Old stars, new music, new money

By Louis Hau

updated 6:40 p.m. ET June 29, 2007

Some veteran rock artists like the Rolling Stones and the Allman Brothers Band have never really gone away. But anybody up for a new Peter Frampton disc? How about Styx? Iron Maiden? KRS-One?

It's the latest unlikely development in a music industry turned upside down. As sales of recorded music continue to their alarming decline, record labels are searching for underserved market niches. Sony BMG and Universal Music Group think they've found one: They believe there's new money in new music from old stars.

That's why Sony BMG's Burgundy Records is now home to R&B powerhouse Chaka Khan, '80s pop diva Gloria Estefan and even the queen of disco herself, Donna Summer. New Door Records, part of Universal Music Group, released new albums by Frampton, '70s arena rock favorites Styx and Motown legend Smokey Robinson last year.

"Whether it's coming from retail or music lovers in general, it's evident that there's a void in the marketplace for these artists that are still so vital and still have something to say,'' says Burgundy's Matt Stringer.

To be sure, independent companies, like Malaco Music Group and Koch Records, have long made a business out of releasing new material from aging stars. But for the majors, desperate for new revenue, erstwhile stars like Summer and Frampton are the next small thing. And they have two built-in advantages: instant name recognition and loyal followings.

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Moreover, most of their fans are older consumers who are less likely to be satisfied with a single-song download from Apple's iTunes Store, says John Kellogg, an entertainment attorney who teaches at the Berklee College of Music in Boston. "These older artists' fans are CD or album-buying fans and that's one reason why record companies like them,'' Kellogg says.

Sales of new material from former pop stars tend to be nowhere near the 500,000 unit sales needed for gold-record status, much less platinum sales of at least 1 million. But labels still see opportunities to generate at least modest profits from older artists at a time when it's becoming increasingly difficult to make money on new releases of any kind.

According to Nielsen SoundScan, Frampton sold 52,000 copies in the U.S. of his New Door album Fingerprints, while Robinson's Timeless Love sold 66,000 units. Both released the albums last fall.

But depending on how their deals are structured, even modest sales levels can be enough for an album to make money. Older artists generally command smaller advances, Kellogg says, adding that thanks to their existing fan bases, labels don't have to invest as much on marketing.

America's double-album Here & Now sold 46,000 units in the U.S., since Burgundy released it in January, according to Nielsen SoundScan. That's a tiny tally for a major label. Still, Stringer says, the label recouped its investment.

Burgundy doesn't sign up just any former star looking for a new record contract. Rather, the label focuses exclusively on recording artists who've enjoyed "platinum-plus" commercial success, can still fill seats at concerts and have old hit songs that get regular radio play.

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