The Motown Sound of Money

Motown'. boss Berry Gordy Jr. and the Supremes: lead singer Diana Ross (sitting). Mary Wilson (right). and Cindy Birdsong, the aptly named newest member. Motown's biggest moneymakers, the Supremes are moving deeper into the mass popular-music market with Rodgers and Hart songs and personal appearances at Miami Beach and Las Vegas.
Motown boss Berry Gordy Jr. and the Supremes: lead singer Diana Ross (sitting), Mary Wilson (right), and Cindy Birdsong, the aptly named newest member.Ross (sitting). Mary Wilson (right). and Cindy Birdsong, the aptly named newest member. Motown's biggest moneymakers, the Supremes are moving deeper into the mass popular-music market with Rodgers and Hart songs and personal appearances at Miami Beach and Las Vegas.
John Bryson

Yesterday’s eardrum assault is today’s most significant cultural phenomenon. Rock-and-roll, the music that emerged in the early 1950’s with a booming beat, clanging guitars, honking saxophone, and simple if not idiotic lyrics, has gone respectable. Once regarded by the adult world as yet another exasperating and unfathomable aberration of adolescence, it now has become the darling of the intellectuals and a communication link between generations. Leonard Bernstein interprets rock-and-roll on television; Wilfrid Mellers, a distinguished British music critic, analyzes it for the readers of Harper’s Bazaar; Lawrence Welk records rock-and-roll tunes; and rock-and-roll performers are common fare on network television.

This growing popularity of rock-and-roll music stems partly from the emergence and acceptance of Negro culture growing out of the civil-rights movement. The fact that a generation has grown up on this kind of music has also helped. But rock-and-roll’s popularity among adults reflects the enormous changes that the music has undergone during the past decade and a half. Originally a “white” version of Negro rhythm-and-blues or “soul music,” it has since incorporated strains from country-and-western music, Elizabethan folk songs, jazz, and the classics. It is being altered by electronic and acoustical manipulation, influenced by the effect of hallucinogenic drugs on thought and perception, and has developed into so many new, overlapping styles that rock-and-roll is too restrictive a label. The new music is better called contemporary or just plain pop.

These changes have made much of the music softer, blander, and more appealing to square, adult audiences who used to hate the coarser early variety that blasted up from basement playrooms. And while a torrent of junk still flows daily from recording studios, much of this new music is exciting, original, sensitive, and very intelligent. For adolescents, rock-and-roll has more relevance than any popular music of the past, and with this affluent group enlarged by a growing number of appreciative adults, rock-and-roll seems here to stay as long as any currently salable cultural commodity.

Salable it certainly is. U.S. record sales have grown continuously from $199 million in 1954, the year rock-and-roll first attained national attention, to $892 million last year, according to Billboard magazine. Although these figures include sales of all recordings—classical music, jazz, talk records—the biggest share of the gain has come from pop records.

Driven by the idea that newer is better, the popular-music market absorbs an enormous output of new product each year. This year the record industry will release about 7,500 new “singles,” individual records (45 rpm) with a different performance on each side. That means that around 15,000 different pop-music performances are competing for the attention of radio-station disk jockeys. Frequent playing on the air is about the only way to build demand, but competition is so great that even a record that catches on may come and go in a matter of weeks.

Though a record usually will recover its costs with sales somewhere below 20,000 units, about 70 percent of the single records released do not show a profit, and many of the failures don’t even come close. However, sales of a record that climbs quickly to the top of “the charts” can total one million or more copies. (The all-important “charts” are popularity lists published each week by the two industry trade papers, Billboard and Cash Box, which attempt to rank the 100 most popular single records according to surveys of air plays and sales.) Since the out-of-pocket cost of making a record is relatively small, a runaway hit can be highly profitable.

Most of the major record companies that have managed to survive in the pop-music market are subsidiaries or divisions of entertainment companies that give them access to motion-picture sound tracks, established stars, and, most important, capital. However, a small group of independent companies has managed to achieve and sustain prosperity. Among these, none has done as well for as long as Detroit’s Motown Record Corp. Last year Motown’s sales probably totaled somewhere around $20 million and the 1967 gross may go as high as $30 million. This puts Motown somewhere in a group of about eight record companies with sales in the $20-million to $50-million range but leaves it well behind the industry’s three leaders—Columbia, Victor, and Capitol. (Columbia and Victor, owned respectively by C.B.S. and R.C.A., and Capitol, a subsidiary of Britain’s Electrical & Musical Industries, will each sell about $100 million worth of records this year.) Unlike its major competitors, however, Motown produces only pop records and, in fact, has claimed for years to be the largest manufacturer of pop singles. Sales figures are trade secrets, so attempts by Atlantic (see box, opposite page) and others to refute this claim are greeted with shrugs at Motown.

At the source

More than any of its important competitors, Motown is as much a product as a producer of rock-and-roll. The company was founded in 1959 by Berry Gordy Jr. Like nearly all his performers, writers, and producers, Gordy was born and raised in a Detroit Negro district—the same environment in which the music itself has its roots. Today the company’s headquarters is still about a mile from the street corner where the city’s summer riots broke out.

Detroit has always had its share of musical talent, but it has no special characteristics that recommend it as the base of operations for Motown. Berry Gordy could have done as well in any city with a large Negro population. What Gordy brought to Motown was the ability to attract talented people in the Negro community and to recognize those tunes, lyrics, and audio effects that would appeal to white as well as Negro listeners. “Gordy,” one observer insists, “has the best ear in the business.” But even an ineffable instinct for spotting talent was not enough. The company grew out of Gordy’s ability to build and direct a highly sophisticated enterprise, “a factory-type operation,” he calls it, to manufacture artists from local talent, to release hit records almost as a matter of course, and to do the job in a firm, businesslike manner without interfering with the creative flow.

Now thirty-seven years old, Gordy dresses in the natty and costly attire that is a badge of show business, but he talks business without a trace of self-consciousness about either his race or the newness of his money. His self-confidence and his ambition rule out any condescension or false modesty. And while he may make more frequent use of the term “company president” to describe himself than another chief executive might, that seems only because he gets a palpable sense of pleasure from the power he wields in his business and in his industry. Yet Gordy can talk about himself with wry self-derision. He says frankly, “I have great respect for company presidents. I stumbled into being one.”

Gordy says he learned how to be a businessman “through osmosis.” Both of his parents ran their own small businesses when he was growing up; his mother was an insurance agent, his father was a plastering contractor. When Gordy left Detroit’s Northeastern High School twenty years ago, he embarked on a career as a professional lightweight boxer. (His 140 pounds are still so well placed on his five-foot-seven frame that he looks as though he were in training now.) He had fifteen fights, won twelve, lost one, and “was robbed on two.” Induction into the Army in 1951 ended his athletic career.

When Gordy got out of the Army in 1953 he made his first move into the music business by opening a record store in a Detroit Negro neighborhood with savings from the Army plus a loan from his father. “I loved jazz—Stan Kenton, Thelonius Monk, Charlie Parker—and I wanted to let people know I was modern, so I called the place the 3-D Record Mart. People started coming in and asking for things like Fats Domino. Pretty soon I was asking Who is this Fats Domino? What is this rhythm-and-blues stuff?’ I listened and ordered a few records by these people and sold them. Still all my capital was tied up in jazz, but jazz didn’t have the facts, the beat. I went bankrupt.”

Fats Domino, the singer Gordy didn’t know, was one of many talented artists whose recordings were listed in record catalogues as “race” music and, later, rhythm-and-blues. Most of these records were sold almost entirely to Negro buyers. But in the early 1950’s white singers, mostly country-and-western artists, began to record rhythm-and-blues songs, adapting and modifying the techniques of Negro blues singers. The music became known as rock-and-roll, and in 1956, the year after Gordy went bankrupt, Elvis Presley became the first rock-and-roll singer to gain national attention.

After closing the record shop, Gordy worked for his father for a while as a plasterer, but he preferred reorganizing the business to working at it. He left and went to work in a Ford assembly plant. He recalls, “I originated a lot of songs in my mind while I was working. They consoled me and helped me forget I was doing the same thing every day: move this, move that.”

A few of the songs that Gordy wrote were recorded by local groups. “Sometimes,” he recalls, “they got my ideas across but often they didn’t. So I began producing myself.” Gordy entered the music business with the most rudimentary low-cost operation possible. As an independent producer, he would rent a recording studio, hire musicians, and, at times, sing the songs himself. (Today the out-of-pocket costs of recording a two-tune disk run to about $1,000, but in those days, with Gordy himself as a performer, it cost somewhat less.) The products of those efforts were record masters, which Gordy then took to New York in search of a record company that would bring them out on its label and pay Gordy on a straight royalty basis—nothing in advance and 5 percent of net sales. “I’d be extremely happy when I placed a record, but when I got the royalties, they weren’t that much.” His first sale, a tune called Reet Peteet on the Decca label, earned him a profit of about $1,000. However, the independent record producer’s obvious advantage is no overhead, a fact Gordy has apparently never forgotten.

The distinctive sound of hits

During this period Gordy had begun to work with a young songwriter named William Robinson, then eighteen, who persuaded Gordy to try to manufacture and distribute his own records. The company was formed in 1959 with $700 put together by members of Gordy’s family. Soon after, Robinson, who is one of the most talented young men in the rhythm-and-blues field, wrote a new song called Shop Around, which he performed himself with a group called Smokey Robinson and the Miracles. Released late in 1960, the record became a hit; by February, 1961, Motown had sold one million copies of Shop Around.

On the business side, the company ran into a problem it hadn’t had as an independent producer—slow payment and even bankruptcy among its distributors. As a newcomer, Motown had to rely for the most part on small, marginal distributors to get its records to retailers. But as Motown began turning out hits, some of its distributors got carried away by success and overextended themselves as they tried to increase their staff and expand their premises to handle the new volume. When Motown tried to collect, the distributors were frequently out of money. One of Gordy’s sisters, the late Lucy Wakefield, took over the job of collecting the money and managed to get enough out of receivables to keep the company on its feet.

Meanwhile, Robinson and other Motown producers (including Gordy himself in the early years) were creating more hits and a distinctive sound—a lively, commercial modification of basic rhythm-and-blues that was aggressively promoted as “the Detroit Sound” and, later, when other companies in the city tried to capitalize on the name, as “the Motown Sound.” The sound resembles the output of other rhythm-and-blues companies. But even an outsider can occasionally recognize a Motown record without seeing the label. Robinson, Eddie Holland, Lamont Dozier, Brian Holland, and other songwriters and producers who work exclusively for Motown have all been with the company almost from the start. They take turns working with its whole roster of performers, and collaborate frequently and in different combinations. (Holland-Dozier-Holland is one of the most successful writer-producer teams in the record industry.) Moreover, the final decision, whether or not to release a record, rests almost always with one man, Berry Gordy. As a result, this somewhat isolated, tightly knit group has created an idiom close to the mainstream and yet with a distinctive family sound of its own.

From the start Gordy has viewed the company’s basic business as the production and distribution not merely of pop records but of hits. He refuses to sign contracts with singers and musical groups that require the company to release a minimum number of their records each year in order to keep their names before the public. Gordy feels that this practice—common in the industry—is self-defeating if it means releasing a record that won’t be a hit. Aside from the loss of reputation, the company is out the manufacturing and distribution costs. While most major record companies release five or more disks a week, Motown puts out an average of only a little more than one. But three out of four of its new releases appear on the industry’s popularity charts compared to a substantially smaller proportion of those released by even its most astute competitors.

Getting a record played on the several hundred radio stations that cater to teen audiences virtually assures profitable sales. In the early days of rock-and-roll, payola—bribing disk jockeys—was a standard procedure. But the scandals of the late 1950’s and the increasing sophistication of the audience have eliminated much of this bribery. Some stations prohibit their people from taking so much as a free lunch.

For a company such as Motown, the job of getting air plays rests with its own promotion men and those of its distributors. These men call at the stations to deliver new releases and a sales talk. But program directors, confronted with a flood of new releases, generally can add no more than a half-dozen new records a week to the top forty or so that constitute virtually all of their program content. Many stations will never program a new release until it has already achieved hit status elsewhere. Appearances by recording artists on television shows can help build a hit, as can displays and continuous playing in retail record shops. But air plays are crucial, and program directors are cautious. If they like a record by an unknown group or company, they still may not schedule it, holding off until it begins, in industry argot, to “break out” somewhere. (When promotion men cannot get a record played on a major rock station, they will try to get it on several smaller stations in the area to create the impression that it is breaking out, which it then may well do.)

The almost legendary fickleness of adolescents places a high premium on the speed with which a company can produce and bring out a record. It may take only an evening in the studio to turn somebody’s idea for a song into a finished master tape. If the number sounds like a hit, the rest of the process can be compressed tightly. Once Gordy approves release, Barney Ales, Motown’s sales vice president, takes over. Since record-pressing plants can stamp out disks by the thousands overnight, his staff can get the release to retailers in about ten days. A turntable stands alongside one of Ales’s phones, and if he is trying to move a record fast, he will play it over the phone to distributors and then take their orders. If stations in major markets begin programming the record, the disks will be flown, bused, even hand delivered to distributors and retailers. The company can often tell within a week after release whether the record will become a hit. Two weeks later it is possible to estimate how long and how well it will sell.

The next move is to turn out an LP album containing the same hit tune. Typically, albums have been the package for much of what the trade calls “easy listening” music, the less evanescent stuff like Lawrence Welk, Frank Sinatra, and as he and his audience have matured Elvis Presley. But albums produce higher unit profits; their manufacturing costs are relatively lower (around 38 cents for LP and jacket versus 10 cents for a single) when compared with manufacturers’ selling prices (about $2.25 for a pop album versus 42 cents or so for a single). And in recent years a combination of more aggressive promotion and rising affluence among the teenagers has made albums increasingly important sources of volume and profits to the pop segment of the industry. When a single record begins to look like a hit, the company will often bring out what is known as an “opportunity” album, an LP quickly put together to incorporate the best-selling single- its name prominently displayed on the cover plus enough other tunes already on tape or hastily recorded to fill out the disk. In such cases, promotion costs are minimal; the success of the featured single pushes the album. Ales says that Motown’s LP dollar volume last year accounted for more than half of total sales, though single-record volume also climbed. This year he figures albums may account for 70 percent of Motown’s volume. That virtually guarantees that net earnings will rise more rapidly than sales.

How to raise talent

With only the most cursory background in business, Gordy nevertheless has managed to fashion an organization whose premises, personnel, and relations with talent, though unorthodox, have been effective and profitable. His days as a marginal independent producer equipped him with a disdain if not a fear of physical overhead. While its competitors are often quartered in elegant style, Motown and its affiliates confine themselves largely to seven old houses on both sides of Detroit’s West Grand Boulevard. This divided, tree-lined street was once appropriately named, but for decades it has been a neighborhood of large, seedy residences, often converted to funeral homes and beauty parlors. Among Motown’s neighbors are the Sykes Hernia Control Service, the Ethical Hair Shop, and Your Fair Lady Boutique and Wig Room.

Gordy keeps talking about buying or building new quarters, but he doesn’t do anything about it. One former associate doubts the situation will change soon because, he says, Gordy “sees it as just a costly addition to the operation.” To get from reception to sales or talent development may require a walk across lawns and driveways or into a broad, heavily traveled street. But Motown people defend and even flaunt their curious setup by citing the informal creative atmosphere it provides. A visitor trying to thread his way into the right building will usually encounter a group of young production people and artists lounging on the stoops and lawns. The first impression is one of a struggling but lively Negro college.

The somewhat disheveled compound houses, in addition to Motown, three other integrally related corporations, every share of which Gordy himself owns. Jobete Music Co., in typical record-industry fashion, holds and markets the copyrights on songs Gordy and his talent write and record. (The company name is a kind of acronym of his three children. Hazel Joy, Berry, and Terry.) Hitsville U.S.A. owns the organization’s recording studios; one is buried in the Grand Boulevard complex, another is located a couple of miles north. And International Talent Management, Inc., a key unit, offers Motown’s contract artists every service they require from tax and investment advice to lessons on glooming, table manners, elocution, and choreography.

International Talent Management provides Motown with a corps of trained artists who not only turn out hits but who can perform effectively in public appearances that help promote sales as well as provide additional revenue. Moreover, most of these people were developed almost from scratch—the Supremes came to the company straight from high school. As a result, the company has not had to lay out big cash advances ($250,000 over five years is not unusual) to sign already established performers. Beyond these obviously lucrative results of I.T.M.I.’s activity, Gordy takes enormous pride in the way the unit has helped slum kids develop their talents and still avoid the impulsive high living and cruel exploitation that have plagued the lives of Negro performers and athletes. (Once they have been taught to pay their income taxes, I.T.M.I. usually advises them to invest in a house.) He talks with feeling about the bright boys in his high school (“brighter than I was”) who wound up in prison or dead because they didn’t have his breaks.

A family affair

That Gordy, a Negro, runs his own company in an industry still almost entirely white owned and operated manifests itself most clearly in the somewhat defensive personnel policy of the organization and in the paternalism of I.T.M.I. Motown’s payroll includes both of Gordy’s parents, along with sisters, brothers, and in-laws. Several of them have made major contributions to the growth of the company, some lent him his original capital, but all of them provided him with advice and companionship when he was starting out. Gordy concedes that he still favors Negro applicants for trainee and clerical jobs, “because they don’t get as many opportunities to do that kind of work.” And the creative and technical staff that makes the Motown Sound is mostly black. But those functions that involve regular contact with the white business world—such as sales, finance, and public relations—are mostly performed by white men.

Motown’s talent factory has developed some of the most popular artists in the business including Stevie Wonder, Marvin Gaye, the Four Tops, the Temptations, and Martha and the Vandellas. But the Supremes are easily its hottest product. The phenomenal international success of the Supremes stems from a dual force that is erasing many of the lines that until recently divided pop music. On the one hand, white audiences are increasingly responsive to music derived from rhythm-and-blues. On the other, artists, writers, and producers are creating records with material and delivery that is all but raceless. Moving with this trend. Motown has transformed three high-school gospel singers into a polished trio selling Rodgers and Hart songs to middle-aged whites and adolescent Negroes as well as to record buyers as diverse as the British and the Japanese. (Motown estimates that when one of its records sells a million copies, at least 70 percent of the buyers are white.)

Against the Beatles

The Supremes’ first million-selling record appeared in 1964, a notable exception in a year that the American record industry remembers for a far more significant event, the Beatles. “That year.” one record man recalls hyperbolically, “if you didn’t have the Beatles, you didn’t have anything to sell.” The Beatles—and the dozens of other British groups that quickly followed their invasion of the American market—played a major role in broadening the market for rhythm-and-blues. Atlantic Recording’s Jerry Wexler believes white teen-agers, especially girls, would not respond to Negro music sung by traditional blues singers “because they could not identify with them. But when four English boys promulgated a neutral image that has since become endemic, it was safe. The Beatles made it possible for white teen-agers to identify with a kind of rhythm-and-blues: they were sanitized, they didn’t sweat, and they were the right color.” That the Beatles were strongly influenced by American Negro music is a matter of history. Two of the tunes in their first album were recorded earlier by Motown.

The Beatles not only helped wipe out racial distinctions. They also attracted more mature audiences to rock with their infectious irreverence and their growing musical sophistication. What began as an adolescent cult that flourished in the privacy of transistor radios, has finally been taken over by parents. The Beatles’ latest album. “Sergeant Pepper’s Lonely Hearts Club Band.” is packed with wild aural experiment, drug-influenced lyrics, East Indian music, and quite literate if despairing poetry. Now in their mid-twenties, with untold and mounting wealth, the Beatles have become, as one of their members reflected, “old men.” Meanwhile, the circuit from Negro blues to white middle-class music seems about to close. This summer a record called .4 Whiter Shade of Pale, done by a white British group using a Bach theme and lyrics with references to “vestal virgins” and a tale by Chaucer, soared to the heights of the charts and did well even on strictly Negro radio stations.

Whatever way the market goes, Gordy is convinced that Motown will be able to stay with it. Recently the company has been signing new kinds of talent including white artists such as Chris Clark, Paul Peterson, the Underdogs, and the Messengers. But Gordy now wants to go beyond the record business and diversify into other phases of entertainment maybe including broadcasting stations and movie, television, and theatrical productions. When asked what Gordy knows about subjects so far removed from rhythm-and-blues recording, a former associate replied, “When I first met him, he didn’t know a common stock from a debenture, but you only have to tell him just once and he has it cold.”


The three men who run Atlantic Recording Corp: Ahmet Ertegun (left), forty-four, president, his brother Nesuhi (standing), forty-nine, a vice president, and Jerry Wexler (seated right), fifty, another vice president, with artist Aretha Franklin.Myron Ebrenberg-Scope
Myron Ebrenberg-Scope

SIDEBAR: Also, the Old Turks

The three men who run Atlantic Recording Corp.—Motown’s most astute competitor—have proved that being born in a Negro slum is not the only way for independents to succeed in the rhythm-and-blues business. Ahmet Ertegun (left), forty-four, president, his brother Nesuhi (standing), forty-nine, a vice president, and Jerry Wexler (seated right), fifty, another vice president, regularly turn out pop-music hits with such artists as Aretha Franklin, a brilliant young blues singer, seen above with the three men. (This year Atlantic has sold more than one million copies of two different Aretha Franklin records.)

The Erteguns, sons of a distinguished Turkish diplomat, first encountered American jazz and blues while traveling from embassy to embassy through Europe in the 1930’s. American Negro music was, as it often is, in vogue among European intellectuals, and the young men fell in love with the sound. When their father was posted to the Turkish Embassy in Washington, the two boys grabbed the chance to pursue their hobby of collecting American music on records. They toured the country, managed to amass 25,000 records, and made contact with other jazz and blues buffs including Wexler, a New Yorker who was then a reporter for Billboard. Like many other jazz buffs and critics, they wound up in the business. Ahmet started Atlantic in 1947. The company’s early records featured both jazz and blues artists, and its first hit was Drinkin’ Wine Spo-dee-o-dee, sung by Stick McGhee. Soon Atlantic began recording a long list of rhythm-and-blues singers including Ruth Brown, Ray Charles, and Big Joe Turner.

Like Motown, Atlantic has been consistently successful with rhythm-and-blues music that appeals to white as well as colored buyers. But Atlantic has also done well with such jazz artists as the Modern Jazz Quartet, Ornette Coleman, and the late John Coltrane, as well as such straight popular-music singers as Bobby Darin. Unlike Motown, Atlantic regularly works with independent producers and small companies in need of marketing and distribution facilities. Early this summer Atlantic set a record when eighteen of the 100 recordings on Billboard’s popularity chart were either its own productions or those of companies whose output it distributes. Even so, Motown’s policy of releasing only likely hits lowers selling costs and probably yields higher net profits.

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