Dirty dancing.

Gay fans love CD compilations of club hits, but they may not know that many are pirated. Those responsible say they're just promoting rare tracks. So who's really profiting?

WHEN JEFF TARDIFF OPENED PERFECT BEAT IN MARCH 1999, HE HAD BIG PLANS FOR HIS SMALL WEST HOLLYWOOD, CALIF., STORE. The energetic entrepreneur worked 18-hour days as part of his "die-hard mission" to serve the gay community's apparently insatiable craving for dance music. Perfect Beat carried the latest CD singles, club hits, and DJ compilations. A knowledgeable staff answered customer questions. Sales were good.

His world collapsed on the morning of July 21. Minutes after Tardiff opened for business, eight people entered Perfect Beat, presented a search warrant, locked the front door, and flipped the OPEN sign to CLOSED. He watched as the team--composed of law enforcement officers from West Hollywood and Los Angeles County and investigators front the Recording Industry Association of America, the watchdog and lobbying group that guards the interests of the recording business--combed through the shop's CD bins. At one point, he says, they "tried to peel the flat wall off" as they "looked for hidden rooms" that might conceal other items in the small store.

Four hours later the investigators had what they were looking for: a haul of around 600 alleged "bootleg" CDs. Most were compilations of dance tunes, typically mixed by popular party DJs, that were without authorization from--or any payments to--the original artist or their record labels. Ultimately, the charges filed against Perfect Beat centered on a California law requiring CDs to carry their producer's address in plain view on the packaging.

A similar raid occurred that same day down the street at gay novelty and music shop Don't Panic! where, according to the RIAA, more than 900 CDs were seized. (Don't Panic! declined to comment for this story.)

The West Hollywood raids came on the heels of a series of events that took aim at the multimillion-dollar dance music piracy industry--an industry sunk to the roots in gay culture thanks to the DJ compilations that are sold in connection with major clubs and dance events. For the gay partygoer who just wants to hear again the tunes he danced to one special weekend, the CDs may seem innocuous. He may even think he's funneling more money to the nonprofit group that benefited from the party named on the CD's cover. But in fact, the only people profiting from bootleg CDs are the pirates who make them. Not the charities and certainly not the singers, songwriters, and musicians--many of them gay--whose livelihood, the RIAA would argue, is being stolen behind their backs.

For the DJs who mix them, compilations are a sonic business card (and as long as the CDs are used only for promotion--not sold to the public--they're not illegal). For the many small stores that sell them, they're a valued source of revenue. And for people who buy them, compilations are a source of stares: The music that's newest and hardest to find is always most coveted.

"When I've interviewed a lot of retailers, their main thing is, `People want [this music]. If I don't sell it, my competitor down the street will,'" says Billboard reporter Michael Paoletta, who has exposed several popular DJ compilations as bootlegs in stories for the magazine. "Does that make it right? No."

In the era of Internet downloads and MP3 technology, music pirates are having their biggest party ever. Not counting Internet sales, the recording industry loses about $300 million a year to piracy, says Frank Creighton, senior vice president and director of antipiracy at the RIAA. That's almost $1 million a day.

Opponents of piracy are struggling to stem the tide. In July, a week before the West Hollywood raids, the Billboard Dance Music Summit held a panel discussion to address the problem of bootlegging, with members of the dance community, including the RIAA, vowing to take stronger measures against pirates and against DJ dance compilations in particular.

In the days following the raids, a not-so-civil war of words broke out, with some members of the dance community countering accusations of piracy with accusations of their own via E-mail and unsigned letters sent to gay retailers. These screeds charged that the RIAA had homophobically targeted gay retailers.

Nonsense, says Hilary Rosen, president and CEO of the RIAA. "I'm a proud, open lesbian who happens to be in charge of the music industry's enforcement operations," she says. "We're not targeting gay store owners. To the contrary, we're protecting artists and the people who invest in their work. We've been asked by our member companies and their artists to try and be broad-based in enforcing against [DJ and dance] compilations, which they see as a particularly difficult problem."

The anonymous communiques also accused several members of the dance music community of betraying their colleagues and urged a boycott of their products. The chief target? A gay-owned company that is producing legitimate dance compilations: Centaur Entertainment. Its president, Nick DeBiase, and its house DJ, Julian Marsh, were singled out for "snitch[ing] on" and "hurt[ing]" the gay dance community as a whole.

Nonsense again, says Creighton. "Those retail raids and search warrants were scheduled ... prior to my having had any discussions with anybody in the dance community about what we were doing to fight piracy in this arena." DeBiase and Marsh, he says, provided no tips or information of any kind.

So why the heat? One explanation: sour grapes. Says DeBiase: "We were the first people to produce legal DJ compilations in the gay and lesbian market. By the fact that we were providing a legal alternative, that helped to shine light [on those who] were not doing it legally." Grounded or not, the rumors were enough to shake Centaur's business. "Certain stores have called our head of sales and questioned things," DeBiase says.

Marsh says his name was "dragged through the mud" thanks to the rumors. "A promoter who had hired me to do a party in San Francisco was told by all the stores and clubs and restaurants that they wouldn't put up any signs with my name on them," he says. "Other promoters were not quite sure now if they wanted to use me. Attendees of parties told me they had a problem with me being there. Stores wouldn't promote the stuff I'm doing. Physically it had a toll on me. I suffered physically through this."

Eventually, Marsh says, he managed to convince most people that he's trustworthy, often by responding to individual E-mail accusations from strangers. "What hurt me most," he says now, was how easily people decided "that I would turn my back on my own community. It also hurt that people seemed to be standing up for the bootleggers and not for the legitimate people."

And who exactly are the pirates? An in-depth story in Billboard's June 26 edition identifies not individuals but the best-selling illegal compilation series they produce: Master Beat, Go Girl!, SPINfinity, DJ Limited Edition, Essential Mix, Paragon, Circuit Grooves, 'KTU Radio Cuts, Sessions, and Passion Tracks.

These producers and others reacted to the RIAA raids. Sources say that one company, IAM, quietly called stores and asked that its CDs be returned. The reason: Pride '98, one of IAM's biggest sellers, allegedly contains at least one unlicensed track. (IAM chose not to comment for this story.)

Some pirates who disappeared after the raids have reportedly resurfaced under new names. But the names, of course, don't matter. Gay consumers still buy pirated CDs as fast as they hit the shelves. "Hell, yeah, I know it's probably not legal!" says one fan. "It's great music. It's better than anything that's on the, radio. I want the music that I want now!"

Why don't more gay music fans care if they're supporting illegal activities? Marsh thinks the key lies in the nature of gay culture. "Our society was an illegal society," he says. "We weren't allowed to be gay. When gay people buy music and they know it's illegal, do they really care? Most of our lives have been illegal."

Anyway, sometimes it's not so easy to spot a pirate. Deacon Maccubbin, proprietor of the Washington, D.C., gay and lesbian retail outlet Lambda Rising, remembers stocking a load of bootlegs by mistake. "We had been told that they were legal, copyrighted materials originally by the vendor," says Maccubbin. "We asked, and they said, `Oh, yeah, that's all clear.' Eventually they did let us know that they weren't firmly licensed, and as soon as they let us know, we pulled them."

Unlike Maccubbin, some retailers have no intention of giving up bootleg revenue. An employee of another gay-focused store, who asked not to be identified, says pirated CDs were removed from some of the store's locations after the West Hollywood raids--but in this employee's branch, the owners kept selling them because the demand was so high. "When people are coming in for the music, they're looking for what they heard at the latest circuit party or by the latest DJ," the source explained in an interview a few days after Montreal's Black and Blue party. "People will want the Black and Blue party CD after they get back. They don't want it six months after the party's already happened."

This demand for the "latest" music is what created the bootleg and pirating markets in the first place. Much of the music DJs play at clubs and circuit parties is in a form not readily available from legitimate record labels--many songs are unreleased, imported, or remixed. And the segues from song to song create a whole different experience, fans argue. "I understand why bootlegs got started, and believe me, the labels are partly at fault because we stopped providing the community with mixes they wanted," offers Frank Ceraolo, senior director of marketing and A&R at Epic Records.

It's a scenario Tardiff is all too familiar with. "Let me give you an example: the new Jennifer Lopez single, `Waiting for Tonight'? Not being released on a CD single. The new Donna Summer single, `Love Is the Healer'? Not being released on a CD single. The new Ricky Martin [single]? Not being released domestically on a CD single. I call record labels all day long, saying, `Why aren't you releasing this?' People every single day come into my store looking for these dance songs."

But the music on pirated compilations does not typically come from mainstream chart toppers like Lopez and Martin. Most tracks feature more obscure dance music mists looking for their big break--one they might not get if the demand for their music is satisfied by bootleggers who have no interest in the artist's career or even in paying the artist at all.

Not that record labels are quick to respond to consumer demand. As Ceraolo explains, part of a label's strategy for breaking an artist or a song has to be that DJs make a song popular before it's available in stores. Then, when it does hit the bins, he says, the hope is that "you see it debut really high on that SoundScan chart"--the retail sales barometer for the music business, which helps determine most of Billboard's rankings. "It's gotten to a point where ... if that record doesn't debut in the top 50, it's not so much of a big deal"--and the record label may not promote the song or the artist any further.

The strategy gives the pirates a huge window of opportunity to get their hands on a promo copy of an unreleased song, put it on a compilation, and get that CD into stores. If that squelches sales for a legitimate release later on, it could kill an artist's career before it even gets started, Rosen argues. "It's frequently the case in dance music ... that an artist will have one hit. They might not even have a full-scale record deal, and so those sales are important to their careers," she explains.

Kevin Williams, head of A&R at the dance label Nervous Records, has experienced this firsthand. Kim English, an artist he describes as "struggling," had her summer hit, "Unspeakable Joy," pirated "as soon as it broke," which gave the pirates "money that belongs to the label, that belongs to the artist outright for that song performance. They're really stealing it." If the pirates have their way, Williams could conceivably have a huge dance hit and never see a dime.

Ultimately, all this intrigue hurts the dance-music-buying public, says one source. "Gay people like to dance," the source says. "Gay people buy dance music. If they keep supporting the bootleggers, and small labels go out of business, and the major labels aren't making a profit, what are gay people going to have to dance to?"

Perhaps the most serious harm that befalls the gay community when pirates proliferate unchecked is the drain of funds away from gay-supportive and AIDS charities, such as those that benefit from many circuit parties and from CDs put out by legitimate companies like Centaur and the Red Hot Organization.

If I don't sell it, someone else will. That's what Tardiff told himself when he opened Perfect Beat and chose to sell bootleg CDs as part of his stock. "It was a competitor thing," he explains. "I think I assumed I was going to have to carry them to survive. But now I don't carry them--and I'm doing fine."

RELATED ARTICLE: TO CATCH A PIRATE

IT'S NOT DIFFICULT TO RECOGNIZE A DANCE COMPILATION OF STOLEN MUSIC, HERE'S HOW

Since bootleg and pirated CDs have so easily slipped into the gay market--seemingly indistinguishable from legitimate low-budget releases--we asked some experts for a crash course in spotting illegal products.

But first, a note about terminology. While common usage has "pirates" producing "bootlegs," the Recording Industry Association of America makes a distinction: "A bootleg is where somebody takes a tape recorder to a live performance of a band and replicates that," says RIAA president and CEO Hilary Rosen. "Some bands don't even mind bootlegs. With a pirate recording, which is what most of these compilations have been, it's really an exact duplication of [an existing] recording." That includes unauthorized remixes: Any altering of a copyrighted recording requires permission from (and usually payment to) the original artist, label, and songwriter if the remix is to be sold or distributed.

How do you know for sure if what you're buying is supporting the artist or just lining a pirate's pockets? Here are a few tips for spotting an illegally manufactured, or pirated, CD.

1 Look for the company's name and address. If that information is missing from the visible packaging, it's a big red flag. It's also a violation in California and other states where laws require that recordings clearly display the artist's name and the manufacturer's name and address--as shown on the legit Centaur CD pictured (right)--laws specifically targeted at fly-by-night copyright pirates. In the West Hollywood raids, many of the CDs were confiscated not for piracy per se but for failure to display an address in plain view.

2 Flip the disc. In most cases, recordable CDs used by pirates are blue, green, or aqua on the recording side, as opposed to the industry standard of silver.

3 Check the liner notes. The paper used should be of a substantial stock, not flimsy, and the colors vibrant. Photocopied color artwork is a dead give-away of piracy. Also check for extensive liner notes, credits, and "courtesy of" copyright information. Many pirated compilations contain a track listing and not much else.

4 If the artists sound too big, they probably are. When a modestly packaged CD on an obscure label contains works by big-name talent--Madonna, Whitney Houston, Cher, Mariah Carey, etc.--odds are good that the tracks have been stolen.

--S.G.

RELATED ARTICLE: "IT GOT OUT OF HAND"

HE DIDN'T DO IT FOR MONEY, HE SAYS, BUT FOR LOVE OF MUSIC. A PIRATE CONFESSES

Friends and foes alike refer to the Master Beat series as the best of the pirated compilations. In an interview excerpted below, a former representative of the label tells how he started pirating--and why he stopped.

Could you give us a brief history of Master Beat?

When I moved here to Los Angeles, I was blown away by the nightclubs and the DJs. I'd go to the record stores, trying to find the music you'd hear at these clubs. I was frustrated to find it was virtually impossible for the general public to buy a CD with this music.

I was always into computers--I got one of the very first CD burners. And I would make CD compilations for friends. A friend said, "These are the best CDs ever. You should look into selling these." This was a little over three years ago.

Did you have a mixing program on your computer?

The Master Beats [weren't] mixed. They're all individual tracks. That's one of the things I thought I was doing that was completely legal.

Friends got me a copy of this letter [supposedly issued] from Warner Bros., written as a guideline to DJ compilation services: There couldn't be more than one song by a particular artist on the same CD. The songs could not be mixed together. You could only sell to--quote, unquote--DJs through DJ specialty stores. And the [package] had to say that the CDs were for promotional use only.

I followed those guidelines. There was no question in my mind when I started Master Beat that I was doing anything wrong. The first time we received any indication that we were upsetting someone was when we got a letter from a record label [for using] Donna Summer's "Carry On."

We tried to get permission on a lot of songs. A lot of times we didn't try to get permission. When we did ask for permission and they said no, we didn't use [the songs.]

When the record labels said yes, did you pay a licensing fee?

No, because I would say that I was a promotional service for DJs only. And I had a subscriber list of about 400 DJs. I could go the record labels and say, "Putting your song on [a Master Beat] CD will be an instant promotional tool for you." So we got their permission on a lot of songs.

Did you know that a large portion of your clientele would not be DJs?

Yes, of course. There's no DJ card out there that says, "Hi, I'm a DJ," like a driver's license.

What made you stop?

We got a notice from a record label saying, "Hey, our song is on your CD, and we don't remember giving you permission to use this." I called them instantly, and they said, "You owe us this amount of money." A couple of months later we got a letter from another label. I called them and settled. Then we got a letter from another label saying "You can't get away with this!" I sent the a letter saying, "I'm sorry. These are the guidelines we're following. What do we need to do?" We started realizing these "guidelines" may not be as accepted as we thought.

But I did such a good job marketing Master Beat that it really got out of hand. Everybody and their dog started making CDs! [The pirates] were suddenly becoming very blatant, using Madonna and Whitney Houston and [other] big names. With Master Beat, never would you see Madonna or Whitney Houston. [My] goal was to get people music they couldn't get elsewhere.

I decided to abandon Master Beat, settle with anybody who had a problem with Master Beat, and start my own record label. The last Master Beat CD came out June 1 [1998].

Did you ever say, "Wait this isn't legal"?

To a small degree. But the way I justified it is, I love this music. People want to buy this music and they can't. I was never trying to steal money out of anybody's pocket.

But now that I've started my own record label, I do see the other side it. I definitely get frustrated when I see a bootleg compilation on the shelf [of a CD store] that has [a track by one of my artists] on it. I'm mad, and I don't feel like I'm in a position to do anything because it would be like the pot calling the kettle black.

--S.G.

Gdula is a freelance writer based in Washington, D.C.