GUEST AUTHOR BLOG: New book about MTV reveals music business’ “long history of doing incredibly stupid things” by Rob Tannenbaum co-author of "I Want My MTV: The Uncensored Story of the Music Video Revolution."
A reviewer described “I Want My MTV: The Uncensored Story of the Music Video Revolution” as “rip-roaring and hilarious,” because it brims with stories of outrageous, are-you-kidding-me? rock-star behavior, but another writer praised it as “the best book I’ve read on how the music business really works.”
Even though MTV made many strategic mistakes during the book’s span, from its 1981 launch through its first decade, they were still, at every turn, smarter than the record labels, whose relationship with MTV passed through four distinct phases, all of them unwise.
This is what happens when one company recognizes and accepts cultural and technological change, and another doesn’t.
1) Disdain. Record executives who heard MTV's pre-launch presentation acted as if it was the stupidest idea they'd ever heard. They didn't believe in the network, and a few refused to hand over their videos (which had already been paid for) because they didn’t believe it could profit them, even though record sales were in the doldrums. One executive admitted that when he heard what MTV planned, “I was like, What the f*** are you talking about?"
As with Napster and iTunes in later years, innovation in the record industry came from outside. (Steve Jobs was the smartest guy in the music business for the last ten years, and he wasn't even in the music business.) But the record labels weren’t the only skeptics: John Malone at TCI and Jack Gault at Manhattan Cable initially refused to carry MTV on their systems, and thought it would harm their operations.
2) Resentment. In 1984, MTV had its first profitable quarter. This enraged the record labels, even as their earnings rose — they viewed the channel not as a partner, but as a leech. U2's manager Paul McGuinness told us: "MTV designed a brilliant business, where they got free programming, paid for by record companies and artists, and they sold the advertising and made a lot of money. I mean, it was wonderful — for them." Tommy Mottola, president of CBS Records: "They built the biggest music enterprise in the history of the world off of our backs, off of our money... So we negotiated a big contract with them, and all the other record companies did the same, where they would pay us X amount of money."
But in exchange for these payments, MTV received exclusivity windows which allowed the network to snuff out emerging competitors. Al Teller, Tommy Mottola’s powerful predecessor, said: "I had no interest whatsoever in seeing MTV become a monopoly. I thought that would be a disaster... Warner Bros. and CBS were profitable, but RCA wasn't profitable, PolyGram wasn't profitable, Capitol wasn't profitable. So when MTV came to them with a check, they couldn't resist. MTV played its cards well. The music industry has a long history of doing incredibly stupid things at important moments in its history."
3) Dependence. In 1981, when MTV launched, record sales were at $3.9 billion annually, a lower figure than in 1978. In 1992, sales cracked $9 billion. Rarely has an industry benefitted so much from an innovation it initially rejected. Jazz Summers, an artist manger, told us, "After the mid-'80s, MTV knew they had the power. That's when the record companies said, 'Please play our record!' instead of 'Why should we give you our record?'"
Rick Rubin, who cofounded Def Jam Records as a college student, said, "The labels became dependent on MTV. Their entire marketing campaign was to make an expensive video." And MTV executive Abbey Konowitch said, "The scary thing...is the amount of power MTV had. We were perceived as a panacea for the record business. We were the crutch."
4) Indignation. MTV's ratings went up or down depending on whether or not a superstar like Michael Jackson or Madonna was releasing an album that year. So in the late '80s, network executives resolved to break MTV's dependence on record labels, by creating long-form shows, most notably the runaway hit game show "Remote Control." Videos started to become less central to MTV, which was bad news for the labels: MTV had thought to make themselves independent of the labels, but the labels never thought to make themselves independent of MTV. When MTV began to replace videos with "Remote Control" and "The Real World," the same labels who earlier wanted nothing to do with the network now felt betrayed.