Atlantic Powers Faltering Warner

And introducing . . .

That seemed to be the mantra of the U.S. record business in 1997, with a string of new acts dominating the charts--a cadre of pop, ska, hip-hop and R&B; performers led by the Spice Girls and Hanson.

But when it comes to running the labels themselves, the big winners included two savvy industry veterans with the ability to start from scratch after being unceremoniously toppled from the presidency of other labels.

Leading the pack in a year when total album sales increased a projected 5% over 1996 was Doug Morris, who not only rejuvenated the lackluster MCA Music Group (which has been renamed Universal Music Group), but also scored with his own Universal Records label. The result: The company that was once known as the Music Cemetery of America has a new energy and respect, and a position at the forefront of the record industry. And all this just two years after Morris was fired as domestic chief of Time Warner’s music division.

Also deserving high marks again was Clive Davis, whose ear for rising producer-songwriter talent paid off big in the many hits spun off by rap entrepreneur Sean “Puffy� Combs. Davis formed Arista in 1974 after being dismissed the previous year by CBS (now Sony).

Another executive whose bonus this year should be sizable is Ken Berry, who was elevated to the chairmanship of EMI’s troubled North American operation and seemed to bring order to the company as it reaped the benefits of sales of the Spice Girls and Garth Brooks.

And what about Warner Music, which had the biggest market share in the U.S. record business?

There’s not a lot to cheer when your industry-leading share drops from 21% in 1996 to 17.6% this year. The main bright spot: Warner’s Atlantic Group division, which was the nation’s hottest single property.

Here’s the roundup drawn from SoundScan’s sales figures and market share figures, based on new product, not older catalog items. The figures are through Dec. 21.

WEA (17.63% MARKET SHARE)

The Atlantic Group (includes Atlantic, Curb, Rhino)

Atlantic, whose 8.15% market share was tops for any label, benefited greatly from its association with Nashville-based Curb Records (LeAnn Rimes, Tim McGraw), but it still had an impressive year on its own. Atlantic showed good patience in sticking with Jewel’s 1995 debut album, nurturing it steadily into this year’s second-biggest seller. Atlantic also scored breakthroughs with Matchbox 20, Duncan Sheik and Sugar Ray. The label’s whopping market share is seen as a payoff for Chairman Val Azzoli’s moves over the last two years in streamlining the company’s roster and empowering his young executive staff.

Biggest seller: Jewel’s “Pieces of You,� 4.1 million. Total albums among the year’s Top 200 sellers: 10.

Warner Bros. (Warner Bros, Reprise, Maverick)

Everyone’s waiting for the other shoe to drop after Phil Quartararo’s arrival from Virgin Records as president of Warner Bros. Music, with expectations of significant trimming in both the artist roster and the staff, which are seen as top-heavy. Three of the company’s four biggest sellers came from its joint venture with Maverick (including Prodigy and the “Evita� soundtrack). Help may be on the way next year, thanks to new releases from Madonna, Eric Clapton and Alanis Morissette.

Biggest seller: Fleetwood Mac’s “The Dance,� 2 million. Top 200 albums: 14.

Elektra (Elektra, EastWest).

Chairwoman Sylvia Rhone suffered one big blow when En Vogue’s return went into the tank, but there were lots of success stories at the label, where Rhone is making strides in overcoming the questions about whether the former president of EastWest Records can sell rock as well as she can market R&B.; Keith Sweat, Third Eye Blind, Metallica, Missy “Misdemeanor� Elliott and LSG all contributed to Elektra’s punch.

Biggest seller: Metallica’s “Re-Load,� 1.3 million. Top 200 albums: 11.

BMG (14.19%)

Arista (includes Bad Boy, LaFace)

The hits just kept rolling under Davis’ remarkable regime, which snared a 6.6% market share thanks largely to his joint venture with Combs, who dominated the pop single and album charts much of the year.

Biggest seller: Notorious B.I.G.’s “Life After Death,� 3.1 million. Top 200 albums: 15.

RCA (includes Loud)

Besides the Wu-Tang Clan, which comes to RCA via Loud, and the reliable Dave Matthews Band, things continue to look pretty bleak at the label, whose market share is just over 2%. In other words, it’s about the same as it’s been for most of the ‘90s. Still, there’s a feeling that RCA is finally finding its footing under President Robert Jamieson, with high marks for steadily working pop-dance artist Robyn into what some expect will be a 1998 breakthrough.

Biggest seller: Wu-Tang Clan’s “Wu-Tang Forever,� 1.6 million. Top 200 albums: 6.

Zomba (Jive)

This is the home of the year’s most unlikely success--the sentimental Christian-country weeper “Butterfly Kisses� by journeyman songwriter Bob Carlisle, which shot to No. 1, an odd hit for a label known for its steady stream of R&B; and hip-hop hits. Zomba is also the new, posthumous home of Tupac Shakur.

Biggest seller: “Butterfly Kisses,� 1.3 million. Top 200 albums: 4.

EMI (13.66%)

Virgin

Spice is nice, but the relatively tepid performance of Janet Jackson’s “The Velvet Rope� and the Rolling Stones’ “Bridges to Babylon� hasn’t provided a very smooth arrival for Virgin’s new presidential team of Ray Cooper and Ashley Newton, imported from the U.K. to replace the departed Quartararo. The questions for 1998 revolve around what the new team will be able to do to boost both A&R; and promotion. But there’s lots to work with at the label, including the latest hit British invader, the Verve.

Biggest seller: the Spice Girls’ “Spice,� 5.1 million. Top 200 albums: 7.

Priority

Bryan Turner’s company continues to tap the streets, with Master P the latest rap entrepreneur to make a major impact, and its deal to take Death Row releases passed on by Universal has yielded a few big hits.

Biggest seller: Master P’s “Ghetto D,� 1.4 million. Top 200 albums: 8.

Capitol

Gary Gersh is making some inroads at the high-profile label. Though his market share remains tiny (only about half of the upstart Interscope), he’s made some coveted signings and will benefit from EMI’s purchase of the remaining 50% of Priority. Meredith Brooks’ single “Bitch� was ubiquitous for a while, but so far there’s been no follow-up hit, and the Foo Fighters’ album keeps running hot and cold but never quite makes a big move. Radiohead and Everclear seem ripe for a sales spurt, but radio play has proved elusive. However, a new deal with film company Miramax gives the label “Scream 2,� a soundtrack potentially as big as “Romeo & Juliet,� and an expected renewal with the Beastie Boys’ Grand Royal label could also be fruitful.

Biggest seller: “Romeo & Juliet� soundtrack, 1.5 million. Top 200 albums: 7.

Capitol Nashville

Two words--Garth Brooks. Well, five: Garth Brooks and Deana Carter.

Biggest seller: Brooks’ “Sevens,� 2.7 million. Top 200: 3.

UNIVERSAL MUSIC GROUP (13.38%)

MCA (MCA, MCA Nashville, Decca, Radioactive)

The label market share, now about 5%, has traditionally benefited from country and R&B; sales, so Jay Boberg, who took over as president last year, needs to build its rock and pop presence. The success this year of the two Sublime albums and the fluffy Aqua helped offset the disappointing showing of Live.

Biggest seller: Sublime’s “Sublime,� 2 million. Top 200 albums: 10.

Interscope

The phasing out of Death Row and gaining the big hit with new-gospel ensemble God’s Property could sum up Interscope’s year, which registered about a 4% market share. Another trade-off came with the breakthroughs of Jakob Dylan’s Wallflowers and new act Smash Mouth compensating for the bitter legal squabble with Trauma Records (which launched No Doubt and Bush with Interscope). Meanwhile, Interscope, impressively, signed a new joint venture with R. Kelly.

Biggest seller: The Wallflowers’ “Bringing Down the Horse,� 3 million. Top 200 albums: 10.

Universal (Universal, Uptown, Mojo)

In less than two years, Universal has become a legitimate force, with R&B; singer Erykah Badu quickly becoming a household name, British anarchist collective Chumbawamba having the year’s catchiest hit with “Tubthumping� and solid numbers in rock (Sister Hazel), ska (Reel Big Fish) and rap (Heavy D, Lost Boyz). Despite a small roster, Universal achieved a 2.3% market share.

Biggest seller: Erykah Badu’s “Baduizm,� 2 million. Top 200 albums: 8.

Geffen (Geffen, DGC, DreamWorks, Outpost)

Here’s a shocker: Only one 1997 Geffen release finished among the year’s Top 200 sellers--and Veruca Salt’s “Eight Arms to Hold You� only ranked No. 193. No wonder the company, which once held forth with such essentials as Guns N’ Roses (will a new album ever come?) and Nirvana (the archives are now bare), is trying to reinvent itself with former PolyGram Music publishing head David Simone now in charge of A&R.; The first sign of the “new� Geffen is the recent album from English female pop-dance trio She Moves. The biggest bright spot going into 1998 is the buzz surrounding Outpost’s young rock band Days of the New. Big questions: the new Hole album and how long it’ll be before DreamWorks delivers a hit.

Biggest seller: Counting Crows’ “Recovering the Satellites,� 990,000. Top 200 albums: 4.

SONY MUSIC (12.81%)

Columbia

Unlike the many other labels that had good years in 1997, Columbia’s strength was largely in its veterans, with Barbra Streisand’s sales resurrection perhaps most impressive. Among the others who contributed to the label’s robust 6.1% market share: James Taylor, Aerosmith and Bob Dylan. But Columbia also did well with some newcomers, notably Maxwell. The slow start for Will Smith’s solo debut, coming off the huge “Men in Black� album, is a big disappointment.

Biggest seller: “Men in Black� soundtrack, 2.5 million. Top 200 albums: 13.

Epic (Epic, 550, the Work Group)

The promotion of 550 President Polly Anthony to president of Epic and the shake-up of the A&R; team has apparently invigorated the label, which hopes to reignite Pearl Jam commercially in ’98. Epic’s brightest arrivals this year came via the Work Group, which saw big breakthroughs with Jamiroquai and Fiona Apple. Celine Dion’s latest provides a strong follow-up to “Falling Into You,� but Oasis’ showing was underwhelming. Market share: 5.9%.

Biggest seller: Dion’s “Falling Into You,� 3 million. Top 200 albums: 10.

POLYGRAM (11.85%)

Mercury (includes Mercury Nashville, Def Jam, Motown, Capricorn)

Danny Goldberg has revived Mercury in much the same way he did previously at Atlantic--with astute hirings and deal-making, including adding Def Jam and floundering Motown to his plate. The roster is nicely balanced with country, R&B; and rock.

Top seller: Hanson’s “Middle of Nowhere,� 3 million. Top 200 albums: 11.

A&M; (includes Polydor, Rocket, Perspective)

Somehow it’s typical that A&M; oversaw the biggest single ever (Elton John’s “Candle in the Wind 1997�), but makes no profit from it since it’s a charity release. Chairman Al Cafaro has certainly won plenty of goodwill, but he needs to deliver some hits. Sheryl Crow’s second album provided a steady seller for ‘97, but John’s own new album hasn’t even hit the 500,000 mark. Good news is that Chris Cornell’s solo album is due in ’98.

Biggest seller: Sheryl Crow’s “Sheryl Crow,� 1.1 million. Top 200 albums: 6.

Island (includes London)

Sad to see such turmoil at one of the industry’s most respected labels. But founder Chris Blackwell’s recent angry departure--following a clash with PolyGram Chairman Alain Levy--was just one problem at the label. U2’s “Pop� album fell far short of goals, especially considering the very expensive promotional campaign. And the label’s only other current act to make the year’s Top 200, Dru Hill, sued the label after a physical altercation allegedly provoked by label executive Hiriam Hicks against the group’s manager and lawyer.

Biggest seller: U2’s “Pop,� 1.3 million. Top 200 albums: 3.