LA Reid Gets Canned. By, Bob Lefsetz

Posted on May 13, 2017 by


He spent too much!

And he was Doug’s guy and it’s now Rob’s company.

Come on, you expect history to repeat itself ad infinitum? For things to never change? For the wall to fall and democracy to reign in Russia and Napster to happen and for recording CEOs to continue to be big swinging dicks?

The power has shifted. To promoters. To managers. To producers. The guys at the labels are traffic cops, signing based on relationships and heat, they’re about as memorable as the guys running movie studios, can you name ONE? Sony just upped Tony Vincequerra to the top post and I doubt even insiders know who that is, proving the point.

First and foremost you’ve got to spend less. L.A. Reid was in the league of Clive Davis, who pissed off the Germans, even if you’re making dough, why do you have to live such a large lifestyle, why do you have to waste so much money? Do that at a tech company and you’re history, and today record companies are tech companies. It’s all about the data. And when the data says yes you push go, if the data says no you hold your horses, maybe make a few small bets, try to build a fire, which is the exact opposite from flying everybody across the country to appear on late night television, with all that hair and makeup, nearly six figures, for no impact.

Maybe a slot on the Grammys still counts. But that’s all about relationships, not bread, and Ken Ehrlich runs that with an iron fist.

And today’s execs have learned the Doug Morris lesson, who got so big for his britches he got canned at Warner. Doug flew lower than that thereafter, you want to fly low today, the talent rules, not you. However, right now the talent is evanescent and it’s your job to promote acts that last but you won’t take a risk, you won’t make the long investment, because you’re paid on yearly numbers and who knows how long you’ll be there.

And the era of Ahmet and Jac Holzman is deep in the distance, music lovers with their own money at risk. Just about everybody at a label today has come up through the system, they don’t know what it’s like to lose their own cash. The recording industry is mature, no wonder it no longer attracts the best and the brightest, they’re looking for room to move, but all the label says now is NO!

But the generations are changing, and that’s a good thing. Royalty deals will get better, because the acts will have leverage. You don’t need the major to get started, and if you start yourself and get traction you can extract a better deal. The dirty little secret is all these companies need the revenue, for their market share, for Wall Street, if they suddenly show no cash flow the majordomo is gonna get blown out, proving once again that finance is key and L.A. Reid is out of time.

And we’re headed for a wholesale revolution in the business anyway, because no one seems to see that the hottest medium, i.e. music, is taking a back seat. Comedians are all over the news, but musicians are just famous for their TMZ antics. Why is that? You can’t say it’s a lack of publicity, we’re all on Beyonce baby watch.

And the new acts will realize they are not a tool of the machine, not there to be manipulated by either the media or the major, but to direct their careers themselves.

And other than the trades, who knows what labels these acts are on anyway, it’s not like you’ve got a 45 with a spinning label, and all the hit acts have vanity/custom labels… It’s a banking deal, you just want someone you believe in to push the button. You don’t need the label for guidance, to make the record, all the greats are hirable individually, from Max Martin to Jeff Bhasker to even the radio promotion people. The label develop you? Once again, the label says NO! And just like in tech, we’re in a world where you develop yourself, and then the big boys buy you.

So if you’re waiting for a deal, for mommy and daddy to save you, you’re living in a bygone era.

L.A. Reid was living in a bygone era. He thought he was a kingmaker.

But that was in an era when we all watched MTV, physical dominated and we all knew the hits on the radio.

Now music is much more surgical. You’ve got to learn how to win on bunts and singles, with the occasional doubles. If you’re lucky a home run like Ed Sheeran or Drake will come along, but you can’t count on it, and now, more than ever, acts have a hard time repeating.

So, those on the street are empowered.

But just like with your tech devices, there’s little help.

They’re still evolving the record company of the future.

And there’s no room for old farts overspending anymore.

Now you don’t lead with your relationships but your data.

Data is everything.

Except for the tunes, of course.

Have a hit tune and you can own the world!

L.A. Reid just did not have enough hit tunes, not enough for the amount of money he spent. If he can come up with more hits that others can make money on he’ll re-emerge.


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