Sony luring Lang Lang away from Deutsche Grammophon for three million dollars got about as much press as classical music gets these days. Very little mainstream, but it resounded in the small and money-challenged world of those who make classical music recordings
For me – a member of that small group for 25 years – I thought it was a reflection of another time. A better time, a time when classical music actually drove a company to prominence in the global world market. And as a young turk on the PolyGram side, Sony’s new entrée into the classical music business was a challenge aimed right at us.
In the late 1980s, Sony purchased Columbia Records, and sent their soldiers into the US retail field armed with significant money and the message was that they were going to grow to the size of PolyGram’s classical division in five years (that would be a quadrupling of size). We were full of bluster and dismissed their intentions as talk, as if you could replicate the greatness of the Deutsche Grammophon, Philips and Decca catalog in five years.
Sony hired Peter Gelb, who had shuttled Vladimir Horowitz, Kathleen Battle and a plateful of projects to DG in the prior decade. Then Sony went after the jewels in the PolyGram crown – they got Horowitz, made a video deal for Karajan concerts on laserdisc (remember that?) and were chasing Sir Georg Solti hard. PolyGram and Sony’s drive to one-up and own the classical business (at that point at an astounding 10% US market share) resulted in a series of truly ridiculous contracts given to artists who only had to come within three blocks of a Sony A&R exec to tack on a 10 or 15 extra recordings in their PolyGram negotiations. No exaggeration – one artist signed an 88 record deal.
But all it really did was to kill the goose that laid the golden egg – the upper management of Sony, led by several lovers of classical music, eventually saw that the new recordings wouldn’t be profitable until 20 years down the road, if ever, and pulled the plug. The market sagged, and PolyGram was tied to contracts that suddenly looked astounding in their foolishness, and had to spend major money to live up to the commitments that kept those artists in the fold when Sony came a-callin.
So the whopping sums of money evaporated – and they were truly amazing once upon a time, evidenced by Philips Electronics authorizing PolyGram to spend 200 million dollars in 1988 on two pop labels, A&M and Island – money provided by the success of the CD format, and the success of selling 20 year old classical recordings on CD. And when Philips took PolyGram public, the first line in their prospectus was about their dominant role in recording and exploiting highly profitable classical music recordings.
So what is different and what is the same about Lang Lang’s big payday?
Same companies again, the younger brother Sony looking to take the handsome older brother (now Universal Classics) down a peg.
But we’re not in 1988 Kansas any more. Sony’s signing is a strong, supportable strategy, nicely timed. If they stay disciplined they have hurt DG, and it will take time to recover. Even if Lang Lang leaves you wanting (which is my opinion of his talent), Sony kneecapped DG’s growth strategy in the most important market in the world for the next decade. And they will make excellent records, and the overall company sees Lang Lang as a cultural figure, not just a pianist from the Far East, and Sony is far better positioned as an electronics company with a range of products to exploit this than Universal Music Group.
Sony still has to execute the plan; I only give them a 50/50 chance, depending on if the executives can not be overly consumed with Lang Lang’s US market standing, which has probably peaked, or at least, plateaued. If they keep themselves focused on the artist’s standing in the Far East, they will succeed and possibly succeed for generations.
Don’t weep for DG – they’ll still be here. The fact that they didn’t match Sony’s 3 mil is more an issue of company structure (Sony can use Lang Lang to sell a range of products; Universal Music is owned by a company that kind of wants to be a telecom but might really be a public utility) than a lack of monetary commitment to classical music. But, with executive turmoil at the top of UMG bound to affect the decision makers at Universal Classics, there might be a chance for Sony Classics to establish themselves as more than the also-ran they really are in most markets outside the United States.
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