War against Web tops music biz 'screw-ups' list
March 12, 2008
The talent scout who turned down the Beatles has long been credited with committing the music industry's biggest gaffe.
But Dick Rowe's billion-dollar boo-boo has been beaten to the top spot on Blender magazine's list of the "20 biggest record company screw-ups of all time" by the failure of record companies to capitalize on the Internet.
The major labels took top dishonors for driving
"The labels' campaign to stop their music from being acquired for free across the Internet has been like trying to cork a hurricane--upward of a billion files are swapped every month on peer-to-peer networks," Blender said in the report, which appears in its newly published April issue.
Rowe came in at No. 2 for politely passing on the Beatles after the unpolished combo performed a disastrous audition in 1962. Beatles manager Brian Epstein later claimed the Decca Records executive had told him that "groups with guitars are on their way out," a comment that Rowe denied making. He went on to sign the Rolling Stones.
Motown Records founder Berry Gordy was No. 3, because he sold the money-losing home of the Supremes and Marvin Gaye for about $60 million in 1988. The sum was dwarfed the following year when A&M Records sold for about $500 million.
And in 1990, David Geffen got about $700 million for Geffen Records. (Gordy did retain ownership of the lucrative Motown copyrights.)
Geffen Records grabbed two spots on the list: No. 11 for suing Neil Young in the 1980s because it did not like his uncommercial musical direction; and No. 12, for pumping a reported $13 million into a Guns N' Roses album that still has not seen the light of day after more than a decade of work.
Other hall of shamers included Columbia Records at No. 10, for dumping Alicia Keys and rapper 50 Cent before they became famous; and Warner Bros. Records at No. 13 for signing rock band R.E.M. to a money-losing $80 million contract in 1996.