CBS Records Is Back, Jack

In a blast-from-the-past moment, CBS (NYSE: CBS  ) announced the relaunch of its historic CBS Records music division. Under its Columbia and Epic labels, CBS was a juggernaut in the music industry until it sold its labels to Sony (NYSE: SNE  ) in 1988. Some of the best-selling records of all time -- Michael Jackson's Thriller and The Eagles' Their Greatest Hits -- were the handiwork of CBS.

I'm waxing nostalgic over the news. While I was still in college, my band Paris By Air was signed to Columbia in 1987. After a short run at Columbia and then Sony, we wound up doing well on MP3.com on this side of the millennium, with more than 500,000 downloads before the site was shut down.

That digital tack will be a big part of the new CBS Records. The label's focus will be digital distribution through its own CBSRecords.com site, as well as through Apple's (Nasdaq: AAPL  ) iTunes. The company will ultimately outsource the CD production to third parties.

This certainly doesn't sound like the same prerecorded music titan of days gone by, but CBS is taking a smarter, more cost-conscious approach this time. Small contracts and bunt singles are admirable approaches to a dicey music industry that has been burned way too often when it shoots for the fences -- like when EMI had to pay $28 million to buy out Mariah Carey's contract.

So why go with CBS when popular unsigned artists can go it alone in this digital age? Well, for starters, CBS will be helping its artists by getting their music on popular CBS primetime shows. Other outlets include CSTV, The CW, Paramount's syndicated shows on other networks, and video distribution through CBS' Innertube offering. CBS was spun off by Viacom (NYSE: VIA  ) earlier this year, so it can't be too bad to have the parent of MTV and VH1 as a friend.

No, the majors like Warner Music Group (NYSE: WMG  ) and Vivendi Universal won't be quaking in their melodic boots over this announcement. However, CBS Records is back -- even if it's without its flagship labels. And that's a catchier tune than you may think.

Longtime Fool contributor Rick Munarriz has always loved his keyboards, whether they are synthesizers, pianos, or the computer kind. He does not own shares in any of the companies in this story. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.TheFool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 518123, ~/Articles/ArticleHandler.aspx, 11/27/2014 12:28:47 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement