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YEAR IN REVIEW 1995 : A Pressing Time for ‘Suits’ : The record industry’s revolving door made heads spin, but domestic sales still cranked.

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Chuck Philips is a Times staff writer

This will go down in record business history as the year the “suits” got taken to the cleaners.

Heads rolled and regimes collapsed in 1995 as four of the industry’s most powerful global bosses, often derided as “corporate suits,” suddenly found themselves out the door. The casualties: Bob Morgado and his successor Michael Fuchs at the Warner Music Group, as well as Sony’s Mickey Schulhof and MCA’s Al Teller.

It was part of a savage purge that sent shock waves through the business, causing employees at every level to worry about their futures and question whether the giant conglomerates have any idea what they’re doing.

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Nothing was more dramatic than what happened at the Warner Music Group, where seven top executives were fired in a corporate blood bath--all under the watch of Pop Eye’s loser of the year, Time Warner Chairman Gerald Levin.

He is the man Time Warner shareholders have to thank for virtually dismantling in 18 months what others had spent 30 years building into the world’s most successful and respected record company.

You really knew things were spinning out of control last year when Fuchs, whom Levin moved over from HBO to bring order to the music division, blew into LAX on the company jet for a secret consultation with Psychic FRIENDS? Network diva Dionne Warwick, who is also co-chair of the National Political Congress of Black Women. Fuchs sought help from the veteran singer and rap critic, whom he counted on to set up a meeting with Death Row Records Chairman Suge Knight to try to resolve Warner’s crisis over rap music. Nine weeks later, Fuchs was out the door too.

Despite the chaos, the record industry still managed to scrape up about $11 billion in sales in the U.S., approximately the same as last year.

Here’s how major companies did during the past year, based on SoundScan estimates of U.S. market share as well as interviews with key industry figures, who evaluated labels on both image and performance. The corporations are listed in order of 1995 domestic market share.

Time Warner: 22.01%

Warner Bros.: “If my boss calls, get his number, and oh yeah, don’t forget to find out what his name is, will ya?” That was the joke last summer at demoralized Warner Bros. Records, where the well-liked veteran Russ Thyret took over after the ousting of Mo Ostin, Lenny Waronker and Danny Goldberg. The stature of Warner’s flagship label took a body blow, not only because of executive infighting, but also because of disappointing showings this year by acts such as Green Day, Rod Stewart,CK the Red Hot Chili Peppers, Prince, k.d. lang and Neil Young.

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Still, Warner Bros. ended the year second only to Atlantic in market share (x.x% to x.x%),TK thanks in part to successes by Van Halen, Tom Petty, Madonna and Seal, as well as a big boost from Green Day’s 1994 debut album and its alliance with Madonna’s Maverick label, which delivered the year’s hottest newcomer, Alanis Morissette. Other Warner-financed ventures, such as American, Giant and Qwest, continue to flounder. One big challenge Thyret faces is to stop R.E.M. from jumping ship when the rock quartet’s contract runs out after its next album, which could come as early as spring.

Elektra: Although Sylvia Rhone’s retooling of the label generated record revenues last year, it’s going to take time for the first black woman ever to head a pop label this big to convince the industry’s good ol’ boy network that she’s for real. Sexism and racism die hard in the record business. Competitors are reluctant to give Rhone credit for delivering hits from Natalie Merchant, Better Than Ezra and the Rembrandts, preferring instead to dwell on the poor performance of rock warhorse AC/DC’s latest.

Atlantic: Atlantic ended the year at No. 1, but the question dogging new head Val Azzoli is whether he has the vision and executive acumen to sign and develop fresh talent. Before the dismissal of mentor Doug Morris, Azzoli was regarded as the quiet architect of Atlantic’s muscular marketing machine, which spit out surprise hits from newcomers such as Hootie & the Blowfish, whose 1994 “Cracked Rear View” album outsold everything else in 1995 by around 1.7 million copies.CK

With new releases in the wings from Stone Temple Pilots, Brandy and Hootie, the diligent Azzoli could, as one Atlantic source says, “keep the battleship afloat for at least two years--even without vision.” But he’s going to have to sign a lot of hip bands next year to make up for the loss in image and sales Atlantic will suffer after its affiliation with the cutting-edge Interscope (which contributed x.x% of Atlantic’s market share) and Matador labels ends.

Sony: 13.7%

Epic: It’s a good thing Michael Jackson is such a big star overseas, because Epic is going to need somewhere to ship all those leftover “HIStory” albums that U.S. retailers return after the first of the year. Jackson, whose new double CD has (according to Sony) sold 8 million copies outside the U.S. but only 1.8 millionUPDATE in this country, can’t blame Epic chiefs Dave Glew and Richard Griffith for the album’s weak domestic showing. Rivals say Epic wasted millions promoting the album and still couldn’t keep it in the Top 10 for more than XXTK weeks. Jackson aside, Epic is highly regarded in industry circles as a diverse powerhouse that last year delivered hits from young Aussie rock band Silverchair as well as R&B;’s Des’ree, Sade and Brownstone. With new albums on tap from Pearl Jam (whose 1994 “Vitalogy” album sold an additional 1.5 million this year) and Rage Against the Machine, 1996 looks bright.

Columbia: Critics claim that Columbia chief Don Ienner hasn’t discovered a new act in ages, but if you look at the sales charts, Ienner’s label ranks fourth with hits by Sponge, Xscape and the Presidents of the United States of America, not to mention blockbusters from pop stars Mariah Carey, Bruce Springsteen (his greatest-hits compilation, not the new, slow-selling “The Ghost of Tom Joad”), Michael Bolton and Pink Floyd. There was much whispering this year that Ienner would step down or launch his own Sony-affiliated label. To dispel rumors, Sony Music chief Tommy Mottola released a statement this month saying he is pleased with Ienner’s performance, which helped Sony reclaim its title as the No. 2 selling label in the nation.

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Polygram: 13.01%

A&M;: PolyGram Chairman Alain Levy is looking smarter every day. A&M;, the earliest in a series of Levy’s big-buck acquisitions, shone this year with strong sales from Sheryl Crow, Blues Traveler, Janet Jackson and Barry White. Under the leadership of Al Cafaro, A&M; helped temporarily push PolyGram ahead of Sony in the market share race earlier this year.

Island Group: While Island lost hot rap duo Salt-N-Pepa to MCA, Chris Blackwell scored big with the Cranberries and Melissa Etheridge, although the latter’s latest album is already starting to slip down the chart. PJ Harvey’s album drew critical raves, though sales were disappointing. Island also benefited from hits by Montell Jordan, Method Man and “The Show” soundtrack, instantly validating Levy’s lucrative investment in Russell Simmons’ label.

Mercury: Rivals say Levy’s decision to install Danny Goldberg as president of the much-maligned Mercury label gives the company a chance to compete more effectively in the rock market. But with Bon Jovi as his biggest-selling act other than country star Shania Twain, Goldberg has his work cut out for him--though he inherits the hot Joan Osborne.

Motown: Maybe newly installed Chairman Andre Harrell ought to consider just changing the name of the label to Boyz II Men--if he can keep his reported ego from dubbing it Harrell Records. Boyz is the only Motown act selling records these days. Catalog sales have slowed and the latest from such veterans as Stevie Wonder and Diana Ross bombed.

BMG: 10.71%

Arista: Michael Dornemann, who runs the Munich-based BMG, has often been chided for ignoring the industry’s bidding wars--for artists and companies. But he bit the bullet this year rather than lose Clive Davis, the veteran music man who started Arista virtually from scratch and built it into the engine that drives the entire BMG operation. Davis--Pop Eye’s most valuable executive of the year--was rewarded with a five-year, $50-million-plus pact, and the consensus is he’s worth every penny.

The knock against Davis used to be that Arista was simply a pop singles label, but it now has a remarkably diverse roster, thanks to Davis’ personal signings and a series of dramatic joint venture deals hammered out by TITLE TK Roy Lott, including LaFace (with L.A. Reid and Babyface), Rowdy (Dallas Austin) and Bad Boy (Puffy Combs). In 1995, LaFace provided Arista with the year’s No. 2 seller, TLC’s “Crazysexycool.” The industry is now watching to see what happens with Davis’ newest joint venture, with Offspring manager Jim Guerinot’s Time Bomb Recordings.

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RCA: If Elvis knew how big the Beatles would be again this year, the rock icon might wish he had signed to Capitol, where executives seem to know how to milk potentially profitable historical recordings, rather than RCA. While label President Bob Jamieson scored hits with the Dave Matthews Band, the Chieftains and Loud Records rappers Raekwon and Mobb Deep, insiders think he has long way to go before he restores credibility to the floundering label.

MCA: 9.93%

MCA: For years, the big complaint about MCA was that the firm had no rock roster. So what did the company do when Chairman Al Teller gave them the fourth biggest-selling rock album of the year in Live’s “Throwing Copper”? They fired him. Go figure.

Teller’s sudden dismissal followed the sale of MCA to Seagram’s when the record division was booming, with hits from Mary J. Blige, Jodeci and the soundtrack album from “Dangerous Minds.” But Teller apparently just didn’t fit the vision of new owner Edgar Bronfman Jr., who replaced him with Doug Morris, who four months earlier had been canned by Warner. Highly regarded Warner Music veterans Mo Ostin and Lenny Waronker also resurfaced this summer at DreamWorks, the MCA-distributed entertainment combine founded by Steven Spielberg, Jeffrey Katzenberg and David Geffen, which already has signed pop star George Michael.

Geffen: Things were slow at industry jewel Geffen Records, partly due to lack of product from some of its powerhouse bands, such as the inactive Guns N’ Roses, the disbanded Nirvana, and Aerosmith, which has left Geffen for Sony. Chairman Ed Rosenblatt has assembled a strong new talent acquisition team and the company remains a powerful magnet for new artists such as Weezer, Hole and Elastica--although only Weezer approached 1 million in sales. The label’s biggest hits: the live Eagles album and White Zombie.

Geffen also stands to benefit from distribution deals with DreamWorks as well as with the fledgling Almo Sounds label, where label chiefs Jerry Moss and Herb Alpert have already drawn attention with the new alternative band Garbage. There are questions as to whether the sheer volume of product pumping through Geffen will damage the image of a company that has long prided itself on releasing fewer albums and focusing on them.

Thorn-EMI: 9.92%

Capitol: The biggest talk surrounding Capitol and rest of the Thorn-EMI music division isn’t about what new records are coming up, but about whether the division is for sale. Thorn-EMI Chairman Colin Southgate adamantly denies it, but that hasn’t stopped the gossip about his dining with interested suitors such as Viacom’s Sumner Redstone, Seagram’s Bronfman and Disney’s Michael Eisner. Expect the talk to heat up next fall when Southgate establishes the music division (and some other properties) as a separate, independent company.

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On the Capitol front, the story was the Beatles and Capitol’s carefully orchestrated media blitz for “Anthology 1.” Once again, marketing whiz Charles Koppelman--with assistance from EMI Music execs Terri Santisi and Jim Fifield--pulled a rabbit out of his hat to rescue Capitol chief Gary Gersh, whose artists and repetoire skills have yet to deliver a blockbuster.

While Gersh has put the aging tower back into the race by winning bidding wars for acts like the Foo Fighters and Everclear, the verdict is still out on whether he can turn them into smash hits. Sales of new releases by Blind Melon, Bonnie Raitt and Bob Seger were disappointments. Garth Brooks, of course, just kept on rollin’ down in Nashville.

Virgin: The Smashing Pumpkins saved the day for Virgin Records chief Phil Quartararo by delivering a critical and commercial blockbuster. The company also had some success with acts such as Luniz and Shaggy, but saw its market share plunge after duds from Lenny Kravitz, Paula Abdul and the Rolling Stones. On the bright side, look for Virgin to re-sign Janet Jackson.

EMI: The murder of Selena generated brisk sales of the Tejano singer’s albums, but label chief Davitt Sigerson’s only other real seller was soul singer D’Angelo, whose own representatives are privately grumbling that the label hasn’t maximized the album’s commercial potential.

Independents: 19.23%

Interscope: Time Warner got cold feet and dumped the controversial Westwood label after its connection to Death Row and Nothing/TVT Records raised the ire of politicians. Interscope founders Ted Field and Jimmy Iovine, who also scored hits by Bush, 2Pac and Primus, are on the verge of signing a lucrative new partnership deal with either EMI Music or PolyGram, sources said.

Epitaph: Label founder Bret Gurewitz, whose tiny Hollywood firm sold more than 5 million copies of Offspring’s 1994 album “Smash” without the aid of a traditional record company distribution unit, has turned down purchase bids from every major corporation in the industry.

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Disney’s Hollywood Records: Take a tip from the Mouseketeers: Now it’s time to say goodbye. . . .

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Times pop music critic Robert Hilburn and freelance writer Steve Hochman contributed to this story.

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