Despite the slate of industry heavy-hitters at the helm, the music division of DreamWorks SKG has not translated considerable critical acclaim into blowout record sales.
After a handful of moderate successes, the DreamWorks Records label finally has one artist edging into the top 10 albums on the Billboard charts. Other than that, the label has very little to show after four years in existence somewhat of a surprise considering the group is overseen by record-industry legend David Geffen, not to mention such well-known executives as Mo Ostin and Lenny Waronker.
“The music business (at DreamWorks) has been off to a slower start than anticipated,” said Christopher Dixon, a senior media analyst at PaineWebber. “After the George Michael contract (which was signed early in the company’s existence), they haven’t seemed able to expand.”
In an effort to pump some life into the music division, DreamWorks Records is turning to the Internet. The label plans to use its Web site to attract new artists, while continuing to focus on acts with long-term potential.
“We’re trying to position ourselves as a progressive record label, and this is another step toward doing that,” said Jed Simon, head of new media for DreamWorks Records.
Slow, steady development
According to Simon, the label’s principals Michael Ostin, Mo Ostin, Lenny Waronker and Michael Goldstone believe that developing promising artists is more important than capitalizing on the latest music trend.
“If you look at their track records, they always have and still do believe in artist development,” Simon explained. “The rest of the industry is more of a singles-driven business. We still believe in artist development and feel that ultimately will be the winning strategy.”
The company is not ignoring sales, however. “We believe all the records we put out should be commercial successes, that they have an audience,” said Luke Wood, an A & R; executive at DreamWorks Records. “We’re not collecting art.”
But some observers say the label is running out of time to make a commercial impression.
“I would think the next two years are going to be very crucial,” said Jay Cooper, an entertainment attorney at Manatt Phelps & Phillips. “At some point, the financial entities will come in and have a review.”
In its four years, DreamWorks Records has signed a number of critically acclaimed musicians Rufus Wainwright, Elliott Smith and Randy Newman among them.
Last year, the label had just three albums that earned industry distinctions for sales. Observers are carefully watching newcomer Papa Roach, which is currently heating up on the Billboard charts and is considered the label’s biggest hit to date. Papa Roach’s rock album “Infest” hit No. 12 last week, earning the “Greatest Gainer” title. Some are seeing this as a sign of building momentum.
“The industry is always very skeptical. (DreamWorks Records) has been around four years, they’ve put out a lot of records but have had limited success,” said David Katznelson, a former vice president of A & R; for Warner Bros. “But if you look at it on a growth chart, they had two hits last year, and they currently have their biggest hit yet.”
Finding acts on the Web
The newest online venture at DreamWorks Records is the A & R; development site at www.DreamWorksDigital.com, which will focus on signing promising artists to the DreamWorks Records label.
Launching the digital effort became increasingly important to DreamWorks executives over the past year or two.
“We realized a lot of our musicians and artists were sending us MP3 or digital files or putting up their work on (a Web site) so we could hear demos,” Wood said. “It seemed asinine that we couldn’t communicate with unsigned artists in the same way. We thought, ‘We should already be there because the artists are already there.'”
DreamWorks will begin selling MP3 downloads of singles this summer, and by the end of the year will likely offer full-length albums online. Next year, the company plans to experiment with subscriptions or smaller transactions, so users can stream music through their computers for a lower fee but would not own those tracks. Instead, they would be able to access the music files only for a certain period of time.
Other major music companies have launched or are in the process of launching similar efforts, most notably Jimmy and Doug’s Farmclub.com, a fairly new label under the Universal Music Group. DreamWorksDigital.com differs in that it is not a separate label, but will be integrated into the DreamWorks Records A & R; department.
DreamWorks officials are maintaining tempered expectations about the future of the site, considering the difficulties of keeping up with today’s fast-paced changes in technology.
“We’re not really sure where it’s going to head,” Simon said. “It’s a starting point. If it works, great. If it doesn’t work, at least we’re learning the lesson ahead of our competitors.”
