Despite a highly competitive marketplace during the past 12 months, Arista Records posted its sixth consecutive record-breaking year by logging $420 million in sales for the fiscal year ended June 30.
The impressive tally stems from a relatively small number of new releases compared with competitors, nearly 41, and extensive artist development led by label prexy Clive Davis.
Along with its joint-venture partners LaFace and Bad Boy Entertainment, and the Nashville outpost, Arista is among the industry’s best-run operations, accompanying each release with an extensive set-up process and execs overseeing its radio promotion and marketing arms.
Arista, which nabbed $400 million on sales of about 45 albums last year, is known for squeezing the most mileage possible out of every album, and fosters market share and sales growth internally, rather than through often expensive acquisitions.
The label’s two main joint ventures, with LaFace Records and Bad Boy Entertainment, consistently bear fruit for Arista. The label recently enhanced its deal with Bad Boy CEO Sean Puffy Combs to reflect his contributions to Arista’s bottom line.
Though the label doesn’t disclose profits, Arista’s tally usually hovers about 15% to 20% of gross revenues.
“We continue to break new artists, and we take established artists to new peaks,” Davis told Daily Variety. “We also pride ourselves on our leanness and making each album that we release count.”
The totals come as Arista parent BMG Entertainment is poised to announce record earnings for its fiscal year ended June 30, in which the success of Arista and other conglom-owned labels played a significant role.
“From a creative standpoint, Clive’s ears are incredible, and every bit as cutting-edge and fresh as they ever have been,” Strauss Zelnick, prexy/CEO of BMG Entertainment North America, told Daily Variety. “From a business standpoint, Arista has set the standard for taking a limited number of shots and (making the most of each). Which is a recipe for success in the entertainment business.”
Ushering in sales
Arista’s sales boom was helped by such acts as Sarah McLachlan, whose “Surfacing” disc has topped 3 million units domestically, Puff Daddy & the Family, LaFace’s Usher, whose “My Way” is nearing 4 million units stateside, and Aretha Franklin’s “A Rose Is Still a Rose,” which is on its way to 500,000 units.
Country acts Brooks & Dunn and Pam Tillis added to the Music City coffers, as did a “best of” set from Alan Jackson.
Sales of albums from the Nashville outpost, led by Tim DuBois, typically contribute about 10% to 12% of Arista’s overall sales totals.
Arista also made a chunk of change with sales of singles, such as Usher’s “You Make Me Wanna'” and Next’s “Too Close” — both of which spent months on the charts — and practically anything from McLachlan’s disc, including “Building a Mystery.”
The acts are also known for being long-term residents on the chart, and Davis is particularly pleased about McLachlan’s ascension into the triple platinum stratosphere as evidence of a long-term artist development strategy that is paying off.
The label also benefits from extensive radio airplay for its artists, primarily on top-40 stations — a charge led by Arista’s promotion big-gun Richard Palmese.