CBS spins digital record label

Network getting into music business

The Eye is adding an ear.

CBS will launch a digital record label in January, signing artists with the goal of breaking them via television show placement, iTunes and the Eye web’s broadband channel.

CBS Records will be launched primarily utilizing the existing infrastructure of CBS Entertainment and CBS Interactive. It will operate as a newly created unit within the entertainment division based in Los Angeles. The label will debut with three artists — Boston rock act Senor Happy; Will Dailey, a John Mayer-ish singer-songwriter, also from Boston; and P.J. Olsson, an established indie-rock artist — and is looking to sign another five acts in the first year.

Larry Jenkins, head of his own management company, L J Entertainment, and a former publicity and marketing exec at Capitol Records and Columbia Records, will consult for CBS Records during the primary launch phase, identifying talent and assisting with A&R administration. He will be working with Nancy Tellem, president of CBS Paramount Network Television Entertainment Group, under whose aegis CBS Records will fall.

Jack Sussman, CBS’ exec VP for specials, music and live events, will work closely with the new label, though he won’t have a formal role.

Tellem said a confluence of factors — including rising music-licensing costs and the ease with which music can be distributed digitally — made it the right time to launch CBS Records.

“The cost of entry is so low that it was a great way of setting up a new model for a record label,” Tellem told Daily Variety. “If we can lower music costs while gaining an additional revenue stream, it’s a win-win.”

CBS is looking to hire a label head and another eight or so staff members for A&R, marketing and liaising with various partners.

Goals outlined for the new arm include using music from CBS Records on primetime and daytime series on CBS, the CW and Showtime; selling CBS Records releases via iTunes and setting up physical distribution on a case-by-case basis; incorporating songs from CBS Records artists in CBS Paramount-produced programs; and placing videos on CBS’ Web channel innertube, YouTube and wireless carriers.

While CBS has made inroads with superstars — getting Pete Townshend to OK the use of “Who Are You” as the “CSI” theme, for example, just a few years after he nixed the use of the phrase “teenage wasteland” for Fox — the label will be dedicated to up-and-comers. Each of the three artists on the label has already released indie albums.

“We have tremendous flexibility,” Jenkins said. “If we have an artist who doesn’t want to wait until they have 12 songs to post, we might put up four songs — even before the first show that uses one of them airs. If all four appear in shows, we can group them and present them as an album (of songs with TV placements).”

Of the first three signings, Dailey’s “Grand Opening” was heard in an episode of “Jericho” and Senor Happy’s “Love If You’re Real” will be featured in tonight’s episode of “Ghost Whisperer.”

Execs said there is no existing template for the operation. The Eye got directly involved in the promotion of an artist early this year by featuring Teddy Geiger in the skein “Love Monkey.” Series was canceled, however, before the release of Geiger’s Columbia debut, which was moved from “Monkey’s” fourth week to three months away after the debut.

Sussman believes coordinating a project such as “Love Monkey” would go much smoother within the CBS Records structure.

He also was quick to point out that the label’s music will be used promotionally in various platforms but that it would not receive any priority status at other Viacom-owned properties, specifically Infinity Radio and MTV Networks’ channels.

“There is no quid pro quo between us and TV or us and radio,” Sussman said. “It’s not going to happen. The idea of doing this now, this being a unique moment in time, is a perfect-storm moment. Traditional labels have had a hard time with their rosters, and TV producers want more and more music. We’re uniquely positioned to have a low cost of entry. We’re not gearing up a behemoth.”

Tellem noted, “We don’t have any of the huge baggage the other labels have built up. We can look at the business with fresh eyes.”

In recent seasons, pop music has become integral to series such as “Cold Case,” “Scrubs,” “Gilmore Girls,” “The OC” and others, but elevated music-licensing costs have cut into profits when the shows are sold to cable or into syndication and have stalled DVD plans. While having an inhouse label is not a sure-fire solution, CBS will create revenue streams it has never enjoyed.

Execs did not discuss publishing arrangements with CBS Records artists.

CBS did not have to pay for the name, which has not been used since the early 1990s. Columbia Records owned CBS in 1927 and sold it two years later. In 1938, CBS purchased the diskery and used the name CBS Records as well as Columbia until the unit was sold to Sony in 1988.