CBS gets (back) into the record business

It's apparently cheaper for a television network to run a record label than to license recordings.

Variety reports: CBS spins digital record label: "CBS will launch a digital record label in January, signing artists with the goal of breaking them via television show placement, iTunes and the Eye web's broadband channel. CBS Records will be launched primarily utilizing the existing infrastructure of CBS Entertainment and CBS Interactive. It will operate as a newly created unit within the entertainment division based in Los Angeles. The label will debut with three artists -- Boston rock act Senor Happy; Will Dailey, a John Mayer-ish singer-songwriter, also from Boston; and P.J. Olsson, an established indie-rock artist -- and is looking to sign another five acts in the first year."

With music licensing costs increasing and the costs of recording and distributing albums dropping, it may make more sense to sign an artist to a recording contract instead of paying a license fee for placing a song into a television show (particularly a recurring use, such as for a theme song.)

Television shows are now distributed across multiple platforms-- broadcast, cable, DVD, video on demand, iTunes, Xbox, streaming on the web-- and more. From the perspective of the studios, it may make more sense to just buy the recordings instead of licensing particular uses. This way, the studio sees a piece of the record sales generated by the promotional value of a television placement.