Record label sees better days

Poptones, the record label founded by the man who discovered Oasis, today showed it had more than halved its losses after a major cost cutting programme.

The group has saved cash by removing all non-board member staff, meaning the group is now made up of directors such as chief executive Alan McGee, famed for setting Oasis on the road to stardom.

The move, together with lower administrative costs, means it saves more than £200,000 (€318,000) a year and instead buys in services as required.

The cost cuts reduced operating losses to £364,000 (€578,000) for the year to June 30, from £1m (€1.59m) the previous year.

Poptones announced the plans last year, saying it would reduce the nine staff at its north London office by four or five workers.

At the same time it launched a strategic review, which resulted in it establishing two joint venture companies with production, distribution and marketing group Telstar Music Group.

One of these incorporates Swedish band The Hives, which saw its album “your new favourite band” achieve platinum status by selling more than 300,000 copies.

The Hives has however signed a contract with another record publisher, although Poptones said it would still benefit from sales of the album.

The second joint venture has been set up to include three separate artist agreements.

Poptones has signed the first of these, The Bellrays, which includes soul singer Lisa Kekaula.

Poptones said each joint venture was constructed to produce a 50:50 profits share. Previously, Poptones had assumed all the risks and expense of promoting its bands.

Chairman Mike Blackburn said the success of The Hives had “inevitably overshadowed” other bands in its roster but he believed these had good potential.

He added: “Timing is a critical factor in this industry; their time may come,”

Mr Blackburn acknowledged that the music industry was enduring a tough time.

“Poptones is a niche player whose challenge is identifying emerging trends and talent earlier than mainstream labels, whilst still only committing to artists which the directors believe will be capable of delivering appropriate financial returns,” he added.