Barry Weiss, the president of the Zomba Label Group, had been chatting with a guest at his label's recent party at the Ritual club here when he abruptly cut off conversation and strode toward the dance floor.
That's Right, a song by one of the label's artists, Ciara, had just begun to play at ear-splitting volume, and Weiss decided to conduct some impromptu market research.
Reaching for his glasses, he watched the partygoers dance as he stood off to one side of the darkened dance floor. "You can still get a feel" for how people will respond in clubs like this, Weiss said.
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After more than 25 years in the music business, he has come to trust his instincts more than ever. It fell to Weiss to guide Zomba after the company's creative mastermind, Clive Calder, sold it to Bertelsmann five years ago for US$2.7 billion, cashing out just as the label's slate of teen pop stars like 'N Sync waned.
Today, amid financial setbacks in the music industry, Zomba is on a hot streak again, with hits from performers like Justin Timberlake, R. Kelly and T-Pain, a rapper-turned-singer whose new CD surpassed Paul McCartney's last month to enter the Billboard chart at No 1.
It is quite a turnabout for Weiss, who was one of a handful of longtime Zomba executives to stay on at the company after 2002, even as critics crowed that the label would never again match its earlier success.
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"We knew what people were thinking," he said in a rare interview recently. "We weren't like, 'Oh, my God! What's going to happen here?' We were too busy trying to stay afloat and stick to our knitting."
Since the sale, Zomba, which includes Jive Records and the gospel label Verity, has managed to defy the industry's troubles by discovering new artists, like the R&B singer Chris Brown and the rockers Three Days Grace, while keeping costs down - a tough task in a business given to financial excess.
Johnny Wright, a talent manager overseeing acts including Timberlake and the Backstreet Boys, remarked, "They overanalyze every penny that's spent to make sure it's not just frivolous money being thrown away."
He added: "As a manager of an artist, you want a US$2 million video budget. Do you really need one? At the time that you're involved in it, you're feeling a little frustrated," but "at the end of the day you've made a decent video, and you have an artist that's actually getting a royalty check."
There is little argument that the label's sales and market share have slid sharply from their pinnacle during the teen pop sales surge; the industry itself has buckled under the weight of widespread piracy and other woes.
But if any of the corporate-owned labels can be described as succeeding these days, Weiss' is one of the few. Zomba has increased its share of new-release sales almost 20 percent so far this year, even as sales of new albums industry-wide have dropped 16.5 percent, according to Nielsen SoundScan data. It has remained consistently profitable, having generated more than US$40 million in profit last year on well over US$200 million in revenue, according to executives briefed on the label's business.
Being part of a sprawling media empire has had certain advantages; a Bertelsmann reorganization three years ago shifted established stars like Usher and then-unknown artists like Ciara to Zomba's roster. But side businesses, including a studio-equipment rental service, that once bolstered Zomba's success have been sold.
What remains at the center is Weiss, 48, who exudes a feverish energy even when sitting. Since his appointment in 2002, he has taken pains to preserve the internal culture of the label; that has meant, in part, a preference for developing artists in-house rather than through ventures with outside talent finders.
Zomba has kept its home in a bare-bones office building in the Chelsea section of Manhattan, apart from the big suites of higher-volume labels in Midtown. It may face new challenges when it relocates to the Madison Avenue headquarters of its corporate parent these days, Sony BMG Music Entertainment, a move expected later this year.
"There's very little ego," said Max Martin, a Swedish producer behind hits for Britney Spears and others. "When you meet a lot of other presidents," he said, declining to specify anyone, "you see lots of big offices, you see a lot of 'I'm the president of the record company.' That's the one thing I that I love about Barry and Jive in general, there's very little of that thing. It's a very tight group of people."
The chairman of a competing record label, who spoke on condition of anonymity, said that Zomba's reputation for frugality was sometimes overstated. Zomba may pour cash into important production and marketing expenses, though "they're not going to send you a limousine just because you're going to get an ASCAP award," this executive said, referring to the American Society for Composers, Authors and Publishers, the industry professional group.
Weiss makes no apologies, and suggests that some rival labels have chosen to whack away at their overhead costs - resulting in hundreds of layoffs - rather than take on the potentially more difficult pruning of day-to-day production and marketing expenses.
"On the one hand," he said, "they're laying off all these people from these companies to the point where you're cutting into the bone. But nobody's focusing on the fact that that album that should've cost US$800,000 cost US$2 million. Or the video that the egotistical president of the company decided to scrap, for US$400,000, because they didn't like the color of the pants that the artist was wearing. Those things still kind of go on in the business."
Now, labels are scrambling to offset plunging CD sales by cobbling profits from bite-size products like ring tones and digital downloads. Indeed, more than 40 percent of Zomba's revenue from new releases through the first half of this year came from digital sales.
Weiss said that has made it all the more important for labels to sign artists with commercial potential; Jive has had a particular ear for street-savvy R 'n' B that can attract mainstream pop fans.
"The margin for error has been greatly reduced," he said, "and the winners don't pay for the losers the way they used to."
With the right songs, he added, the label can generate a profit even without a gold album. When the rap newcomer Huey released his first album last month, for example, it sold fewer than 29,000 copies the first week. But Huey's hit single, Pop, Lock & Drop It, had already turned into a radio hit, fueling sales of more than 2 million downloads and ring tones, the latter typically costing as much as US$2.50 each. By keeping costs low, the label was already in the black when the album reached shops, Zomba executives said.
Weiss' talents as a manager were on display one recent night at the House of Blues in West Hollywood, where a group of Jive executives and he had gathered to watch a set by T-Pain. Stars from competing labels, Akon and Busta Rhymes, unexpectedly clambered onstage to join T-Pain, sending the already giddy crowd into bliss.
Upstairs, Weiss danced with colleagues and made no attempt to conceal his delight at the scene of screaming fans. "And the good news?" he said. "It didn't cost us anything."
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