Reid To Take Arista Helm As Davis Readies New Venture

In a long-anticipated move, Antonio "L.A." Reid was officially named president of Arista Records yesterday. Reid expects to spend the next few weeks "listening to many tapes, taking many meetings, and just preparing" for his July 1 start date. Reid succeeds Arista president/founder Clive Davis, who says in a statement that he will launch a new venture in September. While some sources say Davis, whose Arista contract expires on June 30, may be ready to announce his plans as early as two weeks from now, others say he is still in negotiations with a number of companies, including BMG. Though some Arista staffers are expected to leave with Davis, Reid says the majority will stay. Additionally, both Reid and Strauss Zelnick, president/CEO of Arista parent BMG Entertainment, say that Arista's superstar acts, such as Whitney Houston and Santana, will remain on the label. Reid was tapped to replace Davis after the latter balked at BMG's insistence that he name a successor. Reid will also continue to helm LaFace Records, the Atlanta-based label he co-founded in 1989 with Kenneth "Babyface" Edmonds as a joint venture with Arista. LaFace will be consolidated into Arista as an imprint, with Arista assuming sales, marketing, and promotion duties. Regarding potential staff cuts at LaFace, Reid says, "Many of the people will join me at Arista so we'll still service the LaFace artists, some of them will stay in Atlanta, and some of them have already made the decision to move on with their careers." LaFace has approximately 70 staffers. BMG completed its purchase of the remaining 50% of LaFace it did not already own several weeks ago. In addition, Arista has started a new joint venture with Edmonds, which, according to sources, is named Joe Lies. As for his plans at Arista, Reid says he would like to expand into the Latin market, and while Arista Nashville will be folded into the RCA Label Group on July 1, he would eventually like to get back into the country market.
--Melinda Newman, L.A.


SFX Buys Into Merchandise Biz

SFX is getting into the merchandise business. The concert promoter's SFX Interactive division has purchased a minority stake in the merchandise fulfillment operation of musictoday.com, an e-commerce company headed by Dave Matthews Band manager Coran Capshaw. Terms of the deal were not disclosed. The remainder of musictoday is held by private investors, including the Dave Matthews Band. SFX Interactive and musictoday will run the fulfillment operation as a joint venture called Clikpakship.com. Musictoday, which began business in 1993 as the merchandise outlet for the Dave Matthews Band, now provides such services for some 45 acts, including Santana, Cheap Trick, Insane Clown Posse, and Medeski, Martin & Wood. The company sells directly to consumers and to wholesalers. The musictoday name will be retained, serving as a comprehensive tour-date database with some e-commerce operations. Clikpakship will operate from musictoday's 100,000-square-foot facility in Charlottesville, Va., and will retain its current management, headed by chairman Capshaw. Capshaw says the joint venture's first project will be to establish Web stores for SFX touring acts, to be integrated into SFX.com.
--Carolyn Horwitz, N.Y.


Majors Sign FTC Decree To End MAP

The other four majors have joined the Warner Music Group in signing a Federal Trade Commission consent decree that would result in the elimination of their minimum-advertised-pricing policies, according to sources. The Warner Music Group signed such a decree in January, and Sony, EMI, BMG, and UMG have signed similar documents over the last few days. The agreements would result in a seven-year abstinence of tying cooperative advertising funds to the price of advertised product; in addition, the majors would not be allowed to drop direct accounts for a period of five years. While sources at the majors acknowledge that they have signed the decree, one executive says his company has only signed a preliminary agreement. Executives declined to comment officially or couldn't be reached.
The signed consent decrees will be presented to the FTC's board of commissioners, who must approve them and then post them publicly, allowing a 30-day period for comment by interested parties.
--Ed Christman, N.Y.


Sony, Universal Team For Subscription Service

Sony Music Entertainment and Universal Music Group are teaming to develop a subscription-based service for music and video content. The joint-venture Internet initiative will target delivery over a wide range of platforms, executives say, including computers, wireless devices, and set-top boxes. Both companies have agreed to license content to the venture. UMG is involved in another online initiative with BMG, GetMusic, while Sony has ties with Warner Music via their Columbia House. Al Smith, senior VP of Sony Music Entertainment, says decisions are currently being made regarding the structure of the joint venture and content offerings. No launch date has been set, according to Heather Myers, executive VP/GM of UMG's Global e division.
--Marilyn A. Gillen, N.Y.


Billboard Latin Show Scores Big Ratings

The Billboard Latin Music Awards show, which aired Sunday night on Telemundo, was the network's highest-rated special ever. The show scored a 7.9 rating, up from 5.2 last year. Festival Mushroom, Zomba Make Peace In Australia The Festival Mushroom Group (FMG) and Zomba Records Australia have settled their legal dispute and announced closer ties. The action was launched last April by Festival Records (as it was known at the time) against Zomba Australia and its managing director, Scott Murphy. According to a joint statement, Zomba Australia (including the Jive and Volcano labels) will be distributed by BFM Distribution, FMG's joint venture with BMG Australia, starting July 1. Zomba Australia is now distributed by Sony Music Entertainment, which will continue to handle Zomba's manufacturing. Meanwhile, Zomba affiliate Pinnacle Records has extended its distribution agreement with Mushroom U.K. for the U.K. and Ireland, and Zomba in the U.S. has agreed to a first-look arrangement for the release of a number of FMG's Australian artists in the U.S. and Canada. In the legal action, Festival had claimed that Murphy, the former managing director of Mushroom subsidiary Mushroom Distribution Services, had poached staffers and conspired to take away business from Mushroom while still in its employ (Bulletin, April 9, 1999). Last November, Festival and Mushroom were rolled into the one company.
--Christie Eliezer, Sydney


Losses Increase At CDnow In First Quarter

CDnow Inc. reports its net loss for the first quarter of 2000 almost doubled, increasing to $37.8 million, or $1.23 per share, from a loss of $19.1 million, or 96 cents per share, in the first quarter of 1999. The net loss, excluding special items related to mergers and acquisitions, was $28.2 million, or 92 cents per share. Wall Street analysts were forecasting a loss of 88 cents. Revenues increased 99% at the online retailer, to $43.6 million from $21.9 million a year ago. Shares in CDnow closed ahead of the news down 9.5% at $4.20.
--Brian Garrity, N.Y.


Warner Music Group Gets Noble

Warner Music Group has named Jim Noble as senior VP/chief information officer. Noble, who will guide the company's technology infrastructure, was global head of information technology strategy at General Motors Corp. Based in New York, he reports to executive VP/CFO Jerry Gold.


Sony Japan Site Readies Downloads

Bitmusic, the download site of Sony Music Entertainment (Japan), will become the first Japanese Web site to distribute music by non-Japanese artists using a copyright-protection system that complies with the Secure Digital Music Initiative. A total of 22 tracks by foreign acts, including Celine Dion, Lauryn Hill, Savage Garden, Mariah Carey, and Ricky Martin will be available on the site (http://bit.sonymusic.co.jp) for 350 ($3.30) each, starting May 10. Last year, Sony became the first major Japanese label to launch a download service, with material from local artists only (Bulletin, Dec. 2, 1999).
--Steve McClure, Tokyo


Charles Scully Dies

Charles Scully, a 40-year veteran of performance right group SESAC, died last week of heart failure in Yonkers, N.Y. He was 74. Scully joined SESAC in 1952, selling licenses to radio. He later moved to the public relations department, which he headed for 15 years before retiring in 1992.
--Irv Lichtman, N.Y.


What's On

Late-night tonight: Alison Krauss (on Letterman), the Go-Go's (Kilborn), Barry White (Conan O'Brien).

CBS airs the Academy of Country Music Awards tonight at 8 ET.