• frontpage-logo
  • NYI-homepage-mobile-logo

  • Clive Davis and Whitney Houston Sony/RCA is the latest to try to spin another sign of the music industry’s decline–the closing of imprints, Arista and Jive–into something positive.

    The industry has been down for so long, everything must look like up to the suits who still occupy the executive suites.

    “The concept is that there is value in branding RCA and not having it confused or diluted by other labels,” said RCA executive Tom Corson when he announced the move.

    Maybe so, but the closing of Arista and Jive sends a clear signal that nothing is sacred in the battle to stem the industry’s losses, except maybe Lyor Cohen’s expense account.

    RCA’s announcement on Friday (Oct 7), no doubt to minimize the coverage, is particularly noteworthy because the two indie/major labels were home to some of the most striking artists in the last two decades.

    Arista (launched in 2000 by record-mogul Clive Davis) signed Whitney Houston, Alan Parsons, Dionne Warwick, Aretha Franklin and Barry Manilow.

    Jive was the home of Britney Spears and Justin Timberlake.

    In terms of consolidation, their demise was likely a fait accompli when Sony acquired RCA.

    Barry Weiss who ran Jive left the company last year to head up Universal, while Universal’s Doug Morris left to run the combined RCA/Sony.

    Morris, like Davis, is a visionary. He was brought up in the business by no less an authority than Ahmet Ertegun.

    But the executive moves are like shuffling deck chairs on the Titanic.

    “The business just grew too fast in the ’70s and ’80s,” explained veteran music industry pr man David Salidor..

    “New artists abounded and the industry capitalized on the migration of record collections from vinyl and cassettes to compact discs,” he said.

    “In those days, every major had literally dozens of custom-labels. Sure, it was ego to a big extent, but the model gave labels like Jive the flexibility and independence to find and develop artists,” he added.

    So, an eventual drop off was inevitable. The labels, bloated and overstaffed, were limousine driven, not market driven. Even junior executives were making $250,000 a year.

    But no one was ready for the digital revolution.

    First, digital music and file-sharing stripped the industry of its control over production and distribution. Then Apple took away the labels’ pricing power with iTunes in 2003.

    “Doug Morris didn’t even know how to use a computer when I met him in 2003,” said Keith Girard, former editor-in-chief of Billboard magazine.

    “The industry also tied its fate to selling high-margin albums instead of singles, which also opened the door to iTunes,” Girard added.

    In contrast, the digital service focuses on single sales, which fans seem to prefer. Not surprisingly, iTunes is now the largest music retailer.

    More than a decade has passed since Napster fired the first shot in the file-sharing war in 1999, yet the industry still hasn’t figured out how to build a successful digital business model.

    Until it does, bruising consolidation and retrenchment will be the order of the day.