CBS Records returns for a spin
Execs see label's acts integrated into eye network showsCBS Corp. is reaching into its past for its latest business proposition by launching its own label, CBS Records, to be overseen by Jack Sussman, executive vp specials, music and live events at CBS Entertainment.
CBS Records is starting out small, with three artists, and plans to grow the roster to eight acts by the end of the label's first year. Likewise, staffing will be kept at a minimum, with five hirings expected next month and the possibility of five more in the first year. In addition to outsourcing some functions, the label will be a part of CBS Corp. and will draw upon the existing infrastructure of CBS and that of CBS Interactive.
Said Leslie Moonves, president and CEO of CBS Corp., "CBS is one of the most powerful entertainment brands in the world, and music represents a natural and complementary extension of our content assets."
CBS bought Columbia Records in 1938 and then sold its CBS Records business to Sony Corp. in 1988 for $2 billion in a deal engineered by then-label chief Walter Yetnikoff. While CBS is hoping to latch onto some of the magic it created during its 50-year stewardship of Columbia, the startup will leave the traditional record label model as the last step in its sales process. Instead, the new CBS will concentrate on building an imprint to take advantage of digital sales and distribution capabilities and the power of television.
"It's a unique moment in time," Sussman said. "While record labels are shrinking, consolidating and dropping acts, television wants more music integrated in its programming and in a bigger way. … In primetime television for one season on CBS, there were 2,200 unique song placements — and that's not counting daytime or shows that air any other outlets. Digital sales are getting bigger, and primetime television is still the best place to sell anything, even music."
CBS executives envision the integration of songs from CBS Records artists into the network's programming, with call-outs at the end of the shows providing artist and purchase information. Larry Jenkins, a consultant for the new label who runs his own management company, LJ Entertainment, said music will be sold through CBSRecords.com, Apple's iTunes Store and other digital or wireless merchants.
"Our artists will have access to an incredibly powerful medium — television — to drive music sales," said Nancy Tellem, president of CBS Paramount Network Television Entertainment Group. "Our television producers will have greater flexibility to use music as a creative enhancement in their shows, and our company will be able to reduce the network and studio's music licensing cost center while transforming it into a new revenue stream."
TV sources suggest that, thanks to sync licensing deals, if each artist gets enough songs placed in television shows, the record label could be at break-even before it sells its first download or CD. While the label will report to Tellem, the network will continue to use music by other record labels and independents artists as well, the executives said.
If digital sales warrant it, CBS Records will offer physical product. But executives at the company said they will do so sans long-term deals. Jenkins said the label will work with its artists and its artists' managers to decide what sort of distribution deals make the most sense. Sometimes that might mean the label will put the record out itself through an independent distributor, or it might mean going through an existing label or a retailer.
"We will do those deals on an artist-by-artist basis, and maybe even a project-by project basis," Jenkins said.
So far, CBS has signed Will Dailey, P.J. Olsson and indie rock band Senor Happy. Dailey was named best male singer-songwriter at the 2006 Boston Music Awards and will soon release his debut album "Back Flipping Forward." A song on that album, "Grand Opening," was featured on the Nov. 29 episode of CBS' "Jericho." Senor Happy's album "I'm Sorry" will be released by CBS Records next month, and one of the songs on it, "Love If You're Real," will be featured on tonight's episode of "Ghost Whisperer." Olsson has released three albums since his 1998 self-titled debut and is recording an album for the label.
Ed Christman is senior retail correspondent at Billboard.