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Joe Smith Appreciation: Late Exec Wasn't Afraid of Going Digital as Labels Winced at CDs, Napster

Joe Smith
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Honoree Joe Smith attends the 2nd annual Billboard Power 100 Cocktail Reception at Emerson Theater on Jan. 23, 2014 in Hollywood, Calif. 

Back in 2006, when Joe Smith was just 78 years old, I called him about a book project. I wanted to know if the record business had thoroughly botched MP3s and the Internet, as many Napster defenders and pundits had suggested for much of the previous decade. At that time, labels had only recently emerged from their defensive stances, having licensed their catalogs to iTunes after years of declaring that digital music equaled theft and that it needed to be stamped out. It was almost impossible, even then, to find label executives who admitted they should’ve made a Napster deal when they had the opportunity.

Smith, a lighthearted, funny character in an industry of hard-charging cutthroats, had retired as chairman of both Warner/Elektra distribution and EMI at the time. He gave a surprising response. "The music industry has choked itself so many times by failing to recognize any changes in technology," he explained over the phone. "It's run by a group of guys who were raised in the atmosphere of a distribution system, pressing plants and all that came with it."

He recalled the early '80s, when label execs were terrified of the compact disc, which Sony, Philips and others were trying to push as efficient and lucrative replacements for the vinyl LP. "The industry resisted it. The conservatives said, 'We have too much invested in these pressing plants,'" he told me. "Eventually, common sense ruled, but it was not an easy sell." He further said that, more recently, he served on the board of technology startups who were frustrated that labels wouldn't license even one or two tracks for digital distribution. "The record industry wouldn't listen to anybody," he said in his gentle voice.

Smith's point of view emboldened me to interview other retired execs, from A&M's Gil Friesen to Sony's Marc Finer, who agreed the industry was running in the wrong direction. Their comments became the backbone of my 2009 book Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age. I spoke with Smith several times, once at his enormous mansion in a ritzy section of Los Angeles. I learned more about him over time, reading his excellent book, "Off the Record," full of in-depth interviews with stars from Woody Herman and Tony Bennett to Tom Petty and Robert Plant, and soaking up knowledge of Smith’s wit from Frederic Dannen's investigative music-business classic Hit Men. At an event in 1973 filled with mobbed-up execs, Dannen says then-Elektra chief Smith responded to a prominent heckler: "I said either tonight I'm a hit, or tomorrow morning, I get hit, one or the other."

He told me war stories over the year, about signing the Grateful Dead in the '60s after attending one of their happenings in a suit and tie, about how he "signed a kid backstage at the Indiana State Fair -- and he turned out to be Garth Brooks." But my favorite stories were about the business itself, particularly execs who were hilariously ignorant of new technology. At one point in the early '80s, when labels were fiercely debating the CD, Elektra founder Jac Holzman, known for being innovative and tech-savvy, took a question from the late Jay Lasker, head of a smaller label called ABC-Paramount. "Sometimes," Lasker said. "I turn on the television set and I get a lot of clouds. Is there something else I'm not plugging in?"

Smith paused the story for comic effect, then recalled: "We were aghast. I said, 'He's not the repairman! He can't answer why you get clouds on your television set!'"

Smith, who died earlier this month at 91, was not a tech genius himself but he had a knack for guessing what could save the business, whether it be a musical talent or a piece of technology. As opposed to many of his peers, he would at least entertain the idea that they might be helpful. Referring to Napster and other nascent digital-music companies, he told me: "It seemed like you ought to give them a shot."


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