AND WHILE WE'RE ON THAT SUBJECT: Most record companies say they have stopped doing business with independent promoters. But several labels, including CBS and A&M; Records, issued statements last week leaving room to maneuver. CBS said it would "substantially curtail" its use of independent promoters, while A&M; said it had suspended its relationships with "various" outside promoters.
Label execs refused to elaborate on these distinctions. However, several industry sources, who asked to not be identified, explained that some record companies may continue to use outside promotion firms to work album-oriented (AOR) records and adult-contemporary (AC) records. (Industry experts point out that the majority of controversy surrounding independent promotion has focused on firms handling mostly Top 40 records, not AOR or AC records.)
Independent promotion sources also noted that the vague language of some record company announcements left open the possibility that some labels could revive the use of outside promotion--but at reduced prices. A major complaint of record execs has been the enormous industrywide cost of independent promotion, which has been estimated at between $60 million and $80 million per year.
"What these cut-off announcements have done is give labels the leverage to go back to using independents, especially AOR and AC-oriented firms, but not spend as much money doing it," said one independent promotion exec. "We've already heard talk from record label representatives about 'restructuRing' their relationship with us, which we see as a euphemism for us going back to work at lower prices.
"No one's mentioned any specific timetable--it could be weeks or months. But the option is either going out of business or restructuring on their terms, so I think the choice is obvious."
Other industry sources added that some record labels may also continue working with independent promotion firms by making funds available to artist's management companies, who would in turn, hire the outside promoters to work individual records themselves.