For six years the mp3 had been the leading technology of its kind in the world. During that period it had managed to capture a fractional sliver of the total market. Now, with the introduction of AAC, it was officially obsolete, discharged from service by its own inventor, and suddenly it was the format of the future. Brandenburg benefited. So did Grill, Popp, and the rest of the team. So did any other Fraunhofer researchers who’d joined them along the way, for German law guaranteed inventors a certain percentage of royalties, and this was an inalienable right, one that could not be negotiated away. Others were not so lucky. American law, too, guaranteed patent and copyright protection—in the Constitution, no less—but, like everything in the United States, the rights to this future income could be bought and sold. Brandenburg’s American counterpart James Johnston had signed away his rights to AT&T when he’d gone to work for Bell Labs, meaning that, even as the mp3 succeeded beyond his most fervent imagining, he earned nothing.
Around this time, Linde began to notice subtle changes come over Brandenburg. His wardrobe shifted from sweaters to sport jackets and ties. He began talking less about things like modified discrete cosine transforms, and more about things like marketplace position and long-term barriers to entry. He was starting to understand the power of open, competitive markets and, like all good capitalists, did his best to avoid participating in them. Linde noticed, too, that while Brandenburg might have been eccentric, it wasn’t as if he had a personality disorder. Indeed, he seemed in recent years to have developed an excellent understanding of people’s tendencies and motivations. He had proved to be a careful student of human nature, and his own personal awkwardness was almost like a disguise he wore.
In the months and years to come, Linde watched as Brandenburg used this growing expertise, both in business strategy and human relations, to steer the market for global music toward the maximum economic benefit of the Fraunhofer team. It began with AAC. The new standard was better than mp3, bar none. In a perfect world, then, one designed by an engineer for the benefit of the end user, the mp3 format would have been phased out in 1996, and the superior AAC format would have taken its place. But Brandenburg was careful not to let this happen. Instead, he split the marketplace, directing AAC toward industrial applications like cell phones and high-definition TV, while pushing the mp3 to home consumers for use with their music.
Why did he do this? Well, though he earned money from both standards, his stake in the mp3 earnings was greater. It also kept his colleagues happy, rewarding them for decades of work. And consumers were unlikely to complain. To them, the mp3 was a black box that spat out free music, and the mention of AAC would only confuse things. Still, from an engineering perspective, there was only one word for this kind of maneuvering: politics.
By 1998 Brandenburg’s journey to the dark side was complete. His success with both formats was the toast of the audio engineering world, and he was coming to be regarded as a visionary. That year he was awarded a medal for technical achievement from the Audio Engineering Society, the first of many prizes he would go on to receive. The political weight inside MPEG was shifting, away from Philips and MUSICAM and toward Fraunhofer and Brandenburg. The same engineers who had once ignored his petitions for consideration now regarded his authority as the final word.
MPEG had snubbed him many times. In 1990 it had inserted a cancerous tumor into his tech. In 1995 it had betrayed him, gutted him, and left him for dead. Now, in 1998, he basically ran the thing. In an MPEG meeting that year, when asked if a certain proposal would succeed, one of the Japanese delegates had pointed at Brandenburg, and said, “Ask him.”
In May 1998, Saehan’s MPMan arrived. The first consumer-grade mp3 player was a box-sized contraption with a tiny monochrome screen that cost $600 and held five songs. It was roundly criticized by reviewers, and sales were limited to enthusiasts. Brandenburg thought it was wunderbar, and ordered three. Many other companies began approaching Fraunhofer. Popp and Grill shifted roles, away from building technology and into managing people and streams of revenue.
Late in 1998, Bernhard Grill traveled to Los Angeles to work on the details of a licensing agreement. Afterward, he went shopping at a nearby suburban mall. Standing on the escalator behind two teenage mallrats, he heard a discussion of the technology he had helped to invent. They’re called mp3s, said one mallrat to the other. You can use them to put music on your computer. Then you can share them on the Internet. Haven’t you heard about this yet? It’s how I get all my music now.
The golden ear of Fraunhofer eavesdropped on this conversation, saying nothing. Something extraordinary was occurring to him, something he was realizing for the first time. The format war was over. He had won.
CHAPTER 8
In 1998 Glover built a tower. That is, seven compact disc burners, stacked vertically, that duplicated perfect copies of a source. The burners ran at four times speed, so in the course of an hour Glover could produce about thirty clones. Glover scoured #warez and other underground networks for material to sell. PlayStation games, PC applications, mp3 files . . . anything that could be burned to a disc and sold in a hand-to-hand transaction for a few dollars in loose cash.
He focused especially on movies. Video compression was just arriving to the pirate networks, and this had led to an influx of low-grade rips. Home DVD burners hadn’t yet arrived, and the release groups relied on an inferior technology known as “Video Compact Disc.” Glover downloaded this material, made copies with his tower, then sold the bootleg discs for five to ten dollars apiece. The video quality was poor, but business was brisk.
Soon he was buying blank CDs in bulk, snapping up spindles of hundreds of discs at a time. He bought a label printer to catalog his product, and another color printer to make mock-ups of the movie posters. He bought a black nylon CD binder, filled it with the color posters, and used this as a sales catalog. He kept his inventory in the trunk of his Jeep and sold the movies by the side of the road.
The one thing he didn’t sell was leaked CDs from the plant. While these continued to trade on the black market, Glover considered them too risky. It had taken an awful lot of overtime hours to make the move to permanent, and he didn’t want to chance his employment status. Also, he needed health insurance. His son Markyce had been born the year before, and his mental ledger now contained terrifying entries for things like diapers and child care. His own upbringing had instilled in him the importance of family, and he was mentally prepared for fatherhood, if not marriage exactly.
He matured a little. He tried, for a while, to spend more time at home. He got another tattoo, on his bicep, of an enormous Christian cross. In the mornings before work, he would rise from his restless sleep and brush his teeth with little Markyce. In the evenings, he would sit the child on his lap and play with him amidst the whirring background of the burning bootlegged discs.
As soon as he’d saved up enough cash, he moved with his girlfriend out of the trailer and into a modest apartment. The move marked the end of the dog-breeding experiment. This had not been a lucrative venture. Pit bull puppies were a pure commodity, a market with no barriers to entry, and the premium on pedigree litters had been competed away. This experience was a lesson for Glover, as he began to see that success in a capitalist economy required a durable competitive advantage. So he started to act as a middleman between the street and the Scene. But even so, he struggled, losing out to his primary competitor: Tony Dockery.