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NEW ORLEANS — The CBS Records Group held its annual year-beginning marketing meetings at New Orleans' Fairmont Motel Jan. 25-28. The meetings brought together CBS Records executives of New York, Los Angeles and Nashville. members of all CBS Records branches and overseas representatives of CBS International.
Included in the conference's agenda were sales, promotion, merchandising A&R and publicity seminars and new product presentations and performances by select artists on the Columbia, Epic, Portrait and CBS Associated Labels.
Jack Craigo, senior vice president and general manager of marketing for CBS Records, and Paul Smith, vice president and marketing and branch distribution for CBS Records, co-chaired the week's activities. The meetings were coordinated by Rosalind Blanche, director of merchandising planning and administration for CBS Records.
Speeches were delivered by Walter Yetnikoff, president of CBS Records Group; Bruce Lundvall, president of CBS Records Division; Ron Alexenburg, senior vice president of E/P/A; Craigo; Don Dempsey, vice president of marketing for Columbia; and Jim Tyrrell, vice president of marketing for E/P/A. Paul Smith delivered the keynote speech.
Highlighting the meetings were audio-visual presentations of new product, produced by Arnold Levine, vice president of advertising/creative services for CBS Records. Among the new albums slated for first quarter shipment are LPs by Heatwave. McCrarys, Marlena Shaw, Walter Egan, Vicki Leandros, Mark Colby, Bobby Bare, Judas Priest, Mac Davis, Bonnie Koloc, Toto, Mickey Gilley, Lonnie Liston Smith, Hounds, Johnny Cash, Kris Kristofferson, Webster Lewis, Nigel Olsson and Johnnie Taylor.
Three classical albums were also featured: Zubin Mehta/New York Philharmonic version of Stravinsky's Rite Of Spring; Jean-Pierre Rampal's Japanese Melodies For Flute And Harp; and the Maazel/Cleveland Orchestra reading of Strauss' Ein Heldenleben.
CBS artists who performed at the meetings included Toto, Pockets, Weather Report, Brainstorm, Heatwave, Elvis Costello, Karla Bonoff, Crack The Sky, Meat Loaf, Eddie Money, Charlie Richards, Wild Cherry and Janie Fricke.
Contribution To CBS, Inc.
With its spectacular growth over the past year, CBS/Records Group, comprising both international and domestic divisions, has become an increasingly significant part of CBS, Inc. Walter Yetnikoff underlined this fact when he told the attendees, "In reviewing CBS, Inc.'s financial results for 1977, it turns out that of all groups — and that includes broadcasting — the largest contribution to additional earnings per share over 1976 came from the Records Group."
Reiterating his statement that the group is closing in fast on the billion dollar sales mark (Cash Box, Jan. 28), Yetnikoff said CBS is the number one record company in the industry with nearly 50 percent more sales than its nearest competitor, the WCI Record Group. He also said CBS had 25 percent more platinum records in 1977 than WCI and nearly double the number CBS had in 1976.
Expanding on this point, Bruce Lundvall noted in his speech that, while the industry grew an estimated 25 percent in 1977, revenues of the CBS Domestic Division rose 33 percent, with profits up 26 percent. With this kind of track record, he said, he had no doubt that CBS Records Division would hit the half-billion dollar mark by the end of the year.
Yetnikoff stressed that the Records Group is expected to continue delivering for CBS. "We did great in 1977 and we're expected to do much better in 1978," he said. "They're counting on bigger profits and they're confident we can bring them in. Finally our budgets are stretched to meet these high demands . . . The profit requirement means that we are going to have to keep our eyes more consciously on the bottom line — on what I referred to at last year's NARM as the 'elusive in-between' — on what is left over after expenses and costs are deducted from sales. It means that we are going to have to hold down on unnecessary costs at all levels."
Yetnikoff emphasized the big financial commitment which the corporation is making to the Record Group. "We are committing to building a major fourth manufacturing facility in the United States," he said. "That plant is now in the final planning stages and construction will begin shortly. We're talking of tens of millions of dollars in expanded facilities in the U.S. alone, plus tens of millions of additional dollars for new planned facilities in the U.K., Brazil and elsewhere around the world."
Changing Standards
Lundvall told Cash Box that "we're looking toward a year in which the objectives are staggering." He pointed out that while a few years ago CBS had only seven or eight artists in the platinum-plus category, the company now has more than 25. "The real message here is that there is no top on what you can hit on a given record," Lundvall said.
Jack Craigo elaborated on this point in his speech. "Over the past several years," he said, "the parameters which define success and superstardom have expanded explosively. The gold record has always been the mark of success by which we judge our achievements. Yet in 1974, the RIAA raised the sales requirement for gold certification from about 420,000 units to about 500,000. Today at CBS Records, the gold record serves only as a stepping stone to platinum, and multiple-platinum is clearly the best 'new wave' that we relate to."
Paul Smith also zeroed in on the changes that have overtaken the industry. Recalling that, not so many years ago, the growing influence of rackjobbers had stimulated retail competition, he noted that today, the racks are looking closely at the specialty retailer's "superstore" concept. "I think it's safe to assume that in the not-too-distant-future they will have their own superstores," he commented.
Both Smith and Craigo stressed the importance of artist development, especially at the local branch level. "The sophistication of today's music marketing is a veneer adhesive covering the hardwood of the record business; that hardwood is local branch marketing," stated Craigo. Later in his speech, he added, "We have great music. But you've got to do something about it. . .exciting, contemporary music can easily lie dormant unless you sell it."
Point Of Purchase
Smith urged his listeners to ensure the availability of merchandising materials to all dealers. "Market research tells us that over one third of all record and tape sales are influenced at point of purchase," he noted. He also urged branch personnel to fight for the dominance of CBS music in in-store play. The payoff from these measures, he said, was demonstrated by the CBS "Winning Season" and "Saleathon" retail promotions which resulted in sales of $40 million "with no appreciable increase in returns."
Two of the CBS programs have proven their value over the past year, Smith said. The "Developing Artist" program, which provided incentives to retailers to promote new acts, helped break Crawler, Meat Loaf, Karla Bonoff and Elvis Costello, he said. In addition, "Operation Breakthrough" offers extra incentives and advertising in support of acts that have already broken through. According to Smith, artists who have benefited from this program include Heatwave, Billy Joel, Pockets, Bob James, Dave Mason, Karla Bonoff, Kenny Loggins, Journey, Santana, The Emotions, Wet Willie and George Duke.
New Wave
Largely due to the success of Elvis Costello the New Wave was the subject of several encouraging remarks at the conference. Yetnikoff said that Costello is "the first and only U.K. so-called 'new wave' artist to happen meaningfully in this country." And Craigo noted that in a recent interview, Jerry Wexler had said that Warners regretted the fact that it had not signed Costello.
Lundvall said , "We have drawn the first blood on U.S. shores with Elvis Costello — at the same time that the most highly touted of the British punk rockers, The Sex Pistols, fell apart at the time when the media had virtually laid out the red carpet for their ultimate explosion to the U.S. music scene. We have a position of credibility and first advantage. We have Elvis, Nick Lowe, The Clash and the Vibrators — artists who really count. And make no mistake — the music will happen here."
Lundvall also discussed the mainstream music categories. Remarking that, over a year ago, "we held a clear leadership position" in R&B, jazz, MOR and country, he said that, "in 1977, we dramatically began closing the gap in the dominant pop-rock category. This is where our sharpest A&R and marketing focus must continue to be concentrated — this is the fountainhead of mega-platinum."
Country music could also use a push at CBS, Lundvall said. "Although we maintain a healthy position of leadership, I feel that we haven't come close to realizing our full potential." He expressed the hope that this year, Johnny Paycheck, Bobby Bare, George Jones, Mary Kay Place, David Allen Coe, Willie Nelson and Janie Fricke would all cross over to the pop market.
At dinner on the opening night of the conference Lundvall thanked Cash Box for its extensive preview coverage of the CBS marketing meetings. He called George Albert, president and publisher of the magazine, "a pioneer in the industry," and expressed his appreciation to the publication for its support.
International Acts
International sales were not highlighted at the meetings, but the increasing efforts to establish CBS International artists in the U.S. were a major topic. Citing the success story of the English group Heatwave, Yetnikoff said it was time for CBS to make up for all the international acts it had missed out on during the '60s. "Now it's our turn to capitalize in this country on the overseas artists with the likes of Heatwave, Crawler, Lake, Tina Charles and a host of other great artists."
Dick Asher, president of CBS International, told Cash Box that, besides Heatwave, Crawler and Lake, CRI had given the domestic division to acts whose albums had sold over 25,000 units each. "And you have to make money on those when the recording costs are paid overseas."
Additionally, Asher noted, CRI has recently signed some non-English speaking artists who are big stars overseas, with the idea of introducing them in the U.S.
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