Cowboys and Indies: The Epic History of the Record Industry (26 page)

With the Beatles and the Stones taking a sabbatical from live shows, Andrew Loog Oldham convinced Lou Adler that the Who would amply suffice as ambassadors of London rock. Both Oldham and Paul McCartney then convinced Adler to take a blind gamble on Jimi Hendrix, at the time just a London phenomenon. Reprise boss Mo Ostin, with admirable prescience, had just signed Hendrix’s American rights from Track, an indie set up by Who managers Kit Lambert and Chris Stamp.

The shy but determined Mo Ostin was another rising force on the West Coast. Having learned the business at the mythical jazz label Verve, he had been quietly navigating Frank Sinatra’s label into the swinging sixties thanks initially to a license agreement with British indie Pye Records. That one deal secured Reprise the North American rights to the Kinks and Petula Clark. Assiduously thumbing through trade magazines ordered from London, Ostin watched as Jimi Hendrix’s first single, “Hey Joe,” entered the U.K. top ten in February 1967, followed in March by another British hit single, “Purple Haze.”

Alas, as Ostin knew, due to a licensing agreement between Atlantic and Decca, which distributed Track, Ahmet Ertegun had first call on Hendrix’s North American rights. “I couldn’t believe they passed on Hendrix,” admitted Ostin, who learned that Ertegun, in a rare lapse of judgment, thought Hendrix was too like B. B. King. “I went after him very, very quickly. I called people in England whose opinion I trusted, and they all told me what an outstanding performer Hendrix was. And that look Hendrix had—it was phenomenal. I couldn’t stop thinking about him. All of the elements were present in Hendrix to indicate that he might be something important—a major find.”

Not only would Monterey soon provide Jimi Hendrix with a spectacular homecoming, his American breakthrough set up Mo Ostin’s giant future. The festival’s biggest challenge, however, was convincing the San Francisco underground bands to participate for free. As Warner Bros. Records executive Joe Smith already knew, the Bay Area groups were a law unto themselves. “Truthfully, I hadn’t a clue as to what the Grateful Dead were all about when I signed them in 1966,” confessed Smith, “but I did realize that there was a buzz on the street. The band had something like seven managers at the time. You never knew which one would arrive at a meeting or pick up the phone.”

Signing them turned into a long, tedious saga of mutual paranoia. The band, having heard all kinds of horror stories, considered the Warner executives bloodsucking capitalists. The Warner executives, having heard their own horror stories, were terrified of ingesting any liquid in the band’s company. Finally, “my wife and I went to the Avalon Ballroom and, wow, it was like walking into a Fellini movie,” recalled Smith, who stood out like a suit at a hippie party. “The music, the lights, the drugs, the people dancing, the overall craziness—it was just overwhelming. We watched and listened with our mouths open the whole time. When it was over, we did the deal. The Grateful Dead had its recording contract, and Warner Bros. had its first big hippie band.”

Still, $25,000 was a risky bet for such drugged-out, unreliable people. Realizing that other happening flower-power acts such as Janis Joplin and Country Joe were ripe for the taking, Joe Smith told his Warner boss, Mike Maitland, “I can sign every act up there for $25,000 apiece.”

“Let’s see how we make out with the Dead,” replied Maitland with understandable caution.

“It’ll be too late by then,” concluded Smith.

Monterey proved his point. About 55,000 people stayed for the entire event, while the big shows at night attracted up to about 90,000. Not only was it the world’s first experiment with a modern sound system, as a media showcase, Monterey was a veritable coup, in large part thanks to Beatles publicist Derek Taylor, who attracted over one thousand media personalities.

Interestingly, for the London contingent, Californian
flower power
was hard to stomach. “Haight Ashbury was like a fucking tourist dive,” Who guitarist Pete Townshend thought. “What was going on in London at the time seemed to be much more interesting. I was surprised at how shallow it all seemed. The bands at Monterey were really pretty bad. I couldn’t get Janis Joplin … She was just an ugly, hard-drinking, screaming woman who to me didn’t evoke Ike and Tina Turner or any of the other people whom she was compared to. Her band the Holding Company were just about the worst fucking band I’d heard. Country Joe & the Fish were on; Country Joe was interesting as a kind of political balladeer but the band put together around himself were all geeks … When Otis Redding walked on with Booker T & the MGs, complemented by the Memphis Horns, I started to think this means something. But I thought, even Otis Redding is gonna get blown away when the Who and Hendrix walk on stage.”

Andrew Loog Oldham also returned to London unimpressed by what he’d seen at Monterey. “I didn’t like the bands; to me they weren’t stars. They were dirtier than thou, unoriginal and totally fueled by drugs and liquor. Although via Monterey … these new bands seized back for America a large part of the pop ’n’ rock mantle from Britain, I couldn’t understand the attraction. I like my stars to behave like stars.” There was little doubt about the event’s general effect on the music industry. Monterey was the defining moment when counterculture went mass market, convincing independents and majors alike what type of bands to sign. Record bosses who hadn’t been at Newport in 1965 now got the picture, loud and clear.

A&M founder Jerry Moss was there, feeling slightly sore he had no acts on the bill, but in equal measure resolutely enchanted by hippie culture. The man holding the winning ticket, Mo Ostin, was also watching from the crowd as Hendrix torched his guitar. “I’ve always wondered if I would have been able to sign Hendrix after the festival,” mused Ostin. “Afterwards, I had A&R people from other labels coming up to me and asking me if I was interested in selling his contract.” At Monterey, Ostin also met a hip, well-connected Englishman, Andy Wickham, who had started out under Andrew Loog Oldham’s tutelage in London and was working for Lou Adler. Ostin hired him as an A&R man, and Wickham pointed him to Joni Mitchell, Jethro Tull, and Van Morrison.

“When we saw the numbers that those records could sell in,” explained Mo Ostin, “we said, ‘Wow, there’s something here.’ You’d struggle with a middle-of-the-road artist to sell maybe 300,000 albums when you could sell two million Jimi Hendrix albums. Frank Sinatra never sold two million albums. Dean Martin never sold two million albums. I don’t think there were too many artists who ever sold two million albums until this wave of
involving
records.”

Although neither the Doors nor Love played at Monterey, Elektra was reaping the rewards. “By the spring of 1967,” recalled Jac Holzman, “the Doors were smoking, and by Monterey, the label was on fire. L.A. was the place.” As Californian psychedelia captured the contemporary imagination, the radio-friendly edit of “Light My Fire” provided the elusive breakthrough. “After ‘Light My Fire’ everything just exploded,” said Ray Manzarek. “In mid-July 1967, the Doors were the number one band in America.”

After seventeen eventful years chasing his muse through the wilderness, Jac Holzman had entered the major league. Already the owner of a chauffeur-driven Cadillac, he celebrated Elektra’s first No. 1 single by splurging on various gifts. Doors drummer John Densmore received a horse. Robby Krieger and Ray Manzarek were given film equipment. Even the parole officer who facilitated Paul Rothchild’s sojourn in Los Angeles was sent a gold disc.

“I remember the day in 1967,” said Rothchild, “Jac walked up to me in the hall and said ‘Paul, this is the first year we’re going to break five million, gross.’ There were about fourteen or fifteen of us on the payroll. And then all hell broke loose. The company got huge. Jac was running a corporation. The record part of it was tangential for a long time … I watched him study what it takes to be an executive, and that’s when Elektra got into its big stride. He equipped himself and Nina with the tools of the yuppiedom of the day. You know, a nice apartment—the first co-op I’d ever been in in my life in New York—great kitchen, great food on the table, stuff on the walls … good collections.”

Striking while the iron was hot, Holzman reinvested profits back into Los Angeles. “Nailing down real estate on La Cienega was the easy part,” recalled Holzman, who felt that Elektra could never be a genuine presence on the West coast without its own recording facility. He spent $120,000 building a state-of-the-art studio beside the main offices—in his own words, “the fulfilment of a dream.”

After eight decades of New York being the nerve center of America’s vast record industry, the psychedelic explosion put Los Angeles firmly on the musical map. Battle lines were being redrawn; networks were being rewired; the British underground had even sold an American blues guitarist back to America, via Monterey. Just three years after the British Invasion landed at JFK, a new dream was swirling across the continent from west to east, inviting the boom generation to “turn on, tune in, drop out.”

16. ON BLACK CANVAS

No romance without finance. Although remembered in popular culture as the
Summer of Love,
when accounts for 1967 were compiled, the American record industry’s annual turnover, for the first time ever, exceeded $1 billion. With various corporate events, including the buyouts of both Atlantic and Warner, 1967 in many respects marked the beginning of the record industry as we know it today.

Gazing out across Manhattan, the debonair Goddard Lieberson, president of the CBS Records group, was one key eyewitness to this giant renaissance. Having begun his long career as a young man in the Great Depression, the enlightened mogul understood the global surge in teen music as cue to start thinking about the future—both Columbia’s and his own.

The only problem was that he was still having a great time being Goddard Lieberson. One of the less admirable aspects of his style of presidency was a personal aversion to team building. Maintaining an aloof distance from his senior management, he allowed vicious power struggles to run riot in the floors below. In particular, two younger bucks had been vying for position throughout the midsixties: Bill Gallagher, Columbia’s sales chief, and Clive Davis, a lawyer who had been promoted to the international division.

Since Goddard Lieberson took over Columbia in 1956, he had been flying around the world, wining and dining in various languages with the best minds of his generation. The more he was out of the office, the worse the office politics got. The more they tried to outperform one another, the less they demanded from him. It was a perfect arrangement from which both company and president benefited. Occasionally, when tempers overheated, Lieberson would step in as a peacemaker.

The only problem was that Goddard Lieberson did have to answer to the chairman of CBS Inc., Bill Paley, who was wont to throw a wrench into the gears occasionally. As the baby boom prompted corporations to buy into youth products, CBS found itself the reluctant stepfather of Fender Guitars and a toy company called Creative Playthings. It didn’t take long to realize such haphazard acquisitions were a mistake, so Paley called in the Harvard Business School to study the CBS empire. Then came an unwelcome surprise for Goddard Lieberson. The consultants advised Paley that CBS Records and its two big labels, Columbia and Epic, should combine marketing and A&R into one omnipotent department, the very thing Lieberson had always resisted. To complicate matters, Columbia’s head of pop A&R, Mitch Miller, decided to leave the company.

Being the monarchical figure that he was, rather than get his own hands dirty, Lieberson decided to create a buffer between his busy lifestyle and the thankless headache of reorganizing Columbia. To most insiders, the obvious contender for a major promotion was Bill Gallagher, who had been instrumental in setting up CBS’s distribution system. However, Lieberson had an instinctive preference for Clive Davis, admitting, “I have a penchant for lawyers because … I think the training they’ve had gives them some cultural background, in addition to a very clear way of thinking that’s not too frequently messed up with emotionalism.”

At this late stage in his career, Lieberson was concerned about maintaining Columbia’s cultural legacy. For years, he had been investing a small portion of profits on money-losing projects he felt were of historical or artistic importance. He shuddered at the idea that Columbia might be taken over by
commerçants
who understood only warehouses and ledgers.

So Lieberson called Davis up to his office and offered the thirty-three-year-old a new post with an unusual title, administrative vice president. What Lieberson hadn’t foreseen was that Clive Davis, despite being a musically illiterate lawyer, harbored big ambitions. Lieberson also underestimated the rapidity and scale of change in popular culture. In the past, fifty-six years of age was not too old to run Columbia, but by 1967, Goddard Lieberson looked like a dinosaur from a bygone age. The numbers spoke for themselves; although the company still commanded the biggest turnover in the industry, pretax profits had flattened to just $5 million. At a time when the record industry was rapidly expanding, Columbia was going cold.

As the court intrigue played out upstairs, throughout the spring and summer of 1967, John Hammond, then aged fifty-seven, landed Columbia a rare fish. He had stumbled on a thirty-two-year-old poet from Montreal by the name of Leonard Cohen. A friend named Mary Martin, who would later be Van Morrison’s manager, called him with the tip, warning that although Cohen was a “wonderful songwriter,” he was “sort of strange” and unlikely to interest the rank and file at Columbia.

Always curious, Hammond watched a documentary entitled
Ladies and Gentlemen … Mr. Leonard Cohen
that had been made by the National Film Board of Canada about Cohen’s career as a young poet and novelist. His best-known works were the novel
Beautiful Losers
and
The Spice-Box of Earth
, a book of poetry. Like Hammond, Cohen was well heeled, a beneficiary of a small family trust fund. Yet, also like Hammond, Cohen wasn’t interested in money. Whether flush or going through a lean phase, he always lived frugally and was generous to others.