Michael Jackson, Captain EO and the business of conquering the world – Part 3- The Music Industry

By The Last Tear (Lou)

 

 

I’d like to take some time and get away, then they’ll say
Is that boy still alive
They make you start taking pills, what a thrill
Only the strong survive

(The Price of Fame, Michael Jackson)

Singing and dancing were natural behaviors to the children of Adam and Eve – imitating the birds, the roar of the lion and other animals, the running water, the thunder and the anger of Nature, appealing the Gods for to protection and food or for having the courage to fight the enemy. It appears that these two activities, singing and dancing, played a crucial role in the evolution of the first men and women and helped them to invent the human languages.

The eminent linguist, Otto Jespersen has described this phenomenon in a much better way than I can. Here it is a quote from his book Language, Its Nature, Development and Origin:

Men sang out their feelings long before they were able to speak their thoughts. But of course we must not imagine that “singing” means exactly the same thing here as in a modern concert hall. When we say that speech originated in song, what we mean is merely that our comparatively monotonous spoken language and our highly developed vocal music are differentiations of primitive utterances, which had more in them of the latter than of the former. These utterances were, at first, like the singing of birds and the roaring of many animals and the crooning of babies, exclamative, not communicative–that is, they came forth from an inner craving of the individual without any thought of any fellow-creatures. Our remote ancestors had not the slightest notion that such a thing as communicating ideas and feelings to someone else was possible.

Over many years while men tamed fire, discovered metals especially iron, created languages, coined the first cents and pennies, came up with the idea of having different categories of jobs; and then the “masters” – the slave owners or later the powerful feudalists–  arrived. They ruled the communities as kings, princes and nobilities.

Some time during this process, it appeared that some slaves or free men or subjects had a rare gift that could be used to amuse and to entertain the masters, the gift of singing and dancing; the categories “dancers”, “musicians” and “singers” were born and they were asked to provide  diversions for their lords and royalty.

In a way, the art of music became an instrument to please the rich and the powerful; the musicians, the singers and the dancers had to look like beautiful, well clothed and have pleasant manners. Luxurious operas, concert halls, theaters were eventually built. However, besides these frivolities, the common men and women had their own music and dance, their own rhythms and rhymes in almost every country, with any race and religion.

But two basic elements have always gone hand in hand: to have a good music, successful songs and dances, we need the technology – new and sophisticated instruments and materials, acoustically built halls, etc. as well as talented artists-creators who would write magical pieces and unforgettable performances.

The printing revolution in the 15 century – the German Johannes Gutenberg invented the first type machines some time between 1436-1439 – gradually developed and resulted in the mass production of books, music sheets and other texts as well as the circulation of information and ideas.

It has been said that Wolfgang Amadeus Mozart was one of the first composers and performers who wished to sell his music and art commercially to the general public. This happened in the middle of 18th century when the industrial revolution had conquered Western Europe, North America and Japan and was changing almost everything in the daily life of millions of people. After his death, Mozart’s wife and her second husband continued to commercialize Amadeus’ music.

Undoubtedly, Mozart’s wish to sell his music was not only an attempt to acquire money; he wanted to give a status to the art of creating music. He hoped that people would consider the music, the opera and the ballet, as artistic and admirable as art painting and sculpture; he also wished that the musicians, the singers and the dancers would be respected and rewarded as talented individuals.

As the industrial norms and habits fashioned the lives of the people in the West and Japan, the art of music was about to be recognized as another way to gain money. Gradually, the intellectual rights of the creators became an issue; different laws were passed to protect the owners of their artistic works; eventually, some of these music pieces became more valuable because millions of people liked them and wished to buy reproductions of them.

The next big change inside the music world which was about to become an industry, was the invention of the phonograph, the record player or gramophone by the American Thomas Edison in 1877. And you can imagine how everything changed after this invention : inventors and companies continuously produced newer models of the gramophones, and the vinyl industry, EP and LP productions were introduced gradually in the beginning but by the middle of 1900’s, recording studios with more sophisticated machines were created, etc.

In 1920, another technical revolution happened in US: the radio also became a new way to broadcast all types of music. Imagine salons filled with guests, friends and relatives, all dressed up who gathered around the radio to listen to the songs and to dance.

Still there was not yet huge money to be maid in the music industry at that time. In the 50’s and the 60’s, many record companies were born but many of them died quickly. Those who survived ate up the dying ones and became more powerful. During this process, the profits gained were a few millions but soon it changed to several millions and later to billions!

By the end of 1980’s, there were 6 large recording companies in Western Europe and USA – the “Big 6” – EMI, CBS, BMG, PolyGram, WEA and MCA.

To understand what happened to Michael Jackson, we need to review quickly the music industry and its ups and downs from 1980’s and onward.

As we mentioned before, the evolution of technology and the creation of new machines were and are crucial for the survival of this industry. It is no surprise if large industrial companies owned or were connected to these record companies. For example Phillips owned PolyGram for some years but later they sold it to MCA.

Another issue is the economic crisis that shakes this industry approximately every ten years. In order to survive, the industry has to come up with new measures and routines to go through these rough times. Despite all the crises, the industry has the capacity to produce huge amounts of money.

Besides people who would do honest business in this “family”, there were also some who used dishonest methods like spying, plotting, stabbing in the back and ruining each other. Suspicious connections with the “underworld” were fact; some good names were ruined because of their collaboration for example in drugs related and other illegal activities.

Until 1986, the music “family” remained mostly American and European but things were about to swing.

In 1987, the Japanese joined in and bought CBS and changed its name to Sony Music in 1991.

In 1998, PolyGram merged into MCA. The “Big 5” were born.

Soon, because of the economic crisis, the companies were reduced to 4: the French-owned Universal Music Group, the Japanese-owned Sony Music Entertainment,the US-owned Warner Music Group, and the multinational EMI Group.

The new century brought more crises and more losses for the big music companies. Actually, there are now 2 larger companies: Universal Music group and Sony/ATV Music Publishing. Apple Inc.’ iTunes Store is the third one but on the Internet.

On November 12, 2011, EMI sold its recorded music operations to Universal Music Group for $1.9 billion and its music publishing operations to Sony/ATV Music Publishing for $2.2 billion.

As we know, the Estate of Michael Jackson is actually one of the entities inside the music industry. Conquering and controlling the industry was probably one of the goals that Jackson wished to achieve in the 90’s. Jackson hoped to terminate the discrimination which was applied towards not only Black artists but also towards others as well. There is no doubt that he would have succeeded if he was not stabbed in the back, and if he was not falsely accused by his enemies.

Having the value of Jackson’s Estate in mind, it was no surprise that a few months ago, some of Jackson’s brothers and sisters and probably others who are hiding for now behind the Jacksons, tried to challenge Michael’s Will in the hope of managing his unique and valuable assets. We have to understand that managing the Estate of Jackson, which in some years will go to his children, is not only about the money. It is also about the power. It means to be listed on the Forbes’ 100 richest persons; it means to be “pals” with the most powerful people in this world.

There are some fans who defend the siblings attempt to control the Estate of their brother. These people say that money is not the goal for at least one of these brothers and sisters because “she is already rich”. These fans, naively or intentionally are misleading the community. As we said before, the Estate of Jackson is more than only money! Besides to be labeled by a tag worth $200 million is not the same as $2000 million!

Let us now go back to our study.

Alongside the big names and companies, there were independent groups that produced and sold music. Especially in USA and UK, the Independents – the Indie Labels – were an important alternative to the “Big” companies (during the 1980’s and 1990’s) but the Indies were eventually eaten up by the “Bigs” too.

Despites its long history and many changes that occurred during these years, the music industry was and is a racially marked territory. The owners were mostly White people who liked to keep all the billions of dollars among themselves. Lousy contracts with musicians and artists, discriminatory decisions and manners recall the old age when the “owner” did almost what he wanted with his “subjects”.

A study on the music business was published by The Guardian in 2008. Even the writer, Simon Napier-Bell seems to be on good term with The Wall Street Journal and probably its owner, although there are some good remarks in his article worthy of mention. You will find the article at the end of this post but now here are quotes from it:

[] In 1966 I came into a business that was alive with excitement and optimism. I was one of a select group – the young managers, like Brian Epstein, Andrew Loog Oldham and Kit Lambert – who had taken over the UK’s new pop groups – the Beatles, the Rolling Stones, the Who, the Kinks, the Yardbirds, the Animals. We young managers were on fire. We hustled, and we were free. We weren’t even friends, yet we knew each other from hanging out at the Ad Lib club or the Scotch of St James. Despite enormous differences between us, we found one thing in common. We all saw our principal job as going to war with the record company []

Ever since the mid-Fifties, a lot of small record companies had been growing up. The people who owned them also ran them. They gave a more personal service than the majors, made the artist feel cared for. The royalties were no more and the profit margins no less but there was a feeling of compromise between commerce and art. Four of them dealt only with black artists – Motown, King, Chess and Atlantic.

Atlantic was owned by Ahmet and Nesuhi Ertegun – sophisticated, jazz-loving, multilingual Turks. With a view to discovering more about the explosion of music coming out of London, Ahmet invited me for afternoon tea and muffins. I’d only been there five minutes when the door opened and Joe Tex, one of the biggest black recording artists in America, stuck his head in. ‘Ahmet, man, I was just wondering if you could loan me 10 bucks.’

‘You want 10 bucks,’ Ahmet told him. ‘Go downstairs to the studio, find a backing track you like and put your voice on it.’

An hour later Joe came back. Ahmet buzzed the studio and asked the engineer if Joe had done a good vocal. Then he doled him out $10 and offered him a cup of tea. When Ahmet left the room for a minute I asked Joe how much royalties he got. He wasn’t sure he got royalties at all. ‘I don’t know exactly how it works,’ he confessed, ‘but Ahmet and Nesuhi are like brothers. Whenever I’m in New York I gotta place I can hang out. And I always come away with a few bucks.’

Ahmet and Nesuhi, by the way, were making themselves very rich []

As record companies got bigger in the Eighties, everything grew more corporate and less personal. Ron Weisner, who managed both Madonna and Michael Jackson, told me: ‘The biggest frustration is always dealing with the record company – cajoling them, bullying them, charming them, threatening them. They’re totally insensitive to the artist or his wellbeing.’ []

Artists had to pay their own recording costs yet companies ended up owning the records. ‘The bank still owns the house after the mortgage is paid,’ is how Senator Orrin Hatch described it. Could we imagine film stars having to pay the costs of the movies they starred in and then giving the rights to the company that distributed it?

Artists also had to pay a packaging deduction of around 15 per cent. This, despite the fact that packaging rarely cost more than 5 per cent. The remaining 10 per cent was enough to pay the record company’s entire cost of manufacturing the record. All in all, it meant an artist who sold 200,000 copies of a first album would still owe the record company although the record company had made a profit of a million.

But the worst thing about being signed to a major was that you lost the freedom to run your life. And though top artists could sometimes re-negotiate an unfair contract, it soon became clear that in the music business you didn’t get out of an unfair record contract to get into a fair one; you get out of an unfair contract to get into another unfair one, but with slightly better terms. []

For artists and managers, this is the moment to take things into their own hands. Artists no longer need to be held for 10 years and they no longer need to sign away ownership of their recorded copyrights. These days, an artist working closely with his manager can ensure that everything is done in the artist’s best interest. Majors have never done that. And never will.

Concerning the Black music and the Black artists, there is a lot to say. Let us just take note of a few things.

In the US, the African-American groups coming from different parts of Africa each have their own music, songs and dances. In the 19th century, African-American music began to influence American mainstream music. During this century, the Black community’s music made several changes and became an integral part of mainstream American culture.

But even as late as 1945, African-American music was classified as “race music”. In 1942, Billboard began to publish a list of African-American music. Usually, African-American songs which were sung by the mainstream musicians were adapted for White audiences. The Black artist had no chance in the mainstream.

In the 1940’s and 1950’s, a new genre called rock and roll was created by the African-American musicians. Soon an adapted version of this genre performed by Elvis Presley became a huge commercial success. In the process, the Black musician Chuck Berry gained fame too.

During the 1950’s the Black blues “travelled” to UK and was adapted to a newer format, the British blues. In the 1960’s, it came back to US as a “British Invasion” with The Beatles and The Rolling Stones. Soon, James Brown changed everything with his funk.

The 1970’s was a very flourishing decade for American Black music however these artists were usually successful “inside” their own race. We have to wait until 1980’s before Michael Jackson came and turned everything upside down.

Besides the Black Independent labels, the American Black musicians and artists had mostly to collaborate with Motown and its several subsidiary labels. Berry Gordon founded Motown in 1959. About 40 years later, Polygram bought it from Gordon. In 1998, PolyGram was absorbed by the Universal Music Group as was Motown and several of its associated companies.

We have mentioned that the music industry has regularly suffered from crises and dark times. To counter these tough periods, the CEOs and their teams had to come up with rescue plans. In 1969, EMI’s managers came up with an interesting change. Let us review quickly EMI group (Source http://en.wikipedia.org/wiki/EMI):

EMI, is a British multinational music company headquartered in London, United Kingdom. It is the fourth-largest business group and family of record labels in the recording industry and was one of the“big four” record companies. EMI Group also has a major publishing arm, EMI Music Publishing []

From the late 1950s to the early 1970s, the company enjoyed huge success in the popular music field under the management of Sir Joseph Lockwood.

George Martin, an English record producer, arranger, composer, conductor, audio engineer and musician, who was EMI’s manager, brought the Beatles in (1960).

Years later, during a time of crisis, the EMI managers knew that they had to have more customers. They had to make their shinning artists – the Beatles – look more like ordinary people; enough of the fine and clean lines; they had to look ordinary! 

In 1969, Angus McBean took a matching group photograph featuring the boys (the Beatles) in long hair and beards to contrast with the earlier clean cut image in order to show that the boys could have appeal across a wide range of audiences. This photo was originally intended for the Get Back album which later was entitled Let It Be. The photo was used instead for the cover of the Beatles second greatest-hits double-disc compilation entitled 1967–1970 (aka “The Blue Album”). (The two compilations were released in 1973.)

Later, at the beginning of the 1980’s another period of crisis was shaking the industry. The managers had to find solutions to two issues. Since the invention of vinyl, the gramophones and the cassettes and portable cassette players by Phillips in 1960’s, no new technical invention had come into the market to revive the face of the industry. So they needed a technological innovation.

Their other problem was even more serious: they were looking for a new artist because all they had were already “old” for the market.

Sony helped with the first issue. It launched the CD as a new recordable material as well as the Walkman, a very portable music player.

To remedy the second issue, the industry found its savior: Michael Jackson. As EMI had remodeled its product, The Beatles, in the 60’s and the 70’s in a way to attract more ordinary consumers, so the industry had to do something similar. They needed to open “the gates” to a Black artist who had the potential to mesmerize White audiences as well as the African-Americans, i.e. Michael Jackson.

Here is a quote from an article that is copied in many fan sites and blogs (You will find the article at the end of this post):

http://www.reuters.com/article/2009/07/04/us-jackson-thriller-sb-idUSTRE56300320090704

How Jackson’s “Thriller” changed the music business

[]

Before all that, “Thriller” gave a much-needed boost to the music business, then suffering from its second slump in three years. At the time, Billboard reported that record shipments had declined by 50 million units between 1980 and 1982.

It was a bleak time, and CBS staffers referred to August 13, 1982, as “Black Friday.” “We had a major layoff that day,” remembers Epic/Portrait/CBS Associated Labels vice president of merchandising Dan Beck. “Half of the marketing department was let go at Epic. It was very upsetting because nothing like that had ever happened before.”

Then Jackson changed everything. “There is no question that ‘Thriller’ was the driving force behind what became the hottest span in Epic’s history,” Beck says.

[]

WRITING ON THE ‘WALL’

Jackson made a name for himself in the early ’70s as the young frontman of Motown’s Jackson 5 and as a solo artist. The Jacksons had left Motown in 1975 and released three albums on Epic, the most recent of which, “Destiny,” peaked at No. 11 on the Billboard 200 in 1978. But Jackson became a bona fide superstar with his first solo album for Epic, “Off the Wall.”

As Jackson recorded that album, which came out in 1979, his team decided to bring it to the broadest audience possible.

“Our whole mind-set was that we were making music for the masses, and part of the big picture was to get the record company to turn around and market and promote to a mass market,” says Ron Weisner, who was co-managing Jackson with Freddy DeMann at the time. “If you were a black artist, you were put in a black music division, and that meant the marketing campaign was an ad in Jet and Ebony. Our attitude was, ‘Let the public decide — don’t just present it to a black market only.'”‘

[]

Before ending this post, let us read again some parts of Simon Napier-Bell’s article (you will find it at the end of this post):

[] Ron Weisner, who managed both Madonna and Michael Jackson, told me: ‘The biggest frustration is always dealing with the record company – cajoling them, bullying them, charming them, threatening them. They’re totally insensitive to the artist or his wellbeing.’ []

Artists had to pay their own recording costs yet companies ended up owning the records. [] Artists also had to pay a packaging deduction of around 15 per cent. This,despite the fact that packaging rarely cost more than 5 per cent. The remaining 10 per cent was enough to pay the record company’s entire cost of manufacturing the record. All in all, it meant an artist who sold 200,000 copies of a first album would still owe the record company although the record company had made a profit of a million.

But the worst thing about being signed to a major was that you lost the freedom to run your life. And though top artists could sometimes re-negotiate an unfair contract, it soon became clear that in the music business you didn’t get out of an unfair record contract to get into a fair one; you get out of an unfair contract to get into another unfair one, but with slightly better terms. []

For artists and managers, this is the moment to take things into their own hands. Artists no longer need to be held for 10 years and they no longer need to sign away ownership of their recorded copyrights. []

Haven’t we seen an exact or a similar version of these lines (the red lines) somewhere else? Yes we have, in the “contract” that AEG Live wanted Jackson to sign. As we know, Jackson did not sign it and this, for good reason.

If you have not seen this “piece of art”, you can find it here (the first blog, read the others too) with an throughout analysis done by the blogger VMJ.

ΩΩ                                                                                ΩΩ

In the second part of this post, we will study the interaction between several people who played an important part in Jackson’s life during the 80’s and the beginning of the 90’s.

In fact, Jackson had to deal with four groups of individuals who pressured him in different ways. From one side, it was CBS and its boss Walter Yetnikoff; on the other side, we have Joe and Katherine Jackson, Don King and the Victory Tour which was problematic in 1984. At that time, Ron Weisner and Freddy Demann were Michael’s managers; a third connection was David Geffen and his company WEA. And finally, people in the industry who did not like CBS idea of taking Jackson ”inside” the industry nor seeing him become a rich and powerful catalog owner.

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http://www.reuters.com/article/2009/07/04/us-jackson-thriller-sb-idUSTRE56300320090704

How Jackson’s “Thriller” changed the music business

By Gail Mitchell and Melinda Newman

Fri Jul 3, 2009 11:31pm EDT

LOS ANGELES (Billboard) – In early 1984, when Epic Records executives presented their slate of upcoming releases at the convention in Hawaii of parent company CBS Records, they couldn’t resist playing up the success they were experiencing. So between the pitches for new albums, Epic inserted stock footage of semi trucks and a voice-over that thunderously announced, “There goes another load of Michael Jackson’s ‘Thriller’ albums!”

Trucks weren’t really leaving the warehouse every few minutes, but “Thriller” was still shattering expectations more than a year after its November 30, 1982, release. Epic was selling more than 1 million copies per month in the United States alone.

Nearly 27 years after its release, “Thriller” still stands as the best-selling studio album in the United States, according to the Recording Industry Association of America, which has certified it 28-times platinum. More than 50 million copies have been sold internationally, according to estimates.

But the album’s success can’t be measured by sales alone. As Jackson moonwalked his way into music history, “Thriller” set a new benchmark for blockbusters that changed how the music business promoted and marketed superstar releases. It also changed MTV, breaking down the cable network’s racial barriers and raising the bar for video quality.

FIRST OF ITS KIND

From the beginning, Epic intended to live up to its name. The label made “Thriller” the first major release to debut worldwide simultaneously, the first album to be promoted for close to two years instead of the usual six or eight months and the first album to spin off seven singles to radio — more than double the normal number.

Along the way, “Thriller” redefined the expectations for blockbuster releases. Starting in 1984, Columbia released seven singles from Bruce Springsteen’s “Born in the U.S.A.,” all of which landed in the top 10 of the Billboard Hot 100. Around the same time, Warner Bros. sent to radio five singles from Prince’s “Purple Rain.” Mercury found seven singles on Def Leppard’s “Hysteria,” all of which went to the pop chart. All three albums eventually sold more than 10 million copies each in the United States alone.

Before all that, “Thriller” gave a much-needed boost to the music business, then suffering from its second slump in three years. At the time, Billboard reported that record shipments had declined by 50 million units between 1980 and 1982.

It was a bleak time, and CBS staffers referred to August 13, 1982, as “Black Friday.” “We had a major layoff that day,” remembers Epic/Portrait/CBS Associated Labels vice president of merchandising Dan Beck. “Half of the marketing department was let go at Epic. It was very upsetting because nothing like that had ever happened before.”

Then Jackson changed everything. “There is no question that ‘Thriller’ was the driving force behind what became the hottest span in Epic’s history,” Beck says. After that, the label had major hits with Cyndi Lauper, Culture Club and REO Speedwagon. The “Flashdance” soundtrack and the Police’s “Synchronicity” also helped lure fans back into stores.

WRITING ON THE ‘WALL’

Jackson made a name for himself in the early ’70s as the young frontman of Motown’s Jackson 5 and as a solo artist. The Jacksons had left Motown in 1975 and released three albums on Epic, the most recent of which, “Destiny,” peaked at No. 11 on the Billboard 200 in 1978. But Jackson became a bona fide superstar with his first solo album for Epic, “Off the Wall.”

As Jackson recorded that album, which came out in 1979, his team decided to bring it to the broadest audience possible.

“Our whole mind-set was that we were making music for the masses, and part of the big picture was to get the record company to turn around and market and promote to a mass market,” says Ron Weisner, who was co-managing Jackson with Freddy DeMann at the time. “If you were a black artist, you were put in a black music division, and that meant the marketing campaign was an ad in Jet and Ebony. Our attitude was, ‘Let the public decide — don’t just present it to a black market only.'”

From the moment Epic’s pop and R&B promotion teams heard “Don’t Stop ‘Til You Get Enough,” the album’s opening track and lead single, they knew they had a major hit on their hands, recalls former West Coast regional urban promotion manager Maurice Warfield. So they took the unprecedented step of promoting singles to R&B and pop radio at the same time.

“It wasn’t the usual ‘Build up the artist at urban radio first and then go to pop,'” Warfield says. “We knew right off: We’re all going to work the records at the same time.”

“Don’t Stop” debuted July 28, 1979, and became Jackson’s first No. 1 R&B and pop single as a solo artist since his 1972 hit “Ben.” That was followed in November by a second No. 1 R&B and pop single, “Rock With You,” then the album’s title track and “She’s Out of My Life.”

“‘Off the Wall’ opened up something at radio that was never closed again,” Weisner says. “The wall was down by the time we got to ‘Thriller.'”

‘THRILLER’ TIME

When Jackson first suggested working with Quincy Jones on “Off the Wall,” Epic executives worried that the producer was too jazzy. But Jackson, who had met Jones when he played the Scarecrow in the movie version of “The Wiz” and Jones produced the soundtrack, persisted. At the time, Jones was struck by Jackson’s “profound discipline and focus”; he knew that “he could still be bigger than everyone else was saying.”

Jones began laying the foundation for “Thriller” in December 1981, when he took Jackson to Tucson, Ariz., to spend three days recording the Paul McCartney duet “The Girl Is Mine.” “Michael and I just wanted to work with Paul, who I’d known for years,” Jones remembers.

Work began in earnest in August 1982. Jackson wrote several of the songs: “The Girl Is Mine,” “Beat It,” “Billie Jean” and “Wanna Be Startin’ Somethin’.” Among the other writers was former Heatwave keyboardist Rod Temperton, who wrote “Rock With You” on “Off the Wall.” He brought them an “amazing” song he had, titled “Starlight Love,” Jones says, which eventually became the song “Thriller.”

Despite the success of “Off the Wall,” Jones says, their working relationship was very much about creativity for creativity’s sake. “You don’t make records to say how many you’re going to sell,” he says. “You can’t control that. You make something that touches you and will hopefully touch someone else.”

One priority was to balance “Thriller” between R&B and pop, disco and rock, funk and ballads. “We thought at one point we were done,” recalls Greg Phillinganes, a keyboardist on the “Off the Wall” and “Thriller” albums. “And Quincy was like, ‘No, not so fast. We need certain missing elements.’ Michael was pretty disappointed, but then that’s how we got (‘The Lady in My Life’) and ‘Beat It.'”

At the time, disco still dominated the charts, and Jones and Jackson wanted to transcend it. “‘Beat It’ came about with Eddie Van Halen because we wanted to do a black rock ‘n’ roll song,” Jones says. “The Knack’s ‘My Sharona’ was No. 1 at the time, plus we had to crawl over disco, which was still so big. We wanted to find a way to transcend all that. By God’s blessing, we got out of the box.”

WORLDWIDE APPEAL

Jackson and Jones continued tinkering through the fall of 1982, which meant that Epic had to move back the album’s release date a number of times. The day before Jones finally turned in “Thriller,” after he and Jackson had spent all night working, he realized that there was too much music on each side. “You need big, fat grooves to make it happen on vinyl,” he says. “We had 24-27 minutes, which makes the sound smaller. We had to get it down to 19-20 minutes.”

So Jones and Jackson pared down the intro to “Billie Jean,” removed a verse from “The Lady in My Life” and finished the project. Or so Epic thought. At the very last minute, still unhappy with some aspects of the album’s sound, they remixed the entire album over a marathon weekend, says Ron McCarrell, VP of marketing for Epic/Portrait/CBS Associated Labels.

Epic executives were eager to release “Thriller” in time for Christmas 1982. As Jones and Jackson fiddled, they decided to wait until January 1983. Then the label’s hand was forced when the album leaked to radio and stations began playing multiple cuts. Once stations put songs in heavy rotation, Epic senior VP/general manager Don Dempsey decided to rush-release it on November 30, 1982.

“Thriller” entered the Billboard 200 at No. 11 during the week ending December 25, 1982. After 10 weeks on the chart, it knocked Men at Work’s “Business as Usual” out of the top spot and stayed at No. 1 for 37 nonconsecutive weeks. The first single, “The Girl Is Mine,” reached No. 2 on the Billboard Hot 100, but didn’t even hint at the hit Epic had on its hands. Then the fun began.

Epic’s head of promotion, Frank Dileo (who grew so close to Jackson during “Thriller” that he later became his manager), decided to release two singles concurrently in order to broaden the album’s audience. As the second single, “Billie Jean,” climbed the pop chart, Epic released “Beat It,” a driving rock track anchored by a searing Eddie Van Halen guitar solo.

“Frank said, ‘Let’s release another single; we’ll blow their minds,'” McCarrell says. It did. During the week of December 18, 1982, “Beat It” was one of Billboard’s top three adds on rock radio alongside cuts by Sammy Hagar and Bob Seger. The song peaked at No. 14 on Billboard’s nascent rock tracks chart.

Former rock radio consultant Lee Abrams — now chief innovation officer at Tribune Co. — describes the period as “kind of a confusing time” for album-oriented rock. The format was at a crossroads, caught between AOR stalwarts like Led Zeppelin and new groups like the Police and U2.

“AOR had to start thinking more,” Abrams says, in order to remain relevant. “A few stations tried ‘Beat It,’ and the reaction was fantastic. It generated requests and opened a lot of programmers’ eyes. AOR was accepting someone not in the traditional club, but the timeless, universal quality of the song couldn’t be avoided.”

JACKSON GETS HIS MTV

From the start, Jackson’s vision for “Thriller” was to “take it to the next giant level,” Weisner says. “It was about how we were going to marry the album with the visual extension.”

So it was with high hopes that Weisner walked into the office of a 16-month-old network called MTV with the Steve Barron-directed clip for “Billie Jean.” While MTV had played videos by a few black artists, including Garland Jeffries and Joan Armatrading, it had notoriously declined to play the video for Rick James’ “Super Freak,” leading the R&B singer to brand the channel as racist.

“I remember taking a red-eye to New York and going to MTV (with) a rough cut of ‘Billie Jean’ and MTV declining the video,” Weisner recalls. He walked from there to Epic headquarters. “I sat down with (CBS Records head) Walter Yetnikoff,” he says. “We then went to (CBS head) Bill Paley, and he and Walter (told MTV), ‘This video is on by the end of the day or (CBS Records) isn’t doing business with MTV anymore.’ The record company played hardball, and that was the day that changed history. That was the video that broke the color barrier.”

That’s not the version of events remembered by Les Garland, then-senior executive/VP of programing at MTV Networks. “‘Billie Jean’ set the standard that day for what excellence in music video stood for,” he says. “There was never a question that we were putting it on.” The only delay, he says, was that he wanted to show the clip to his boss, Bob Pittman. “There was never a threat from Walter Yetnikoff — it’s folklore,” he says. “He got more upset because we didn’t play Willie Nelson or Barbra Streisand.” (Yetnikoff didn’t respond to interview requests for this story.)

Either way, “Billie Jean” immediately went into heavy rotation with eight plays per day, catapulting Jackson and MTV to another level of success. And Jackson’s triumph broke down the barrier for Prince, Billy Ocean and Eddy Grant.

“‘Billie Jean’ opened (the door) to more R&B videos being made, and that led us to making more space for a wider variety of music that went beyond this initial AOR format,” Garland says.

MTV wasn’t the only TV exposure that changed the course of Jackson’s career. On May 16, 1983, NBC broadcast “Motown 25: Yesterday, Today, Forever,” and Jackson performed an instantly iconic rendition of “Billie Jean” and unveiled his sequined glove and the James Brown-inspired moonwalk. The next day, Fred Astaire called Jackson to congratulate him.

“That was staggering,” Weisner recalls. “Everyone forgets that all those Motown giants and legends were on the show. The next day all anyone was talking about was Michael.”

And that was before the video for “Thriller” itself. Although the videos for “Billie Jean” and “Beat It” increased Jackson’s star power, the 14-minute clip for “Thriller” became a pop culture sensation.

Made at a cost of $1 million — in 1983 dollars — “Thriller” was the first video shot by a film director, John Landis. “We were making most videos for $30,000-$40,000,” McCarrell says. “I remember falling off my chair when I saw the budget.”

Fascination with the video grew so intense that Epic created an hourlong documentary called “Making Michael Jackson’s Thriller,” which aired on MTV and was eventually sent to retail. It was the first time such a package had been created around a single video, and “it started a commercial market for videos,” says former Recording Industry Association of America CEO/chairman Hilary Rosen, now a CNN commentator and managing director of the Brunswick Group.

Jackson and MTV’s fortunes were so intricately linked that Garland, who is now a consultant, says he can’t even think about how MTV would have evolved without Jackson. “All I can tell you is the path would have been very different. I don’t think it would have been good.”

Ultimately, “Thriller” spent 122 weeks on the Billboard 200, leading Epic to one of its greatest periods of prosperity. Given the decline in album sales, the rise of digital downloads and the lack of an heir apparent to Jackson, it’s unlikely another album will ever dominate radio, video or the collective consciousness the way “Thriller” did.

As Garland puts it, “We saw the top of the mountain with ‘Thriller.'”

(Editing by Sheri Linden at Reuters)

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http://www.guardian.co.uk/music/2008/jan/20/popandrock.musicindustry

The lobby of the Sony building in New York is 70-feet high and heavy with music business ambience – gold records, photographs and the ‘Sony Shop of New Technology’. Upstairs, the main reception is like the lounge of an exclusive club. Young people, dreaming of stardom, stand in wonder breathing in the atmosphere, looking at memorabilia – platinum CDs, photos of stars, framed press reports, Billboard charts. For an aspiring artist or manager, just to step into the building is a thrill. The impression is of a corporation dedicated to the success of its artists, almost altruistic in its understanding of their needs.

Yet it’s nothing but a flytrap. Artists go there dreaming of being signed. But out of every 10 signed nine will fail. A contract with a major record company was always a 90 per cent guarantee of failure. In the boardroom the talk was never of music, only of units sold. Artists were never the product; the product was discs – 10 cents’ worth of vinyl selling for $10 – 10,000 per cent profit – the highest mark-up in all of retail marketing. Artists were simply an ingredient, without even the basic rights of employees.

Imagine the outcry if people working in a factory were told that the cost of the products they were making would be deducted from their wages, which anyway would only be paid if the company managed to sell the products. Or that they would have to work for the company for a minimum of 10 years and, at the company’s discretion, could be transferred to any other company at any time.

Recently, the Wall Street Journal investigated the industry and concluded that ‘for all the 21st-century glitz that surrounds it, the popular music business is distinctly medieval in character: the last form of indentured servitude.’

As long as the major record companies controlled the industry, artists had to accept these conditions. But the majors’ grip on things has almost gone. For years they saw it coming but did little to change things. Now each week brings them more gloom. CD sales are down on last year, which were down on the year before, and the year before that. Sony and BMG amalgamated, but brought themselves little benefit in doing so. EMI and Warners tried to go the same route, but failed. So EMI was taken over by someone with no knowledge of the record industry. Guy Hands of Terra Firma fame promised to reinvent the whole business plan; he started by parting company with Radiohead.

But outside of the industry, who cares? Pop music has never sounded better or more vibrant, never been more easily available to the listener. The only people who are suffering are the people who brought it on themselves. The major record companies.

In 1966 I came into a business that was alive with excitement and optimism. I was one of a select group – the young managers, like Brian Epstein, Andrew Loog Oldham and Kit Lambert – who had taken over the UK’s new pop groups – the Beatles, the Rolling Stones, the Who, the Kinks, the Yardbirds, the Animals. We young managers were on fire. We hustled, and we were free. We weren’t even friends, yet we knew each other from hanging out at the Ad Lib club or the Scotch of St James. Despite enormous differences between us, we found one thing in common. We all saw our principal job as going to war with the record company.

The first record company I ever went to was Decca in London in 1964. It was a six-storey building on the south bank of the river at Lambeth. The inside was painted in the same colour, olive green, as government buildings – like the labour exchange or the tax office. With a gruff commissioner on the door, it was pure bureaucracy, the civil service of the music industry. During the Second World War, Decca developed radar for the army. From the profits, its stuffy owner, Sir Edward Lewis, indulged his enthusiasm for recording classical music. For him, pop music was a necessary sideline, nothing to be too proud of.

At Decca they didn’t like young people. I was 25, but I talked my way into seeing someone in A&R, a small mean-minded man who sat picking his nose while I played my record. It was a group I wanted to manage and I’d paid for them to make the record. The man was a pedant; a killjoy. ‘It’s dreadful!’ he exclaimed. ‘The song’s not memorable and the musicians don’t catch the beat.’ Then, surprisingly, he agreed a deal. It was a very small one, but I was delighted – my first step into the business. But if the record was as bad as he’d said it was, why did he give me a deal? And if it wasn’t that bad, why had he said it was? I left the building thinking, ‘What a wanker!’ and it’s been difficult to think of A&R people in any other way since.

At that time Britain had four major record companies – Decca, EMI, Pye and Philips. These last two were offshoots of corporations that produced electronic hardware for home and industry. EMI, like Decca, manufactured hi-tech equipment for the government, mainly for hospitals – brain scanners and the like. None of these companies had been set up first and foremost for music; they made records for extra profit. It was a wonderful trick they’d learnt. They bought vinyl cheaply; added a label, a song and a sleeve and sold it expensively.

When I took over the management of the Yardbirds I had to deal with EMI. In 1961, it had become the biggest record company in the world, and that was before it signed the Beatles. There was an air of pomposity about the place. Artists were from the wrong class – they tended to cause problems. EMI preferred to deal with managers, especially if they were middle class and public school. The people in the business affairs department were extraordinarily pissed off when I told them I considered their contract with the Yardbirds to be invalid. They doubted I was right, but were too scared to challenge me in case they lost the group altogether, so they agreed to negotiate a new deal. In order to bypass the company’s A&R department, I insisted the Yardbirds should produce their own records. I demanded the biggest advance they’d ever paid and the highest royalty – £25,000 and 12 per cent of retail – and they gave it to me. If this was my entrance exam into management, I thought I’d passed with flying colours. I soon learned I’d failed.

EMI had simply advanced the Yardbirds their own royalties and included a host of tricky accounting clauses – for instance the artist was only paid on 90 per cent of records sold, and was not paid on ‘over-pressings’, although these were usually sold anyway. I asked the group’s lawyer why he’d let these things pass. ‘If I told my clients not to sign unfair contracts they’d never get a deal.’

I had learned the first golden rule of management – record companies are not to be trusted.

Management is a wildly up and down occupation. Sometimes – if you’re standing at the top of a stadium looking down on 100,000 people stomping and cheering at your artist, or popping another bundle of cheques into your bank account, or being hailed as the Svengali behind the new icon of youth culture – it feels good. Like standing at the back of the hall in Guangdong during Wham!’s trip to China with the group being cheered or encore after encore. But at other times – when your nitwit star, out of his head on drugs or drink or self-admiration, tells you to cancel the gig with a stadium full of people waiting for the first chord, or wakes you in the middle of the night with a call from Sydney to say he can’t go on stage because he has no clean socks (as the lead singer of the Yardbirds once did) – it feels less so.

In the end, though, you have to see it from the artist’s point of view. He’s the one who will be booed off if he performs badly, or slated by the critics if he makes a bad album, or shot at by some maniac just for being famous. The artist takes all the emotional hits and needs you as his friend. Your common enemy is the record company.

Having got the contract with EMI sorted out, I visited our American record company. In 1966 the US market was dominated by CBS and RCA, both of whom had the same civil service atmosphere as EMI and Decca. Their principal business was broadcasting and they held government licenses that required them to keep high moral standards. The other majors were Capitol, which had been bought by EMI, and MCA, which had bought the American office of Decca. (Warners was still considered a minor offshoot of a movie studio.)

The Yardbirds were with CBS whose New York HQ was known as Black Rock – a gaunt, black-bricked, black-glassed skyscraper. Its lobby was as austere as a high security prison and I was accompanied to the elevator by a guard. I was meant to be seeing Len Levy, the head of the Epic label, but the company didn’t want me there. They had the rights to the record, they were going to release it, they’d decided on the budget and they didn’t want the manager turning up demanding things.

‘The Yardbirds’ manager is here.’

‘Aw Jesus, is he? Well, Len’s out at the moment. Ask Ernie if he’ll have a talk with him. That should do the trick.’

So I saw Ernie Altschuler, one of their old-time staff producers. He knew nothing about rock’n’roll or British pop or Swinging London; he produced Tony Bennett and Ray Conniff. But he was a charmer and we became immediate friends. Ernie was 20 years older than me and wildly disillusioned with things. ‘I’ve made CBS more hits than any other producer but I’ve never been paid a royalty or a bonus. They see me the same way they see the artists – just part of the process.’

I wasn’t ready to believe such doleful news. I was excited, I was in the USA, I was managing a top band. America felt good. This was the real record industry – the corrupt, tough, no holds barred, American industry – not the whingeing, always-changing-their-mind industry we suffered in the UK.

Nevertheless, I was totally in their hands. Here there were 6,000 radio stations. Four thousand were said to have playlists under Mafia control. To promote my record would require cocaine and sex and suitcases full of cash. I hadn’t chosen to be with this company: that had been done by EMI. In America I had just one job – to persuade CBS the Yardbirds were worth promoting. But since that was already decided there wasn’t much left to do. So I went and had tea with Ahmet Ertegun.

Ever since the mid-Fifties, a lot of small record companies had been growing up. The people who owned them also ran them. They gave a more personal service than the majors, made the artist feel cared for. The royalties were no more and the profit margins no less but there was a feeling of compromise between commerce and art. Four of them dealt only with black artists – Motown, King, Chess and Atlantic.

Atlantic was owned by Ahmet and Nesuhi Ertegun – sophisticated, jazz-loving, multilingual Turks. With a view to discovering more about the explosion of music coming out of London, Ahmet invited me for afternoon tea and muffins. I’d only been there five minutes when the door opened and Joe Tex, one of the biggest black recording artists in America, stuck his head in. ‘Ahmet, man, I was just wondering if you could loan me 10 bucks.’

‘You want 10 bucks,’ Ahmet told him. ‘Go downstairs to the studio, find a backing track you like and put your voice on it.’

An hour later Joe came back. Ahmet buzzed the studio and asked the engineer if Joe had done a good vocal. Then he doled him out $10 and offered him a cup of tea. When Ahmet left the room for a minute I asked Joe how much royalties he got. He wasn’t sure he got royalties at all. ‘I don’t know exactly how it works,’ he confessed, ‘but Ahmet and Nesuhi are like brothers. Whenever I’m in New York I gotta place I can hang out. And I always come away with a few bucks.’

Ahmet and Nesuhi, by the way, were making themselves very rich.

Owners of other small companies were getting rich less pleasantly. For a while I was producing records with Ray Singer and we went together to see the Roulette label, rumoured to be connected with the Mafia. People told us not to, but what the hell, we wanted all the work we could get and dealing with the Mafia sounded fun. We arrived early and were shown to a waiting room. Only when Ray wanted a pee did we notice there were no handles on the inside of the doors. He held it.

We were taken to meet the boss – Morris Levy, a Jewish record company executive with lots of Italian friends. His office was long, with his desk at one end on a dais. We arrived and Morris was standing mid-office. His hands were round the collar of a slightly built black guy, lifting him off the floor, shaking him furiously. ‘You fucking black cocksucker. You promised to make me a hit record and you screwed up.’

The little black guy was shuddering from top to toe of his shaken body. Then we recognised him.

It was Mickey Stevenson, for God’s sake! One of the top black producers in the world. He’d written ‘Dancing in the Street’ for Martha and the Vandellas and produced ‘What Becomes of the Brokenhearted’ for Jimmy Ruffin. Now he was being shaken to death. When Morris realised we’d come into the room he let go of Mickey, who fell to the floor like an empty sack. While Morris motioned us to chairs, Mickey crawled to the door and fled.

‘So you want to make some records for me?’ Morris boomed. Ray and I eyed each other awkwardly. What we’d seen seemed accurately to portray how the American music business dealt with people who failed.

Extraordinarily, Morris Levy was hugely loved in the music industry. In 1973, when he was voted Man of the Year by the United Jewish Appeal, the entire hierarchy of the music industry turned out to his celebration party. Morris loved to play the Mafia chief – he behaved the way all the other executives wished they were able to behave. Whenever artists asked Morris about royalties, he yelled: ‘Royalties? Try Buckingham Palace.’

Other small companies popped up all over the place. In the UK, there was Island, owned by Chris Blackwell, a white West Indian who spoke Oxford English and Jamaican patois with equal panache. Charisma was owned by Tony Stratton-Smith, who was much loved by his artists despite a lifestyle that revolved around fine wine, racehorses and rent boys. In California, trumpet player Herb Alpert started A&M, which zoomed to success with the Carpenters and Carole King. Jac Holzman started Elektra specifically to sign non-mainstream artists such as the Doors and Judy Collins. Like all the other owners of small labels, he liked rock stars for what they were – self-obsessed and irrational. When he signed Love, he gave them a $5,000 advance ($100,000 in today’s money). There were five of them, all living in a single hotel room and they needed transport to get to gigs with their equipment. They took his money and went to buy something suitable. An hour later they came back with a gull-winged Mercedes capable of taking two. Jac shrugged and shelled out for a van. At a major no one would have done that.

Whenever a rock singer experienced success, the ambition lobe in his brain seemed to develop a permanent, painful erection. Small companies understood how to deal with this, the majors hadn’t a clue. Seeking to solve this problem, CBS appointed a charismatic figure to head the company, Clive Davis, a charming young lawyer. Clive camped it up, put on love beads and a hippy Nehru jacket and signed Scott McKenzie, Donovan, Laura Nyro and Blood Sweat &Tears. CBS’s market share suddenly shot up.

Warners was now close on its heels. Steve Ross, who’d made money from car parking and hobnobbing with the Mob, headed an investment group which bought the company out for $50m. Free of all controls, the new company could go hell for leather for profit and forget about the niceties. To run it, Steve Ross found a guy called Mo Ostin who had a talent for picking off-the-wall artists and standing by them – the Kinks, Jimi Hendrix, Frank Zappa. Ross also took Warners on a buying spree and snapped up the best two small companies together with their owners; Elektra, with Jac Holzman, and Atlantic, with Ahmet Ertegun. Suddenly stuffy old Warners had become WEA.

At that time I was producing records for RCA. It too was trying the ‘friendly president’ approach but couldn’t get it right. Each time I visited there was a new face at the top. Each new person signed new artists and stopped promoting the artists his predecessor had signed. Eventually RCA had more than 100 artists who were not achieving chart success so it had to hire yet another new president especially to fire them all.

By the mid-Seventies, in both the UK and the US, there were now only six majors . In the UK, there were three new small labels – Chrysalis, Zomba, and Virgin, which had signed my group Japan.

After four years Japan had finally broken in the UK so I decided to head for the States. Virgin had licensed America to CBS, which had fired Clive Davis in the wake of a payola scandal. The company was now run by two lawyers – Walter Yetnikoff and Dick Asher. I liked Walter but fell into the half of the company run by Dick – a very dull man indeed. I finally got a meeting with him but had no sooner arrived in his office than the buzzer sounded and his secretary’s voice said: ‘Bob Dylan on line one.’

‘Can I call him back?’ Dick asked.

‘No. He says he wants to talk to you now.’

Dick was about to have a conversation he didn’t want. Eighteen months previously there had been publicity about Jewish-born Dylan becoming a born-again Christian. He’d made a couple of albums full of evangelical zeal but they’d bombed. Now his contract had come up for renewal. Dick especially didn’t want to have this conversation in front of me. He took the call anyway.

To begin with, it wasn’t too interesting but then Dick yelled, ‘I’ve told you, Bob – no fucking religion! If you can’t agree to that, the deal’s off …’

Bob was arguing the point but Dick was having none of it. ‘Look, I’m telling you. There’ll be no fucking religion – not Christian, not Jewish, not Muslim. Nothing. For God’s sake, man – you were born Jewish, which makes your religion money, doesn’t it? So stick with it, for Christ’s sake. I’m giving you 20 million bucks – it’s like baptising you, like sending you to heaven. So what are you fucking moaning about? You want 20 million bucks from us? Well, you gotta do what we tell you. And what we’re telling you is … No Torah! No Bible! No Koran! No Jesus! No God! No Allah! No fucking religion. It’s going in the contract.’

As a devout atheist, I could hardly object, though it seemed tough that a contract should include such specific restrictions. When we finally got back to the subject of my group Dick had rather lost interest. He agreed to release one album. There were three to choose from, each a cohesive musical whole, but he wanted bits from each. It was like introducing a new film director with a composite of three of his movies – the album wouldn’t have a chance. And to make sure it didn’t, CBS gave it no promotion. That way, Dick was able to tell me, ‘You see, I was right. There’s no market for a group like yours in the States.’

A year later I was back with Wham!. By now Walter Yetnikoff had taken the whole thing over for himself. He took artist friendliness to new levels. In his book Howling at the Moon, he describes his 15 years at the top of the company. He was there, he explained, for the artists. Yet from beginning to end of the book, he only talks about seven artists with whom he spent time – Paul McCartney, Michael Jackson, Mick Jagger, Barbra Streisand, Paul Simon, Bob Dylan, and Patti Labelle (and the latter only because he was screwing one of her singers).

During that 15-year period, perhaps 700 artists would sign to CBS, only 10 per cent of whom would have hits. More than 600 others would see CBS as the dead end that killed their career. Yet Walter saw himself as the man who nurtured artists – seven of them. In a greater or lesser way, that had been the ratio of care meted out to the artists by the majors since the beginning of time.

‘People are so anxious to record, they’ll sign anything …’ said singer Tom Waits, ‘ …like going across the river on the back of an alligator.’

They flocked to the majors asking for a chance. The failure rate was still the same. Count the names of every artist who appeared in the Top 100 from 1980 to 1990 – 1,000 perhaps? Multiply by nine and that’s the number who signed to majors and were never heard of again.

As record companies got bigger in the Eighties, everything grew more corporate and less personal. Ron Weisner, who managed both Madonna and Michael Jackson, told me: ‘The biggest frustration is always dealing with the record company – cajoling them, bullying them, charming them, threatening them. They’re totally insensitive to the artist or his wellbeing.’

Polygram bought up every small company left to buy. At the annual conference in the US, the new German MD started his speech by saying: ‘The first time I saw America was through the periscope of a U-boat.’

In the UK, Chrysalis, Zomba and Virgin had grown fast and were opening offices in the States. At Virgin they were trying to boost income, waiting for someone to buy them, using age-old accounting tricks. On one occasion I noticed the royalty statements for Japan had arrived with the artist’s royalty less than it should be. It was because the company had first deducted the producer’s royalty of 4 per cent. Lower down on the statement it stated the producer’s royalty as 4 per cent and deducted it a second time. A call to the accounts office set things right but when the next statement came it was calculated in exactly the same way. A quick call round other managers established it was the same on their statements, too.

Ed Bicknell, manager of Dire Straits, said that dealing with Polygram altered his whole personality. ‘You sometimes do things you wouldn’t do to a mate. I had no compunction in screwing a corporation. I got through 16 or 17 managing directors … they’re incredibly inefficient and absolutely hopeless to deal with … ‘

Ahmet Ertegun was still at WEA, but hating every minute of it. ‘They kept putting up people to run it who were non-music people … they would never take somebody from the cable division and let them run the movie division … but they would take anybody and let them run the music … there was no leadership from the top … it was everybody fighting everybody else …’.

In the Nineties, WEA’s biggest artist, Prince, found it so frustrating he refused to record for them again even though he was still under contract. George Michael attempted to terminate his contract with Sony, which had now purchased CBS. It was rumoured what had triggered George was hearing the company’s new president, Tommy Mottola, referring to him as a ‘limey fag’. If a Sony employee were referred to in the same way the company would probably end up in court and be fined. But an artist was not an employee, he was just an ingredient. Under advice from his lawyers George didn’t sue over this but instead claimed his contract was invalid. It didn’t win him his case but it told people a great many things they hadn’t previously known about the record business.

Artists had to pay their own recording costs yet companies ended up owning the records. ‘The bank still owns the house after the mortgage is paid,’ is how Senator Orrin Hatch described it. Could we imagine film stars having to pay the costs of the movies they starred in and then giving the rights to the company that distributed it?

Artists also had to pay a packaging deduction of around 15 per cent. This, despite the fact that packaging rarely cost more than 5 per cent. The remaining 10 per cent was enough to pay the record company’s entire cost of manufacturing the record. All in all, it meant an artist who sold 200,000 copies of a first album would still owe the record company although the record company had made a profit of a million.

But the worst thing about being signed to a major was that you lost the freedom to run your life. And though top artists could sometimes re-negotiate an unfair contract, it soon became clear that in the music business you didn’t get out of an unfair record contract to get into a fair one; you get out of an unfair contract to get into another unfair one, but with slightly better terms.

Irving Azoff ran MCA for six years. Talking about ‘time-honoured accounting traditions in the record business’, he tells an industry audience of 3,000 audits on record companies. ‘In 2,998 of them the artist was underpaid.’

Everyone had the same story. ‘Systematic thievery,’ said the Dixie Chicks in their writ against Sony. ‘Intentionally fraudulent,’ claimed US music lawyer Don Engel.

‘Makes Enron look like amateur hour,’ wrote music journalist Dave Marsh.

Azoff changed sides. He decided to head the American Artists’ Association and sue all the major record companies on behalf of its artists. But he was pessimistic about their winning much; the majors were going under too fast. ‘The big boys swooped in and bought all the historic, artist-friendly, independents … A&M, Geffen, Interscope, Island, Chrysalis. The multinationals rationalised these purchases based on growing cash flows that don’t exist any more. Now they are trying to defend failed business plans.’

So what have the major record companies done to try to solve the mess they bought into?

First, they chose to attack their own customers by suing people who downloaded files from Napster. Then Sony amalgamated with BMG and everyone enjoyed the show as top executives fought over who should be made redundant. The joint company had a disastrous setback when it attempted to stop the copying of records by secretly putting a code into CDs which made people’s computers more vulnerable to viruses.

Meanwhile, two of Britain’s recent big successes, Arctic Monkeys and Franz Ferdinand, signed to an independent, Domino, famous for giving its artists fairer deals. Forced to finally accept downloads into the singles charts, the majors watched as Arctic Monkeys got 18 of their songs into the Top 200. Once, that would have given a major half a million opportunities to sell a penny’s worth of vinyl for a pound.

At Domino the deals with artists are more like partnerships and other independent companies are following suit. But the problem with signing to any record company is what might happen if it sells out to a major.

It’s clear. The majors should become ‘music companies’. They should find new artists, develop them, promote them and participate in all aspects of their earnings. The artist, rather than the record, should be the product. Artists should be developed for longevity, not for quick profit.

Universal, Sony and EMI all claim to be heading in that direction, but nobody believes them. As always, the biggest problem with signing to a record company is the bottomless pit of commitment. When your record flops, how do you extricate yourself?

For 50 years the major labels have thought of themselves as guardians of the music industry; in fact they’ve been its bouncers. Getting into the club used to be highly desirable. Now it doesn’t matter any more.

For artists and managers, this is the moment to take things into their own hands. Artists no longer need to be held for 10 years and they no longer need to sign away ownership of their recorded copyrights. These days, an artist working closely with his manager can ensure that everything is done in the artist’s best interest. Majors have never done that. And never will.

Four tops: the major players

Although independents account for 28 per cent of the market, the music industry today is still dominated by ‘the Big Four’ record companies.

Universal Music Group

Chairman and CEO Doug Morris presides over the largest record company in the world. Taken together, its labels such as Island, Polydor and Mercury account for a 25.5 per cent share in the global market. UMG itself is a subsidiary of Vivendi, the French media conglomerate.

Sony BMG

The result of a 50/50 joint venture between Sony Music Entertainment (part of Sony) and BMG Entertainment (part of Bertelsmann). Subsidiary labels include Arista, Columbia, Epic, J Records and RCA.

Warner Music Group

Subsidiary labels include Elektra and Atlantic. A merger with EMI looked likely until the latter was bought out by private equity firm Terra Firma.

EMI

The only British company in the pack, formed in 1931. Now run by Terra Firma boss Guy Hands; recently parted company with both Paul McCartney and Radiohead.

Life and times: Simon Napier-Bell

1939: born on 22 April in Ealing, west London.

1966: manages the Yardbirds, and co-writes ‘You Don’t Have to Say You Love Me’ for Dusty Springfield, her first No 1. 1967 ditched by the Yardbirds, whom he replaces with Marc Bolan and John’s Children.

1976: manages proto-new romantics Japan.

1983: Japan split. Softens blow by co-managing Wham!, who land a No 1 single and album.

1988: receives tax demand for £5m, obliging him to adopt more acts, among them Boney M.

1992: forms new management company. Takes on Ultravox and prog rockers Asia.

1998: publishes first book, You Don’t Have to Say You Love Me, about his experiences in the Sixties.

2003: enjoys success with Russian duo Smash!!.

2006: publishes I’m Coming to Take you to Lunch about Wham! in China.

• This article was amended on 29 April 2011 to correct the name of CBS executive Dick Asher.

More reads:

Creativity and Innovation in the Music Industry by Peter Tschmuck (chapter 9):

http://books.google.se/books?id=OHH5qeZ7wVMC&pg=PA149&lpg=PA149&dq=music+industry+crisis+in+1980,+1981+and+1982&source=bl&ots=0bVA7_uvd5&sig=WLngm0FmmxmN228x71tiFQeXPlY&hl=sv&sa=X&ei=nbpoUJ_FAa734QSXgoHYDw&ved=0CEsQ6AEwBA#v=onepage&q=music%20industry%20crisis%20in%201980%2C%201981%20and%201982&f=true

It’s a jungle sometimes. The music industry, the crisis and the state, by Dave Harker.

http://www2.hu-berlin.de/fpm/textpool/texte/harker_the-music-industry-the-crisis-and-the-state.htm

http://musicbusinessresearch.wordpress.com/2010/03/29/the-recession-in-the-music-industry-a-cause-analysis/

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