MORE ARTISTS VENTURE INTO VIRGIN TERRITORY

V irgin Records.

That may sound like something Madonna would choose for a new record label, but it’s actually the name of one of the most powerful and prestigious recording companies in England.

Among the best-selling artists under Virgin’s wing back home: Phil Collins, Peter Gabriel, Simple Minds, Culture Club, Genesis, Bryan Ferry and Human League.

Virgin owner Richard Branson has finally decided to start his own American label, also called Virgin. Until now his company had leased the U.S. recording rights of some of his artists to rival companies here.

The fact that the American rights to many of Branson’s artists will eventually revert to the new company is one reason that the Virgin launching shapes up as one of the most dramatic moves in the U.S. record industry since MCA’s bid to revitalize its label with the 1983 hiring of supermanager Irving Azoff.

Virgin’s operation here has already benefited from its international connection by picking up singer-songwriter Steve Winwood, who was recently signed by Virgin worldwide. Winwood’s latest album for Island Records has sold more than 2 million copies in this country and received six Grammy nominations.

But the power of the international connection isn’t the only thing that has industry observers paying close attention to the new operation.

Branson also opened many eyes by naming Jeff Ayeroff and Jordan Harris as co-managing directors.

As senior vice president of artists and repertoire for A&M; Records, Harris either signed or helped nurture an interesting blend of commercial and critical favorites, including Simple Minds, Bryan Adams, Janet Jackson, UB40, Iggy Pop, Suzanne Vega and David + David.

Former senior vice president of creative marketing for Warner Bros. Records, Ayeroff is widely regarded as one of the pop world’s most imaginative image-shapers, especially in the video and advertising areas. Among the acts with whom he worked closely: Madonna, ZZ Top, the Police and Talking Heads.

Together, they represent a blend of pragmatic and creative instincts in a field that has begun to re-think the late-’70s trend toward elevating businessmen and attorneys to the top spots in record companies.

Ayeroff and Harris have already released their first Virgin album--the sound track from “The Mission”--and expect to release about two dozen more LPs by the end of the year.

In addition to Winwood, the roster already includes Culture Club, Warren Zevon, Heaven 17, Killing Joke and a flurry of new artists who’ll be making their U.S. debut this year.

“We are not starting from zero,” Ayeroff said, sitting with Harris in the conference room at Virgin’s headquarters in Beverly Hills. “That’s one of the things that attracted us. We have access to one of the greatest rosters in the business.

“If someone came to us and gave us unlimited funds, we could start a company, but we wouldn’t be able to release 25 albums the first year or have albums of the quality that we are talking about. You can’t find artists that fast. People want to see a track record. And Virgin has a name. . . .”

“Don’t get us wrong,” Harris added. “The most important thing for both of us is still discovering new talent. It’s not that we just want to go out and sign all Steve Winwoods or established artists. But we want to have the resources to be able to do that and the power that it takes to sign an act worldwide and have a worldwide company.

“I said this to Jeff, ‘The last thing the world needs is another record company unless somebody does it better or in a different style and offers opportunities that other people can’t offer.’ We felt the Virgin deal offered us this. The timing was right in the business and the timing was right in our careers.”

Ayeroff and Harris appear to be an unlikely team. Ayeroff, 40, is a big, flamboyant man with a reputation for a large ego, while the smaller, soft-spoken Harris, 33, has tended to operate on the theory that artists--not executives--are the ones who should do the talking in the record business.

But they worked together for years at A&M; and kept in close contact even after Ayeroff moved over to Warner Bros. in 1983. So Harris proposed a dual management concept when Virgin’s Branson approached him last year about heading up the company’s U.S. arm.

Both Ayeroff and Harris were lured to Virgin in part by the challenge of working with Branson, who largely launched his Virgin empire (which also includes retail record stores, a film and video company and music publishing, among other activities) on the success of his first release: Mike Oldfield’s “Tubular Bells” album, which sold more than six million copies.

A free-wheeling entrepreneur with something of the Malcolm Forbes/Ted Turner sprit of adventure, Branson lives on his own island in the Caribbean. He recently broke a 34-year-old record for a trans-Atlantic crossing by making the 2,949-mile trip in a 72-foot power boat in three days and eight hours. The Englishman now plans to cross the Atlantic in a hot air balloon.

Though they will work closely with Virgin’s English parent company, Ayeroff and Harris say they have autonomy. They don’t have to release acts here signed by the British division, and they can sign acts independently. Without disclosing their budget, they described Branson’s financial commitment as “significant.”

“We don’t feel like we have to be as big as Warner Bros. to be successful,” Ayeroff said. “The record industry is a very funny industry. It’s not like a race, with one finish line. You can run 500 yards and make $30 million on your gross or you can run 200 yards and make $10 million and still be successful. It’s all relative.”

The most important thing in signing acts, Harris suggested, is not to get caught in the trap of letting what’s selling at the moment dominate your thinking.

“We also both believe very strongly in a diverse roster,” he continued. “We’re going to get into black music and dance music as well as rock and pop. We’re also going to start a classical label and something in the new-age area.”

Aside from the music itself, Ayeroff sees video as still the most important device in shaping an artist’s image. “Videos are advertisements . . . the best form of advertising that I can come up with for an album right now. The best of them seem like Alka-Seltzer (ads) to me. . . . They tell you something that you can relate to and that you remember. . . . ‘I ate too much, I ate too fast.’ . . .

“People used to criticize me because they thought I was spending too much money on videos. You may spend $250,000 on a Madonna video, but you could end up selling three million albums from it. That’s not wasting money. That’s a good investment. The fear is that video budgets will get out of hand. So, the answer is that you use good sense in doing them. You don’t back away because you are afraid to make a mistake.”