When you start a business, what are your goals? To make money? To make a difference? To gain respect and recognition? Do any of your goals consider longevity? Does it matter to you if your business is around for 10, 30, or 100 years from now? Can your venture be a “success” even if it closes shop in the end?
I think a good example to look at (if you would rather not look at your own business), is the case of Motown Records. The history of Motown is well documented, so I won’t get into all of the details here. But basically, Berry Gordy, Jr. started Motown with an $800 dollar loan in 1959 to start the Tamla Record company. His motivation at the time: to make money. Well, more money then he was making just as a songwriter contributing to the coffers of other record companies.
Needless to say, the 1960s belonged to Motown (which became the dominant label imprint for the company). With dozens of singles making #1 not just the R&B charts, but the pop charts as well (denoting “crossover” success). Ironically Motown sold more records in the 70s, then they did in the 60s. However, they were still the most successful independent record label in America at the time.
So what exactly made Motown so successful? Well, it was a combination of factors really:
- Berry Gordy initiated a very goal-oriented, efficient way of making music. Each song was reviewed and was deemed hit worthy or not. Mr. Gordy wanted hits to be made, not just records. Once a pattern (or formula) was found, then that is what they liked to stick to. For this reason, the music of early Motown has a distinct sound, and rarely deviates from this formula.
- The market for pop music was integrating racially just like other social institutions in America at that time. Motown would have not worked in 1945 because the American public still operated in distinct social spheres that were delineated by race. So the ability to recognize the opportunity to capture more than just Black American record consumers was key.
- The product was appropriately presented. Motown actively made their music appeal to a larger audience; even to the point of not displaying pictures of the Black artists on the cover (like the original cover of the Marvellettes “Please Mr. Postman”). Then when Motown artists were ready to be seen, they were put through the “artist development” program at the label to make them some of the most refined, classy people in the industry; regardless of race.
Oh and of course, the music and lyrics were excellent. Without that, nothing else would have really mattered!
So where did Motown go wrong? Well contrary to popular belief, it was not when Mr. Gordy packed up the Detroit headquarters and moved out to Los Angeles in 1967. It also was not in the 1970s, when big names like The Jacksons and core professional staff like Holland-Dozier-Holland and the Funk Brothers were gone from the company. That is because any successful firm can have their pick of talent. And Motown still had loads of talent. You had The Corporation and Ashford-Simpson as songwriters. Los Angeles had no shortage of talented session musicians to play the music. So what really happened?
Well the reality is that Motown #1 enemy was time. That, and their ability to adjust to it. Motown came into the 1980s with a very outdated business model. The competition (major record labels) were now comfortable taking on Black performers to their rosters — now that Motown proved that Black music can be very profitable. Also Motown focused on hits and tight control over the product. However artists were looking for opportunities to innovate and grow. They wanted to collaborate with others and reinvent themselves if necessary (case in point: Michael Jackson). Also the promotion of music and artists had changed. Radio was minimized with the advent of MTV. Music mega-stars had not only records, but TV/movie appearances, toy lines and endorsement contracts. While Motown did venture into TV, movies, even promotional products; the focused was still firmly planted on producing profits for the record company, not fueling the greatness of their label acts.
In 1988, Berry Gordy sold Motown Records for $61 million. He had already made that amount many times over during the course of his ownership. Although today, Motown is just a small remnant of its former glory, it did make plenty of profits for its owners during its existence. But my personal take is that at some point, Mr. Gordy lost his way. He was behind the ball way too often when sitting at the helm. With the right approach and growth, Motown could have become one of the biggest record labels in America and still going strong today.
So what do you think? Would you consider Motown to be a success or a failure from a business perspective?