Tommy Boy's Tom Silverman Explains How Labels Buy Back Their Own Product

posted Thursday July 15, 2010 at 05:06AM PDT | 33 comments

Tommy Boy's Tom Silverman Explains How Labels Buy Back Their Own Product

De La Soul and N.O.R.E.'s old boss, explains how labels boost sales by purchasing their own artist's work.

After helping launch the careers of artists like Naughty By Nature, Digital Underground and De La Soul at Tommy Boy Records, Tom Silverman now wants to introduce a business model that will split revenue and costs with artists 50-50. But, he says the current business model, which includes a lot of alleged shady accounting, and payola needs to be scrapped. In an interview with Wired.com, Silverman also explained how and why labels buy their own product in bulk.

“If they buy 50,000 songs, we’re talking $50,000 less 70 percent, so it would cost about $15,000,” Silverman explained. “For $15,000 in a week, they can buy 50,000 more song downloads, which could drive the record up three or four positions on the chart. And they hype of it all would make people believe it, and then the next week it would be real, which is what always used to happen.”

This is hardly the first time labels have been accused of buying their own artists album to boost sales, with the most recent being 50 leveling similar accusations against Def Jam.

“They could have only one scan and have it count four times,” 50 told UK magazine Uncut, after losing a domestic sales competition to Kanye West in 2007. “West's entire career hasn't sold half what I sold on my first album.”

No one has actually proven labels buy their own product to boost sales, and technically the process is not illegal. Additionally, The Wall St. Journal reports the figures may be inaccurate even if some labels aren’t buying their own artist’s material.

“Record labels don't always request certification, and sales might not be tracked for more than a short period of time after an album is released,” states Carl Bialik of the Journal. “On the other hand, the certified numbers might overstate sales if stores order more albums than they are able to sell.”

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