Yes!Clive Davis Got Fired

by Joseph Steine

A friend of mine broke the news to me last week that Clive Davis got fired from the top job at SonyBMG. What was my reaction to old Clive getting canned? I’ll tell you, it put a big ol’ Cheshire Cat smile on my face…not because I’m an evil bastard who takes pleasure in other people’s misfortune, but because of what it says about where the music industry is headed. Besides, I don’t think Clive will be going hungry any time soon.

Clive’s a survivor. He got fired from Columbia in the seventies, started Arista and turned Barry Manilow and Whitney Houston into stars. The second time he got fired happened after he sold Arista to Bertelssman, the German media company. They canned Clive in 2000, but he came back and then with friends Whiteney Houston and Carlos Santana, created such a ruckus that the Germans put up half the money for Clive’s next venture, J Records. I visited J Records up in New York City last year and it’s the only record label I’ve ever been to that makes you feel like you’re at an Armani fashion shoot. It’s gorgeous. Anyway, Bertelssman at some point decided to buy up J Records and make Clive the new head of RCA Music Group, which is part of SonyBMG.

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This time though, I think Clive might be gone for good. I know this because it has less to do with him than it does with the large structural changes going on in the music industry. David Byrnes over at Wired Magazine has an excellent piece titled “Survival Strategies for Emerging Artists-And Megastars.” He makes the argument that although the music industry may seem like it’s in chaos, it’s actually becoming what it was always meant to be; an industry where artists have many different choices of business models to choose from.

He believes that the Major label industry dominance of the last decades was an aberration. That was the world that Clive Davis and friends created and it’s disintegrating in the wind. Byrnes says of the music industry, “What is called the music business today is not the business of producing music. At some point it became the business of selling CDs in plastic cases, and that business will soon be over. But that’s not bad news for music, and it’s certainly not bad news for musicians. Indeed, with all the ways to reach an audience, there have never been more opportunities for artists.”

We’re entering an era where musicians are entrepreneurs again. There’s more risk involved, but also more freedom. According to Byrnes there are six distribution models to choose from, with varying levels of freedom for the artist. The first, with the least freedom, is the equity deal where the label handles every aspect of the artist’s career. Think Pussycat Dolls. This is the Clive Davis model and it’s on its way out. At the other extreme is the self-distribution model where music is self-produced, self-marketed and self-played. Marketing is done online and CDs are sold online and at gigs. This is pure independence. Most musicians aren’t skilled enough at business to use this model. Radiohead used this model to sell their last album.

The average Independent artist out there is going to need a model that falls somewhere in the middle, where distribution and marketing are handled by an established label, while creative work is done by the artist and team. The problem right now is that the Clive Davis-style equity model gained such dominance for so long that musicians now have to learn how to be self sufficient. Successful musicians in the near future won’t just be musicians. They’ll need to be entrepreneurs; confident leaders who understand how to build a system piece by piece. Will the real entrepreneurs please stand up!

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