Tee Vee Toons, Inc.

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Tee Vee Toons, Inc.

23 E. 4th St., 3rd Floor
New York, New York 10003
U.S.A.
Telephone: (212) 979-6489
Fax: (212) 979-6410
Web site: http://www.tvtrecords.com

Private Company
Incorporated: 1985
Employees: 100
Sales: $100 million (2003 est.)
NAIC: 512220 Integrated Record Production/Distribution; 512230 Music Publishers

Tee Vee Toons, Inc., better known as TVT Records, is the leading independent record company in the United States. The firm’s offerings range from hip-hop and heavy metal to Broadway show tunes, movie soundtracks, and television theme songs. TVT is perhaps best known for launching the career of Nine Inch Nails, but its roster also includes British pop band XTC, hip-hop acts Snoop Dogg Presents The Eastsidaz and the Ying Yang Twins, and heavy metal groups Nothingface and Sevendust, among others. TVT puts out albums under several label names, including Wax Trax!, TVT Soundtrax, and Blunt. The company is run by its founder, Steven Gottlieb.

Early Years

The story of TVT Records begins in 1984 with a recent graduate of Harvard Law School, Steven Gottlieb. When someone suggested that he compile an album of television program theme songs, the lifelong music fan decided to set aside his legal career and put one together. Determined to create a better package than several earlier, but haphazard compilations, he spent months tracking down the legal rights to 65 different songs including the classic themes from Green Acres, Mission: Impossible, and Gilligan’s Island.

With the help of several friends, Gottlieb raised $125,000 and founded Tee Vee Toons, Inc. to distribute the collection, which he initially sold out of his New York apartment. Aided by the judicious use of television advertising, the album sold well and Gottlieb’s company was off and running. Over the next two years additional volumes of TV themes were also released.

In 1987 Gottlieb took the profits he had made from the television albums and formed a new label, TVT Records, which would be dedicated to signing unheralded, but promising, rock music acts. Among the early performers signed to the label were Shona Laing, The Saints, and The Connells, each of which would go on to reach the top five in Billboard’s alternative music chart.

The year 1988 saw Gottlieb enter another new area with the release of the soundtrack album for the hit French movie Jean de Florette. The following year he put together a collection of 55 classic commercial jingles, which the firm charged $7,500 per ad to appear on. Spots for Coke, Chevrolet, and Schlitz beer were among those included.

Nine Inch Nails Signed in 1989

In 1989 TVT signed an act which would go on to be one of its most successful ever, Nine Inch Nails. Fronted by charismatic vocalist/songwriter Trent Reznor, the goth/metal rock band released its debut album Pretty Hate Machine in 1990. With little radio or music video exposure forthcoming, the company promoted it with a series of strategically placed television advertisements, and the recording quickly sold more than 500,000 units. It would later be certified “gold” and continued to sell for years to come. TVT was also having success at this time with the groups Modern English and KLF, whose debut album Chill Out went on to become a classic of the electronica/ambient music genre.

In 1990 TVT began to mine the extensive archives of television’s Ed Sullivan Show, which had been broadcast from 1948 to 1971. The label compiled the audio portion of performances by a number of major artists and released them on albums devoted to 1960s British Invasion rock bands (though Beatles and Rolling Stones cuts were omitted), Louis Armstrong, Big Bands, and Broadway performers, among others. Additional volumes in the “Sullivan Years” series appeared over the next several years.

In 1991 TVT entered into a 50/50 joint venture with Interscope Records to form Nothing Records, an independent entity run by Trent Reznor which would release new albums by Nine Inch Nails and other artists. TVT also became a minority owner of the bankrupt Chicago-based Wax Trax! records in late 1992, before buying the entire company. Wax Trax! had released 100 albums, including popular records by the groups Ministry and KMFDM.

TVT was now involved in disputes with several of its artists, including pop band The Connells, whose albums had sold more than 250,000 copies. In March the two sides agreed to settle a suit filed by the group over allegations of incomplete accounting of royalties and inadequate promotion. The band would stay on the label, with TVT pledging to improve its support for their releases.

In 1993 the company formed a new imprint, Blunt Recordings, which would feature New York-based rap and hip-hop artists. Its first release was by a performer named Mic Geronimo. TVT also signed jazz vocalist and rap precursor Gil Scott Heron during the year. In 1994 the company named Irv Gotti to head its Urban A&R department, and he soon procured the services of a new group, Cash Money Click, which included future rap star Ja Rule.

Mortal Kombat Soundtrack a Hit in 1995

TVT had a major success in 1995 with the soundtrack from the film Mortal Kombat, which hit the Billboard Top 10 chart and went on to sell 1.5 million copies. TVT won the rights to the album after several major labels had passed on it, partly because they had been given only a few weeks to usher it into stores before the movie’s release date. The New Line film, which was based on a martial arts video game, surprised industry analysts when it became the top grossing motion picture in the United States for several weeks running. The album included material by Wax Trax! artists KMFDM and Sister Machine Gun, as well as actress Traci Lords and other non-TVT performers. The company later released a second soundtrack from the film, and in 1996 formed the TVT Soundtrax label to issue recordings from movies, television shows, and Broadway musicals.

In the fall of 1996 TVT released four more volumes of television theme music, a decade after its last such release. The new set featured 65 cuts per album, with 24-page booklets and 3-D cover graphics. To promote the series TVT created a special in-store display rack which featured television antennalike “rabbit ears,” and also sponsored radio trivia contests and sent bulk e-mails to members of Internet television discussion groups. By this time TVT had 65 employees and annual sales estimated at more than $50 million. In addition to its New York headquarters, the firm maintained satellite offices in Los Angeles, San Francisco, Boston, and Chicago. The company had established its own distribution system in the United States, and started distributing the releases of other independent labels over the next several years.

In late 1997 Gottlieb unveiled a new cassette storage case he had invented called the “Biobox.” Similar in appearance to a cigarette pack, the Biobox offered more space for display of graphic images and was more durable than the easily shattered plastic cases commonly used. It had taken him five years and more than $2 million to perfect the design. After it was introduced a number of major music firms switched to the Biobox for their cassette packaging. It was manufactured by SGI, Inc., a sister company to Tee Vee Toons.

June 1998 saw TVT Soundtrax release a new recording of the complete score to the Stephen Sondheim musical Follies, which included previously unrecorded material from the first version of the show. A retrospective of 50 years’ worth of music associated with CBS television was released during the summer, and in the fall TVT put out a four CD set of music from programs on the cable television Sci Fi Channel. During the year the firm also signed veteran British pop band XTC and entered into a joint venture with United Producers, a new record label formed by ten successful record producers.

Once again seeking ways to circumvent the restrictive playlists of radio and music video programmers to break a new act, in November 1998 TVT took the unusual step of running an infomercial to promote a hard rock band called Sevendust in select markets. The program, a taped concert titled “Live & Loud,” was run with commercials for such companies as Epiphone Guitars and Best Buy stores, which gave Sevendust CDs prominent display space in exchange for the ads. TVT spent approximately $500,000 on the promotional campaign, which significantly boosted sales of Sevendust’s albums and concert tickets.

Company Perspectives

In its sixteen-year history TVT has been on the industry’s cutting edge introducing to the world such impact artists as Nine Inch Nails, Underworld and Jα Rule. The label currently maintains an ever-growing staff of 100 people around the country, with field offices in Los Angeles, San Francisco, Chicago, Boston and Toronto.

TVT Records provides the credibility and focus of an indie and the marketing and distribution power of a major while priding itself on grass roots artist development.

1999: $23 Million Loan to Fund Expansion

In February 1999 TVT secured a loan for $23.5 million from CAK Universal Credit Corp., in association with Prudential Securities, to fund the creation or purchase of new record labels and to sign more artists, using revenues from the firm’s record masters and music publishing as collateral. In the spring the company signed rock act Guided By Voices, and formed a distribution deal with Mushroom Records for that company to distribute TVT products in Australia and New Zealand. Later in the year the firm also reached agreements with digital streaming companies Reciprocal and Musicmaker.com to offer TVT material via the Internet. TVT would take equity stakes in both companies. In November TVT made its entire catalog available for download at tvtrecords.com for free on a timed-out basis. During the year the label also signed rap outfit Snoop Dogg Presents The Eastsidaz, in association with Dogghouse Records, and sold its stake in Reznor’s Nothing operation.

In the spring of 2000 TVT joined several other record companies and music publishers in suing both MP3.com and Napster, which allowed Internet users to download music for free via the Internet. The suits, which claimed copyright infringement, collectively sought hundreds of millions of dollars in damages. TVT also formed alliances with legitimate digital download providers emusic.com and Supertracks during the year.

In January 2001 TVT became the first company to officially settle its claims against Napster, which had recently agreed to start a fee-charging download operation with major label BMG. The settlement amount was not disclosed, but TVT agreed to make its recordings available on the new service. In April the company won its lawsuit against MP3.com, but due to a mistake in the jury’s calculations a mistrial was declared. The jurors had told the judge they found MP3.com liable for nearly $300,000 in damages, but later revealed that they had added the numbers incorrectly and should have put the figure at $3 million. Before the case could be retried, the two firms settled out of court for an undisclosed sum. MP3.com had earlier paid $133 million to the five largest record labels.

In 2002 TVT signed well-known rap act Naughty By Nature, which had recently been dropped by Arista; made its catalog available for download via the subscription-based Rhapsody service of Listen.com; and signed a European distribution pact with Universal-Island Records UK. The company also released a new compilation called TV Guide’s 50 All-Time Favorite TV Themes to commemorate the 50th anniversary of that publication’s founding.

2003: Taking Def Jam to Court

In the spring of 2003 the firm was back in court with a lawsuit against Island Def Jam Music and its chairman, Lyor Cohen, whom TVT accused of backing out of an agreement to let it release a “reunion” album by rap trio Cash Money Click and Ja Rule, now a Def Jam artist. Some songs on the album dated to the group’s original tenure with the company in the mid-1990s, while other material was to be newly recorded. In May a jury awarded $24 million in compensatory damages and $108 million in punitive damages to TVT, of which Cohen was liable for approximately half. Lawyers for Island Def Jam, a unit of Universal Music Group, declared they would appeal.

Meanwhile, the firm was in a dispute with Prudential Securities, which was trying to take over the revenues of the company’s TVT Catalog Enterprises unit after payments had been missed on the $23.5 million loan. Some sources were also reporting that Gottlieb was seeking to sell TVT to a larger record company, but had found no takers. In mid-July the company’s woes continued when Gottlieb’s laptop computer, containing sensitive data, was stolen from the firm’s New York offices in a burglary.

Tee Vee Toons, Inc., or TVT Records as it was best known, had grown from humble beginnings into the largest independent record company in the United States. Its broad range now included pop music, heavy metal and rap, as well as Broadway show tunes, movie soundtracks, and the television theme songs with which it had started. The scrappy competitor was still run by founder Steven Gottlieb.

Principal Subsidiaries

TVT Records; Wax Trax! Records; Blunt Records; TVT Soundtrax; TVT Catalog Enterprises; and Australian and Canadian distribution units.

Principal Competitors

Universal Music Group; Sony Music Entertainment, Inc.; BMG Entertainment; Warner Music Group; EMI Group plc.

Key Dates

1985:: Steven Gottlieb founds Tee Vee Toons, Inc. to release TV theme album.
1987:: TVT Records is formed to record alternative rock bands.
1989:: Nine Inch Nails signs with TVT.
1990:: Company begins releasing musical performances from Ed Sullivan Show.
1992:: TVT buys stake in bankrupt Wax Trax! Records; later acquires entire firm.
1993:: Blunt Records is formed to release New York hip-hop recordings.
1996:: TVT Soundtrax label is created after success of Mortal Kombat album.
1999:: Firm secures $23.5 million loan to fund expansion.
2001:: Lawsuits against Napster and MP3.com are settled.
2003:: TVT is awarded $ 132 million in damages following lawsuit against Def Jam.