Lenny

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When they write the history of the record industry, one of the highlights is bound to be Warner Bros. Records’ heyday in the 1970s and ’80s. Under the leadership of executives Lenny Waronker and Mo Ostin, the label was a creative hotbed where artists ranging from Eric Clapton to Prince to the Talking Heads churned out releases that not only took popular music in new directions, but sold millions of records as well.

For Waronker and Ostin, those days drew to a close several years ago when the label’s artist-friendly approach to the business seemed increasingly at odds with the corporate interests of Warner Bros.’ parent company, Time Warner Inc. In 1995, they left the label.

Now, Waronker and Ostin are getting a chance to recreate those heady times at DreamWorks Records, the 2 & #733;-year-old music division of DreamWorks SKG. The pair, along with Ostin’s son Michael, are again trying to place the focus on careful artist development, rather than the quick hit.

Whether that deliberate approach can work in the fast-moving, media-saturated ’90s remains to be seen. Just as with DreamWorks’ movie division, the jury is out on the label’s performance to date. While it has scored a number of critical raves notably with recent releases by Elliott Smith, Rufus Wainwright and the Propellerheads genuine blockbusters have been absent.

Waronker recently sat down with Business Journal for a rare interview, where he discussed DreamWorks Records’ strategy and the state of the music business in general.

Question: Almost three years after launching DreamWorks Records, you’ve had considerable critical success, but no huge sellers yet. Does that trouble you?

Answer: A record company, and almost any creative company, really is about having a point of view and a personality. Our concern now is the message that we’re sending to artists not to the business community. I want them to see we’re supporting interesting artists, that we’re not necessarily about following trends, but more about aligning ourselves with the artists who can start the next trends. That’s something that could attract other artists to the label.

It’s starting to feel like people are getting a sense of who we are. There’s nobody that sounds like Elliott Smith or Rufus Wainwright or the Eels. I don’t think we have anybody who doesn’t have their own very distinctive musical personality. When you’re trying to do that in a day and age when the record business seems to be about disposable quick hits and not so much about the long term it’s difficult, it’s harder. But long term, it feels like the way to go.

Q: How long before you need to post a bona fide, blockbuster hit?

A: I don’t know. We’re different here. We’re not like the other companies. We’re privately owned. And DreamWorks has a sense of reality in terms of the record business. They know what it’s going to take, and they support this approach. David Geffen built Geffen Records with this approach.

I don’t know what the time limit is. We’ve only been doing this for 2 & #733; years. And the reality is, it’s going to take five. You can’t come into this business and build something that has some stability in just two years. It won’t happen.

Q: With music, movies, video games, CD-ROMs and everything else, there are so many entertainment options out there competing for the same consumer dollar. How do you break through the chatter?

A: It’s really about having the patience to allow (artists) to have their voices. The stuff that has been the most successful usually has something interesting and new about it that’s what attracts people. Sure, you can do it with a ditty. We’re not against that I mean, we’re in the record business. If we feel like it’s a hit, we’ll put it out. But the real fun is developing an artist, where you know that every time they put out a record, it’s going to be interesting.

Q: But isn’t that at odds with the bottom line pressures of running a company?

A: It could well be. There’s a different sensibility at corporations. But we’re set up in a way where we have the time to develop.

Q: Does the need to show quarterly profits get in the way of creating artists who are going to be able to deliver more than one hit?

A: I think it creates a problem. I’ve seen it. I lived with it. The guys on top are under the pressure of the board of directors and the stockholders. That intensity filters down through the company, and everybody senses it. In the “good old days,” the goal was to get good reviews and sell 50,000 albums. Now, if you can get the same kinds of reviews and sell 100,000 records, you’re building an artist’s career. But people don’t think that way anymore. And I think that has to do with the three-month report card that they have to deal with.

Q: How is the relationship between DreamWorks Records and the DreamWorks film division?

A: So far it feels really good. The first soundtrack we did was “Small Soldiers.” Regardless of how it sells, it was an interesting collaboration between the film company and us. There’s a kind of synergy going on.

I think we’re going to be in good shape. DreamWorks Films will have a handful of releases every year that will be music-oriented films to some extent, and we’ll have hits that come that way. And if that happens it’ll be fantastic, because it allows us to take our time in the harder area, the pop area. So that’s going to be helpful, in terms of getting the so-called “quick hit.”

Q: You mentioned the “good old days” a minute ago. How has the industry changed in recent years?

A: In the old days, you had people who were really music people. When the record business wasn’t such a good business, when it was just a little business, people were in it because they loved it. Maybe they thought they could make a killing only back then, a killing wasn’t $100 million, it was maybe a million bucks. It was just as much about making great records that would scare your friends.

To say that doesn’t exist now would be silly. It does exist. The real artists are still out there, competing against each other in a positive way. What we’re trying to do at DreamWorks is create something close to how it was. At Warners it was great. The artists didn’t hang out together. But my sense was that the Talking Heads were pretty interested in what Prince was doing and Prince was pretty interested in what Eric Clapton was doing. What was Madonna going to be doing next? If that’s all in one family, it’s a neat vibe.

And I think that’s starting to happen here in a much smaller way. We’ll never be a big company. I don’t think that’s the goal here. We’ll always try to keep it small. The one change is that based on the marketplace, and all the things you have to overcome, you can’t be spread out, you have to be focused. There are so many things going on, if you don’t stay focused, you have no chance at all.

Q: What drew you into the music business?

A: I’ve been around music my whole life. My father was a musician. He started his own record company, Liberty Records. He started out with jazz records, odd novelty records. I was 14, and it looked good to me.

What was really great and I only just realized it is that he was a guy who had a point of view about music. He tried to create a vibe for his company, which was not unlike a lot of companies back then. These guys were thinking about their company, about what it represents. And because of that they attracted the artists.

Q: Do you spend much time in clubs, seeing new artists?

A: I leave that to the A & R; staff. I don’t want to be out there that way. The kids out there are much sharper. But I can hear stuff that has a special quality. I feel good about that. I still have a sense of what’s going to be special. But it’s good to have young people out there turning me on. We have a team here. If Mo and Michael and I decided we were going to do it all, it would be a mess. What we need to do is have a philosophy and a goal and trust our people to build a company and meet the standards.

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