Major Labels Still Not Too Clear On The Belt-Tightening Concept

Today, Forbes ran a piece on the new trend among major labels, which involves putting out albums by stars who have had platinum-level success in the past–a tactic that’s worked for smaller labels like Koch. One of the divisions profiled was the new Sony BMG division Burgundy, which released America’s Hear And Now in January and is putting out albums by Donna Summer and Chaka Khan. Now, both those women are fine artists, but we weren’t the only ones to find Burgundy’s setup in need of some inflation-adjustment:

Burgundy usually limits itself to one-album contracts with its artists, sometimes with options to release more music. And because it has a full-time staff of only about two dozen employees, it expects to put out no more than two or three albums a year.

Twenty-four full-time employees, two or three albums a year, each of them selling about 50,000 copies. (America’s Hear And Now was their collaboration with Fountains of Wayne and Nada Surf members; it has sold 46,000 copies) Isn’t the indies’ relative smallness a big reason for this model’s success? One-album contracts are a fine way of minimizing overhead, but you’d think that a less bloated payroll would be a better long-term solution–or, at the very least, free up enough cash to give a deal to Miquel Brown.

Old Stars, New Music, New Money [Forbes]