Clive Davis: The Business Behind The Golden Ears

Today’s episode and memo is our latest installment on One of Ones. We broke down the career of the legend, Clive Davis. I was joined by Zack O’Malley Greenburg. You can listen to our episode here, read Zack’s piece here, or read below for a few of my highlights.

I’m always fascinated by how companies handle strong, capable leaders who can be hard to work with.

The unwritten rule is that leaders are tolerated until their performance slips, then it’s over. Difficult yet effective leaders get less leeway than nice yet mediocre ones. Sometimes these leaders are objectively difficult, but it’s often mere personal preference.

For Clive Davis, it was likely a mix of both.

When it was time for Clive to deliver, he delivered. In the late 60s, when he pushed Columbia toward rock music, the label doubled its market share in three years. In the 70s, shortly after taking over Arista, the label’s profits grew 700%. In the 90s, Davis won the Album of the Year Grammy twice (The Bodyguard soundtrack and  Santana’s Supernatural). And in the 2000s, Davis’ J Records had successful debut albums from Alicia Keys and Maroon 5.

The result is a shelf full of awards and accolades that can rise above all. Davis is a one-of-one. But the journey was full of more workplace drama than an episode of Industry.

Davis was famously fired from Columbia in 1973 for payola, tax evasion, and mishandling corporate funds for unacceptable uses, like his son’s bar mitzvah. On paper, those are understandable reasons, but Clive’s behavior wasn’t unique. Payola was rampant. Labels were known to literally fund sex and drugs for rock and roll. The mob ties were everywhere. What hurt Clive though, was his tension with the executives he reported to which led to his dismissal. Objective logic was used to justify their subjective beliefs.

Clive, despite his background in law, saw himself as a “creative” who looked down on the higher-ups. Here’s a famous quote:

“Corporations haven’t got a clue when it comes to creativity in the music world,” Davis says. “I remember a few years ago when everybody was talking about synergy and how powerful all these corporate figureheads were. Well, half of those guys are gone now. They really didn’t know anything about music then, and they don’t really know anything about it now.”

With that mentality, conflicts are inevitable. Ironically, a similar thing happened at Arista. Davis left when he found out that his protege, L.A. Reid, was being groomed to replace him. Corporate wanted a younger person who was easier to work with.

Our business culture is full of examples of relationships that crumbled an otherwise formidable force. Luckily, Clive proved time and time again that he can succeed wherever he goes.

You can listen to the full episode here or read below for more highlights.

Whitney Houston’s Bodyguard

Clive’s relationship with Whitney Houston is the most important one of his career. He discovered her during the music industry’s post-disco decline in the early 1980s. But as the business started to bounce back, the 80s and 90s soon became a peak time for movie soundtracks as well.

The rise of MTV, music videos, and VCRs created more culture around visual music. A memorable music video could sell a movie, and vice versa, especially if the same characters were involved.

Whitney Houston’s leading role in 1992’s The Bodyguard was a stars-aligned moment. She was in her prime, shared top billing with Kevin Costner at his apex, CD sales were booming, and the soundtrack’s lead single, “I Will Always Love You,” covered an already popular song by Dolly Parton.

The soundtrack sold over 45 million copies, likely outgrossing the $411 million that The Bodyguard film made at the box office. Much like Saturday Night Fever and Dirty Dancing, the movie soundtrack made more money than the movie.

Clive’s was tied to Whitney’s through her ups, downs, and transgressions. Even until her final moments, when she passed away the night before the 2012 Grammys. Clive hosted his annual pre-Grammys party that night, in the same hotel that Houston had died hours earlier. The decision to host the party will be an ongoing polarizing debate among Houston’s fans, but the connection these two had is arguably more impactful than any other artist and executive in recent memory.

The next generation

Clive’s best signings are discussed often, like Janis Joplin and Whitney Houston. But his most underrated moves are the other record labels and executives he empowered the thrive on their own terms. Babyface, L.A. Reid, Dallas Austin, Puff Daddy, and others all started their record labels thanks to investment from Davis.

Davis didn’t fully understand soul, hip-hop, or new jack swing, but he partnered with those who did and saw great success. It’s similar to Def Jam’s strategy in the 1990s and 2000s. The hip-hop label was able to work with Jay Z’s Roc-a-Fella, Ja Rule’s Murder Inc., and Ludacris’ Disturbing The Peace. The bigger label gained more points toward revenue and market share, which the artist-led sub-labels gained distribution from the soon-to-be major label in Def Jam.

Listen to the rest of the episode for more on:

- Clive Davis’ M&A deals
- the issue with “spray and pray” for record deals
- Milli Vanilli, LFO, and other forgettable signings by Davis

Chartmetric Stat of the Week - Higher Love

In our episode, we talked about whether Steve Winwood's 1986 song "Higher Love" gets as much radio play as the 2019 cover version by Kygo and Whitney Houston. Winwood's version has had over 36,000 spins on terrestrial radio in the last 365 days, compared to over 35,000 spins for the Kygo and Whitney versions. It's close!