Music Industry Battles mixtapes

February 18, 2007
Hip-Hop Outlaw (Industry Version)
By SAMANTHA M. SHAPIRO

Late in the afternoon of Jan. 16, a SWAT team from the Fulton County Sheriff’s Office, backed up by officers from the Clayton County Sheriff’s Office and the local police department, along with a few drug-sniffing dogs, burst into a unmarked recording studio on a short, quiet street in an industrial neighborhood near the Georgia Dome in Atlanta. The officers entered with their guns drawn; the local police chief said later that they were “prepared for the worst.” They had come to serve a warrant for the arrest of the studio’s owners on the grounds that they had violated the state’s Racketeer Influenced and Corrupt Organizations law, or RICO, a charge often used to lock up people who make a business of selling drugs or breaking people’s arms to extort money. The officers confiscated recording equipment, cars, computers and bank statements along with more than 25,000 music CDs. Two of the three owners of the studio, Tyree Simmons, who is 28, and Donald Cannon, who is 27, were arrested and held overnight in the Fulton County jail. Eight employees, mostly interns from local colleges, were briefly detained as well.

Later that night, a reporter for the local Fox TV station, Stacey Elgin, delivered a report on the raid from the darkened street in front of the studio. She announced that the owners of the studio, known professionally as DJ Drama and DJ Don Cannon, were arrested for making “illegal CDs.” The report cut to an interview with Matthew Kilgo, an official with the Recording Industry Association of America, who was involved in the raid. The R.I.A.A., a trade and lobbying group that represents the major American record labels, works closely with the Department of Justice and local police departments to crack down on illegal downloading and music piracy, which most record-company executives see as a dire threat to their business.

Kilgo works in the R.I.A.A.’s Atlanta office, and in the weeks before the raid, the local police chief said, R.I.A.A. investigators helped the police collect evidence and conduct surveillance at the studio. Kilgo consulted with the R.I.A.A.’s national headquarters in advance of the raid, and after the raid, a team of men wearing R.I.A.A. jackets was responsible for boxing the CDs and carting them to a warehouse for examination.

If anyone involved with the raid knew that the men they had arrested were two of the most famous D.J.’s in the country, they didn’t let on while the cameras were rolling. For local law enforcement, the raid on Drama and Cannon’s studio was no different from a raid they executed in October on an Atlanta factory where a team of illegal immigrants was found making thousands of copies of popular DVDs and CDs to sell on the street. Along with the bootlegged CDs, the police found weapons and a stash of drugs in the factory. (The Fox report on the DJ Drama raid included a shot of a grave-looking police officer saying, “In this case we didn’t find drugs or weapons, but it’s not uncommon for us to find other contraband.”)

But Drama and Cannon’s studio was not a bootlegging plant; it was a place where successful new hip-hop CDs were regularly produced and distributed. Drama and Cannon are part of a well-regarded D.J. collective called the Aphilliates. Although their business almost certainly violated federal copyright law, as well as a Georgia state law that requires CDs to be labeled with the name and address of the producers, they were not simply stealing from the major labels; they were part of an alternative distribution system that the mainstream record industry uses to promote and market hip-hop artists. Drama and Cannon have in recent years been paid by the same companies that paid Kilgo to help arrest them.

The CDs made in the Aphilliates’ studio are called mixtapes — album-length compilations of 20 or so songs, often connected by a theme; they are produced and mixed by a D.J. and usually “hosted” by a rapper, well known or up-and-coming, who peppers the disc with short boasts, shout-outs or promotions for an upcoming album. Some mixtapes are part of an ongoing series — in the last few years, the Aphilliates have produced 16 numbered installments of “Gangsta Grillz,” an award-winning series that focuses on Southern hip-hop; others represent a one-time deal, a quick way for a rapper to respond to an insult or to remind fans he exists between album releases. The CDs are packaged in thin plastic jewel cases with low-quality covers and are sold at flea markets and independent record stores and through online clearinghouses like mixtapekingz.com. A mixtape can consist of remixes of hit songs — for instance, the Aphilliates offered a CD of classic Michael Jackson songs doctored by a Detroit D.J. Or it can feature a rapper “freestyling,” or improvising raps, over the beat from another artist’s song; so, on one mixtape, LL Cool J’s “Love You Better” became 50 Cent’s “After My Cheddar.” In most cases, the D.J. modifies the original song without acquiring the rights to it, and if he wants to throw in a sample of Ray Charles singing or a line from a Bugs Bunny cartoon, he doesn’t worry about copyright. The language on mixtapes is raw and uncensored; rappers sometimes devote a whole CD to insulting another rapper by name. Mixtapes also feature unreleased songs, often “leaked” to the D.J. by a record label that wants to test an artist’s popularity or build hype for a coming album release. Record labels regularly hire mixtape D.J.’s to produce CDs featuring a specific artist. In many cases, these arrangements are conducted with a wink and a nod rather than with a contract; the label doesn’t officially grant the D.J. the right to distribute the artist’s songs or formally allow the artist to record work outside of his contract.

In December, not long before the bust, I spent a week with DJ Drama and the Aphilliates in Atlanta. The D.J.’s are true celebrities in the city’s vibrant hip-hop community. They were seated at the V.I.P. tables at nightclubs and parties and surrounded by fans at strip clubs, which in Atlanta are considered crucial venues for new hip-hop; tracks are often given their first spins while strippers frantically shake their behinds.

Although the music that the Aphilliates promote glorifies violence and drug dealing — one of their trademark Gangsta Grillz sound effects is a few shots fired by a gun with a silencer, followed by the thud of a body dropping — they did not live a gangster lifestyle. (Drama often rose at 8 a.m. to take his oldest daughter to kindergarten at a private school.) Instead, they seemed to be aspiring young music executives with a long-term business plan who had figured out a faster and more lucrative way to make it big than an internship at a record label.

The success of “Gangsta Grillz” had secured for the Aphilliates their own radio shows and record contracts, as well as endorsement deals with Pepsi and clothing companies. When I visited, the Aphilliates were working on an “official” Gangsta Grillz release, to be distributed by Grand Hustle, part of Atlantic Records; Drama said it would use only licensed songs and cleared samples. In September, the Aphilliates signed a partnership deal with Asylum Records, part of Warner Music Group, to distribute albums that Drama and Cannon would produce.

DJ Drama knew that aspects of his business were in what he described to me as “a legal gray area,” and he was secretive about even the most basic facts of how the Aphilliates ran their business. He allowed that he had “got rich” because of his reputation as a mixtape D.J., though he would not even admit to me that he actually sold mixtapes. The line between self-promotion and secrecy was sometimes an awkward one for him to walk, especially as his underground CDs moved further into the mainstream. Several small distributors had begun selling Drama’s CDs, repackaged with scannable barcodes, to major retailers like Best Buy.

One of the CDs confiscated by R.I.A.A. investigators during the Atlanta raid was “Dedication 2,” a mixtape that DJ Drama made with Lil Wayne, a New Orleans rapper; it appeared on the Billboard hip-hop and R&B charts and was widely reviewed in the mainstream press. (Kelefa Sanneh of The New York Times chose “Dedication 2” as one of the 10 best recordings of 2006.) As the R.I.A.A. agents boxed up Drama’s stash of “Dedication 2,” the CD continued to sell well at major retailers like Best Buy and FYE (a national chain of record stores) and also at the iTunes Store online.

The local Fox report of the bust was posted on the Internet and widely viewed. The spectacle of men who were known to every hip-hop fan as players in the mainstream music industry being arrested with the aid of the enforcement arm of that same industry was so bizarre and unexpected that a handful of conspiracy theories quickly arose to explain what had happened. Some fans speculated on message boards that the D.J.’s must have been running other illegal businesses on the side. There were others who thought that the bust was payback from a small distributor who had recently sued DJ Drama for violating a contract. But most fans simply thought the men were victims of a music industry that didn’t understand hip-hop. The day after Drama’s arrest, fans circulated on the Internet a stylized image of Drama’s face over a caption that said “Free Drama and Cannon.” Mixunit.com, the biggest Web distributor of mixtapes, removed its entire stock from the site and posted pictures of Drama and Cannon on its main page with the message, “Free the D.J.’s.” A member of the Diplomats, a Harlem hip-hop group, told MTV News that Jan. 16 was “D-day in hip-hop.” Some fans said that in protest they’d never buy another label release; a New York City radio D.J. called record labels the ultimate “snitches.”

Lil Wayne, who made “Dedication 2” with Drama, said in an interview that Drama would have to “play the game fair,” adding that he thought it was unfortunate that sometimes mixtapes outsell an artist’s official label releases, cutting into the artist’s royalties. Soon after, Rapmullet.com, one of the most prominent mixtape Web sites, posted an image of Wayne on its home page over the words: “Is Wayne a traitor? Did he side with the suits? We didn’t abandon Drama — will you? Who’s next to jump ship?”

Drama is the public face of the Aphilliates, but he, Cannon and their third partner, DJ Sense (a k a Brandon Douglas, 26) function as a team; all three are the hosts of a weekly radio show broadcast on WHTA, an Atlanta hip-hop and R&B station, and another Gangsta Grillz show on Sirius satellite radio, and they jointly own the Aphilliates Music Group. The men have been friends since they met at college a decade ago, and they have an easy rhythm with one another, like teammates who play pickup basketball every week and can pass or negotiate a pick without making eye contact. All three wear the collective’s signature neck chain with a diamond-encrusted pendant in the shape of the letter A.

Drama, whose mother is a white education professor and whose father is a black civil rights activist, has expressive brown eyes and a closely trimmed beard. He usually wears a baseball cap backward or propped loosely atop his light brown hair, cocked to the side. Although his workday rarely starts before noon, he comes across as a savvy businessman. Most of the time he doesn’t say much, but it’s clear he is always paying close attention to what is going on around him. When he is in the studio, about to lay down a Gangsta Grillz “drop” (a phrase that is repeated throughout a mixtape), or when he has to tell a bouncer that no, he won’t stand behind that velvet rope, he rocks back and forth, building his energy, then barks out a torrent of speech, after which he seems to retreat back into himself again. He has a quiet, focused energy that can seem gruff; around Sense and Cannon, though, he gets goofy.

Cannon is a huge guy — 6-foot-6 and 250 pounds — with a lumbering gait and a sweet, unguarded smile. He sometimes spends 24 hours at a stretch in the studio, hunched over a mixing board and a computer running Pro Tools, taking breaks to play video games. He loves to shop, and he especially likes to visit high-end Atlanta malls to buy Prada cologne and examine the jewelry. His enormous sneaker collection takes up the bulk of his apartment’s walk-in closet, as well as the trunk of his Chevy Tahoe S.U.V. and most of a storage space he rents by the month.

Sense is known as the visionary with the business ideas, the one who operates mostly behind the scenes. He is short and just a little bit nerdy. Once when we were in the studio at WHTA, a D.J. named Mami Chula wandered in while a song was playing. She gave Sense a look, shook her head and mused aloud, “I just never saw someone with such a small head.” Sense didn’t say anything, just gave her an indignant look. It seemed as if he was accustomed to being teased.

The day after the raid, when Drama and Cannon were each released from jail on $100,000 bonds, they drove straight to the WHTA studios, went on the air and promoted their coming label releases. There’s a video on YouTube that shows the scene: Drama swaggers into the studio in a white T-shirt and a gray zip-up track-suit jacket, his diamond “A” chain swinging across his chest.

The D.J.’s on air were known as the Durrty Boyz, and one of them announced that they had an “exclusive interview to find out what the hell is going on with Gangsta Grillz.” He asked the accused felons to get close to the microphone.

Cannon murmured: “It’s Don Cannon. Holla at me.”

DJ Sense, who also goes by the name Trendsetter, said: “Yeah, yeah, you know what it is. The boy T-t-t-t-t-t-trendsetta! Holla at your boy!”

Drama, who sometimes calls himself “Mr. Thanksgiving” because, he says, he “feeds the whole industry,” said: “Thanksgiving is every year, man. It doesn’t go nowhere. Do you understand what that means? It’s a holiday, it’s every year. . . . It’s not going nowhere. DJ Drama! I am in full effect.”

After the Durrty Boyz spun a Ying Yang Twins song, Drama took calls at a rapid clip, and he responded to nearly every question or message of support with a reminder of the Aphilliates’ coming Gangsta Grillz release on Atlantic.

One female caller, particularly incensed, demanded, “Can I speak to Drama?”

“What’s up?” Drama asked. “What’s good?”

“Drama, what happened? . . . I mean, come on now, you went to jail?”

“I mean, for a quick minute,” Drama replied. “I am home, though.”

“Uh-uh! We ain’t having that. Don Cannon, Trendsetter, do I need to fight somebody?”

“We’re gonna need you,” Drama said. “We’re gonna start a whole campaign. . . . You know the Gangsta Grillz album is coming out, right?”

“Oh, for real?”

In 1996, Sense and Drama, then both freshmen majoring in mass communications, met in Brawley Hall, their dorm at Clark Atlanta University. C.A.U. is part of the country’s largest consortium of historically black colleges, directly abutting Morehouse and Spelman. Drama and Sense were both aspiring D.J.’s, and they were both from Philadelphia. After they met, they competed in a local D.J. battle and became friends. The following year they met Cannon, also a D.J. from Philadelphia (“Aphilliates” combines the Phil of Philadelphia with an A for Atlanta), and the three became inseparable. Each D.J. found his own niche: Sense interned at WHTA, Cannon spun records at college parties and Drama started selling his own mixtapes. Every night in his apartment, Drama made 10 copies of his latest cassette, and the next day he brought them to campus. Between classes, he would set up a cheap yellow boom box on a major promenade at C.A.U. known as the Strip and offer tapes for sale. He also sold tapes at Georgia State, where he would tell customers that the identity of DJ Drama was a mystery. “I’d tell them I never met Drama, I don’t know the guy, I just work for him,” he told me.

In his junior year, in 1998, Drama put together a compilation of Southern hip-hop, which was beginning to emerge nationally as a distinct sound and style. Often called dirty South, it was more dance-oriented and melodic and raunchier than hip-hop from either coast. That mixtape, “Jim Crow Laws,” sold well, and Drama decided to start a Southern series, which he named Gangsta Grillz. Amateur mistakes were made early on — “we actually spelled ‘Grillz’ with an S,” Drama recalled — but the series quickly took off. Through Sense, Drama met a young local rapper named Lil Jon, who had helped invent a frenetic new style of hip-hop known as crunk. Drama asked Lil Jon to be the host of a mixtape, and Jon did a manic series of drops throughout Gangsta Grillz No. 4. It was the first CD that Drama was able to get into stores.

Around the time Drama was hitting his stride, a young entrepreneur named Jason Geter was working as a manager for T.I., then a little-known artist from Atlanta’s Bankhead housing projects signed to an imprint of Arista. Geter wasn’t happy with the label’s marketing of T.I.’s first album, so he undertook his own promotions, independently shooting a video and printing up T-shirts. Geter said that he started seeing Drama’s mixtapes everywhere — in barbershops and record stores. (“Drama was the most consistent guy doing mixtapes in Atlanta,” he told me. “Some of the other people didn’t even have covers for the CDs, but Drama stood out.”) One night Geter called Drama and asked if he could bring T.I. by Drama’s home studio to do some drops and freestyles on a mixtape.

Drama was ecstatic. “At that point, no one was really checking for me,” he told me. “I hadn’t had a call in three months.” After the impromptu recording session, Geter started giving Drama unreleased T.I. songs and eventually asked him to produce and release a whole CD of T.I.’s work. When T.I.’s mixtape “Down With the King” sold well, other managers started taking their artists to Drama’s studio. The first mixtape Drama was paid by a label to produce was “Tha Streetz Iz Watchin,” which Def Jam’s CTE label hired him to make with Young Jeezy in 2004, in order to build up hype for a coming CD. When Jeezy’s official release, “Let’s Get It: Thug Motivation 101,” came out in 2005, bearing a bonus track from the Drama mixtape, it sold two million copies.

At least once a week last fall, Jason Brown, the 30-year-old promotions director for the Aphilliates, could be found making a circuit of Atlanta with boxes of Drama’s new releases stacked in the back of his Chevy Tahoe. The trip often took as long as nine hours. The Thursday I rode with Brown, he was carrying copies of two mixtapes Drama had recently recorded in the studio with Lil Keke and Lil Boosie, who are popular in their home regions — Louisiana and South Texas, respectively — but have not yet broken out nationally. Brown drove down the parkways and roads of Atlanta’s low-income black suburbs, past a landscape of Waffle Houses, custom rim shops and halal meat stores, stopping in with his wares at flea markets and little mom-and-pop record shops.

At around 3 p.m., we pulled into the parking lot of Backstage Records, a small, tidy shop across the street from the Greenbriar Mall, a locale frequently mentioned in hip-hop lyrics. (Ludacris: “Any charges set against me, chunk it up and stand tall/Next year I’m lookin’ into buyin’ Greenbriar Mall.”) Brown tucked a stack of CDs under each arm and headed into the store. He greeted the owner, a short broad man in his late 20s named Vic XL.

“How many you want?” Brown asked XL, holding out the Keke and Boosie CDs.

“Whoa!” XL said, excited. “Boosie is overdue for a mixtape.” XL told me that Boosie’s major-label release, “Bad Azz,” on Asylum Records, was not selling well, but, he explained, “he’s a hood artist,” so that wasn’t a big surprise.

XL inspected both discs and placed his order: “I’m gonna take five.” As Brown started to count CDs off his pile, XL looked again at the liner notes and reconsidered: “No, 10 each.”

A small record store like Backstage rarely orders more than 10 copies of any CD, and Drama’s distribution system meets XL’s needs better than the mainstream distribution system does. If XL wants just 10 copies of the new Lil Scrappy CD, he can’t buy them directly from the label’s distributors as chains like Best Buy do. Instead, he has to go through a middleman called a one-stop, which charges XL $10.75 for a CD that retails at Best Buy for $9.99.

The economics of mixtapes appeal to XL, and so do their politics; as he sees it, mixtapes undermine the power of major record labels and radio stations. “Most artists can’t afford to get their music on the radio, but an artist has the right to let his fan base hear what he’s done,” XL said. “Who is the label to dictate how to feed the fan base?”

Mixtapes have long played an important role in hip-hop. In the late 1970s, before rap music was ever recorded onto vinyl or played on a radio station, people found out about hip-hop acts through live recordings of D.J. sets from block parties or clubs. Those cassette recordings were duplicated by hand and sold on the street or in record stores, and given free to gypsy-cab drivers in the Bronx as promotional tools. Throughout the ’80s and ’90s, mixtapes remained an important subculture. In the last five years, though, they have risen to a more prominent place in the industry and made the most successful D.J.’s rich.

Mixtapes fill a void left by the consolidation of record labels and radio stations. In the mid-1990s, sales of independent hip-hop albums exceeded those from major releases. But those smaller independent labels were bought out by major labels, and in the late ’90s, the last major independent distributor collapsed. This left few routes for unknown hip-hop artists to enter the market; it also made the stakes higher for major labels, which wanted a better return on their investment. As Jeff Chang, author of “Can’t Stop Won’t Stop,” a history of hip-hop, told me recently, “The whole industry shifted to massive economies of scale, and mixtapes are a natural outgrowth and response to that.”

Mixtape D.J.’s came to be seen as the first tier of promotions for hip-hop artists, a stepping stone to radio play. Labels began aiding and abetting mixtape D.J.’s, sending them separate digital tracks of vocals and beats from songs so they could be easily remixed. They also started sending copies of an artist’s mixtape out to journalists and reviewers along with the official label release. DJ Chuck T, a mixtape D.J. in South Carolina, told me that when label employees send him tracks to include on his mixtapes, they request a copy of the mixtape so that they can show their bosses the track is “getting spin from the street.” He also said record-label promoters want sales figures for his mixtapes so they can chart sales patterns, which they use in marketing their own releases.

Mixtape D.J.’s have effectively absorbed many of the functions of an A&R department, the branch of a record label that traditionally discovers and develops new talent. Ron Stewart, a promotions coordinator at Jive Records, a subsidiary of Sony BMG Music, told me he prefers to test new artists out on mixtapes. “Budget permitting,” he said, “we’d do a few mixtapes with a few D.J.’s, because they have different audiences in different regions.” Labels prefer to use established mixtape D.J.’s like Drama, rather than produce promotional CDs themselves, Stewart said, because “the best D.J.’s have a better brand than the average label does.”

Although the deals are informal and often secret, labels typically pay a prominent D.J. like Drama $10,000 to $15,000 to produce a mixtape for an artist. The label’s representatives, Stewart explained, adopt what amounts to a don’t ask, don’t tell policy about the D.J.’s plans to sell the work; what the D.J. does with his copy of the master, Stewart said, “is his own business.” For successful D.J.’s, mixtape sales can bring considerable revenue. Mixtapes sell for anywhere from $5 to $10 on the street or on a Web site like Mixunit, and overhead is low, since the CDs cost only about 50 cents to manufacture and D.J.’s rarely pay royalties or licensing fees.

Although many hip-hop artists view mixtapes as an essential way to build their careers, some are critical of aspects of the system. One editor of a hip-hop magazine, who would comment only anonymously, told me: “In the aftermath of the raid, talking to artists, the stuff they say when Drama’s not around — there is a little bit of animosity, because he is clearly making money off these artists. They all saw his car being towed off on TV. What was it? A Maserati?”

Killer Mike, an Atlanta rapper who is signed to Sony and who has been featured on a number of DJ Drama’s mixtapes, told me he is not really a “supporter” of mixtapes. “That doesn’t mean I don’t play mixtapes in my car and listen to other peoples’ mixtapes, but as an artist, I feel the amount of rhymes you have to write to put out a mixtape is the same amount you have to for an album,” he said. “I’d rather put out albums over my own beats than use other people’s beats and have a problem later.”

Pimp C, a Texas rapper who is half of the popular underground hip-hop duo UGK, has repeatedly refused to participate in a UGK mixtape despite requests by his record label and, he said, from countless mixtape D.J.’s. Pimp C told me that because there is no paper trail, mixtape D.J.’s are able to invent sales figures, and they routinely claim that, after their overhead, they just break even. But based on his experience producing two of his own mixtapes, Pimp C suspects D.J.’s make plenty; they just don’t want to give artist a cut. “Every time I was approached by a mixtape D.J., they tried to sell me the dream there was no money in it, and it was something artists need to do to help their album sales,” he said. “But I know how much bread can be made. . . . If you’re making money, chop it up with me.”

Before DJ Drama went to jail, no mixtape D.J. had been the target of a major raid; busts had been directed at small retailers, like Mondo Kim’s in New York’s East Village. Jonathan Lamy, a spokesperson for the R.I.A.A., said the raid on Drama’s studio represented no official change in policy and had been undertaken only at the behest of Atlanta law enforcement. But for many in the industry, the focus on a single prominent figure seemed like no accident. “Arresting them criminally under RICO was firing a warning shot at anyone who has mixtapes,” said Walter McDonough, a copyright lawyer who has negotiated with the R.I.A.A. on behalf of Jay-Z.

Others pointed to the selective nature of the crackdown as evidence that the raid was a deliberate effort — major retailers like Best Buy were not raided, even though they carry many of the same CDs Drama was arrested for selling. The R.I.A.A. “would have to know nothing about the industry they are monitoring not to realize this stuff is all over Best Buy and FYE,” says Eric Steuer, the creative director of Creative Commons, a nonprofit that works to develop more flexible copyright arrangements for artists and producers. “Maybe they leave them alone because the major chains have promotion deals with record labels.”

Ted Cohen, a former executive at EMI Records who now runs a music-consulting business, told me that the raid was typical of the music industry’s “schizophrenic” approach to promotions; a label’s marketing department wants to get its artists’ songs in front of as many people as possible, even if it means allowing or ignoring free downloads or unlicensed videos on YouTube. But the business department wants to collect royalties. “It is a case of the right hand not knowing what the left hand is doing,” Cohen said.

Drama’s arrest shook up mixtape D.J.’s and promoters across the country. But even in the days immediately following the raid, D.J.’s continued to release tapes — some with hastily added tracks on which rappers cursed the R.I.A.A. — and major labels continued to e-mail them new tracks. Some in the industry speculated that things would have to change, that mixtapes would either move further underground or become legitimate licensed products. But no one I spoke with thought the arrest would permanently damage Drama’s career. In fact, Julia Beverly, the editor of Ozone, a Southern hip-hop magazine, suggested that it was more likely to improve his image and album sales. “Really, this takes him to a gangsta level,” she said. “It gives him a little something extra. It’s messed up, but if someone goes to jail or dies, it elevates his status and just makes him more of a star than he was before. That’s the way the entertainment industry works in general. So, having cops at your door with M-16’s at your head, and MTV News reporting on the raid, calling you the biggest D.J. in the world? You can’t pay for that type of look.”

Samantha M. Shapiro is a contributing writer.