All Things Must Pass – The Rise & Fall of Tower Records

The 2015 documentary All Things Must Pass, is a fascinating look at Tower Records. In 1999 Tower Records  had 1 billion dollars in sales, and by 2006 was forced to declare bankruptcy. All Things Must Pass is now playing on Showtime, and is well worth watching.

Tower Records $1 Billion in sales 1999, bankrupt in 2006

Tower Records $1 Billion in sales 1999, bankrupt in 2006

Russ Solomon started Tower records in 1960 as a young man who knew absolutely nothing about business. However, what he did have was tremendous people skills and a feeling for what customers wanted.  In 1960, other record stores were small with very little selection, high prices and snooty salespeople.  Tower Records came along with a huge selection and inventory, low prices and a friendly atmosphere.

Early days at Tower Records

Early days at Tower Records

The people Russ Solomon hired loved music and loved talking to the customers about music. They were also a little crazy.  Many of the employees at Tower Records came looking for work since no place else would hire them. They had long hair and tattoos. They wore crazy clothing. They has a few drinks at lunch (and sometimes at breakfast). Russ accepted them all, and they loved him for it.

Cocaine charged to Tower Records expense accounts as "hand truck fuel"

Cocaine was charged to Tower Records expense accounts as “hand truck fuel”

The 1960s & 1970s were the era of “sex, drugs, and Rock & Roll” and Tower records was there  for the ride. If the employees had to work late doing things like stocking the shelves or counting inventory they would buy “hand truck fuel” and charge that to the company. Everyone in management knew that “hand truck fuel” was code for cocaine. Tower Records began expanding across the country and across the globe.  Tower Records opened in Japan and was a huge success.

At  its zenith, Tower Records was the place to go, even for megastars of the music industry. Elton John would go to the Hollywood store with his chauffeur following behind him with a box.  Elton John would buy stacks of records and hand them to the chauffeur to put in the box. Elton John bought three of any record he wanted, since he needed a copy at each of his 3 houses.

Most people now assume that Napster is what caused the demise of Tower Records. However, Russ Solomon himself is quick to point out that this is not the case. After all, Tower Records of Japan is still thriving with 85 stores that do a booming business.

There were really three things that caused the downfall of Tower Records.

  1. The greed of the record industry. Every time a new technology came out, the record industry took the opportunity to raise the price even if the new technology actually meant lower production costs for the recording industry. From 1960-2006 the format went from 45s to LPs to 8track tapes to cassettes to CDs.  Each time the price to the consumer went up significantly. In addition, the recording industry made it impossible to buy singles. If you only liked 2 songs by a particular artist, the recording industry forced you to by the whole $20 CD with a bunch of other songs you didn’t want. No wonder people turned to illegal downloading as a protest.
  2. Tower Records started expanding without thinking first. In the beginning, the executives agonized over exactly where to open a new store. Sort of like an Apple store today, a huge amount of forethought went into each new store location. But Tower Records was so successful that they began to think that no matter where they opened it would be an instant success. They jumped into markets like Argentina without ever doing any market research first. The result was that a lot of the new locations were disasters with low sales.
  3. The death of CFO Bob Martin. He was the guy who from the beginning of Tower Records ran all the finances. He was the polar opposite of Russ Solomon. Every time Russ wanted to sped more money, Bob Martin would try to hold him back. They were a perfect Yin-Yang combination. When Bob Martin died, a new CFO let himself get bullied by Russ Solomon into large expansions and took out bonds to finance everything. It was the crushing debt load from these bonds that ultimately bankrupted Tower Records. (Japan was sold off as a separate entity which is why it still thrives today). However, even Bob Martin was not your typical CFO. During working hours he was all business, but at night he became a heavy-drinking, woman chasing party animal.
Director Colin Hanks

All Things Must Pass Director Colin Hanks

All Things Must Pass is directed by Colin Hanks and written by Steven Leckart and Steve Stevens.  It tells the story beautifully with fascinating footage and still pictures of the early days of Tower Records. It also has great interviews with Russ Solomon and many of the original employees from the early days. The ending scene will bring tears to your eyes. Russ Solomon travels to Japan to visit the Tokyo Tower Records mega store. As he walks into the Japan Tower Records headquarters he is greeted with applause by the hundreds of employees paying tribute to this man of vision.

 

 

 

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