The Lawsuit That Killed Hip-Hop

The hip-hop music that I fell in love with back in the mid-to-late 80's had a certain sound that you just don't hear in today's rap music. At the time everybody was sampling James Brown, and groups like the Beastie Boys went well beyond that, sampling even the Beatles and Led Zeppelin for their 1989 opus Paul's Boutique.

The ability to combine samples from anywhere and everywhere led to some of the most interesting and creative hip-hop and electronic music in the history of the recording industry. There was one little problem, though: none of the sampled artists were getting paid, despite the fact that other artists were making money off of music containing snippets of their songs.

That's when the lawyers stepped in. And you know that's always a bad sign.

Once dismissed as a fad, hip-hop was generally considered a cultural backwater for most of the 80's (despite the successes of Run-DMC, LL Cool J, Whodini, and other artists). It took the meteoric rise and spectacular mainstream success of MC Hammer and Vanilla Ice in 1990 to make the rest of the world realize that rap music could make big money. As it became more popular, the recording industry became increasingly aware of the fact that many rappers were laying rhymes over other people's music and selling it as their own. It was a legal powderkeg waiting to explode, and in 1991 it finally did.

Biz Markie was a member of Marley Marl's Juice Crew, and a well-known player on the New York hip-hop scene. While best known these days for "Just A Friend", a classic tale of lost hip-hop love, the song that got him into trouble was a hard-luck story from his album I Need A Haircut entitled Alone Again. The song itself was nothing out of the ordinary, aside from its sampling of the Gilbert O'Sullivan song Alone Again (Naturally). O'Sullivan caught wind of the song being used without his permission, and Grand Upright Music, Ltd. - to whom O'Sullivan had signed over the rights to the recording - immediately filed a copyright infringement suit.

Biz Markie really never had a chance in court. The ensuing trial revealed that Warner Bros. Records had actually tried to get permission to use the sample but were denied, making its use in Markie's song even more damning from a legal perspective. Markie's lawyers also defended the sampling by stating that the use of unauthorized samples was rampant in hip-hop, a veritable "everybody does it so it must be okay" defense that no judge was going to buy. Grand Upright won the suit, and future copies of I Need A Haircut had the song omitted.

The outcome of the lawsuit drew a clear legal line in the sand: all hip-hop samples must be cleared, and the original artists had every right to sue rappers and their record companies if their work was used without permission. This shook hip-hop production to its very foundations. Sample-heavy production, which at the time was being pushed to its outer limits by production crews like The Bomb Squad and The Dust Brothers, came to a halt; most records were limited to two or three samples at most to avoid excessive clearance costs. The more clever producers like Dr. Dre began using "interpolation" - getting studio musicians to replay original music - in order to pay only the songwriters (as opposed to also having to pay the original performer and their record label). Rap music would never be the same.

However, the story isn't over yet. In the midst of coming to grips with the recent death of founding group member Adam "MCA" Yauch, the Beastie Boys have been hit with a lawsuit filed by recording label Tuf America regarding the use of samples of the group Trouble Funk. The label contends that samples of the Trouble Funk song Drop the Bomb were used without permission on Beastie songs The New Style and Hold It Now, Hit It from Licensed to Ill, and Car Thief and Shadrach from Paul's Boutique. They also contend that the group continues to profit off of this illegal sampling by re-issuing the albums, spurring new record sales.

The problem is that both of these accusations are 100% true. At the time that these seminal albums were recorded, sampling was a legal grey area. Beyond general copyright law, there was no legal precedence to govern sampling prior to 1990, so it has long been assumed that these sample-laden albums were "grandfathered" in to the newly-litigious era of sampling and would remain unassailable in court.

This lawsuit has the potential to change all of that. If Tuf America wins the suit and the Beastie Boys are forced to pay up, there's nothing stopping The Beatles, Led Zeppelin, and the dozens of other artists sampled on their albums from coming after the group to get their cut. And in a broader sense, there's nothing stopping other sampled artists from going after 80's rap stars either. It's a scary proposition, and one that could retroactively take classic hip-hop records off the shelf, denying future fans the chance to learn about the history of rap and its influential production practices.

Some sort of accord needs to be reached in order to end these sampling wars. Artists that get sampled need to get paid for the use of their work, but they shouldn't be able to outright refuse the sampling of their music or be able to price it so high as to effectively prohibit its use altogether. While they most certainly own their music, they shouldn't be able to stifle the creativity of other artists just because they disagree with the concept of sampling. Their music also shouldn't be prevented from being shared with new generations for fear of legal repercussions.

A standardized industry-wide sampling pay scale based on the popularity of an artist's music would work wonders to remove this contentious atmosphere. Today's open sampling market creates nothing but a mish-mash of legal wrangling, with some artists being friendly towards sampling (Parliament) and some artists absolutely despising it (The Rolling Stones). Meanwhile, music fans are denied the great sample-based music that would undoubtedly be made if a more sensible payment system was in place, one that made sampling more universally accessible and affordable. In the end, the only ones that really benefit from this mess are the lawyers.

And you know that's always a bad sign.

The Lessons Taught by the 38 Studios Debacle

Living up here in Boston, it's been hard to avoid coverage of the implosion of 38 Studios. It's simply a bad situation all around. Bad for 38 Studios and the game it was creating, bad for the people that worked there, bad for the state of Rhode Island and its taxpayers, and bad for gamers, who will likely never see the MMO known only as Project Copernicus.

Putting the headline-grabbing drama aside, I think it's useful to look at the mistakes that the company made. I'm sure Harvard Business School will have a field day with this whole episode, inserting case studies into its curriculum as soon as it can get them off the presses, and with good reason. There's definitely some lessons to be learned here. Let's examine them one by one.

Don't attack an entrenched market leader with a nearly identical product. Although we'll never know for sure as it was never shown to the press, it's difficult to envision Copernicus being anything but an extremely well-done clone of World of Warcraft. Company founder Curt Schilling is an admitted WoW fanatic, so putting him in the driver's seat of what was surely intended to be his "perfect game" would probably result in something akin to what he already considers to be near-perfect: World of Warcraft. The problem with this approach is that you can't out-WoW WoW, just like Google Plus can't out-Facebook Facebook. MMO after MMO has tried to clone WoW and its achievements, with results ranging from moderate success (Star Wars: The Old Republic) to relative failure (Warhammer Online: Age of Reckoning). If there isn't a big differentiation between your product and the top dog, gamers aren't going to migrate.

Start small. Blizzard didn't get to where it is overnight. In fact, it took more than a decade for it to reach its current pinnacle. It started as a three-man operation doing ports of existing titles, eventually finding success on the SNES before moving on to the breakout PC title Warcraft: Orcs & Humans. id Software started much the same way, as have many other successful game companies. While I admire 38 Studios' swinging for the fences, they would have been much smarter to start off with a more modest single-player game instead of a gigantic MMO (Kingdoms of Amalur: Reckoning doesn't count, as the MMO studio didn't create it). Instead, they bet the farm on a game genre subject to development cost overruns, significant ongoing operational costs, and a vocal, unforgiving playerbase with a voracious appetite for new content. While 38 proved that, given enough money, you can throw enough people in a room to make a top-flight MMO take shape, what you can't buy is the ability to execute on such an endeavor in a cost-efficient manner. That can only be bought with significant time investment and a team that grows together.

Hire Young and Cheap. The most successful game companies hire young and hungry coders, artists, and designers, letting them grow along with the company. Then, once the greenhorns have matured into veterans, they bring in the next generation to create a potent mix of youthful ambition and experienced leadership. This allows an organization to get the best bang for their buck in terms of staff, while also resulting in a team that really loves the company they work for, since they "grew up" with it. One of 38's big mistakes was going out and hiring a virtual who's who of staff from the MMO industry, along with top-shelf creative folks like Todd MacFarlane and R.A. Salvatore. While this looks good on paper, it costs a ton of money, and may not necessarily result in the product being any better than what's already out there. If you hire the audio designer from this game, the UI designer from that game, and the combat designer from the other game, chances are your game is going to look like a combination of all of those games (that are already on the market). Sometimes it's best to roll the dice on new blood with new ideas, instead of going after industry veterans to the exclusion of anyone else.

Involve the press as early as you can. 38 Studios' top PR priority over the last year was getting the hype train rolling for Kingdoms of Amalur: Reckoning, with good reason. It was their first release as a company, and was thus critical to their establishment of a foothold in the industry. However, there was nothing but years of baffling radio silence surrounding Project Copernicus. The first video of the game wasn't released until May 18th 2012, weeks after the faltering company had missed its May 1st loan payment to the state of Rhode Island. R.A. Salvatore later claimed that the game was deep into its development process. If that was the case, why wasn't the press shown anything but screenshots? The public can't miss what they don't know about, and can't rally around a project that they've never had a chance to get attached to. Copernicus has now vanished, but nobody is going to miss it...because it was never really there to begin with.

Never take public money. There is no better way to turn the whole world against your company than to accept, and then squander, taxpayer dollars. The game industry is volatile; companies are bought and sold at a steady clip, employees are laid off constantly, and a significant number of game studios shut their doors each year. These events matter little to the average taxpayer, as game developers are typically small and private, or large and publicly-traded, just like any other company in the entertainment industry. What they are not, however, is funded by public money. Sure, some may get tax credits from certain states, but the kiss of death for 38 Studios was the fact that it became a government-subsidized business thanks to its $75 million state loan. This made every man, woman, and child in the state of Rhode Island financially liable for the failure of the company, regardless of whether or not they even knew it existed. There's no easier way to have an entire state's population hating you than to pull money directly out of their pockets for no reason other than your company's inability to stay solvent.

The 38 Studios story isn't done yet, as the developer has yet to officially declare bankruptcy. But given the fact that it laid off all of its employees on May 24th, even a best-case scenario - in which it secures private equity and is able to continue operations - leaves the company in dire straits. The original group of employees would be impossible to reassemble, with many already in the process of moving on to more stable companies in the area, or some even moving out of New England entirely.

Furthermore, even if Project Copernicus was to be finished and released, it would be viewed as damaged goods by the gaming public. MMOs face an uphill battle in the best of circumstances, with much of a new release's early traction riding on the perception - good or ill - that players have in regards to its long-term prospects. Because MMOs require such a massive time investment on the part of players, they are often hesitant to involve themselves in a title that they consider to be a lame duck. With 38 Studios' history of instability, gamers will be rightfully skeptical of its ability to keep a modern MMO operational and updated with content. In short, the industry will expect it to fail, and as a result most gamers won't touch it with a ten-foot-pole.

The fall of 38 Studios only further proves that you can't buy your way to a successful video game company. No amount of money can make lightning strike. It takes a lot of hard work, ruthless money management, excellent timing, and a great deal of luck.

At least 38 Studios can say that they worked hard.

The NFL Draft Has Come and Gone

Well, the NFL draft is done. The Colts and Redskins got the quarterbacks they wanted (in what was probably the quickest 1-2 picks ever), and the Falcons finally concentrated on their offensive line. Hopefully Peter Konz turns out to be a bit more solid and dependable than Sam Baker. Lamar Holmes already has a foot injury, which is great...but at least Bradie Ewing looks to be a promising replacement for Ovie Mughelli, who was just released for salary cap reasons.

Am I optimistic about the upcoming Falcons season? Sort of. I think the Falcons will be at least a 10-win team, but with the roster they now have that's not really the criteria I'm judging them by any more. They're solid enough across the board to have a winning season every season, so the measuring stick now becomes playoff performance. So far they've been abysmal in the playoffs, scoring a measly 2 points last year against the Giants. I don't care if the G-Men went on to win it all...they aren't superhuman. Not even scoring an offensive point against a team in a playoff game means that you were either outcoached (possibly), or your team had such glaring weaknesses that the other team exploited them all day (likely). When it came down to it, the Falcons couldn't run the ball all that well, and they couldn't rush opposing quarterbacks that well either. Hopefully their draft-day additions will pan out and allow them to do both of these things better in 2012-2013.

It'll also be interesting to see how Dirk Koetter and Mike Nolan fare as OC and DC. Koetter made something out of nothing in Jacksonville, and Nolan's defenses have historically been quite good. I don't think these were bad coaching hires, but it remains to be seen if they can get the Falcons over the hump. I always thought Mike Mularkey and Brian Van Gorder were a bit overrated, to be honest. Let me put it this way: I never came away from a Falcons game saying, "Boy, the Falcons sure did outcoach the other team." If anything, it was completely the opposite.

I remain cautiously optimistic. Hopefully they can make something happen this year!