Did U2's soft-selling "pop" cost 16 staffers at Island Records their jobs? That was the suspicion within the industry when Island announced layoffs that trimmed the company by almost 10 percent during the same week that its heavily promoted Pop slipped to No. 89 on Billboard's Top 200. Although an Island press statement claims that the layoffs came as part of a restructuring aimed at shifting resources to "creative areas of the company," some former Island staffers and industry observers point the finger at U2. (Island executives refused to comment.) The scenario illustrates the burden that record companies face in promoting superstar acts and how risky it can be for smaller labels to undertake huge marketing campaigns.
According to an ex-Island employee, U2's lucrative contract with the label – signed in 1989, at the height of the band's career – forced the company to shell out massive amounts of money to promote U2's records. For Pop, that meant spending well over a million dollars on radio promotion, video production and advertising, as well as buying thousands of PopMart concert tickets at face value. Also, it was U2, not the label, that had the power to pick the album's first single, "Discotheque," which some label executives did not think ranked "among the 20 best U2 songs of all time," says the source. On top of that, U2's royalty rate is reportedly in the range of 20 percent, which means the band nets nearly $3.50 per CD, almost double the going rate for most groups. Representatives for U2 declined to comment.
Astute Radiohead fans may have noticed something different about the version of "Let Down" being played on the radio. Compared with the one coming out of their CD players at home, it's 32 seconds shorter – with the quiet midsong interlude missing. It seems that Radiohead got a nip and tuck. "I'll 'fess up," says Phil Costello, senior vice president of radio promotion at Capitol Records. "We whacked it."
Editing rock songs for Top 40 radio is nothing new. But only recently has it become a common practice for modern-rock radio. For instance, Oasis' new single, "D'You Know What I Mean?," was trimmed by nearly a minute and a half for radio. The question is, says Costello, "what do we have to do to make it sound good for radio?" He stresses that changes are not made without artists' approval. Besides, he says, if Radiohead hadn't edited "Let Down," radio stations could have done it themselves – new low-cost technology gives programmers the ability to craft their own edits. For Capitol, the revision worked: "Let Down" was picked up by 55 stations during its first two weeks in release.
It hasn't been the best year for the powerhouse Warner Music Group. Profits were down 24 percent in the second quarter, and WMG recently lost its No. 1 market-share crown. New releases distributed by Warner-affiliated labels accounted for 17 percent of domestic record sales through the first six months of the year, according to SoundScan. That's down nearly 30 percent from the same period in '96. The sales slump may explain why a source close to the company reports that marketing dollars for up-and-coming acts have been drastically reduced. "They turned off the tap," the source says. That's not good news for the company once considered to be the best at patiently cultivating new talent.
This story is from the September 4th, 1997 issue of Rolling Stone.
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