20 Biggest Record Company Screw-Ups of All Time

This is from the pages of www.blender.com:

From turning down the Beatles to stomping Napster— the most ill-advised, foolhardy and downright idiotic decisions ever made by The Man.

written by Jon Dolan, Josh Eells, Fred Goodman


Blender March 11 2008

They Never Even Recouped Their Aqua Net Expenses
#20 As grunge dawns, one label bets on hair metal
In 1989, with hair metal reaching its zenith, the A&R department at MCA Records finally decided to get in on the act—by tossing a rumored $1 million at L.A. band Pretty Boy Floyd, who at the time had played only eight shows. The band’s debut, Leather Boyz With Electric Toyz, peaked at No. 130 on the Billboard charts, and the Floyd blew another mil or so of MCA’s money before the label finally dropped them in 1991 … right around the time the suits blew a chance to sign a fledgling Seattle outfit called Nirvana.

Unintended consequence Around 1992, the Sunset Strip pizza-delivery scene gets a fresh infusion of talent.


The Vinyl Solution
#19 The industry kills the single—and begins its own slow demise
In the early ’80s, the music industry began to phase out vinyl singles in favor of cassettes and later, CDs. Then, since it costs the same to manufacture a CD single as a full album, they ditched the format almost altogether. But they forgot that singles were how fans got into the music-buying habit before they had enough money to spend on albums. The end result? Kids who expect music for free. “Greed to force consumers to buy an album [resulted] in the loss of an entire generation of record consumers,” says Billboard charts expert Joel Whitburn. “People who could only afford to buy their favorite hit of the week were told it wasn’t available as a single. Instead, they stopped going to record shops and turned their attention to illegally downloading songs.”

Unintended consequence The Eagles still top the album charts.


Come Back, Kid
#18 BMG dumps Clive Davis, begs him to return
In 2000, when company retirement policy deemed Clive Davis too old to run Arista, the label he’d founded 25 years earlier, he was pushed out the door in favor of Antonio “L.A.” Reid. After loud public complaints from artists including Whitney Houston and Carlos Santana, parent company BMG was shamed into giving Davis a nice going-away present—his own label, J Records, along with a $150 million bankroll. Ironically, while J spawned hits from Alicia Keys, Luther Vandross and Rod Stewart, Arista reportedly chalked up hundreds of millions in losses. In 2002, BMG forked over another $50 million to buy J, then two years later ousted Reid and hired a new CEO of BMG North America: an ambitious young turk named Clive Davis

Unintended consequence Rod Stewart’s The Great American Songbook, Volumes I-IV

Dim Bulb
#17 Thomas Edison disses jazz, industry standards
America’s most famous inventor, and the creator of the phonograph, also had his own record label: National Phonograph Company, later Edison Records. Naturally, it was the biggest one around at first but made two fatal errors. One was that Edison Records worked only on Edison’s players, while other manufacturers’ conformed to the industry standard and worked interchangeably. The other was that Edison let his personal taste govern Edison releases—and he hated jazz: “I always play jazz records backwards,” he sniffed. “They sound better that way.” So after releasing the world’s first jazz recording—Collins and Harlan’s “That Funny Jas Band From Dixieland”—the company spurned the craze in favor of waltzes and foxtrots. Edison Records folded in October 1929.

Unintended consequence Edison adds “tin-eared A&R” to his list of inventions.

Double Jeopardy
#16 Warner pays for Wilco record twice
When Wilco handed over their album Yankee Hotel Foxtrot to Reprise in June 2001, acting label boss David Kahne—best known for producing Sugar Ray albums—reportedly thought it was “so bad it would kill Wilco’s career.” The band refused to make changes, so Reprise handed them their walking papers—and the masters to the album. A few months later, Wilco signed with Nonesuch, which, like Reprise, was a subsidiary of AOL Time Warner, meaning that after shelling out roughly $300,000 to make YHF in the first place, the corporation was now paying for it again. The record remains Wilco’s best seller to date.

Unintended consequence Jeff Tweedy’s poetry collection is published in 2004.

Money For Nothing
#15 MCA’s teen-pop calamity
How sure was MCA that slinky Irish teen Carly Hennessy was going to be a gargantuan pop star? So sure that in 1999 they staked the former Denny’s sausage spokesmodel with a $100,000 advance, $5,000 a month in living expenses and an apartment in Marina Del Rey, California, spending roughly $2.2 million in all on her 2001 debut, Ultimate High. How wrong were they? In its first three months in stores, Ultimate High sold a whopping 378 copies, putting the label’s investment somewhere in the order of $5,820 per copy sold. Last seen, Hennessy had resurfaced—still looking for her big break—on season seven of American Idol.

Unintended consequence “Sausage spokesmodel” proves a less embarrassing resumé entry than expected.

Always Read The Fine … Oh, Never Mind
#14 Stax Records unintentionally gives away the store
Soul fans can credit Memphis’s Stax Records for classic hits by Otis Redding, Sam & Dave and Booker T & the M.G.’s—but the real winner was Atlantic. In 1960, Atlantic partner Jerry Wexler liked one of Stax’s first releases enough to pay label president Jim Stewart $1,000 to lease it, and Atlantic soon contracted to market and distribute all Stax releases. Seven years later, with Stax reeling from Redding’s death, Stewart finally took a close look at the Atlantic contract and discovered he’d been bamboozled: Contrary to industry practice, Atlantic became the owner of any Stax release it handled. Stax had signed away its catalogue and future.

Unintended consequence Bob Dole flips “Soul Man” into “Dole Man” during his ’96 presidential campaign.

The Last Of The Mega-Deals
#13 One label’s big spending single-handedly ends “alt-rock” boom
In 1996, Warner Bros. signed R.E.M. to a five-album contract for a reported $80 million. It was the most costly record deal in history and elicited one of the lowest returns. Warner needed R.E.M. to sell at least 3 million copies of all five records to come out in the black, but sleepy folk-rock albums like 1998’s Up moved a fifth of that. The execs went further into the hole by allowing R.E.M. to keep the masters of all their Warner releases, forfeiting future revenues generated by the band’s popular ’80s and early-’90s discs. No one knows how much the label lost—but the debacle brought to a close an era in which acts known for their “integrity” could score huge paydays.

Unintended consequence Warner executives still hoping “Daysleeper” makes it on to The Hills soundtrack.

Axl Grease
#12 Geffen pumps millions into (the nonexistent) Chinese Democracy
Ten years ago, Guns N’ Roses still looked like a good investment—they’d gone platinum 32 times. So in 1998, Geffen Records could be forgiven for paying Axl Rose a million bucks to complete GNR’s fifth album, promising a million more if he delivered it soon. (Rose had already spent four years working on the LP, losing every original bandmate in the process.) Beset by perfectionism, lack of focus and plain-old nuttiness, Rose never got that bonus million. But his label kept spending: In 2001, monthly expenses totaled $244,000. Four producers and a gazillion guitar overdubs later, the album is no closer to release. And Geffen’s in the red for $13 million.

Unintended consequence A frustrated Rose gets into a well-publicized fistfight with … Tommy Hilfiger!

Just Be Yourself—Or Else
#11 Geffen sues Neil Young for making “unrepresentative” music
At the dawn of the ’80s, David Geffen signed Neil Young to his new record label, promising that “commercial” considerations would never get in the way of art. Young took this to heart, wandering so far off the reservation with albums like 1983’s synth-driven Trans that Geffen filed a $3 million breach-of-contract suit: effectively charging the folk-rock icon with not making “Neil Young” records. Young filed a $21 million countersuit before settling out of court, but remained somewhat bemused by Geffen’s judgment: “He didn’t seem to comprehend how … uh, diverse my musical career had become,” Young said.

Unintended consequence Young’s Happy House and Tejano albums remain on the shelf.


Look for 1-10 in tomorrow's post!!