Recent Hits Put Island in the Mainstream : Entertainment Group Finds Success in What the Big Guys Cast Away

Even by entertainment industry standards, Chris Blackwell rates as an unconventional chief executive.

As the founder and principal owner of Island Entertainment Group, a growing archipelago of record, music publishing, movie and video companies in the United States, Canada and Europe, the 50-year-old Jamaica-reared Englishman operates from no fixed address. He maintains a London flat, a Paris apartment, a suite at the Essex House in New York and several Caribbean estates, including Goldeneye, a 30-acre Jamaican retreat built in 1947 by James Bond creator Ian Fleming.

But Blackwell is seldom at any of his homes. Most of the time he’s flitting in seemingly random fashion from one company office to the next, calling on his key executives and, as he puts it, “cross-pollinating ideas.”

On a recent morning, he popped into the Manhattan offices of Island Records clad in a maroon rugby shirt and blue jeans, a pair of leather thongs and $200 sunglasses. “Chris is a very freewheeling individual,” said Island Records President Lou Maglia, who, by way of contrast to the boss, was dressed that day in a conservative suit, crisp white shirt and tie.

Maglia recalled his first encounter with Blackwell when he was hired to head Island’s American record operation in early 1986: “I sat with the guy for 15 minutes and really liked what he believed in. Then we flew directly to Jamaica for a week and rode around his various estates and just hung out and talked, but never about business. After that, he just turned the company over to me and left--I didn’t hear from him again for three months.”

Despite Blackwell’s idiosyncratic management style and his claim that he has little interest in what’s broadly popular in entertainment, Island has enjoyed remarkable critical and commercial success in the past few years. New York-based Island Records scored with Grammy-winning, multimillion-selling albums from Steve Winwood and Robert Palmer in 1986 and currently is riding a crest with the Irish rock band U2, whose recent “Joshua Tree” album went to No. 1 on the charts on its way to selling nearly 10 million copies worldwide, according to the company.

Los Angeles-based Island Pictures, meanwhile, has established itself in just two years as the movie industry’s foremost distributor of quirky, award-winning “small” films--”Kiss of the Spider Woman,” “Mona Lisa,” “Trip to Bountiful,” “River’s Edge,” “Dark Eyes”--that were either turned down or overlooked by the big Hollywood studios.

“We’re a niche player,” Blackwell said during a recent stopover in Los Angeles. “That’s one thing I feel very, very strongly about and am very firm and clear about. The only time I ever really fall out with one of the people running one of my companies is when they’re trying to jump into something head-on with the majors. I really don’t feel you have a hope of succeeding at that, and it’s not necessary--there’s no point to it because you can offer nothing. However, you offer a viable alternative if you stay within a certain taste and style.”

It’s the same for movies and records, he said. “The major companies always go for the big worldwide hit. They have to because they have huge overhead, which you don’t pay for with something that, even on its upside when it comes out great, is only going to have a relatively limited market. Their theory--which is true for them--is that it’s the same amount of work to do a little thing as a potentially big thing. So they try for the big thing every time out, and sometimes they make it, but often they don’t.”

“Sometimes I really do go for something that’s potentially very commercial,” he added. “It’s a kind of balancing act because I don’t want us to get too artsy.”

Blackwell claimed that he doesn’t know exactly how much his companies earned last year--as a privately held firm, Island isn’t required to publicly report its profit and losses--but he estimated Island’s annual gross revenue at “more than $150 million and less than $200 million.”

Turned Firm Around

“Last year, film was the most profitable for us, this year it will be records,” he said.

Island Records’ current success represents a comeback. Two years ago, just before Maglia was hired as president, the company was overstaffed, inefficient and suffering significant losses. The first thing Maglia did was lay off 55 of the 90 employees and trim the artist roster to 20 from 45. He then set about running the company in what he calls an “American” fashion.

“The first thing I saw when I looked at the books and saw how the company was being operated was they had a very British attitude about everything,” Maglia said. “What I mean is, thinking that press coverage and merchandising are the most important factors in marketing a record, which is totally mistaken. In England it works: You ship a record out, put up some 47-foot posters, give away picture discs or a towel with the purchase of a record and that type of thing. It’s a very manageable situation there--like covering Manhattan.”

In America, however, records are sold primarily through widespread and relentless radio air play, and Island’s artists weren’t getting that, Maglia said.

“For a band like U2 not to be on radio and not to be on MTV--so that when you have great music, you can have a No. 1 record--that’s what the problem was. Chris had had an American company for 17 years and had never experienced a No. 1 single. He’d had a history of great music that was never presented the way it’s done in the U.S.”

Under Maglia, Island finally scored its first No. 1 single with Steve Winwood’s “Higher Love.” Winwood’s album “Back in the High Life” went on to sell 3 million copies in the United States, Robert Palmer’s “Riptide” album sold 2 million and the phenomenal success of U2’s “Joshua Tree” helped push each of the group’s five previous albums past the million-unit mark.

Works Outside System

For a small independent firm like Island, it was like hitting the granddaddy lottery of them all--$90 million in domestic revenue from those three acts alone.

Of course, Island doesn’t get all of that money, since most of its records are manufactured and distributed for a fee by W.E.A, the distribution arm of Warner Communications’ record operations.

Island distributes some of its own records through its fledgling Island Trading Co., which has three small labels called Antilles, Mango and 4th & Broadway. The three independently distributed labels release records of more limited appeal, such as reggae, Cajun and other types of music that Blackwell calls “Third World-influenced.”

The small labels are an accommodation to Blackwell’s entrepreneurial spirit as well as his eclectic taste in music. He produced the latest Antilles release, “Buckwheat Zydeco,” an album of Cajun music that was recorded in four days on a budget of $25,000.

“If you distribute your records through a major company, even though you are independent and separately owned, you just become too much a part of that corporate system, and you have to play by their rules,” Blackwell said. “It’s easy to lose your connection to the street, and that’s very important to have.”

Blackwell admits that he has neither the ear nor the taste for mainstream pop music. “I’d be more than happy to have a jazz label,” he said. “It just so happens that I sign things I like, and some of them have been successful. I’ve not ever tried to manufacture pop. I haven’t ever gone into anything thinking, ‘This will sell a lot.’ ”

Nonetheless, some of it has. He launched the company 25 years ago on the proceeds from his first hit single, “My Boy Lollipop,” by an unknown Jamaican singer named Millie Small. In the ensuing years, he discovered such diverse performers as British rockers Traffic, Jethro Tull, and Emerson, Lake and Palmer and Jamaican reggae artists Jimmy Cliff and Bob Marley.

Some Expensive Flops

In 1965, Blackwell found then 15-year-old Steve Winwood performing in a dingy bar in Birmingham, England, and signed him on the spot. He is widely credited with almost single-handedly introducing Jamaican reggae music to the international marketplace. “Bob Marley reached so many people,” Blackwell said. “A couple of years ago, I went to the Havasupai Indian reservation at the bottom of the Grand Canyon and they had Bob Marley posters all over the place. It seems he’s an incredible hero to the American Indians, though I have no idea why.”

But Blackwell’s enthusiasms often have tended toward those of a musicologist, and his penchant for spontaneously signing recording contracts on the back of a cocktail napkin has yielded a number of expensive deals that didn’t pay off.

“Chris’ natural tendencies are to make a very progressive, excellent record that would appeal first to college or alternative radio programmers,” Maglia said, adding that “I don’t think there’s anything wrong with being eclectic, as long as it pays for itself.”

The two men represent an odd role reversal: Blackwell, the chairman and chief stockholder, talks about signing a new English “speed metal” band called Anthrax. Maglia, the head of the label, says things like, “There’s a simple statement to be made about the corporate side of the music business--in order to allow stockholders to benefit from increased profits and revenues, you sometimes have to make a lot of compromises and do things that aren’t necessarily in the interest of the music itself.”

Even with all of the recent success at Island, there have been setbacks. Steve Winwood, who had been with the company for 21 years, recently left and signed a $12-million contract with Virgin Records. Robert Palmer, who had recorded 11 albums for Island since 1971, went to Capitol in a deal that guarantees him $10 million, according to Maglia.

Blackwell said he was initially “depressed and knocked sideways” by the defections. “But we’re a record and artist development company, not an insurance company,” he said. “If you say to someone that you will guarantee he sells 4 million albums per album over the next three albums--which is the deal Winwood got--and you guarantee that by contract, that to me is insurance, and we’re not in that business.”

Maglia agreed. “This company isn’t in a position to sign a deal like that,” he said. “I wouldn’t allow it because it would put us back in the position we were in in the past. There has to be a very secure strategy for the future.”