Gary Gersh Forming New Music Company With John Silva

Look for former Capitol Records president Gary Gersh and Gold Mountain Management executive John Silva to form an entertainment entity at the start of the year. The venture will include a management company, record label, publishing arm, and Internet component. The pair is lining up financial backing for the new concern, with a number of labels, multimedia companies, and Wall Street investors looking to lend their support. Silva and Gersh declined comment.

Gersh and Silva are old friends, having worked together with a number of artists. Gold Mountain's clients have included some of the top acts from Capitol and its affiliated labels, such as Beastie Boys, Bonnie Raitt, and Foo Fighters.

--Melinda Newman, L.A.


New Firm To Create Online Stores For Radio Stations

Music Magic, a new firm based in Los Angeles, is planning to set up a nationwide chain of music stores linked to radio stations. The company, started by film producer Ed Palmer and his wife, independent radio promoter Debbie Palmer, has signed up its first radio station, country music powerhouse KZLA in Los Angeles. Ed Palmer said at deadline that he expects two other stations to sign contracts soon. He is also in talks with large radio companies representing about 1,000 stations.

Under the plan, visitors to a radio station's Web site who are interested in buying music will be directed to the store set up by Music Magic for that particular station. The customer will be offered recordings from the station's playlist as well as other charting titles; Palmer says Music Magic will not carry the full catalogs that other online stores have. Stations will get a portion of the revenue from music sales.

Orders will be fulfilled by Dixiraks, a Nashville-based distributor of country music; however, Music Magic will not be limited to the country genre, according to Palmer.

--Don Jeffrey, N.Y.


Label Cuts Cuban Tape Price

Panama-based Spanish label Caribe Productions is to launch a cheap local-currency cassette system in Cuba to open up the retail market. Cassettes on the island currently sell for $4.50, and CDs for $14-$18, which is more than the average monthly wage. By Christmas, Caribe plans to sell cassettes at outlets run by Artex, the state agency for artist representation, at 20 pesos, or $1. Cubans earn in pesos and are excluded from the U.S. dollar market, which was intended only for tourists and foreign business people but has grown to include many restaurants and shops, including sound-carrier outlets. "For the first time, a label is to bring new Cuban music to nearly all Cubans, meaning that the young generation will become music consumers for