop shop. In addition to providing storage, it runs on-site studios, so staff members can pull tapes and send digital transfers to labels online, avoiding any need for recordings to leave the premises. Yet some music-business insiders regard this arrangement as a mixed bargain. When masters arrive at Iron Mountain, they say, institutional memory — archivists’ firsthand knowledge of poorly inventoried stacks — evaporates, as does the possibility of finding lost material, either by dogged digging or chance discovery. (Many treasures in tape vaults have been stumbled upon by accident.) Tapes can be retrieved only when requested by bar-code number, and labels pay fees for each request. For years, rumors have circulated among insiders about legendary albums whose masters have gone missing in Iron Mountain because labels recorded incorrect bar-code numbers. The kind of mass tape-pull that would be necessary to unearth lost recordings is both financially and logistically impractical.
“I’ve always thought of Iron Mountain as that warehouse in the last scene of ‘Raiders of the Lost Ark,’ ” says Thane Tierney, who co-founded Universal’s now-defunct reissue label Hip-O Select. “Just endless rows of stuff. It’s perfectly safe, but there’s no access, no possibility of serendipity. Nearly all the tapes that go in will never come off the shelf. They’re lost to history.”
There are other institutions devoted to preserving sound recordings. In January 2011, the recorded-sound section of the Library of Congress announced its largest-ever acquisition: approximately 200,000 metal parts, aluminum and glass lacquer disc masters, donated by Universal Music Group. The recordings, dating from 1926 to 1948, are among the oldest extant masters in UMG’s catalog. Physical ownership of the masters was permanently transferred from UMG to the federal government; UMG retained the intellectual-property rights. The library is free to preserve the recordings, digitize them and make them available to scholars. The label can continue to exploit them commercially. For the label, it’s a great deal, transferring preservation responsibility for some of its most fragile assets while saving on storage costs.
Today, of course, a seemingly infinite music library sits at the fingertips of every smartphone owner. The rise of Napster and file sharing in the early 2000s decimated the music business; as recently as 2015, the industry was widely judged to have been broken by digital piracy. But with the rise of streaming, a new era has arrived. In each of the past three years, recorded-music retail revenues have surged by more than 10 percent, with the Recording Industry Association of America reporting $9.85 billion in revenue for 2018. A full 75 percent of that revenue came from streaming, and more than half of the total went to UMG, in what Billboard described as possibly “the most dominant year by a music company in modern history.”
This streaming boom is only the latest in a long history of technological upheavals in the music industry. Shifts in format — from wax cylinders to shellac discs to LPs to CDs and MP3s and now streaming — arrive periodically to transform the record trade. The newest development is a shift within a shift, the advent of high-resolution audio, with streaming services offering premium products built on high-quality sound. The platform Tidal recently started a subscription product called Tidal Masters, described by the company as “the ultimate audio experience ... thousands of master-quality songs.” As in the CD era, the industry is trading on the mystique of masters — and once again it is running up against the imperative of keeping those original recordings around and in good shape. To deliver “master quality” audio, you must return to the masters. The loss and discovery of these ur-recordings is a perennial topic of interest in music news: In the past few weeks, Prince fans savored the release of a new collection of classic song demos pulled from his vault, while Mike D of the Beastie Boys made news by revealing that the masters of their hugely popular 1986 debut album cannot be located.
The resurgence of the record industry in the streaming era would seem to bode well for the cause of preservation. In 2017, Bruce Resnikoff, the head of UMG’s catalog division, told Billboard that “the catalog business is having its biggest expansion since the CD.” A report by BuzzAngle, which analyzes online music consumption, found that about half the music streamed on demand in the United States last year was “deep catalog,” songs three or more years old. A catalog boom could theoretically push labels to digitize more archival recordings. But a question remains as to how deep “deep catalog” extends. The old songs most listeners are streaming are either recent hits or classics by huge artists like the Beatles and Bob Marley. Labels may not see much incentive to digitize less-popular material.
Some view digitization as a moral imperative. Archiving failures have left untold numbers of analog masters damaged and in states of decay. Gerald Seligman, the National Recording Preservation Foundation director, sees a ticking time-bomb scenario: Endangered masters need to be identified and transferred before they are no longer playable. “The figure I hear is about 10 years,” Seligman says. “That’s the window we have to digitize massive amounts of music on improperly-cared-for perishable media.”
But digital recordings are perishable in their own right — far less stable, in fact, than recordings on magnetic tape. A damaged analog tape is not necessarily a lost cause: An engineer may be able to perform restoration work and get the recording to play. But when a digital medium is compromised, it is most likely gone. Many masters from recent decades are kept on hard drives, notoriously fragile mechanisms that may not function after sitting for years in a vault. Today, labels increasingly rely on digital-tape formats like LTO. But LTO is backward compatible for just two generations. Labels must either continually retransfer their archives or maintain outdated playback equipment.
All these problems are exacerbated by the structure of the music business, in which hundreds of labels have been consolidated into three huge ones, which in turn have been absorbed by global conglomerates. The necessity of safeguarding a sound-recording heritage may appear abstract to executives at a distant parent company, who may simply see an expense on a balance sheet marked “Storage.”
The fate of millions of recordings does finally come down to blunt cost-benefit judgments. To invest in comprehensive preservation and digitization programs is not cheap, but it’s not beyond the means of UMG or the other major labels. “It all comes down to funding and priorities,” Seligman says. Eleven years after the fire, UMG defends its commitment to conservation. “In the last five years alone,” its statement says, “we have more than doubled our investment in storage, preservation and metadata enrichment while developing state-of-the-art systems to support our global efforts around capturing, preserving and future-proofing our many media assets.”
Even critics concede that to cast blame solely on penurious corporations is to ignore a bigger picture. In recent decades, the cause of film preservation has made strides, spurred in part by the politicking and largess of individuals like the movie director Martin Scorsese, who has embraced preservation as a crusade. No analogous effort has taken place within music. Artists famous for activism around masters, like Prince, have construed the issue strictly as a labor-versus-management struggle, a matter of individual artists’ rights, not as a question of collective cultural patrimony. The most prominent musician to advocate for sound preservation on broader historical grounds is the singer-songwriter Jack White, who donated $200,000 to the National Recording Preservation Foundation and sat on its board.
“People who have made fortunes in film have been more interested in contributing toward preservation than those who’ve made fortunes in music,” Seligman says. “It’s viewed as a niche issue, when in fact it’s an existential issue. Musicians themselves don’t seem to understand what’s at stake.”
6. The Shadow Canon
Until recently, Randy Aronson never listened to streaming music. Now he is one of Spotify’s reported 100 million subscribers. “The music sounds like it was mastered in a Coke can,” he says. “But on long drives, it’s the best.”
The past couple of years have brought changes for Aronson. The new archiving job he’d hoped for never materialized. Now, he says, “My enthusiasm for the music business has dimmed.” In September 2017, Aronson and his wife, Jamie, sold their house, bought a trailer, and drove nearly 650 miles to Humboldt County, on the Northern California coast. Today they live in the trailer, in a campground near a state park. Jamie works in the health care industry. For a while, Aronson worked as a security guard in a shopping mall. He recently started a new job as a project coordinator at a nonprofit that serves low-income residents of Humboldt.
Aronson still broods about the Universal fire. He reflects on his earliest days at MCA. “When I saw those names on the tape-box bindings, my mind reeled,” he said recently. “There’s Elton John, there’s Steely Dan. Here I am with Chuck [expletive] Berry.” Aronson recalls the Bing Crosby tapes, the Ella Fitzgerald tapes, the Louis Armstrong tapes. “The disappointment and responsibility I feel is sometimes overwhelming,” he said.
Some of the sharpest pangs come when Aronson’s thoughts drift to lesser-known records. A loss that hits him hard, he says, are the tapes of Moms Mabley, the pioneering black female comedian who released 16 LPs for Chess in the 1960s. “It’s not like Moms was selling in huge numbers,” he says. “I doubt there’s many copies out there.”
There are more mysterious losses. “So many things would come to the vault straight from studios and get shelved,” he says. “You know, Nirvana production masters with extra songs no one ever heard. There were Chess boxes that just said, ‘Session.’ Often there was no other info, no metadata. Who knows what was on those tapes? We’ll never know.”
The specter of these unknowns hovers over the Universal disaster. But many of the destroyed recordings fit a different profile. They were, you might say, super-deep catalog: masters for thousands of also-rans, records that neither clicked commercially nor achieved cult status and slipped through the historiographical cracks. Even if a massive digitization program had been in place, it would likely not have extended to forgotten bubble-gum singles, disco one-offs and other long-lost nonstarters.
A skeptic might argue that this is as it should be. In the 140-odd years since Thomas Edison invented the phonograph, countless recordings have been made under the auspices of record companies. To conserve anything close to all those recordings has proved impossible; it may not even be desirable. The caretaking of canonical material, the Bings and Billies and Nirvanas, must naturally take priority. To ask that the same level of attention be lavished on all music, including stuff that holds interest only for obscurantists, is to demand a preservation standard that prevails in no other area of culture. If the sole vestiges of thousands of old recordings are a few stray 45s lining the shelves of collectors — perhaps that’s not a cultural tragedy, perhaps that’s a commercial-art ecosystem functioning properly.
Perhaps. But history holds a counterargument. Many recordings were ignored for decades, only to be rediscovered and enshrined as Imperishable Art. The Velvet Underground were a commercial bust in the late 1960s and early ’70s but have proved to be one of the most influential groups in history. Then there’s Nick Drake, the English singer-songwriter who recorded three LPs of dreamy jazz-inflected folk between 1969 and 1972, before his death at age 26. During Drake’s lifetime, his albums sold modestly. A cult fan base developed following the release of a box set; in 1999, Drake’s song “Pink Moon” appeared in a Volkswagen commercial, and sales went through the roof. All three of Drake’s LPs were included in Rolling Stone magazine’s 2005 tally of the 500 Greatest Albums of All Time.
“The music business intercepted about a century’s worth of sounds, the vast majority of which it lost money on,” says Andy Zax, the producer and writer. “Much of that music, at any given moment, may seem dated, irrelevant, terrible. The most powerful argument for preservation is simply: ‘We don’t know.’ The sounds from the past that seem vital to us in the present keep changing. Since we don’t know what’s going to be important, we have to err on the side of inclusivity and insist that the entities that own our cultural history do the same.”
Recently I’ve been on a hunt — rooting through used record stores and scouring the internet to find rarities whose master tapes burned in the UMG fire. Some of these records were reissued and have found their way onto streaming services. The music may have trickled online elsewhere, preserved by some private enthusiast: Someone uploaded a song or two to YouTube or digitized an LP and posted it on a blog. Often the recordings are available only on the vinyl that was sent out to record shops decades ago.
I’ve discovered the riches of labels I’d never heard of: Back Beat, Argo, Nashboro. I’ve listened to gospel and blues on Peacock, to psychedelic rock on Probe. I took a particular interest in AVI Records, whose catalog includes a bit of everything: rock and funk and soul, a slew of disco singles, more than two dozen Liberace LPs. As a teenager, I was a rabid record collector; later, I worked as a pop critic, laboring under the impression that my grasp of music history was firm. But tracking down remnants of the UMG disaster has been a lesson in the limits of standard historical narratives and a reminder of music’s illimitable plenteousness. The vault on the Universal lot housed another history, a shadow canon of 20th-century pop.
AVI Records was hit hard by the backlot fire. According to UMG documents, AVI’s entire catalog of 9,866 tapes was destroyed. One of those tapes was the master for an LP by Don Bennett, “The Prince Teddy Album,” released in 1977. Bennett is a fascinating figure who straddled musical worlds. He grew up in Pasadena. In his early 20s, he began writing and arranging soul-flavored pop records by independent artists. Bennett was black, but he defied the music industry’s racial typecasting. Around 1967, he drifted into Los Angeles’s garage-rock scene; he did arrangement work on records by the renowned L.A. band the Standells and can be heard singing lead vocals on some recordings by another influential group, the Chocolate Watchband. Bennett also has writing credits on songs by both bands, including what may qualify as the earliest musical sendup of hippie counterculture and one of the first punk-rock-like sentiments ever recorded, the Chocolate Watchband’s “Are You Gonna Be There (At the Love-In)?”
The bulk of Bennett’s musical production dates from a 10-year period between the late 1960s and late 1970s. He formed a pop-soul band that recorded one single and led a hard-rock trio that released two albums. But Bennett released no recordings after 1978. According to one of his former bandmates in Los Angeles, Bennett died sometime in the late 1990s. You won’t find his name in history books, but if you dig into his scattered discography you meet an original: a musician who combined a command of craft with an insurgent’s flair for the impish and odd — the kind of weirdness that can’t be faked.
“The Prince Teddy Album” was Bennett’s fullest musical statement that ever saw commercial release. Today it is a musical endangered species. It was never reissued, and its digital footprint appears to comprise just two and a half songs, posted to YouTube by users who, evidently, made transfers from the vinyl. Those songs were enough to pique my interest: Last year I bought the LP online for $75. At the time, there were just a few copies for sale; it’s unlikely that many more copies are out there. It turned out to be one of the great impulse purchases of my life. The album throws together muscular funk, blasts of electric guitar, eerie synthesizer undulations, lush Philadelphia soul. The inspiration of Sly Stone and George Clinton is audible in Bennett’s singing and in the woozy blend of genres. But a list of influences doesn’t tell the tale: The cleverness of the songwriting and arrangements, the slightly shaggy singing and playing — it seems to originate from its own musical planet.
The tone is set by the album-opening song, “Don’t Wanna Spoil Your High.” It begins with a dissonant rumble from a keyboard, which gives way to a chugging groove. A choir of female vocalists hoots in the distance, and Bennett’s voice rises over theirs, cajoling and cackling, as if amused by the sound he’s making and the words he’s singing. The lyrics are enigmatic: “Don’t let the facts upset you/Nobody’s out to get you/I don’t want to spoil your high/But they’ll get you by and by.” The song seems to be executing several agendas simultaneously: It’s a consolation and a threat, a party invitation, a druggie hallucination, a prophecy, a gag.
I’ve played the song dozens of times, strapping on headphones and letting the needle drop on the still pristine LP. Each time, I’m struck by the loss of Don Bennett, a singular musician who left behind so few traces, and by the disappearance in the Universal fire of an unfathomable number of other recordings, some of which may survive only on stray scraps of vinyl, many of which may no longer exist at all, in any form, anywhere. But listening to “Don’t Wanna Spoil Your High,” I’m struck also by Bennett’s uncanny presence: his gruff half-laughing voice, captured by recording-studio science in the late 1970s and still crackling with life in 2019, transmitting a message across the gulf of time and space.
“I’m speaking my words of wisdom, gonna make it very clear,” Bennett sings. “Bend your head right over, baby, I’ll whisper in your ear.”
We Won’t be Listening to Music in a Decade According to Vinod Khosla
Depending on who you ask, the advantage of technology based on artificial or machine intelligence could be a topsy-turvy funhouse mirror world — even in some very fundamental ways.
“I actually think 10 years from now, you won’t be listening to music,” is a thing venture capitalist Vinod Khosla said onstage today during a fireside chat at Creative Destruction Lab’s second annual Super Session event.
Instead, he believes we’ll be listening to custom song equivalents that are automatically designed specifically for each individual, and tailored to their brain, their listening preferences and their particular needs.
Khosla noted that AI-created music is already making big strides — and it’s true that it’s come a long way in the past couple of years, as noted recently by journalist Stuart Dredge writing on Medium.
As Dredge points out, one recent trend is the rise of mood or activity-based playlists on Spotify and channels on YouTube. There are plenty of these types of things where the artist, album and song name are not at all important, or even really surfaced. Not to mention that there’s a big financial incentive for an entity like Spotify to prefer machine-made alternatives, as it could help alleviate or eliminate the licensing costs that severely limit their ability to make margin on their primary business of serving up music to customers.
AI-generated chart toppers and general mood music is one thing, but a custom soundtrack specific to every individual is another. It definitely sidesteps the question of what happens to the communal aspect of music when everyone’s music-replacing auditory experience is unique to the person. Guess we’ll find out in 10 years.
Ten U.S. States Sue to Stop Sprint-T-Mobile Deal, Saying Consumers Will be Hurt
Diane Bartz, David Shepardson
Ten states led by New York and California filed a lawsuit on Tuesday to stop T-Mobile US Inc’s $26 billion purchase of Sprint Corp, warning that consumer prices will jump due to reduced competition.
The complaint comes as the U.S. Justice Department is close to making a final decision on the merger, which would reduce the number of nationwide wireless carriers to three from four.
The all-Democratic attorneys general from the 10 states, including Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia and Wisconsin, say the reduced competition would cost Sprint and T-Mobile subscribers more than $4.5 billion annually, according to the complaint.
“When it comes to corporate power, bigger is not always better,” New York Attorney General Letitia James said at a news conference.
“To many upstate New Yorkers, (the carriers) still struggle with 3G,” she said, adding that there is nothing in the merger that will guarantee more towers and coverage for certain communities.
James said the lawsuit was not filed to influence the Justice Department’s decision on the merger, adding that negotiations were ongoing among the states, the Justice Department and the carriers.
James also said her office did not notify Justice before the states filed the lawsuit, adding it was not required for them to do so. State attorneys general often participate in lawsuits aimed at stopping mergers but rarely go it alone.
The complaint was filed in the U.S. District Court for the Southern District of New York.
“This is the third time T-Mobile has tried to merge and shrink the market to three players,” said California Attorney General Xavier Becerra.
“Every time they’ve tried they’ve been blocked or forced to walk away because of opposition from the government… Opposition that’s based on the same concerns laid out in our lawsuit today.”
T-Mobile, whose parent company is Deutsche Telekom AG, and Sprint, controlled by Japan’s SoftBank Group Ltd, did not comment. A spokeswoman for Federal Communications Commission Chairman Ajit Pai declined to comment. The Justice Department did not respond to a request for comment.
Shares of Sprint dropped 6.2% to $6.56 while T-Mobile was down 1.4% at $75.28.
WAITING ON DOJ
The T-Mobile/Sprint deal has won the backing of a majority of the FCC. The U.S. Justice Department’s antitrust division staff has recommended the agency block the deal, but no final decision has been made.
Calling the proposed merger “anti-competitive, anti-worker and anti-consumer,” Connecticut Senator Richard Blumenthal said the Justice Department “must follow the leadership of State AGs” who are fighting back for consumers.
“Saying no to this deal should be easy,” Blumenthal said in a tweet.
While AT&T and Verizon dominate the overall U.S. wireless market, T-Mobile is the most popular among customers who make less than $75,000 per year, and Sprint’s Boost Mobile prepaid brand counts 83 percent of its users in that income range, according to Kagan, S&P Global Market Intelligence data.
As part of their push to win regulatory approval, T-Mobile and Sprint have pledged not to raise rates for three years.
The companies have also offered to sell Boost to reduce the combined company’s market share in the prepaid business. They have also indicated they were considering divesting wireless spectrum.
The states’ complaint also said that divesting Boost would not resolve competitive concerns since Boost would be dependent on another carrier to provide network access, meaning that it is not independent.
The two companies have been in regular contact with regulators as they lobby for approval. Sprint Chief Executive Officer Marcelo Claure and John Legere, his counterpart at T-Mobile, met with Justice Department officials on Monday, according to a source familiar with the matter.
If the states’ lawsuit goes forward, the courts would have the last say, not the Justice Department, Blair Levin, an analyst with New Street Research, said in a note on Tuesday.
The next two big steps will be determining the position of Makan Delrahim, head of the Justice Department’s antitrust division, and the identity of the judge assigned to the states’ lawsuit, Levin wrote.
Reporting by Diane Bartz, David Shepardson, Karen Freifeld; additional reporting by Angela Moon and Sheila Dang in New York; editing by Chris Sanders, Steve Orlofsky, Jeffrey Benkoe and Dan Grebler
With One Move, New York Cuts Sprint and T-Mobile Down to Size
States step in where federal regulators failed, by blocking a clearly anti-competitive merger.
In December 2016, Masayoshi Son, the billionaire owner of Sprint, paid a visit to Trump Tower to meet the president-elect. Afterward, the two announced that Mr. Son had spontaneously decided to invest $50 billion in the United States and create 50,000 jobs. There was an unspoken but widely understood quid pro quo. The Trump administration would finally agree to do what the Obama administration had refused: allow a giant, anticompetitive merger of Sprint with T-Mobile, leaving just three gigantic wireless carriers in the country.
“A Sprint/T-Mobile merger is a done deal,” a business columnist for PC magazine proclaimed after the meeting, as Sprint’s stock surged. In April 2018, with Trump-appointed officials in place at the Justice Department and the Federal Communications Commission, Sprint and T-Mobile announced their $26 billion union. The chief executives of the two companies vaguely promised, in an interview on CNBC, that the merger and leadership in 5G would bring “3 million jobs.” (Most major mergers, in fact, lead to firings). But President Trump and Mr. Son had made a giant miscalculation, one the business press also missed. They forgot about the states.
This week, nine states and the District of Columbia, led by New York’s attorney general, Letitia James, filed suit in federal court in New York to block the merger. With this move, the states have jumped the gun on the federal government, which has yet to fully approve or reject the deal. And if the states win in court, as they seem likely to, the merger is dead. Inadvertently, this corporate blunder has created a new role for the states in merger review: acting as a backstop in cases of gross dereliction of duty by the federal government.
Missing the little detail of state power was a serious error, though perhaps an understandable one. State authorities have not, in recent history, acted independently to block a major merger. Indeed, they were usually treated as afterthought. But the states were given, by Congress, the power to enforce federal law to block mergers whose effect “may be substantially to lessen competition.” That power has now come into its own, reinvigorating a strand of economic federalism that has long been dormant.
Sprint and T-Mobile’s error was born of the dangerous assumption that with the right lobbying, you can just ignore the law. That worked to a degree, but the obvious anti-competitive nature of the deal made the merger a tempting target for Beau Buffier, the head of New York’s antitrust bureau, who is the principal instigator of the lawsuit. He had, in fact made it clear to anyone who was listening, in a speech at a 2017 meeting of the American Bar Association, that he planned to awaken the force of state merger oversight. Perhaps everyone thought he was just kidding.
What set off Mr. Buffier was that, from the point of view of an antitrust lawyer, the combination of T-Mobile and Sprint is evidently and almost painfully illegal. Four-player competition in the mobile phone service industry has worked. Both Sprint and T-Mobile are price-cutters and pioneers of ideas like T-Mobile’s “no fees” promises, as well as the unlimited plans beloved by consumers. They compete fiercely for business, and that has lowered prices for consumers. It is elementary economics to expect that there will be far less competition — and higher prices for consumers — if the number of major players falls from four to three.
To be sure, Sprint and T-Mobile claimed that a merger would lead to better competition and significant investments in establishing 5G wireless networks — and to beating the Chinese companies trying to do the same thing. But the claims that they were uniting to fight some kind of yellow peril or an AT&T-Verizon duopoly were unconvincing.
Companies tend to act in their financial self-interest, and where there is less competition, they feel much less need to invest money to keep customers (ask your local cable company). And internal documents, referred to in a partly redacted complaint filed as part of the lawsuit, appear to confirm that the carriers saw the merger less as an opportunity to do battle with China (always an unclear mission for a domestic phone company) but rather as an opportunity to raise prices. The companies’ own economists predict the merger will cost subscribers at least $4.5 billion a year.
Even those who think the merger is uncompetitive might not welcome the entry of states into the merger review process, because it shatters consistency in national economic policy. But that argument reflects a misunderstanding of what state law enforcement is doing here.
The Trump administration is not being consistent when it holds out the implicit promise that befriending the president will lead to reduced law enforcement. The states, it is worth remembering, are a part of a constitutional design meant to prevent abuses of power. In a case like this, they serve as Congress intended, as a backstop against federal failure.
Or, put it another way: The lawsuit sends a message that meeting with the president and promising billions of dollars will not buy off American law enforcement — or at least not all of it.
More than Half of the World's Population is Now Online
Today, more than half of the global population uses the internet, and while many see the technology as a positive tool, there are growing concerns about over-use, per the latest Internet Trends report by Mary Meeker, Bond Capital managing partner and "Queen of the 'Net."
Why it matters: Businesses are adapting to — and even building tools for — users limiting their use of mobile devices and online apps like video streaming and social media.
By the numbers:
• 51% of the world — or 3.8 billion people — were internet users last year, up from 49% (3.6 billion) in 2017 and only 24% in 2009. Growth slowed to about 6% in 2018.
• The percentage of U.S. adults who say they're "almost always online" has grown from 21% three years ago to 26%.
• The percentage of U.S. adults trying to limit personal smartphone use has grown from 47% in 2017 to 63% in 2018.
• Apple, Google, Facebook, and YouTube have all rolled out tools to help users monitor their usage.
• People are more concerned about privacy than a year ago (but these high concerns are moderating).
• Encrypted messaging and Web traffic are rising.
• And yet, U.S. users still view the internet as a positive for themselves (88%) and society (70%), though both metrics have slightly decreased since 2014.
Go deeper: Check out the full deck here.
The War to Free Science
How librarians, pirates, and funders are liberating the world’s academic research from paywalls.
Brian Resnick and Julia Belluz
The 27,500 scientists who work for the University of California generate 10 percent of all the academic research papers published in the United States.
Their university recently put them in a strange position: Sometime this year, these scientists will not be able to directly access much of the world’s published research they’re not involved in.
That’s because in February, the UC system — one of the country’s largest academic institutions, encompassing Berkeley, Los Angeles, Davis, and several other campuses — dropped its nearly $11 million annual subscription to Elsevier, the world’s largest publisher of academic journals.
On the face of it, this seemed like an odd move. Why cut off students and researchers from academic research?
In fact, it was a principled stance that may herald a revolution in the way science is shared around the world.
The University of California decided it doesn’t want scientific knowledge locked behind paywalls, and thinks the cost of academic publishing has gotten out of control.
Elsevier owns around 3,000 academic journals, and its articles account for some 18 percent of all the world’s research output. “They’re a monopolist, and they act like a monopolist,” says Jeffrey MacKie-Mason, head of the campus libraries at UC Berkeley and co-chair of the team that negotiated with the publisher. Elsevier makes huge profits on its journals, generating billions of dollars a year for its parent company RELX .
This is a story about more than subscription fees. It’s about how a private industry has come to dominate the institutions of science, and how librarians, academics, and even pirates are trying to regain control.
The University of California is not the only institution fighting back. “There are thousands of Davids in this story,” says University of California Davis librarian MacKenzie Smith, who, like so many other librarians around the world, has been pushing for more open access to science. “But only a few big Goliaths.”
Will the Davids prevail?
The academic publishing industry, explained
Imagine your tax dollars have gone to build a new road in your neighborhood.
Now imagine that the company overseeing the road work charged its workers a fee rather than paying them a salary.
The overseers in charge of making sure the road was up to standard also weren’t paid. And if you, the taxpayer, want to access the road today, you need to buy a seven-figure annual subscription or pay high fees for one-off trips.
We’re not talking about roads — this is the state of scientific research, and how it’s distributed today through academic publishing.
Indeed, the industry built to publish and disseminate scientific articles — companies such as Elsevier and Springer Nature — has managed to become incredibly profitable by getting a lot of taxpayer-funded, highly skilled labor for free and affixing a premium price tag to its goods.
Academics are not paid for their article contributions to journals. They often have to pay fees to submit articles to journals and to publish. Peer reviewers, the overseers tasked with making sure the science published in the journals is up to standard, typically aren’t paid either.
And there’s more: Academic institutions have to purchase exorbitant subscriptions priced at hundreds of thousands of dollars each year so they can download and read their own and other scientists’ work from beyond the paywall. The same goes for members of the public who want to access the science they’ve funded with their tax dollars. A single research paper in Science can set you back $30. Elsevier’s journals can cost, individually, thousands of dollars a year for a subscription.
Publishers and journal editors say there are steep costs associated with digital publishing, and that they add value at every step: They oversee and manage peer reviewers and editors, act as quality gatekeepers, and publish an ever-larger number of articles each year.
We spoke with executives at both Elsevier and Springer Nature, and they maintain their companies still provide a lot of value in ensuring the quality of academic research. It’s true these companies are not predatory journals, businesses that will publish just about any paper — without any scientific vetting — for a fee.
In 2018, Elsevier’s revenue grew by 2 percent, to a total of $3.2 billion. Gemma Hersh, a senior vice president for global policy at Elsevier, says the company’s net profit margin was 19 percent (more than double the net profit of Netflix).
But critics, including open access crusaders, think the business model is due for a change. “I think we’re nearing the tipping point, and the industry is going to change, just like the industry for recorded music has changed, the industry for movies has changed,” MacKie-Mason says. “[The publishers] know it’s going to happen. They just want to protect their profits and their business model as long as they can.”
It’s a business model as convoluted as the road you paid for but can’t use. And it grows more expensive for universities every year.
Now the status quo is slowly shifting. There is a small army of people who aren’t putting up with the gouging any longer.
This disparate band of revolutionaries is waging war on the scientific publishing industrial complex on three fronts:
• Librarians and science funders are playing hardball to negotiate lower subscription fees to scientific journals.
• Scientists, increasingly, are realizing they don’t need paywalled academic journals to act as gatekeepers anymore. They’re finding clever workarounds, making the services that journals provide free.
• Open access crusaders, including science pirates, have created alternatives that free up journal articles and pressure publishers to expand access.
If they succeed, the cloistered, paywalled way that science has been disseminated for the past century could undergo a massive transformation. The walls, in other words, could fall.
If paywalls fall, the impact would reverberate globally. When science is locked behind paywalls, it means cancer patients can’t easily access and read the research on their conditions (even though research is often taxpayer-funded). When scholars can’t read the latest research, “that hinders the research they can do, and slows down the progress of humanity,” MacKie-Mason says.
But there’s a big thing getting in the way of a revolution: prestige-obsessed scientists who continue to publish in closed-access journals. They’re like the road workers who keep paying fees to build infrastructure they can’t freely access. Until that changes, the walls will remain firmly intact.
How academic journals became so unaffordable
Scientific journals, published mainly by small scientific societies, sprouted up alongside the printing industry in the 17th century as a way to disseminate science and information about scientific meetings.
The first scientific journals, the Journal des sçavans and the Philosophical Transactions of the Royal Society of London, were distributed via mail. Like all pre-internet publishing models, early journals sold subscriptions. It wasn’t the hugely profitable industry it is today.
After World War II, the business changed dramatically. The journals — which were mostly based in Europe — focused on selling subscriptions internationally, targeting American universities flush with Cold-War era research funding. “They realized you can charge a library a lot more than an individual scholar,” says Aileen Fyfe, a historian specializing in academic publishing at the University of St. Andrews.
As more and more journals popped up, publishing companies began consolidating. In the 1950s, major publishers started to purchase journals, transforming a once diffuse business into what’s been called an oligopoly: a market controlled by a tiny number of producers.
By the early 1970s, just five companies — Reed-Elsevier, Wiley-Blackwell, Springer, and Taylor & Francis — published one-fifth of all natural and medical scientific articles, according to an analysis in PLOS One. By 2013, their share rose to 53 percent.
No single publisher embodies the consolidation, and the increase of costs, more than Elsevier, the biggest and most powerful scientific publisher in the world. The Dutch company now publishes nearly half a million articles in its 3,000 journals, including the influential Cell, Current Biology, and The Lancet.
And the consolidation, the lack of competition, means publishers can get away with charging very high prices.
When the internet arrived, electronic PDFs became the main medium through which articles were disseminated. At that point, “librarians were optimistic this was going to be the solution; at last, journals are going to become much, much cheaper,” Fyfe says.
But instead of adopting a new business and pricing model to match the new means of no-cost dissemination, consolidation gave academic publishers the freedom to raise prices. Starting in the late 1990s, publishers increasingly pushed sales of their subscriptions into large bundled deals. In this model, universities pay a hefty price to get a huge subset of a publisher’s journals, instead of purchasing individual titles.
The publishers argue the new mode of digital delivery has come with an array of additional costs. “We’re continuing to invest significantly in digital infrastructure, which has a lot of fixed costs that repeat each year. We’re employing thousands of technologists,” said Elsevier’s Gemma Hersh. “So it’s not the case that digital is cheaper.”
The publishers also say that the volume of articles they publish every year increases costs, and that libraries ought to be funded to pay for them. “The libraries are treated by the senior academics at these institutions as a fixed cost; they’re not a fixed cost,” says Steven Inchcoombe, the chief publishing officer at Springer Nature, which publishes the prestigious Nature family of journals.
The librarians beg to differ. For universities, the most frustrating development is that cost of access keeps rising at a very steep rate.
Take a look at this graph from the Association of Research Libraries. It shows the percent change in spending at university libraries. The category “ongoing resources expenditures” includes spending on academic journals, and it rose 521 percent between 1986 and 2014. Over that time, the consumer price index — the average increase of costs of common household goods — rose 118 percent.
Librarians at the breaking point
The University of Virginia has a website where you can see how much money its library is spending on journals. From 2016 to 2018, the costs for Elsevier journals increased by $118,000 for the university, from $1.716 million a year to $1.834 million.
The data shows that the university is also spending a lot of money for journals that no one who uses their library system reads. In 2018, the university paid Springer Nature $672,000 for nearly 4,000 journals — 1,400 of which no one ever accessed. No one at UVA read the Moscow University Chemistry Bulletin, or Lithology and Mineral Resources, for example.
Why are universities paying for journals that no one reads? “It’s a lot like the cable bundle — they tell you you’re getting 250 channels, but if you look inside your heart, you know all you want is ESPN and AMC,” says Brandon Butler, director of information policy at the University of Virginia Library. An individual journal subscription can cost a university thousands of dollars. “UVA is absolutely considering cutting these bundles,” he says. “It’s quite likely we will, unless the price and other terms change radically.”
As the University of North Carolina Chapel Hill librarian, Elaine Westbrooks is facing what she and so many other academic librarians call the “serials crisis”: “If we buy the exact same journals every year, I have to pay at least $500,000 more just for inflation,” she says. “I can’t afford it.”
In her ongoing negotiations with Elsevier, Westbrooks is considering “the nuclear option,” as she puts it. That is, canceling the subscription that gives UNC Chapel Hill students and faculty access to thousands of Elsevier journals.
“It felt very much in 2017 the librarians felt beaten by the system and they couldn’t afford it,” says David Stuart, the researcher behind a yearly survey on the academic publishing industry. “Whereas in 2018, you could feel there was a bit more strength and power emerging, and they had the ability to push back on the publishers a bit.”
Science funders increasingly are calling for open access
It’s not only librarians waking up to the fact that the costs of accessing science are unsustainable — so are science funders. A lot of the money that fuels this system comes from government grants. In the US, taxpayers spend $140 billion every year supporting research, a huge percentage of which they cannot access for free. When scientists do want to make their work open access (meaning published without a paywall), they’re charged an extra fee for that as well.
This year, a consortium of public research institutions in Norway canceled its Elsevier contract, a move that followed a research consortium in Hungary breaking ties with the Dutch giant. In Germany, nearly 700 libraries and research institutes made a deal with the publisher Wiley: For about 25 million euros, they’re paying to access journal content — but also demanding the work of their researchers, published in Wiley journals, be made open access for all at no additional cost.
These institutions and funders are also banding together as part of Coalition S: The agreement says all scientific publications that have sprung from publicly funded research grants must be published on open access journals or platforms by 2020.
“The ambition is if the University of California does this deal, Germany does this deal — we eventually get to the point where [all science is] open access. The libraries are no longer paying to subscribe, they’re paying to publish,” said Robert Kiley, the head of open research at the UK’s Wellcome Trust.
But open access doesn’t necessarily mean cheap. Currently, publishers typically charge academics to publish that way too. If you want your article to be open access in an Elsevier journal, you could pay anywhere from $500 — the fee to publish in Chemical Data Collections — up to $5,000, the fee to publish in European Urology.
“Open access is absolutely in the best interest of the research process,” Inchcoombe, the chief publishing officer at Springer Nature, says. “If you can pay once and then it’s free for everybody, you eliminate a lot of the friction from the system of access and entitlement.” He hopes publishing will transition, over time, to open access.
But he stresses that open access won’t change “the fact that if you do more research, and you want to communicate it to more people, then there is a cost of doing that that rises with volume.”
Put another way: Publishers are still going to get paid. Open access just means the paychecks come at the front end.
This brings us to another band of revolutionaries in the fight against the status quo: the scientists who want to find ways to circumvent the behemoth publishers.
Some scientists are saying no to the big publishers and spinning off open access journals of their own
The structure of academic publishing isn’t just a pain for librarians and funders; it’s a bad deal for academics too. Basically, scientists trade in their hard work, their results for their toils in the lab, for free, to a private industry that makes tons of money off their work, in return for prestige.
Some researchers have been waking up to this and spinning off freely accessible journals of their own. One of those scholars is a University of Cambridge mathematician named Timothy Gowers. In 2012, he wrote a post bemoaning the exorbitant prices that journals charge for access to research and vowed to stop sending his papers to any journal from Elsevier.
To his surprise, the post went viral — and spurred a boycott of Elsevier by researchers around the world. Within days, hundreds of researchers left comments commiserating with Gowers, a winner of the prestigious Fields Medal. Encouraged by that response, in 2016, Gowers launched a new online mathematics journal called Discrete Analysis. The nonprofit venture is owned and published by a team of scholars. With no publisher middlemen, access is completely free for all.
University of Montreal professor and open access researcher Vincent Larivière has helped take the Elsevier boycott another step further. In January 2019, the entire editorial board of the Elsevier-owned Journal of Informetrics (including Larivière) resigned, and moved to MIT Press to start another open access journal, Quantitative Science Studies.
Again, the move was a principled one. “There’s a universalistic aspect to science, where you want it to be available to everyone,” Larivière said.
Even in the absence of starting open access journals, though, some scientists have been taking quieter, but equally principled, stands. One paleontologist took his name off a paper because his co-authors wouldn’t publish in an open access journal.
One key reason scientists, librarians, and funders can fight back is because other crusaders have made research more accessible. Enter the pirates.
Pirating and preprints are also pressuring the publishing industry to increase access
Over the past decade, it’s been getting easier and easier to circumvent the paywalls and find free research online. One big reason: pirates, including Kazakh neuroscientist Alexandra Elbakyan. Her (illegal) website Sci-Hub sees more than 500,000 visitors daily, and hosts more than 50 million academic papers.
But Sci-Hub is just one tool to get around paywalls. Scientists are also increasingly publishing prepublication versions of their studies (often called preprints). These study drafts are free to access.
The problem is that often, these studies have not yet been peer-reviewed. But advocates of preprints say they’re a net benefit to science: They allow for the public discussion of papers before they’re set in a finalized form — a type of peer review. And there are more preprints than ever before. (Some of the preprint servers are owned by the big publishers too.)
To find these preprints, all it takes is a single click: Unpaywall, a browser extension, helps users find the preprints associated with paywalled journal articles.
These mounting pressures on the academic publishing industry aren’t so different from the pressures on the music industry in the late ’90s. If you recall, in the late ’90s, music pirating was suddenly everywhere. You could log in to Napster and Limewire and illegally download any song you wanted for free.
“Piracy seems to come in when there’s a market failure,” UVA’s Butler says, “and people aren’t getting what they need at a price that makes sense for them.”
But as Larivière points out, Sci-Hub isn’t a long-term solution, and eventually, it may not even be needed: “Once there’s no paywalls, there’s no Sci-Hub anymore.”
What’s standing in the way of a full-on revolution? The culture of science.
For now, the paywalls mostly stand. Elsevier’s profits have actually increased in recent years. And as Elsevier’s Hersh told us, while the volume of open access research published by the company has been growing, so has the volume of paywalled papers.
Even with the growing pressure from the open science crusaders, the publishers remain in an extremely strong and nimble position. More and more, Elsevier’s business is not in the publication of journal articles, but in data-mining its enormous library. That means it’s using analytics to report on research trends, recommend articles scientists ought to be reading, and suggest co-authors to collaborate with based on shared interests.
Even if the publishers lose ground on selling subscriptions, they’ll still offer a profitable service based on control of the content. Still, it’s not hard to imagine a future where more and more institutions of science simply ignore, or circumvent, the major publishers.
The growing popularity of preprints is giving them one avenue to escape. One could imagine a system where researchers upload their drafts to preprint servers and then other academics choose to peer-review the articles. After peer review and revision, that preprint paper could be given a stamp of approval and added to a digital journal. This system is called an overlay journal (in that the editing and journal gatekeeping is overlain on top of preprints), and it already exists to a small extent. (Gowers’s Discrete Analysis is an overlay journal.)
So it’s not technology or innovation holding science back from a revolution. “The biggest elephant in the room is how researchers are rewarded for the work they do,” said Theodora Bloom, the executive editor at BMJ.
At the moment, researchers’ careers — the grants they’re given, the promotions they attain — rise or fall based on the number of publications they have in high-profile (or high-impact) journals.
“If an academic has a paper in Nature or Science, that’s seen as their passport to their next grant or promotion,” said Bloom.
As long as those incentives exist, and scientists continue to accept that status quo, open access journals won’t be able to compete. In fact, many academics still don’t publish in open access journals. One big reason: Some feel they’re less prestigious and lower quality, and that they push the publishing costs on the scientists.
“I’m also waiting to see change within academic culture,” says Fyfe, the historian. “Until we have enough academics who are willing to do something different, then I don’t see a big change happening.”
So for now, the revolution is just beginning. “Everyone agrees, in some way, the future is open access,” UVA’s Butler says. “Now the question is, in that future, how much control do the big publishers retain over every step in the scientific process? They’ve been working for over a decade to ensure the answer is the most possible control.”
Academic publishing isn’t a hot-button political topic. But it could be. “If citizens really cared, they could talk to their representatives and senators and tell them open access matters,” MacKie-Mason says, “and the government should get involved in changing this.“
Huawei’s Export Ban is Wider in Scope than Most People Imagine
Former US assistant secretary of export administration weighs in on Huawei's ban.
The tech industry is still trying to wrap its collective head around the Trump administration's export ban on Huawei. We've seen Huawei be de-listed and then re-listed from industry groups like the Wi-Fi Alliance, Bluetooth SIG, and the SD Association. Companies like Panasonic provided a statement to the BBC saying it would suspend transactions with Huawei, then later said it believed its transactions with Huawei were not in breach of US regulations. We've even seen non-US companies like ARM cut off contact with Huawei due to the US export ban. If you're not familiar with how export law works, it can be tough to understand exactly what's going on.
For the ins and outs of export law, there's probably no better person to turn to than international trade lawyer Kevin Wolf, who recently wrote a bulletin detailing some of the finer points of how export law applies to Huawei. Wolf is the former assistant secretary of commerce for export administration during the Obama administration—from 2010 to 2017, Wolf's job was to enforce export regulations like this. In the article, Wolf says a lot of the media coverage around Huawei's export ban hasn't been thorough enough, as it hasn't taken into account the full scope of US export law.
As Wolf explains, export law applies not just to the country of origin for end products like a smartphone processor or chip, but it also covers commodities—the base components—as well as software and technology used in its construction. Export law has this sort of viral property to it, in that anything that contains more than a trivial amount (the legal term is "de minimis") of US-origin items also becomes a US-origin item. The objects then become subject to US export law.
US export regulations are not concerned with determining some kind of majority ownership of a product—if there is any significant amount of US work in an item, that item is subject to US export law. As Wolf writes, "US-origin technology does not lose its US-origin status when it is redrawn, used, consulted, or otherwise commingled abroad in any respect with other technology of any other origin."
We saw this property of export law in action when chip designer ARM ended its relationship with Huawei. ARM is based in Cambridge, UK, and was purchased by Japan's SoftBank in 2016. At a cursory glance, one might assume that ARM products would count as either UK or Japanese origin. ARM still declared that US export restrictions apply to its chip designs, though, so at some point, the company uses a US technology in its designs.
Since export law applies any time you use a US product in your manufacturing, making export-law determinations requires a complete and thorough understanding of how a product is manufactured. It's a good bet that only the manufacturer itself is familiar enough with any given product to know if said product uses a US-origin technology or not. Manufacturers are too secretive about their supply chains for an outside party to make an informed determination on export law.
For an outside party, identifying things that are definitely banned under the export law is relatively easy: items shipped from the US are banned, as are devices that contain US-origin technology. But clearing an item from US-export regulations is something only the manufacturer and a team of lawyers can do.
For software, export law's viral provisions still apply. Wolf writes that "US-origin software that is incorporated into or commingled with foreign-origin software does not lose its US-origin status." In the world of open source software, libraries, and other forms of copy/paste development, foreign developers would have to make sure they are doing clean room implementations of everything in order to not be subject to US export law.
(Open source, by the way, is not a way to dodge export law. Copyright to open source software is still owned by some entity—Google owns the Android copyright, for instance, while Linus Torvalds and others own Linux. US export law still applies.)
In the case of software needed for Huawei's smartphone business, it's clear the company would not be allowed to use Android, even the open source parts. US app developers would not be allowed to make apps for a Huawei-owned app store. Regardless of where an Android app is developed, it would probably be controlled under US export law. The typical Android development workflow requires a host of US technologies, like the Android SDK, libraries, and other components.
Loophole? Probably not
There has been some speculation that Huawei could find some kind of loophole around the US export law or that it could do something like host its own app store via a third party. After all, the US Government does not control the world, so not everyone is subject to US laws, right? Well, US export law does not really work this way.
Wolf writes that export law prohibitions "apply equally to US and non-US persons" and that "Violations of the Entity List prohibitions by a non-US company can lead to civil or criminal penalties or other sanctions that would affect its ability to receive US-origin items." Export law is not like, say, the US tax code, where loopholes are easily found and exploited—no exports means no exports, and companies that help Huawei circumvent export law could also find themselves on the export ban list.
With the US being such a hub of hardware and software technologies that are distributed around the world, and with US export law applying so liberally to anything containing more than a trivial amount of US components, it would be very tough for Huawei to build telephony gear without running afoul of US export law. Our current technology supply chain was built on a highly cooperative global economy with lots of giant multinational corporations working together. The kind of clean-room product development that would be needed for Huawei to dodge US export regulations does not exist in the current tech supply chain. Every technology product is a global effort, with designs, software, and hardware sourced from around the world. It's a good bet a US technology is involved, somewhere, in many of those components.
News Publishers Say Tech Industry Poses 'Potentially Existential' Threat To Media
In the first of what promises to be many hearings by Congress into Big Tech's dominant role in the information society, the head of a media industry group said that "a small cadre of tech giants exercise an extreme level of control over news."
David Chavern, president and CEO of the News Media Alliance, a group representing about 2,000 news organizations in the U.S., told a House Judiciary subcommittee that despite efforts by media groups to invest in their own online platforms, apps and other formats, the rise of digital news distribution has introduced "new, potentially existential threats to the news industry."
Chavern spoke in support of bipartisan legislation that would allow online publishers to work together to bargain with tech platforms, such as Google, potentially to share revenue. The Journalism Competition and Preservation Act is sponsored by antitrust subcommittee Chairman David Cicilline, D-R.I., and Judiciary Committee ranking member Doug Collins, R-Ga.
Cicilline said concentration in the digital advertising market "has pushed local journalism to the verge of extinction."
A study by Chavern's group estimates that $4.7 billion is earned annually by Google thanks to search advertising revenue through links to news content.
That study, though, has faced criticism since its release on Monday. In a statement, Google said:
"These back of the envelope calculations are inaccurate as a number of experts are pointing out. The overwhelming number of news queries do not show ads. The study ignores the value Google provides. Every month Google News and Google Search drive over 10 billion clicks to publishers' websites, which drive subscriptions and significant ad revenue. We've worked very hard to be a collaborative and supportive technology and advertising partner to news publishers worldwide."
But Judiciary Committee Chairman Jerry Nadler, D-N.Y., said what he called a journalism crisis is also a "democracy crisis."
"Today, the vast majority of Americans consume the news online, and two online platforms have immense control over how Americans access their news sources," Nadler said. "A single algorithm change by one of these private corporations can entirely distort what information the public shares and consumes and what revenue the publisher receives."
Among those testifying on behalf of the legislation was News Corp. General Counsel David Pitofsky, who dismissed criticism by the tech companies that the newspaper business model is obsolete.
"Many in Silicon Valley dismiss the press as old media, failing to evolve in the face of online competition, but this is wrong," he said. "We're not losing business to an innovator who has found a better or more efficient way to report and investigate the news. We're losing business because the dominant platforms deploy our news content to target our audiences, to then turn around and sell that audience to the same advertisers were trying to serve."
Diana Moss, president of the American Antitrust Institute, told NPR's Morning Edition on Tuesday that the Judiciary subcommittee's hearing was part of efforts to "take on some of the bigger issues that arise in the tech sector."
She said government needs to enforce antitrust laws, saying, "We have not seen vigorous antitrust enforcement in the U.S. for many decades now, and my organization has advocated strongly for that for 20 years."
But she said breaking up the tech companies, as some politicians are calling for, is "putting the cart before the horse" and would be "a heavy lift" for antitrust laws.
NYT Promotes Questionable Study on Google and the Media
A New York Times story published on Sunday contains an eye-opening allegation: Google “made $4.7 billion from the news industry in 2018,” according to a new report. The lede of the story quotes the figure again, with all of the zeroes, and mentions that this number is “more than the combined ticket sales of the last two Avengers movies,” and more than what most professional sports teams are worth (the writer of the story usually covers college sports, according to his Times bio). As it turns out, the report was published by the News Media Alliance, a media-industry lobby group formerly known as the Newspaper Association of America, and the figure quoted by the Times—without any critical assessment whatsoever—appears to be based almost entirely on questionable mathematical extrapolation from a comment made by a former Google executive more than a decade ago.
After quoting the head of the News Media Alliance, David Chavern, as saying newspapers deserve a cut of that $4.7 billion, and that the NMA believes this estimate is actually “conservative,” the Times story notes the number is based in part on a study done by a consulting firm called Keystone Strategy. That study relies on a public comment then–Google executive Marissa Mayer made at a media event in 2008, when she estimated that Google News brought in $100 million in revenue. The NMA report calculates what the same proportion of the company’s revenue would be today, then further inflates this figure based on the fact that news consumption via Google’s main search is 6 times larger than via Google News (according to the NMA’s estimate of referral traffic to newspaper websites).
A number of prominent journalists and media-industry observers have publicly scoffed at both the number and the report itself, and also questioned the decision of the Times to publicize the thinly sourced study without more skepticism. (Times spokesperson Eileen Murphy said the story was “fair and accurate,” and that it mentioned the newspaper’s relationship with the NMA, of which it is a member.) Aron Pilhofer, a former digital executive at both The Guardian and The New York Times, and now the Chair of Journalism Innovation at Temple University, called the report’s conclusions “nonsense,” while University of Missouri journalism professor Damon Kiesow said the NMA report was “a recap of all the complaints publishers have spouted at Google in the past decade,” and that it contained “no rational economic argument aside from the specious math the NYT reported.”
A group called the News Media Alliance got the NYT to run a piece last night saying that Google made "$4.7 billion" from the news industry.
And now that the study is out, the number appears to be just as shaky as it initially seemed to a few of us. 1/5 https://t.co/LKUkZqUGDw
— Bill Grueskin (@BGrueskin) June 10, 2019
Several observers noted the story was timed in such a way as to provide maximum publicity for a bill that the New Media Alliance has been promoting to Congress, called the Journalism Competition and Preservation Act. The proposed legislation would exempt newspaper companies from competition laws, which prevent industry-leading entities from collaborating to set prices. The NMA argues this would allow publishers to lobby Google and other platforms for better financial compensation together instead of individually. Congress is holding hearings this week looking into whether Google and Facebook’s market dominance requires anti-trust action.
The main reason the NMA study had to jump through the hoops it did to come up with a number for its report is that Google News doesn’t carry any advertising, and doesn’t generate any direct revenue from the headlines and excerpts of news content it provides. One of the most glaring omissions from the report, mentioned by a number of media-industry observers, is the ad revenue newspapers generate from the pageviews they get via Google News and Google search. The search company says publishers get more than 10 billion clicks every month (the value of which differs depending on the publisher). When asked for comment, the NMA tells CJR the purpose of the report was to look at how much Google benefits from news, not the opposite.
My 2 cents on the Google and News “study”: There are plenty of legitimate reasons to criticize big platforms approach to news. But: Making up numbers randomly and calling it a study is NOT the way to go. “Calculations” like this show an embarrassing lack of business acumen. pic.twitter.com/VGHwNIkWG4
— Anita Zielina (@Zielina) June 10, 2019
Emily Bell, director of the Tow Center for Digital Journalism at Columbia, said the NMA report’s framing was not a helpful way of looking at the kind of digital disruption the news media has gone through since the arrival of the internet. “Framing Google/FB and the effect on the ‘news industry’ in terms of $ amounts is not very helpful,” Bell said on Twitter. “Framing it as the concentration of money and data in the advertising market is better.” Elizabeth Hansen, a researcher working on local news business models at Harvard’s Shorenstein Center, pointed out that, “internet platform economics were going to swamp the majority of publishers no matter what—there is (almost) no market for their products any more; not because they couldn’t make one, but because that’s not how internet economics work.”
In other words, the premise of the NMA’s report—and the argument behind the legislation it is promoting—is based on a misunderstanding of how the marketplace for information has evolved. While it’s true that revenue for newspapers has declined sharply over the past two decades, and revenue for Google and Facebook has increased just as dramatically, it’s not accurate to say that one increasing caused the other to drop. The ad market changed in a number of ways—many having to do with an expansion of choice—and Google and Facebook took advantage of that. Newspaper publishers did not, for a variety of reasons. Asking Google or Facebook to pay back something they theoretically took from the industry is mistaking effect for cause. It’s also a mistake to think that bargaining collectively with the platforms will somehow produce revenue that will save the media industry from the change occurring all around it.
Dark Web Drug Sellers Dodge Police Crackdowns
The notorious Silk Road site was shut down in 2013. Others have followed. But the online trafficking of illegal narcotics hasn’t abated.
Authorities in the United States and Europe recently staged a wide-ranging crackdown on online drug markets, taking down Wall Street Market and Valhalla, two of the largest drug markets on the so-called dark web.
Yet the desire to score drugs from the comfort of home and to make money from selling those drugs appears for many to be stronger than the fear of getting arrested.
Despite enforcement actions over the last six years that led to the shutdown of about half a dozen sites — including the most recent two — there are still close to 30 illegal online markets, according to DarknetLive, a news and information site for the dark web.
This week, customers could still score five grams of heroin — “first hand quality no mix” — for 0.021 Bitcoin (roughly $170), or a tenth of a gram of crack cocaine for 0.0017 Bitcoin (roughly $14) on the market known as Berlusconi.
That means the fight against online drug sales is starting to resemble the war on drugs in the physical world: There are raids. Sites are taken down; a few people are arrested. And after a while the trade and markets pop up somewhere else.
“The instability has become sort of baked into the dark-web market experience,” said Emily Wilson, an expert on the dark web at the security firm Terbium Labs. “People don’t get quite as scared by it as they did the first few times.”
Dark web markets are viewed as one of the crucial sources of fentanyl and other synthetic opioids. These drugs are often produced in China and sent to users found on the dark net. The packages flowing from China are blamed for compounding the opioid crisis in the United States.
On Empire, one of the largest markets still online, people could have their pick of more than 26,000 drug and chemical listings, including over 2,000 opioids, shipped right to their mailbox.
Illicit online drug sales have grown in complexity and volume since the shutdown of Silk Road, the original dark net market that came online in 2011 and initially offered only a small selection of psychedelic mushrooms.
When the authorities took down the Silk Road in 2013 and jailed its creator, Ross Ulbricht, there was a widespread assumption that his failure and punishment would deter imitators.
But the dealers who had been selling the drugs on the market migrated to competing sites set up with a similar infrastructure, using the Tor web browser, which hides the location of the websites and their viewers, and Bitcoin, which allows for essentially anonymous payments.
A few years later, in 2017, when the police took down two of the biggest successors to Silk Road, AlphaBay and Hansa market, there was five times as much traffic happening on the dark net as the Silk Road had at its peak, according to Chainalysis, a firm that analyzes Bitcoin traffic.
The Canadian creator of AlphaBay, Alexandre Cazes, had been living an opulent lifestyle in Thailand for years, with three properties and four Lamborghinis, thanks to the small commission that AlphaBay collected on every transaction, prosecutors said. Mr. Cazes committed suicide shortly after his arrest, according to Thai authorities.
Governments have dedicated increasingly substantial resources to fighting dark net markets, especially as their role in the rise of synthetic opioids has become more clear.
In early 2018, the F.B.I. created the Joint Criminal Opioid Darknet Enforcement team, or J-Code, with more than a dozen special agents and staff. Europol has its own dedicated dark web team. And authorities everywhere have broadened their focus beyond just the administrators overseeing the markets.
During the first few months of 2019, American officials conducted an operation called SaboTor, which focused on the vendors selling drugs on the dark net. There were 61 arrests in just a few weeks. One ring, in the Los Angeles area, was said to be responsible for shipping 1,500 packages of crack, heroin and methamphetamine each month.
Richard Downing, who oversees the computer crime section of the Justice Department, said he and his colleagues have focused on techniques that create distrust on the sites by encouraging users to believe that sellers and site administrators have already been compromised and are feeding information to law enforcement.
There are some signs that these tactics have limited the growth of the markets. When the authorities took down the Wall Street Market in early May it had 5,400 vendors, only one-seventh as many as AlphaBay had when it was shuttered two years earlier.
Several markets have also chosen to ban the sale of fentanyl, to make them less attractive targets for law enforcement. Berlusconi, one of the largest markets, announced that it was making this change in early May soon after Wall Street Market was shut down.
But the impact of the law enforcement activity of the last two years could be temporary.
Data from Chainalysis suggests that before the latest crackdown, overall transactions on the dark net had recovered to nearly 70 percent of the previous peak, right before AlphaBay went down, and were growing each month.
Mr. Downing, the Justice Department lawyer, said that for now there was a recognition, even among the authorities, that dark net markets have become an enduring part of the criminal economy.
“After some years now of this cycle, it would be hard to say that it’s likely we’re going to stamp this out completely,” Mr. Downing said. “I am hopeful that our efforts to spread deterrence and mistrust are having an impact on how quickly they come back and how strongly they come back.”
In late May, the Dutch police shut down a site that offered what is known as Bitcoin laundering, a service that made it harder for police to track Bitcoin transactions by mixing transactions together.
Shortly before that, American authorities took down a news website, known as DeepDotWeb, that lived on the traditional web, providing reviews and links to dark net sites. The absence of the site is likely to make it harder for newcomers to find their way to dark web markets.
The surviving markets, and new ones that have already popped up, have adopted measures to make them more difficult targets for the authorities.
Most markets now allow for payments in alternative cryptocurrencies, like Monero, which are designed to be harder to track. And DeepDotWeb already has a formidable successor in the social network and news site Dread, which is available only on the dark net.
One of the new markets that have emerged recently, Cryptonia, has promised that it has figured out many of the flaws that made previous sites vulnerable to the police.
“As geeks, we believe that with the right technology most of these problems can be solved,” the Cryptonia Team Manifesto says. “That’s why we have set out to build the perfect dark net trading platform.”
There is also some concern that sellers will move away from big markets and offer their wares directly to customers on encrypted messaging systems like Telegram, which are difficult for the police to monitor.
Ian W. Gray, a dark web analyst at the security firm Flashpoint, said many new entrants appear to have concluded that the previous takedowns were a result of mistakes or small problems rather than any fundamental flaw in their business or technology.
“Law enforcement has been very successful,” Mr. Gray said. “But people forget, or they get lazy, or they think they can do it better.”
Draft Bill Proposes 10-Year Prison Term for Dealing in Cryptocurrency
A cryptocurrency is a digital or virtual currency that uses cryptography for security and is generally based on blockchain technology, a distributed ledger enforced by a disparate network of computers. Bitcoin is the most popular cryptocurrency in the world.
• A draft bill has proposed 10-year jail term for people dealing in cryptocurrencies in India
• Besides making it completely illegal, the bill makes holding of cryptos a non-bailable offence
• A cryptocurrency is a virtual currency that uses cryptography for security and is generally based on blockchain technology
Holding, selling or dealing in cryptocurrencies such as Bitcoin could soon land you in jail for 10 years.
The "Banning of Cryptocurrency and Regulation of Official Digital Currency Bill 2019" draft has proposed 10-year prison sentence for persons who "mine, generate, hold, sell, transfer, dispose, issue or deal in cryptocurrencies.
Besides making it completely illegal, the bill makes holding of cryptos a non-bailable offence.
A cryptocurrency is a digital or virtual currency that uses cryptography for security and is generally based on blockchain technology, a distributed ledger enforced by a disparate network of computers. Bitcoin is the most popular cryptocurrency in the world.
Given the high chances of cryptocurrencies being misused for money laundering, various government bodies such as the Income Tax Department and the Central Board of Indirect Taxes and Customs (CBIC) had endorsed banning of cryptocurrencies.
The draft bill for banning cryptocurrency has been in the works for some time with Economic Affairs Secretary Subhash Chandra Garg leading the exercise.
While strict law would soon be in place to deal with people indulging in trade of cryptocurrency, India is likely to have its own digital currency.
"A decision on the launch of Digital Rupee would be taken after consulting the Reserve Bank of India (RBI)," said an official.
Cellebrite Says It Can Unlock Any iPhone for Cops
Not so long ago, companies that cracked personal devices on behalf of governments did so in secret, closely guarding even the descriptions of their capabilities. Now, it seems, they proudly tweet about their updated abilities to hack into new iPhones, like a videogame firm offering an expansion pack.
On Friday afternoon, the Israeli forensics firm and law enforcement contractor Cellebrite publicly announced a new version of its product known as a Universal Forensic Extraction Device or UFED, one that it's calling UFED Premium. In marketing that update, it says that the tool can now unlock any iOS device cops can lay their hands on, including those running iOS 12.3, released just a month ago. Cellebrite claims UFED Premium can extract files from many recent Android phones as well, including the Samsung Galaxy S9. No other law enforcement contractor has made such broad claims about a single product, at least not publicly. The move signals not only another step in the cat and mouse game between smartphone makers and the government-sponsored firms that seek to defeat their security, but also a more unabashedly public phase of that security face-off.
"Cellebrite is proud to introduce #UFED Premium! An exclusive solution for law enforcement to unlock and extract data from all iOS and high-end Android devices," the company wrote on its Twitter feed for the UFED product. On a linked web page, it describes the new UFED tool's ability to pull detailed forensic data off of any iOS device dating back to iOS 7, and Android devices not just from Samsung but Huawei, LG, and Xiaomi. Cellebrite calls the UFED Premium "the only on-premise solution for law enforcement agencies to unlock and extract crucial mobile phone evidence from all iOS and high-end Android devices."
The announcement follows a move from Apple last fall to add new security measures that crippled another iPhone-unlocking tool, the GrayKey devices, sold by the Atlanta-based company Grayshift, which have become popular among US law enforcement.
One iOS security expert who spoke to WIRED says that Grayshift has since developed tools to unlock at least some versions of iOS 12. But it's only recently started working on a tool that can unlock Android devices too, according to a report from Forbes earlier this week, while Cellebrite says its new tool can unlock encrypted phones running either Apple or Google's operating systems.
"This will allow investigators access to newer and updated devices that they didn’t have access to before," says Sarah Edwards, a forensics researcher for the security training group the SANS Institute. Neither Cellebrite nor Grayshift responded to WIRED's request for comment for more information about their latest phone-cracking tools.
Cellebrite too has likely possessed the ability to unlock iOS 12.3 devices prior to this announcement, says Dan Guido, the founder of the New York-based security firm Trail of Bits and a longtime iOS-focused security researcher. "It's well understood that this is the business Cellebrite is working in," he says. "It was only a matter of time until they solved the problem, and then told people about they solved it, which is what we’re seeing now."
More surprising, Guido and other observes of the iOS arms race say, is how publicly Cellebrite is trumpeting its new tool. Guido suggests that the rising tide of publicity around even more aggressive government-contracted hackers like NSO Group—which has been repeatedly revealed in the act of hacking iPhones and Android devices remotely, rather than the more common physical access unlocking that Cellebrite allows—may have given Cellebrite the sense that it's free to talk openly about its comparatively tame techniques. "It’s 2019. I’m kind of surprised it took this long for someone to start talking in the open about doing this," adds Guido.
But competition with Grayshift, a firm founded by a former Apple security staffer whose GrayKey devices have at times been able to crack iPhones that Cellebrite couldn't, may have also spurred the more public approach, says Matthew Hickey, the founder of security firm Hacker House who has closely monitored Cellebrite's product offerings. "My guess is they're trying to take a bite out of GrayKey's market. They’re trying to win back some of those customers," he says.
As with GrayKey, the new UFED Premium will be sold as an "on-premises" tool, allowing police to buy the company's hacking device and use it themselves. That's certainly convenient for law enforcement, but it also increases the risk that Cellebrite could lose control of its cutting-edge unlocking techniques, or that they could fall into the hands of criminals or repressive governments. Hickey notes that he's been able to buy some older Cellebrite tools off eBay. "It introduces a whole bunch of new risks," says Guido.
Neither Apple nor Google immediately responded to a request for comment on Cellebrite's new UFED product announcement. But Apple at least is expected to release a new version of its mobile operating system, iOS 13, in September, with a beta arriving next month that will likely send Grayshift and Cellebrite both back to the drawing board. The cats and mice game continues.
La Liga App Spied on Users through their Phone Microphones to Fight Illegal Football Broadcasts
The Spanish football league La Liga has admitted that its official smartphone app has been making audio recordings in order to identify pirate broadcasts of football games.
The league said its app detected the location of users, and if they were found to be in a bar, it then recorded audio clips using phone microphones.
The app used an algorithm to identify whether the person was watching a football game from the recording and compared that with their location to see if it the bar owner had paid for a licence to show the game or not.
La Liga has denied any wrongdoing and said that users allowed the app to access their location and microphone in an optional clause when they sign up to the app. It denied that any league employees listened to captured audio.
The app has been downloaded 10 million times around the world, reported El Diario, but La Liga said that no audio was recorded from any users outside Spain.
It said that it used the location and audio data to combat piracy, which it claimed costs the league over €150m (£132m) per year.
Illicit football match streaming has become a growing problem for leagues, which have taken steps to block the illegal broadcasts.
UEFA and the English Premier League have obtained High Court permission in the UK to block illegal football streams.
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In September 2016, Spanish police raided an internet service provider that was accused of allowing customers to illegally stream Premier League matches.
Apps asking for broad permission to have control over phone microphones and other features is not a new phenomenon. In 2014, a cybersecurity company criticised a series of Android torch apps for asking for broad controls over smartphones.
SnoopWall said that the apps asked for permission to retrieve location data, view call logs, delete apps, and add additional software to smartphones.
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