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Flom in Virgin territory; tapped label CEO
By Melinda Newman
Sat Oct 22, 4:01 AM ET

LOS ANGELES (Billboard) - Every new label head is charged with developing artists, but for Jason Flom, the incoming chairman/CEO of Virgin Records, the mandate is key to Virgin's lifeblood.

Flom, who may start as early as October 24, replaces former chairman/CEO Matt Serletic, who left the label on October 18 after weeks of speculation over his possible departure and Flom's arrival. Flom stepped down from his post as co-chairman/CEO of Atlantic Records Group August 17.

Flom inherits a label that has seen its U.S. market share stumble the last few years. In 2001, Virgin's overall album market share was 3.48 percent. In 2002, it slipped to 1.99 percent; in 2003 it was 1.59 percent; and last year, it was 1.63 percent. So far in 2005, Virgin's market share is 1.46 percent. Overall market share includes current and catalog titles.

Under Serletic, who started in June 2002, the label has experienced success with such acts as Gorillaz, A Perfect Circle and the Rolling Stones. But other than Christian artist Stacie Orrico, Virgin has failed to break a new or developing act significantly into the mainstream, despite pushes behind such acts as Nikka Costa, the Thrills, Dwele, the Exies, 30 Seconds to Mars, Ima Robot, Ricky Fante, Guerilla Black, Brooke Valentine and current newcomer Hope Partlow, whose debut Serletic produced.

Additionally, a number of the label's big names, including Janet Jackson, Courtney Love and Lenny Kravitz, delivered albums during the last three years that performed below expectations.

In fact, further stats reflect a fairly dismal picture. According to the Billboard charts, Virgin scored only eight albums in the top 20 of the Billboard 200 during Serletic's tenure. Its last No. 1 on The Billboard Hot 100 was Jackson's "All for You" in 2001, before Serletic started. During his stint, the label scored only one top 40 hit, "Lady" by Kravitz.

LOOKING FOR HITS

Simply, the label needs to develop some hits. "That's what they were hoping to have Matt do," a source close to Virgin says. "And he did not."

EMI Music had hoped that Serletic's strong production skills, which included producing a number of multiplatinum acts such as Collective Soul and Matchbox Twenty, could translate into the ability to develop artists at Virgin, but a source close to the label says it was a difficult task.

"When you're an executive, you're the record company to the artist, you're not necessarily their partner in crime, like you can be as their producer," the source says. "It's a whole different relationship and thought process." Although Serletic has his own imprint, Melisma Records, he had never run a major label before Virgin.

In contrast, Flom's quarter-century of label experience should serve him well. Although Atlantic was having its own struggles breaking acts recently, Flom has a proven track record with A&R credits including Sugar Ray, Tori Amos, Matchbox Twenty, Twisted Sister, the Corrs and Kid Rock.

"He has great relationships with artists, and a nose for finding talent," a source close to Flom says. "He knows what it takes to run a record company and to maintain an artist roster. He'll bring more authority to the label."

Sources say they do not expect Virgin's A&R direction to change dramatically under Flom because he and Serletic share a strong pop-rock sensibility. They also share a history: in addition to Matchbox Twenty, Serletic produced "... Something to Be," the solo debut from the group's lead singer, Rob Thomas. The Atlantic project entered the Billboard 200 at No. 1 earlier this year.

Sources say Flom is expected to work closely with Phil Quartararo, executive VP/office of the chairman for EMI Music North America. Quartararo, who reports directly to David Munns, chairman/CEO of EMI Music North America, took on additional duties this summer that include helping run EMI's North American label business.

Flom and Serletic were unavailable for comment. But a source close to Serletic says, "He's learned a lot and he just wants some time off." If he wants another record company job, "There aren't a lot of labels to choose from, but people are already trying to line him up for producing projects."

Reuters/Billboard