Geffen Records, Inc.

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Geffen Records, Inc.

founded: 1980

Contact Information:

headquarters: 9130 sunset blvd.
los angeles, ca 90069 phone: (310)278-9010 url: http://www.geffen.com

OVERVIEW

Geffen Records is a major record company, which includes imprints Geffen/DGC Records and ALMO Sounds. The company also distributes labels such as DreamWorks SKG Records and Outpost Records.

ANALYSTS' OPINIONS

In 1994 Billboard wrote that, "Geffen/DGC's recent conquest of the top three slots on Billboard's Modern Rock Tracks chart could be just the beginning for the label, which plans to unleash a heavily alternative-oriented slate of releases in the next quarter. The label is planning to maximize the impact of its new and still-developing acts with marketing, sales, and promotion campaigns custom-tailored to its baby bands needs."

Geffen's 1994 chart trifecta with its DGC acts is an unprecedented feat. The week of January 29, Nirvana's "All Apologies," Beck's "Loser," and Counting Crows' "Mr. Jones" held Nos. 1, 2, and 3 on the Modern Rock Tracks chart, respectively. The following week, "Loser" hit No. 1, "Mr. Jones" climbed to No. 2, and "All Apologies" slipped to No. 3.

It marked the first time a single imprint held the top three slots on the chart since its inception in September 1988, although companies in the Warner family—Warner Bros., Sire, and Reprise—collectively pulled off hat tricks in 1989 and 1992.

HISTORY

Geffen Records was founded in 1980 when David Geffen, previously the founder of superlabel Asylum Records, resumed working in the music business after a four-year absence. The company, then a three-person operation, was located in the original Asylum offices on Los Angeles' famed Sunset Strip. Among its first artists were John Lennon and Donna Summer. Summer had the first single and album for the label, which in turn became its first gold single and first gold album. The John Lennon/Yoko Ono recording Double Fantasy, was the first Geffen Records album to hit number one. This also became its first million-selling album. In its first year of operation, Geffen Records reported its gross to be $25 million.

At the end of the decade, Geffen Records claimed to be "the most successful independently owned record company in history." The label had struck platinum, time and again, with a host of artists including Peter Gabriel, Tesla, Cher, and Aerosmith. One of the biggest of these was newcomer Guns N' Roses. The band's first recording, Appetite For Destruction, sold 13 million albums domestically and 5 million internationally. The company reportedly has had 41 albums that have sold more than 500,000 copies, with 22 of those having sold more than 1 million copies.

According to a 1996 Forbes interview with David Geffen, "Geffen Records lost money in every quarter for its first six years. Then in 1989 it was worth $500 million."

Geffen Records was purchased by MCA in 1990, ending its reign as the "last major independent" recording label. David Geffen remained chairman of the board and chief executive officer. The company's product distribution was moved to Uni from WEA in 1991. That same year, the company reported that it had grossed $225 million and had released 33 albums.

Also in the 1990s, Geffen Records started DGC Records, an imprint designed for new artists outside the mainstream. One of the first artists on the label was Nirvana. Their debut recording, Nevermind, sold more than 12 million worldwide. Other successful recordings by the imprint in the 1990s included The Counting Crows' August and Everything After; Hole's Live Through This; and Beck's Mellow Gold.

In an interview with Billboard, Ed Rosenblatt, then head of Geffen Records, discussed where Geffen/DGC Records fit into the label, "We, up to this point, are a rock 'n' roll record company," Rosenblatt explained. "We are not in the urban business . . . We are not in the country business. We're not in the classical music business. We are in the rock 'n' roll business. We're just taking advantage of some excellent signing that our A&R [artist and repertoire] department was fortunate enough to get, and some excellent records that those artists have made." Elaborating on Rosenblatt's theme, Geffen's A&R executive Tom Zutaut adds, "Historically, Geffen Records has always been great about bringing various styles of rock music into the mainstream. When hard rock/metal bands were having their day, we were heavy in that business, and we saw it coming before it happened."

Geffen/DGC Records grossed $505 million worldwide in 1994, a year touted in the trade press as its most successful, and certainly the best to date in its then 15-year history. Both Geffen and DGC had a total of 28 albums on the Billboard 200 chart in 1994, compared to 18 in 1993. Its recording artists received numerous awards that year as well. The total awards for Geffen Records through 1996 included 76 gold albums, 48 platinum albums, 22 multi-platinum albums, 19 gold singles, 1 platinum single, and 23 Grammy awards.

"When we started the label, we started with people who put us in business right away, but the intention of the label has always been to find and encourage and develop new artists, and that is what we have done from the very beginning," said David Geffen in a 1995 interview with Billboard. "From 1985 until 1993, we had three guys that were responsible for a lot of the signings, but not all of them," he says. "Now we have a very full, very active, and very talented A&R staff that is responsible for signing a lot of the acts that have happened this year." Acts signed in 1994 included Veruca Salt, Beck, and Weezer.

FAST FACTS: About Geffen Records, Inc.

Ownership: Geffen Records, Inc. is a privately held company.

Officers: David Geffen, founder; Ed Rosenblatt, chairman & CEO

Employees: 200

Chief Competitors: Geffen Records competes with other records labels including: Sony Music; Warner Music; BMG; PolyGram; and EMI.

In 1995 Seagram purchased 80 percent of Geffen Records' parent company MCA for $5.7 billion. MCA had purchased Geffen in March 1990, prior to MCA's sale to Matsushita. David Geffen left the company soon after. In April 1995, he parted company with the label he had founded, in order to work exclusively with DreamWorks SKG, an entertainment company he founded with Steven Spielberg and Jeffrey Katzenberg. Ed Rosenblatt, who had been with the company since its formation, took the helm as chairman and chief executive officer. In June 1995, Geffen Records and DreamWorks SKG reached an agreement in which Geffen Records would distribute recordings on that company's newly formed recording labels. The first artist signed to SKG Records was George Michael.

In 1996 the company rolled out its Geffen Gold Line, an array of previously released works to be sold at lower prices, including XTC's Nonsuch and the Days of Thunder soundtrack. At the end of 1996, MCA, the parent company of Geffen Records, had a 12 percent share of the domestic recording market, and a 6 percent share of the global market. Bill Bennett was named president of both Geffen Records and DGC Records in July 1996. He had been the director of promotion and the general manager, having joined DGC in 1991. Bennett is the second person to hold the title of president in Geffen's 16-year history.

INFLUENCES

Geffen Records, along with its parent company and Virgin Records, ceased distribution with record clubs in 1995. The National Association of Recording Merchandisers found that 74 percent of record club members are also heavy music retail consumers. Music executives contend that the clubs "cannibalize" or eat into retail distribution. These clubs license albums from labels at about half the price that retailers pay, and therefore are able to offer deep discounts and promotional offers.

Geffen Records, in 1995, was the first recording company to use the Internet to release a song. Aerosmith put a "never-before-released" song online for fans to download, Head First.

CURRENT TRENDS

In 1998, Geffen started an imprint called Delinquent Records primarily to release soundtracks of movies produced by Jane Hamsher and Don Murphy as JD Productions. Its first offering, the music from Permanent Midnight, was released in the third quarter of 1998.

PRODUCTS

Geffen Records' recording artists have included Aerosmith, Beck, Cher, Counting Crows, Peter Gabriel, Guns N' Roses, Hole, Elton John, John Lennon, Pat Metheny, Nirvana, Slash, Donna Summer, Tesla, Weezer, Whitesnake, and White Zombie.

GLOBAL PRESENCE

MCA, the parent company of Geffen Records had a 6-percent share of the $37 million-plus global recording market at the end of 1996. It has affiliates in 89 percent of the world's record markets, and wholly owned MCA record companies in such countries as Australia, New Zealand, Ireland, and Portugal. In 1996 the company began to plan for similar operations in Mexico, Brazil, Argentina, and Thailand. BMG had been responsible for Geffen Records' global distribution, beginning in 1991.