Elektra Entertainment Group

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Elektra Entertainment Group

75 Rockefeller Plaza
New York, New York 10019-7284
U.S.A.
Telephone: (212) 707-3000
Fax: (212) 956-7284

Division of Atlantic Records Group
Founded: 1950
Sales: $65 million (1998)
Employees: 110
NAIC: 541990 All Other Professional, Scientific and Technical Services

Elektra Entertainment Group is a division of Atlantic Records Group, a business unit of Warner Music Group, the largest privately held music company in the world. Both maintain their headquarters at 75 Rockefeller Plaza in New York City. Elektra is comprised of a number of labels, including Asylum, EastWest, and the flagship Elektra imprint. Elektra has recorded such legendary artists as the Doors, the Eagles, Joni Mitchell, Linda Ronstadt, and Jackson Browne. In more recent years, Elektra's roster of artists has included Metallica, Tracy Chapman, Phish, and Bjork.

Origins in the Postwar Era

The man behind the creation of the independent Elektra record label that grew into today's Elektra Entertainment Group was Jac Holzman. He was born in 1931, the eldest son of a well-to-do family residing in New York City's Upper East Side. His father, a Harvard Medical School graduate, was a highly successful doctor who, according to his son, was domineering and quick to dismiss him as a failure. Holzman ran away from home a number of times, and at the age of 12 actually made it to Trenton, New Jersey, before he was found in a hotel and brought back to the family's Manhattan apartment, where the one saving grace was top-of-the-line phonograph equipment. To escape his unhappy home life, Holzman became obsessed with music and electronic equipment. His grandmother headed the National Council of Jewish Women and did political commentary on a local station. He often accompanied her and developed an interest in radio, even trying his hand at building crystal radio sets. His father indulged his passion to some extent, buying him as a 15th birthday present a semi-professional disc recorder, equipment which Holzman then used to record bar mitzvahs and weddings. Despite his father's judgment that the boy failed to measure up to his exacting standards for a firstborn son, Holzman managed to graduate from high school by the age of 16 and start his university studies in Annapolis, Maryland, at St. John's College. What especially appealed to Holzman about the school was its electronics lab, in reality a Quonset hut supplied with an array of army surplus equipment. At St. John's, he also came to appreciate folk music, which would become a staple of the Elektra label years later. During his first two years in college, the idea of starting his own independent record label began to take root in Holzman's mind. The concept came to fruition in the fall of 1950, at the start of his junior year, when he attended a recital at school featuring soprano Georgianna Bannister, who performed a number of poems set to music composed by John Gruen. Impulsively, he asked Bannister and Gruen if they would record the songs on his nonexistent record label, and they accepted.

Holzman quickly cobbled together a record label. He took $300 from his bar mitzvah bank account and convinced a classmate, an ex-serviceman named Paul Rickolt, to match that amount. For the label's name, Holzman drew on his classwork, settling on the Greek demi-goddess Electra, who was associated with the artistic muses. Holzman ultimately used the Germanic spelling "Elektra" for the name of his record label. He then substituted the Es with sideways Ms as an inexpensive way to create a distinctive look for the company name that could also serve as a logo. According to company lore, Holzman made his first entry in the Elektra ledgers on October 10, 1950. To establish an off-campus mailing address, he then bartered a free copy of his first album for the right to make use of Wally's Tobacco Shop in Annapolis. Recording for the album was conducted during a three-hour session in a New York studio in December 1950, and the resulting tapes were taken to RCA Records to be mastered and custom-pressed. Unfortunately, surface noise all but drowned out the music. Holzman personally oversaw the next attempt, and in March 1951 the fledgling label's first effort, New Songs (EKLP-1), was delivered to Holzman's dormitory. The 500 records were stored in an empty room, which became Elektra's de facto shipping department. To sell the album, Holzman turned to a so-called national distributor, Jay Wesley Smith, who agreed to take 100 copies if he would also receive an additional 50 for promotional uses. Although New Songs was well received by obscure musical publications, Smith sold few copies. Those that he did sell came out of his free promotional copies. The 100 that he "bought" were all returned for credit, so that Elektra in its first outing took back more records than it actually sold.

Despite this inauspicious start, Holzman left college (at the urging of a dean who suggested he take a year off "to get his bearings") and moved back to New York to follow his dream. He found a cheap walk-up in Greenwich Village and for a while helped to make ends meet by installing sound systems, mostly for family friends. He then started his own record store, taking over the lease of a local sheet music store, which he renamed the Record Loft, although it was actually a street-level shop. A large portion of his stock was devoted to folk music, prompting a number of area "folkies" to visit the store to browse and chat. One of these customers was George Pickow, who was married to a Kentucky folk singer, Jean Ritchie. After listening to her, Holzman decided to make her Elektra's second recording artist. Unlike EKLP-1, Ritchie's collection of Appalachian mountain ballads, not only received excellent reviews, it also sold well, perhaps as many as 2,000 copies. More importantly, the success of the record validated Holzman's decision to launch his own record label. Because it was inexpensive to produce, Holzman concentrated on recording folk music.

Early 1950s Expansion

In 1952 and 1953, Holzman recorded nine more folk albums, then in 1954 released his first blues album. No longer a pipe dream or a hobby, Elektra now required all of Holzman's attention, and in 1954 he closed the Record Loft and moved Elektra's offices from the shop's backroom to new accommodations at 361 Bleecker Street. A year later, he bought out Rickolt's interest for $1000, but the business remained very much a shoestring affair, the sales of one record barely able to finance the production of the next. Holzman turned to a St. John's classmate, Leonard Ripley, who came from wealth, and over the course of the next two years Ripley invested some $10,000 in the business. Although Ripley was now a partner in Elektra, the accounting, such as it was, and other business matters remained the sole responsibility of Holzman, who at this stage was paying himself about $11 a week. In spite of Ripley's financial help, Elektra continued to operate on a tight budget, a money-losing proposition that lacked the resources to achieve any level of significant growth.

In 1956, Holzman refined a concept that proved to be instrumental in turning Elektra into a profitable business: the sampler. For some time, record companies had been providing radio stations with compilations of their artists, and in 1954 Elektra itself produced a ten-inch sampler for radio play. Holzman's new idea was to create sampler albums for the retail market, selling at the bargain price of $2. Because the sampler helped to spur sales of their individual albums, Elektra artists now agreed to waive royalty payments on the use of a limited number of songs in samplers. Record dealers also agreed to a short discount for similar reasons: the cheap price led to greater sampler sales, which in turn led to increased sales for fully discounted individual albums. As a result, a sampler could make a profit for Elektra ranging from $10,000 to $20,000, while at the same time effectively promoting the label's other titles. In 1956, Elektra moved into the black ink for the first time.

In 1958, Holzman was able to buy back a 100 percent interest in Elektra and moved to larger offices on West 14th Street, on the northern border of Greenwich Village. It was here that Holzman built his first studio. As the company moved into the 1960s, its catalog was still very much dominated by folk music. Holzman also eased away from production responsibilities, now devoting most of his time to the signing and management of new artists. Although he generally had a strong sense of the world of popular music, Holzman made a significant mistake in 1962 when he decided that the New York folk scene had played itself out and moved to Los Angeles to establish a West Coast office for Elektra. In the early sixties, Bob Dylan suddenly burst onto the New York folk scene, debuting with a highly acclaimed first album. Dylan was a natural fit for Elektra, but Holzman on the West Coast had missed out on the singer-songwriter's emergence in Greenwich Village. He promptly shuttered the Los Angeles office and returned to New York.

Company Perspectives:

The ruby is a stone of telepathy. Prized as talisman and divinatory tool it dispels nightmares when placed under a pillow and guards against storms if touched to the four outside corners of a house. The Alumina of its blood line projects rather than receives energy; a double refraction that according to arcane lore harmonically vibrates to the note E. An E for Elektra: She of the seven Pleiades daughter of the Oceanus mother of the Harpies. The bright and brilliant one: A muse transformed four decades ago to celebrate music that most mind-reading of the arts. A record's label is hardly as important as the artisans who give it reason for being: yet with few exceptions, it helps to bridge the chasm between creative impulse and realization offering continuity with an oversoul and family tree all its own. An emotional geography spread over time, place and sheer chance it stands like a great center of trade at the crossroads of inspiration and commerce merging in a marketplace of ideas. Our Town: Folks move in, folks move out, humming and hymning life's soundtracks.

In 1963, after moving Elektra's offices uptown to the Rockefeller Center neighborhood, Holzman proved that he had not lost his touch for innovation when he started up a classical music label, Nonesuch. One night, while he waited with his wife for friends to join them at a restaurant located across the street from Carnegie Hall, Holzman thought back to his college days when he faced the difficult choice of picking one of two classical albums to purchase because he lacked the money to buy both. Classical albums in the United States cost in the $5 range in 1963, leading Holzman to daydream about bringing out a line of specialty records priced as cheaply as paperback books. He wrote out the basic business plan on a paper tablecloth and the next day took a jet to Europe. In London and Paris, he met with various record companies, offering a $500 advance plus royalties for each album that the European labels had no intention of attempting to market themselves in the United States. He quickly signed several properties and targeted more sources for future material. Holzman was so convinced that his idea would work, and fearful that larger rivals would emulate his idea and bring their financial muscle to bear before he could secure more material to build a larger catalog, that he grew secretive, giving his new venture the name of Nonesuch because, as he stated, "if we were ever asked we could truthfully say there was no such project." Indeed, the idea proved popular, and Nonesuch quickly became a cash cow for Elektra.

New Leadership in the 1970s

Elektra moved into popular rock and roll music in the 1960s. In May 1966, Holzman first saw the Doors, signed them, and a year later the company had its first number one single on the pop charts, "Light My Fire." The album was also highly popular and over the course of the next three decades would sell in excess of 45 million copies. On the strength of its success with the Doors, Elektra once again established a Los Angeles office. However, the days of being able to launch an independent record label in your dorm room were long past, and Holzman took note of the changing conditions. For instance, Atlantic Records, the rise of which mirrored that of Elektra, was bought by Warner Brothers in 1967. Holzman ultimately sold Elektra to Warner Communications in 1970. He stayed on to run the label, in the next couple of years signing such notable talents as Carly Simon and Harry Chapin, but in 1973, at the age of 42, Holzman, believing that he was starting to repeat himself, decided to retire, turning over the reins of Elektra to others.

In 1974, under the Warner umbrella, former agent and manager of Crosby, Stills & Nash, David Geffen, merged his Asylum label with Elektra. Without Holzman, Elektra lost its bohemian edge, growing into a more traditional record label. It added such pop acts as Tony Orlando & Dawn and the Cars, heavy rockers like Queen, and branched into punk as well as country music. In 1983, the company took on new leadership in the form of Bob Krasnow. The former sales rep for Decca Records and manager/producer for Captain Beefheart, Krasnow had launched his own independent record label in 1968 called Blue Thumb Records, which he once told Holzman he planned to grow into the next Elektra. Instead, he moved on, eventually becoming vice-president of talent for Warner before taking charge of Elektra on January 1, 1983. Over the course of the next 11 years, Krasnow was to transform the Elektra, Asylum, and Nonesuch labels into a true entertainment group, adding a classical music division as well as a video company. At the same time, he returned Elektra to its roots, moving the company's headquarters to Rockefeller Center.

After a long run of success, Elektra began to experience some difficulties in the early 1990s. By 1994, the company's market share among U.S. labels dipped to just 2.8 percent, with revenue under $200 million. In the same year, Krasnow quit during a management shakeup at Warner in which Atlantic co-chairman Doug Morris was put in charge of all Warner music labels. According to press reports, Krasnow balked at the idea of reporting to Morris. In any case, he was replaced by Sylvia Rhone, the first African American woman to head a major music company. She was given the mission of building Elektra's sales to the $300 million level in three years.

Raised in the Harlem section of New York City, Rhone graduated from the University of Pennsylvania's Wharton School with a BS in economics. She became a trainee at Bankers Trust Company in New York, but after a year quit in order to make a career in the music industry. She got her foot in the door by taking a secretarial position at Buddah Records but quickly advanced to the position of national promotion coordinator. After serving in that same capacity for small independent label Bareback Records, in 1976 she moved to ABC Records, where she became regional promotion manager, a position she later held at Ariola Records. In 1980, she moved to Elektra and for three years served as northeast regional promotion manager in charge of special markets. For two years, she then became director of marketing. As a result of this varied experience, she was well prepared in 1986 to become vice-president and general manager of Atlantic's Black Music Operations. Some 18 months later, she was named senior vice-president for the label. She was instrumental in the rapid growth of the Black Music Division: from March 1988 to May 1990, revenues increased by 400 percent.

Taking over Elektra, Rhone was just as successful as she had been at Atlantic. In just two years, she was able to reach the $300 million goal for Elektra. According to Billboard, in November 1996, Elektra commanded 5.47 percent of album sales, making it the sixth-largest label in the United States. Of particular achievement was the revitalization of the career of singer-songwriter Tracy Chapman and the emergence of rock group Phish. In addition, Elektra's heavy metal act Metallica would become the biggest selling band of the 1990s.

Key Dates:

1950:
Jac Holzman founds Elektra records.
1956:
The company releases the first sampler album for retail sale.
1963:
Nonesuch label is launched.
1970:
Holzman sells Elektra to Warner Communications.
1983:
Bob Krasnow becomes head of the company.
1994:
Sylvia Rhone replaces Krasnow.
2004:
Elektra becomes part of Atlantic Records Group; Rhone and other Elektra executives are replaced by a management team headed by new Atlantic chairman Jason Flom.

New Ownership in the 1990s

With the rise of digital technology and the Internet, the music business as a whole was presented with a host of challenges in the new century, and the industry braced itself for a period of what promised to be revolutionary changes. A number of restructurings ensued, and in March 2004 Elektra was recast, along with the Atlantic and Lava record labels, as part of a single entity called Atlantic Records Group. Rhone and other senior executives were ousted in favor of a management team headed by new Atlantic chairman Jason Flom, Lava's founder, who was known for developing such 1980s acts as Twisted Sister and Skid Row and in the 1990s signed artists Tori Amos, Matchbox Twenty, and Kid Rock. The mandate of the new Atlantic group was to devote less resources to promotion and return to its core missionto identify and develop new talent. Elektra's Rhone was clearly a survivor and would likely find a new position in the industry. So too, Elektra, after more than 50 years in operation, would likely continue to find a way to build upon its storied legacy.

Principal Competitors

BMG Entertainment; Sony Music Entertainment Inc.; Universal Music Group.

Further Reading

Davis, Andrea, "Rap-sody & Blue," Executive Female, May-June 1990, p. 44.

Holzman, Jac, Follow the Music: The Life and High Times of Elektra Records in the Great Years of American Pop Culture, Santa Monica, California: FirstMedia Books, 1998, 441 p.

Jeffrey, Don, "Exec Shift Rocks Warner Family," Billboard, July 23, 1994, p. 1.

, "Sylvia Rhone Leads Elektra's Turnaround," Billboard, November 9, 1996, p. 1.

Ed Dinger