Cowboys and Indies: The Epic History of the Record Industry

by Gareth Murphy

  When Lauder arrived at his new job, he found a company in crisis. “A lot of negative things were happening; it was the year Marley died—a very dark cloud hung over St. Peter’s Square. Gloom and doom descended … I had been told, ‘Don’t worry, Chris is always in America, he hasn’t been here for months,’ but the day I started, it was a case of ‘Good Lord, Chris is here!’ … Almost immediately I got a phone call. ‘Can you go and see Vic Godard and the Subway Sect at the Lyceum? Chris would like you to go check it out.’ So I did. And I thought it was a pile of old turd—a poor man’s Tony Bennett or something. So I passed on the message, ‘Yeah, went to see it, didn’t like it, these are the reasons.’ End of story. Then a couple of days later, you’d get bits of conversations coming back to you: ‘Chris isn’t very happy.’ ‘What’s he not happy about?’ ‘That you didn’t want to do the Vic Godard.’ ‘Well, if he wants to do the Vic Godard, it’s his company!’

  Lauder was then called in as firefighter on Marianne Faithfull’s follow-up to Broken English—a wilted tulip of an album titled Dangerous Acquaintances. “The producer had a nervous breakdown and she was in really bad shape,” Lauder remembered. “Work was just not getting done. I came home every night at 5:00 A.M. having been sitting on the stairs just talking to Marianne trying to keep the thing from going off the rails … Then a few weeks later, someone in the corridor asked me, ‘Are you going to the Marianne Faithfull release party tonight?’ And I’m standing there, ‘What, uh, is there a party?’ because nobody had told me anything.” Just as Lauder had feared, he was playing the role of A&R butler.

  The previous year, Island had signed a young postpunk group called U2. So Lauder was sent to Dublin to report on the final stretch of their second album, October. “It looked so obvious to me that this group could be huge. They’d just come off the road touring their first album, Boy, and of course they were struggling with that difficult follow-up. I thought, why is Island pissing around with some of the things they’re doing, instead of giving a big push behind this group that any bozo could see was gonna do something … I remember Chris always having reservations. He was always going ‘yes, but…’ about U2.”

  Lauder came up with the idea to include a free copy of the single “Gloria” inside the album sleeve as a release-only special edition. “It was a trick we used to do at United Artists. It got all the fans to run out and buy the new album on release. Chris was against the idea; he thought it would just make a quick stir then the record would fall away. We did it anyway, and sure enough it charted, then fell away. He said, ‘Look, I told you so.’ And I said, ‘It got them their first chart position. What’s bad about that?’”

  In every department, Lauder noticed “it was very difficult for anyone to make any meaningful decisions without bumping into the ol’ ‘What does Chris think?’ No matter what you suggested or gave them, it always came back as ‘Well, what does Chris think?’ And after a bit you start to say, ‘I don’t know. I haven’t asked him. But this is what I think.’”

  Island Records at the time was employing a staff of about 120, a costly operation to keep fed without a major act. Inevitably, under the weight of such an absent, cultlike figure, office politics were rife. Despite the label’s origins in the late sixties as a gang of kindred spirits, Island Records in the early eighties had turned into a sort of third-world monarchy—run-down, absolutist, unfair. To get ahead one had to play the game according to local rules, or emigrate.

  By 1982, the British market was taking a giant leap into pop. The biggest names of the New Wave, like the Police, Madness, the Jam, the Stranglers, the Clash, Adam Ant, and UB40, were still scoring hits, but their sounds were softening. Usurping them at the top of the charts was this new generation of synth-pop groups: the Human League, Duran Duran, Depeche Mode, Yazoo, Culture Club, Soft Cell, Eurythmics. It took one of Island’s affiliate labels, ZE Records, which symbolized New York’s so-called no-wave movement, to supply Island’s only significant hits in 1982—the album Tropical Gangsters by Kid Creole & the Coconuts, whose salsa-infused hit singles included “Stool Pigeon” and “Annie I’m Not Your Daddy.”

  The very fabric of demand was changing. As Island’s head of publishing, Lionel Conway, noted, “We had career bands in the seventies. It all just changed in the eighties. It basically became more like a singles market. There were a lot of one-offs, and we weren’t equipped for that.”

  Others were, however—in particular, clued-in New York deejays whose job was to spot and test individual tracks from all over the world. “It all grew out of the record stores,” Craig Kallman believed. “I lived in those stores and I’d bump into Rick Rubin, the Beastie Boys, Larry Levan, Jellybean Benitez, Afrika Bambaataa. There was truly a revolution happening with so much exciting music coming out of New York, L.A., and Miami. The U.K. scene was hot, too, so there was this huge wave of seven- and twelve-inch imports, especially from the big importers like Rough Trade and Important. The club scene was exploding with so many new sounds, dance and hip-hop mixed with U.K. alternative music and U.S. indie rock. And in the record stores, deejays were fighting over new releases as they were coming in—because there were never enough copies to go around.”

  In May 1982, Tom Silverman’s fledgling label, Tommy Boy, released “Planet Rock” by Afrika Bambaataa, a classic hip-hop record notable for its use of a drum machine and sampler. Two months later, Sugar Hill Records released an even bigger genre milestone: “The Message” by Grandmaster Flash & the Furious Five. “I don’t think people today can imagine just what a radical departure rap and hip-hop felt like,” said Tom Silverman. “There was this confluence of everything coming together at once: the 808 drum machine, the first Fairlight and Synclavier samplers, break-dancing, graffiti, quick-cut deejay techniques, rapping. It was just such a strange synthesis of so many new things.”

  In fairness to the experienced Chris Blackwell, even at Island’s lowest point, he was barking up the right trees. As well as starting a dance sublabel, 4th & B’way, named after the address of Island’s New York office, he was considering hiring Danceteria deejay Mark Kamins as a talent magnet. When Seymour Stein heard the news, he was laid up in the hospital undergoing treatment for a heart infection. Going stir-crazy listening to demos while penicillin dripped into his arm, Stein immediately telephoned Kamins, to whom he had given $18,000 to produce some recordings. Unbeknown to Stein, Chris Blackwell had already turned down Kamins’s latest discovery—a singing, dancing pop-doll named Madonna Ciccone, whose first effort, “Everybody,” Kamins had been spinning at Danceteria. “Can I meet her?” asked Stein—who had, after all, paid for the experiment.

  At about three in the afternoon, Kamins called back warning that Madonna would drop by the hospital at eight o’clock. Unbathed, unshaven, with his backside protruding from his hospital gown, Stein worked the telephone all afternoon. His secretary delivered a pair of pajamas; his barber arrived for an emergency grooming; his doctors allowed him to wash. “I figured that I had to look healthy,” Stein remembered, smiling. “It was the beginning of the AIDS epidemic, and I didn’t want Madonna to think that she was signing with someone who wasn’t going to be around much longer.”

  Stein knew that to produce and market a pop artist, he would need Warner funding. Because Mo Ostin tried to torpedo the deal, he took Madonna’s case to Nesuhi Ertegun, still head of WEA’s international division.

  “My brother tells me you’re in hospital,” said Nesuhi Ertegun. “Just listen to the doctors and I’ll give you what you need to sign her.”

  That night, Madonna walked into Stein’s ward. “I could have been lying in a coffin,” he said. “It didn’t matter to her. All she wanted was a deal.”

  26. CYCLOPS

  For hot independents, the eighties began sometime around 1978. For certain majors, the seventies lingered on until about 1983. Moguls like Walter Yetnikoff and David Geffen were, for the most part, blind to the synth-pop, postpunk, and hip-hop sounds stirring up the New York club scene. In fa
irness, so was most of America. As if disco and punk had never happened, the biggest-selling album of 1981 came from seventies rock group REO Speedwagon, on CBS sublabel Epic. The following year, a supergroup of aging British progressive rockers, Asia, scored America’s biggest-selling album—a whopping 4 million copies for Geffen Records. Anyone looking at the bottom line was seeing that established names producing high-quality adult-oriented rock remained the most bankable commodities on the market.

  Those with ears knew better. In 1981, A&M boss Jerry Moss took his future wife, Anne, on a trip to London via the Concorde. On arrival, the taxi took them to Derek Green’s house, where, as coincidence would have it, the Police were on the TV screen, performing on Top of the Pops. Discussing which restaurant to eat in, Moss’s attention was drawn back to the television a few minutes later. It was “Don’t You Want Me” by the Human League. He shared a knowing glance with his girlfriend. “We just couldn’t get it out of our heads,” said Moss, who the very next day tracked down the infectious tune to familiar faces at Virgin. On Richard Branson’s houseboat, Moss negotiated the Human League’s North American rights.

  Returning to Los Angeles with a copy of the accompanying album, Dare!, Moss played “Don’t You Want Me” to his head of sales and promotions, Harold Childs. An astute character who only wore white suits and a Panama hat, Childs started making calls in his customary manner—always standing up in his office, no chair, television permanently on. “I recall a promotional trip with Harold to all of A&M’s field staff,” said Martin Kirkup, the company’s artist development VP. Despite the unfamiliar synthesized sound, “the enthusiastic reaction it got everywhere was partially due to the narrative of the lyrics. The promotion guys could relate to ‘you were working as a waitress in a cocktail bar.’ The story arc of A Star Is Born gave it great depth.” However, the record’s momentum was slow; starting on the progressive Los Angeles stations, it eventually won over Top 40 radio, city by city, reaching the Midwest. The single climbed to No. 1 on Billboard’s Hot 100 as the album peaked at No. 3.

  One surprising admirer of the Human League’s quirky sound was Neil Young, who had just moved to Geffen Records for another million-per-album advance. In 1982, Young delivered his infamous album Trans, a jarring mix of synthesizers, folk-rock, and ethereal vocoders. When it flopped with an unrecouped advance, David Geffen interrupted the recording of its country-flavored follow-up, Old Ways, demanding that Young just make some “rock ’n’ roll.” Picking up on Geffen’s choice of words, the pissed-off Canadian renamed his band the Shocking Pinks and banged out a kitsch satire of Elvis-era 12-bar rockabilly. Called Everybody’s Rockin’, the thirty-minute comedy album ended in an equally farcical $3 million lawsuit—in which Geffen’s attorneys failed to convince the court that Neil Young was fraudulently making albums unrepresentative of himself.

  Over at CBS, Walter Yetnikoff was also accelerating with his eye on the rearview mirror. Even though Mick Jagger was barely speaking to the tattered Keith Richards, Yetnikoff spent an exhausting year trying to bag the Stones. “It amused Mick to see hungry record execs chasing his skinny ass around the world,” admitted Yetnikoff, who was thoroughly teased and outsmarted by the deceptively shrewd singer. “His image as the prancing prince of rock belied that side of his character that had seriously studied economics.” Following tortuous negotiations, Rolling Stone magazine reported that the $25 million deal “shapes up as no apparent moneymaker for CBS.” An unnamed source even admitted what staffers were whispering outside Yetnikoff’s office—“a prestige move more than anything.”

  In that difficult year of 1982, CBS’s $1 billion turnover yielded a paltry $22 million profit, forcing Walter Yetnikoff on Friday, August 13, to close two factories and lay off three hundred workers. Few in the postwar record business had witnessed anything like it. In urgent need of a win, he picked up his telephone and called Michael Jackson, who hadn’t released an album since his 1979 disco blockbuster Off the Wall. The message was simple: We need another smash—mixed, packaged, and in stores for Christmas trade.

  An emergency session was convened in Santa Monica by Jackson’s producer, Quincy Jones, who announced the daunting challenge to his production team. “Okay, guys, we’re here to save the recording industry!” Working flat-out, they delivered Thriller just in time for a rush release on November 30. “You gotta remember the time and place,” said keyboardist Brian Banks. “The record business was in the dumps right then. I remember one night, when they were looking at a bunch of proofs, large blow-ups of the centerfold, spread out on the console, and I was just there in the background doing my thing while Quincy was talking. Off the Wall sold something like eight million records, and I remember Quincy saying, ‘The record business is not what it was a couple of years ago, and if we get six million out of this, I’m gonna declare that a success.’”

  To handle Thriller’s marketing, Yetnikoff chose the perfect CBS executive, Frank Dileo, an Italian American who was good friends with Joe Isgro, “the Network’s” main man in Los Angeles. For $100,000 per song, Isgro and his radio promotion colleagues covering other regions pulled out all the stops, embarking on a strategy of blitzkrieg. While “Billie Jean” was No. 1, CBS released “Beat It” as a single. Such a mass assault hadn’t been witnessed since the Beatles invasion of 1964; this time, Thriller was a concerted plan. All seven singles from its nine-song track list entered the Top 10, while the album held the No. 1 spot for thirty-seven weeks. Within one year of release, Thriller had earned CBS $60 million, immediately wiping away any residual gloom from the previous four years. Conservative estimates begin at 45 million unit sales to date. As monster hits go, Thriller was the King Kong of the vinyl jungle.

  The industrial renaissance of 1983 had another arm that coincided with Thriller. Originally set up in 1981 by Steve Ross and American Express, MTV was a novel channel showing nothing but pop music videos on a twenty-four-hour rotation. When “Billie Jean” was refused by MTV, Jackson’s manager, Ron Weisner, called Walter Yetnikoff to flag what was widely rumored to be MTV’s white-only policy. In an uncharacteristically cautious move by a man otherwise known for shouting into telephones, Yetnikoff consulted the powerful Bill Paley, who personally telephoned MTV and threatened that if the video wasn’t broadcast that very day, CBS Records wouldn’t do any future business with the channel. Fearing the wrath of Paley’s long arms, MTV aired “Billie Jean” hours later.

  Despite pocketing a record-breaking royalty of 42 percent on the wholesale price of every record sold, Michael Jackson was obsessive about staying on top. Walter Yetnikoff couldn’t believe how “I used to get calls from Michael in the middle of the night. ‘Walter, the record is not number one … what are we going to do?’ I said, ‘We’re going to go to sleep and deal with it tomorrow.’” Realizing that Yetnikoff didn’t share his panic, Michael Jackson came up with a stunt to push Thriller back to No. 1. Using the horror film An American Werewolf in London as a reference video for the album’s title track, Jackson contacted director John Landis.

  The only problem was that Landis’s idea for a fourteen-minute “theatrical short” would cost half a million dollars. Jackson called Yetnikoff, explained the concept, and passed the phone over to Landis, who later remembered “this blast of flaming—‘You motherfucker! What the fuck’s the matter with you?’ The one conversation I ever had with Walter Yetnikoff—you know, in movies where they hold the phone away?”

  “OK, I’ll pay,” Jackson told Yetnikoff. However, John Landis and his logistics man, George Folsey, found a better plan—to film forty-five minutes’ worth of behind-the-scenes footage to lead up to the actual short film. Thus they were able to pitch a sixty-minute documentary to TV broadcasters. They initiated a bidding war, until MTV and Showtime each pitched in $250,000 for the rights. The landmark “Thriller” video was broadcast in December 1983, a year after the album’s official release, sparking a second wave of Jackson hysteria.

  Despite the drama, Yetnikoff was, well, thrilled with
how the whole episode had played out. Thanks to the general excitement aroused by Thriller and MTV, the entire record industry in 1983 lifted itself out of recession, registering a 4.7 percent increase in business. Dick Asher, forced to forget his antipayola crusade, eloquently noted, “When the tide comes in, all the ships go up.”

  It was probably no coincidence that just as Thriller exploded, Warner decided to pump serious resources into its most promising talent, Prince—a singing, dancing multi-instrumentalist, who’d released five critically acclaimed funk-rock records on Warner since 1978. Following his first Top 10 commercial success in early 1983 with “Little Red Corvette,” Warner talked its movie division into a risky gamble to relaunch Prince. Filmed throughout the year and released in 1984, the semiautobiographical musical drama film Purple Rain was an instant hit—the turning point in Prince’s long and colorful career. The film soundtrack went on to sell over 10 million copies.

  As this new generation of televisual pop music exploded across the globe, a technological revolution was sweeping across Japan. Some Japanese and Dutch industrialists believed it had the potential to create a worldwide music boom of historical proportions—the compact disc.

  Its most powerful champion was Norio Ohga, a former opera singer and senior executive at Sony. The other industrial giant involved was the Dutch conglomerate Philips, at the time merged with German manufacturer Siemens. Although Sony and Philips had each developed its own variation of the same principle, because Sony had just lost millions with its Betamax videocassette, both companies recognized the wisdom in pooling their patents for one standard format.