From Variety, word that CBS is adding a digital music label called CBS Records. (Technically, no records appear to be involved.) The idea: use CBS shows, iTunes and broadband to pitch the up-and-coming artists—and use the artists for network music, thus keeping down licensing costs. Music-license fees have been climbing at a rate of about 20% a year, in large part because studios now routinely license music for Internet distribution.
The unit will report to Nancy Tellem, president of CBS Paramount Network Television Entertainment Group. In typical convoluted fashion, Jack Sussman, the EVP for specials, music and live events, will work with the label but won’t be formally involved. Larry Jenkins, who has his own management company, will help set up the label but as a consultant. Next step: actually hiring someone to run the label and a staff of eight or so. Meanwhile. CBS already has three artists—Boston rock act Senor Happy, Will Dailey and indie-rocker P.J. Olsson—and plans to sign another five in 2007. Tellem told Variety: “The cost of entry is so low that it was a great way of setting up a new model for a record label. If we can lower music costs while gaining an additional revenue stream, it’s a win-win.”
WSJ: The new CBS Records will be a far cry from the highflying major label that then-CBS Inc. sold to Sony Corp. for $2 billion in 1987. After the sale, Sony didn’t keep the name CBS Records.
CBS will at first sell its music through Apple’s iTunes, but may on a case-by-case basis strike distribution deals for CDs with other labels, distributors or retailers.
AP: CBS did not pay anything for the right to use the CBS Records name again. The original terms of the sale only gave Sony the right to the name as long as it was being actively used, said Jack Sussman.
More info in the release here.