CNN PINNACLE
Profile of Clive Davis, Chairman, CEO of J Records
Aired June 15, 2002 - 16:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
WILLOW BAY, HOST (voice-over): Clive Davis, the hit man who changed the course of music history, the force behind Janis Joplin, Santana, Bruce Springsteen, Whitney Houston, Alicia Keys and dozens more.
(on camera): How do you know when you've got a star on your hands?
CLIVE DAVIS, CEO, CHAIRMAN, J RECORDS: You get the tingle up and down your spine. That still happens.
BAY: You get a tingle in your spine? You feel it?
DAVIS: I just feel it.
BAY (voice-over): At an age when most CEOs have exercised all their options, Davis is beating the odds as CEO of the nearly two- year-old label, J Records.
DAVIS: It's about the music, it's not about buying marketshare.
BAY (on camera): It's all in the ears.
DAVIS: I think so.
BAY (voice-over): Chairman and CEO, J Records, Clive Davis and the sounds of stardom, next on PINNACLE.
(COMMERCIAL BREAK)
BAY: At just 21, Alicia Keys is one of today's hottest recording talents, a platinum-selling sensation who swept this year's Grammies, winning five, including best new artist.
UNIDENTIFIED FEMALE: Alicia Keys.
UNIDENTIFIED MALE: Alicia Keys.
ALICIA KEYS, SINGER: To Mr. Clive Davis. I don't even have to say anymore.
BAY: Legendary music impresario Clive Davis, chairman and CEO of J Records, a joint venture with German media giant, Bertelsmann AG, has done it again, backing a talented artist, sending her straight to the top of the charts and delivering profits to the bottom line.
In this case, the label is J Records, nearly two years old and already electrifying the industry. The singer and the label may be new, but, after 36 years of triumphs, Davis says the essence of the business is very much the same.
DAVIS: I've been at three companies all my life. I grew up at Columbia Records. I spent 25 years founding Arista, and now with J, so that's -- the common thread is to surround myself with those that share my passion for music. There's a mission zeal here from people who live, eat, breathe music. The fact that we're here 12, 15 hours a day is not a chore, because we frankly love what we do.
BAY (on camera): Do you still put in that many hours?
DAVIS: Oh, without question, yeah.
BAY (voice-over): Just two years ago, Davis was putting in marathon days at Arista Records, where he'd been president since 1974, selling records and cultivating legends. The multi-platinum Grateful Dead. Whitney Houston, whose 11 number one hits were produced by Davis. Aretha Franklin. Davis jump-started her fading career, and she won five Grammies.
2000 was shaping up to be a banner year for Davis. He became the first music executive ever inducted into the Rock'n'Roll Hall of Fame. At the Grammies, he received an award for lifetime achievement, and celebrated one of the greatest comebacks in recent music history, a comeback engineered by Davis himself.
Carlos Santana, who hadn't recorded a hit in 17 years, walked away with eight Grammies for his best-selling album, "Supernatural." And Davis won his first Grammy as a producer. But more than just winning awards, Davis and Arista were churning out hits and delivering big profits with artists like Toni Braxton.
DAVIS: We were the record company of the year. And the label probably had done over $1 billion in sales with very, very healthy profit margins.
BAY: Business may have been booming at Arista, but Davis and the industry were in for a shock. Top executives at its parent company, Bertelsmann, wanted to make a change at the top, moving 67-year-old Davis out of the recording studio and into a corporate office, replacing him as president with his young protege, L.A. Reid.
(on camera): Is it true that one day at a meeting, you were informed that they were considering replacing you, moving you over, up?
DAVIS: In fairness to them, because I think they've been very maligned, and, of course, even the current Bertelsmann and BMG have made it clear, they never felt that I was replaceable. They always understood my worth. The existing administration felt they could do it on their own and tried to entice me to take a corporate worldwide chairmanship.
BAY: Why not do that? Why not take a nice, fancy title, a nice, fancy office?
DAVIS: Because that's not what I do. I love music. I love the artists. I love developing careers, and that's what I love. I'm not into a corporate chairmanship.
BAY (voice-over): Davis was clear in that meeting, and publicly, he wasn't going anywhere. As a furor raged around him, with artists and executives publicly defending the legend, Davis sprang into action. He agreed to leave, but on his terms. He wanted his own label.
He said that within 24 hours, he asked for, and got, an unprecedented $150 million to get the company off the ground, nearly 90 percent of his senior management team, and 10 of Arista's artists, five of whom were platinum or multi-platinum. In short, everything he needed to create what he calls "an instant major."
DAVIS: It wasn't that the artists rebelled and I got this offer three months later. I got the offer within 24 hours. If we guess right with the artists and their careers and the breaking of Alicia to eight million, the breaking of O-Town to over two million at the new artist level, means that we're right up there in the finals with Columbia, Atlantic, RCA, whomever.
BAY: As usual, Davis seems right on the money. Alicia Keys did break eight million. O-Town did break two million, and, in another Davis-engineered comeback, Luther Vandross has gone platinum, again.
(on camera): You've had, what, four albums debut on the top 10. You've certainly out-performed the industry, and you've done it in tough times. How were you able to do that, and do it so quickly?
DAVIS: The key to this business is really success ratio. So often you find those throwing 10 up against the wall and bragging about the one that is successful. I've tried over the years to really fine-tune that success ratio, so that we sign very carefully, very selectively.
BAY: Are you breaking even at this point? Are you close to making a profit? When do you expect that to happen?
DAVIS: Our business plan did not have us having a profit for, I would say, into the fourth year. We are incredibly ahead of business plan. Well more than half of our albums thus far are either gold, platinum or multi-platinum, so that we are hopeful to be profitable on a worldwide basis really by the end of this calendar year.
BAY: By the end of 2002?
DAVIS: Yeah.
BAY: Good luck. That would be quite an accomplishment.
(voice-over): How Clive Davis came to be the most accomplished hit man of our time, when PINNACLE returns.
(COMMERCIAL BREAK)
BAY: 1967, the Monterey Pop Festival. Peace and love were in the air, and so was a new kind of sound.
DAVIS: I went there. I never signed an artist before. All of a sudden, the guitars were amplified, and there was a whole new sound of music there. Whether it was Big Brother and the Holding Company, whether it was Jimi Hendrix, it was music that I had never really anticipated.
BAY: And neither had the industry, but Davis knew he was hearing the sounds of a revolution.
DAVIS: I signed artists like Janis Joplin, right out of that festival.
BAY (on camera): Is it fair to say that was really the birth of your ear, or the recognition on your part that you had this gift?
DAVIS: It's fair to say that that was the birth of a gift that I never knew that I possessed, yes.
BAY: You know, when I read about your childhood -- you grew up in Brooklyn, you were a Dodger fan, you liked stickball. But nowhere does it say anything about a deep and abiding love of music when you were a kid.
DAVIS: I don't think I had a deep and abiding love of music when I was a kid. Did I like music? Yes. Did I have any sign that I wanted to be a part of music? No way. No, I was going to be a lawyer.
BAY: Law was your way out?
DAVIS: Yeah.
BAY (voice-over): The way out would prove more challenging than young Clive could imagine. He lost both of his parents at 18, one to a heart attack, the other to a cerebral hemorrhage.
DAVIS: Up until the time that my parents were alive, I always felt protected. It toughens you, it enables you, because you force yourself to go on. So that when other challenges take place in one's professional or personal life, you reach down from within to be resilient.
BAY: Davis proved so resilient, he graduated from NYU, Phi beta Kappa, magna cum laude. With a degree from Harvard law, he joined a corporate law firm in 1956. In '58, he joined a bigger firm, but still found himself frustrated by the work, and jumped at an opportunity to work for one of the firm's biggest clients, CBS. In 1960, he became general attorney for one of their record divisions, Columbia.
(on camera): What was your reaction to the music business when you got your first really up-close look at it, as a lawyer?
DAVIS: I loved it from the beginning. I never knew anything about the music business, but I did what I do today. How do I become better at what I do? So, if there were areas of law that I didn't know anything about, like copyright or antitrust law, I immediately went to law school at night.
BAY (voice-over): In just seven years, Davis was named president of CBS Records, making his way in a new role, and, within a year, after the Monterey Pop Festival, making history, bringing a reluctant CBS into the age of Aquarius.
He signed a who's who of rock'n'roll: Blood, Sweat and Tears, "The Boss, Bruce Springsteen, Billy Joel and many, many more. But in 1973, Davis' run of success at CBS ended in disgrace. Amid allegations of misuse of company funds, he was fired, escorted out of the building, and CBS filed a civil suit against him. It was eventually settled out of court. The federal government also charged him with tax evasion. Five of six charges were eventually dropped, but Davis did plead guilty to one count. It was one of the darkest moments of his career.
(on camera): What did you learn from that experience?
DAVIS: First, you learn patience. Because, through an unbelievable confluence of events, one's integrity is being questioned, and until there's an investigation, you have to remain silent. You also learn that challenge or change can be healthy and good. And it does build the fiber of character.
BAY (voice-over): Davis also learned his proven track record could get him out of a jam. Columbia Pictures had an ailing label, Bell Records. Davis signed on as president and rechristened it Arista. He hit a home run right off the bat. He took a skinny kid named Manilow from Brooklyn, changed a song title from "Brandy" to "Mandy," and struck pop gold.
DAVIS: "Mandy" went straight to number one, and it was nominated for two Grammies, and it launched the career of Barry Manilow.
BAY: There, he perfected the art of matching singers with songs. And the result? More than 25 years of mega-hits. TLC's "Waterfalls" was one.
But no matter how great his success, he's still listening for the next big thing.
(on camera): Would you be confident in your ability to hear the sounds of a revolution today?
DAVIS: I approach life not being confident of anything, so that I really believe that you got to earn it each time out. I make sure that I listen to every creative talent as he, she, or they, burst on the scene. To keep my ears current and not think that the last success is going to earn the next success.
BAY (voice-over): A new century, a new label. So how does the hit maker do it? When PINNACLE returns.
(COMMERCIAL BREAK)
DAVIS: Ladies and gentlemen, Puff Daddy. Sean "Puffy" Combs.
BAY: Just how does Clive Davis do it? Spot a star, create a hit, launch a legend. Sure, there are those famous ears, but to hear Davis tell it, it all starts with a little tingle.
DAVIS: You've got to believe, as a performer, that that artist is capable of lifting an audience up by its seat, so that you could say that you get the tingle up and down your spine. That still happens to me.
BAY (on camera): Is that so? You get a tingle in your spine?
DAVIS: I feel it.
BAY: You feel it?
DAVIS: I just feel it.
BAY (voice-over): But Davis' career is built on more than an extraordinary ability to find and nurture talent. He also knows how to spot a hit song.
DAVIS: To me, it's a lyric that can touch you with a melody that just lingers on in you always.
BAY: Sometimes, those songs are created by artists who write their own material.
With other artists, Davis will find hits for them, as he did consistently at Arista for Whitney Houston. Once he's confident about the music, Davis throws his marketing might and a whole lot of money -- these days, about $1 million -- into the mix. His one-of-a-kind industry muscle went into high gear with the launch of his latest sensation, Alicia Keyes.
DAVIS: To meet her is to fall in love with her, and that was the kernel of what our so-called introduction or marketing campaign was -- let people discover for themselves Alicia Keyes.
(BEGIN VIDEO CLIP, "OPRAH WINFREY SHOW")
OPRAH WINFREY, HOST: Some of music's hottest singers are performing here today.
(END VIDEO CLIP) BAY: With more than a little help from Davis. His Rolodex is as golden as his ear for talent. He sent Oprah Winfrey a note to introduce her to Keys.
After the "Oprah Show," Davis packed his bags and took his newest diva on a European tour, something he does only for a select few.
DAVIS: Whether it was London, Munich, Paris, wherever she performed, people wanted to tout, herald this incredible new talent. We played a role. I'm proud of that role. But she delivered, unbelievably.
BAY: Then, Davis booked Keys at the biggest pre-Grammy party in Hollywood, his own.
DAVIS: No one had ever heard "Fallen" before, and she tore the audience upside down. "The Tonight Show" happened to be in that audience.
So, between "The Tonight Show," the week before the album came out and Oprah, the reaction was so electrifying that her album, without major air play, no hit single at the time, the album entered the chart at number one.
BAY (on camera): What's different now about launching the career of an Alicia Keys than it would have been for Janis Joplin?
DAVIS: The prime difference that comes to mind today is video, because other than that the essentials are identical.
One keeps reading about how the business is so different, with the mergers and with technology. They're missing the point. The business is the same. It's all about finding the right artist.
BAY (voice-over): At this year's pre-Grammy bash, Davis unveiled his latest star-in-the-making, the 15-year-old Mario. And he's just signed 25-year-old rocker Gavin DeGraw.
But, let's face it, he may be tapping his toes to a twentysomething beat, but he's turning 69 this year. So when will it be time to turn J Records over to a new generation?
DAVIS: I'm only in it if the report cards are good. If the report cards show that I have peaked in my creative powers, I'm going to gracefully bow out. But right now, it's like coming up with "E.T." and "Gone With the Wind" the same year. You don't quit when you have that kind of explosion.
BAY: Clive Davis, chairman and CEO of J Records, on this edition of PINNACLE.
(END VIDEOTAPE)
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