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Music tech guru says Web is not the enemy

Elektra Records founder Jac Holzman signed The Doors and pushed the adoption of the compact disc, but he has no time for music people who just want the Web to go away.

Jac Holzman
Jac Holzman says "We have to be free enough with our music to permit people to adapt it for their own purposes."
Warner Music Group

The Internet is a killer of art--or at least that's how a couple of former rock 'n' roll gods see it.

John Mellencamp, known for such '80s hits as "Jack and Diane" and "Hurts So Good," last week said the Web is the most dangerous creation since the atomic bomb. Stevie Nicks, the Fleetwood Mac songstress, concluded in an interview this week that the "Internet has destroyed rock."

Jac Holzman, the man who discovered The Doors, founded Elektra Records, and nudged the big recording companies into adopting the compact disc, considers the Web and says: "I think the music industry has a bright future."

Wow, that's quite a contrast in views. The difference is Holzman has witnessed most of the industry-shaking technologies during his six decades in the music business--and he's not panicking.

This year, the 79-year-old celebrates Elektra's 60th anniversary, and at a life stage when Holzman's biggest trouble might be choosing the right 9-iron, he's helping to search for answers to the music industry's burning digital questions. He has said in the past that there were those in the record business who didn't think he was relevant any longer, but Holzman is back in the thick of it. Warner Music Group CEO Edgar Bronfman Jr. sought him out, hired him as a senior adviser, and sees value in the context Holzman can provide.

"I love the way Jac approaches the intersection of music and technology--through the lens of opportunity," Bronfman said.

At spotting opportunities, Holzman has a notable record. As a 19-year-old, Holzman started Elektra with $300 he received at his bar mitzvah. The label would later go to sign such acts as Queen, Judy Collins, The Stooges, and Jim Morrison. After Holzman sold Electra to Warner Communication (a forerunner of Warner Music Group and Warner Bros. Pictures), he became WCI's chief technology officer. In that role, he helped oversee some of the company's film and TV ventures.

"We met right around the time when Napster came together, and I said 'There are opportunities and there are potholes. How are you preparing for a digital future?' He said to me, 'Jac, I just want it to go away'."
--Jac Holzman

When Jack Valenti, the chief of the Motion Picture Association of America, was trying to kill video recorders and comparing them to the Boston Strangler, Holzman was steering WCI into the home-video market. With cable TV he recognized its potential early and contributed to the development of pay-per-view programming.

In music, Holzman saw the rise of the LP, 8-track tape, DAT, compact disc, MP3, and BitTorrent. After all that, new technologies don't spook him. On the contrary, he says many of these technologies helped make a lot of artists and industry people rich. When it comes to the Internet and digital distribution, Holzman is confident music labels can capitalize on them too. He says they really don't have a choice.

"I was having lunch with a very dear friend of mine [in the record business] sometime around 2000," Holzman said during an interview this week with CNET. "We met right around the time when Napster came together, and I said 'There are opportunities and there are potholes. How are you preparing for a digital future?' He said to me, 'Jac, I just want it to go away.' Well, you can't continue that conversation."

It's hard to imagine that anybody would want to put Holzman out to pasture. At a time when the industry is trying to make sense of the Internet, wouldn't it make sense to have people around who have a history at capitalizing on technological advances?

Holzman recounts the meeting where he introduced the compact disc to some of the label chiefs, including Ahmet Ertegun, the founder of Atlantic Records, and Mo Ostin, who headed Warner Bros. Records. Holzman said that what eventually appealed most to some of the leaders was the money they could earn by reselling their catalogs in the new format. While the CD proved to be a financial boon, Holzman recognized much later that by selling the discs to the public, the record labels were essentially placing digital-master recordings into every home.

Holzman, second from the right in the back, signed The Doors after seeing them at the famed L.A. rock club, the Whiskey A GoGo. Doors Photo Archive

That proved to be a liability when CD burners arrived on the scene and enabled people to make high-quality, unauthorized copies to share with each other via the Web.

"I didn't see that coming," Holzman said mournfully. "I knew that CD burners were out there, but when companies began putting them in computers...that surprised me."

On Napster
If Holzman's advice to Bronfman sounds anything like the opinions he offered during our interview, here's what he might be whispering into the CEO's ear.

Holzman suggested that the big labels goofed when they sued Napster out of existence. At that point, the rise of the CD had left the industry without an effective way to sell individual songs. Before the CD, the 45-rpm vinyl disc was the perfect singles vehicle. The costs of manufacturing CDs, however, made that format more suited to selling full albums, according to Holzman.

"With Napster, it would have been easy to proliferate singles," Holzman said. "You would have had no manufacturing costs. You would still have the value of the single as a calling card for albums and you could have sold [songs] for something like 79 cents, made it affordable. You would have had ability to count because all of the transactions went through a central server at Napster, unlike peer-to-peer where you bypassed servers. Now, would P2P still have happened? Yes it would. But we would have established a principle of being paid for digital music."

On fair use
Holzman agrees with some of the arguments made by Lawrence Lessig, the academic who has called for making copyright and trademark laws less restrictive.

"I think Lessig has some good ideas," Holzman said. "We have to be free enough with our music to permit people to adapt it for their own purposes and to create new works out of the building blocks of our music. I know that will drive most of my fellow record company people up the wall."

He said he thinks that the lawsuits filed against accused illegal file sharers by the Recording Industry Association of America, the trade group representing the four largest music labels, was a mistake. He also believes, however, that artists and record companies deserve to be compensated.

"I think we need to be paid for our music," Holzman said. "I think we are entitled to something from the ISPs. They have been getting a free ride on our music for a long time."

If some former marquee acts are wringing their hands about the future of the music sector, Holzman said he's encouraged by signs that the top labels are beginning to get their digital feet under them.

"I don't think anybody is afraid anymore," Holzman said. "I'm looking at all the labels, and I know them all and I've sat down with all their digital guys. Everybody is embracing digital technology, but they're just trying to figure out how to make it work for them."