Old Recordings Are Music to Dunhill President’s Ears

NORTHRIDGE —  Music isn’t the only thing Marshall Blonstein hears when he plays a compact disc. He hears the sound of cash registers.

Dunhill Compact Classics, the company Blonstein runs as president, licenses old recordings that it converts to compact discs, usually for the first time. What Blonstein does is much like dusting off an old record found in an attic and resuscitating it by issuing a crystal-clear version on compact disc. The company gains the rights to use original master recordings, cleans up hisses and pops using sophisticated recording equipment, and transfers the songs digitally to disc.

Blonstein, 44, is a 22-year music industry veteran who began his career with a separate label called Dunhill that was sold in 1967 to ABC. He later was a vice president with Lou Adler’s Ode Records and went on to serve as president of Island Records.

By 1985, Blonstein was pretty much out of the music business, had moved to Northridge and was operating a small firm that sold computer software to businesses. “I owned five blue suits at the time. Then I listened to the talk about compact discs. It got me excited again,” Blonstein said.

No Longer Classics

In many cases, Dunhill Classics’ recordings aren’t classic sellers anymore. Much of its catalogue includes recordings from the 1960s that are middle-of-the-road, easy listening or jazz works. Dunhill’s titles were largely big sellers 10 to 20 years ago, but sales of their recordings slowed in the 1980s as their fans aged and the young, record-buying public turned to U2, Bruce Springsteen, Michael Jackson and Bon Jovi.

Dunhill’s 64 titles include works by poet Rod McKuen, the late folk singer Harry Chapin, singer Sammy Davis Jr. and the late Judy Garland. It also offers discs of the Royal Philharmonic Orchestra playing songs by The Beatles and The Police. Most recently, Dunhill acquired the rights to recordings of Leon Russell, a rock pianist popular in the 1970s with such hits as “Lady Blue.”

Dunhill has emerged as one of a handful of companies that is cashing in on the burgeoning compact disc business by putting old recordings on discs. So far the profits have been small.

For the 9 months ended Sept. 30, the company earned about $190,000 compared to a loss of about $82,000 a year earlier. But its sales are growing fast, rising 93% in the period to $1.9 million from $958,058 a year earlier.

In the fourth quarter, Blonstein said, he expects sales of $3 million because the Christmas season is by far the busiest time of year for CD sales.

The market for many of the recordings that such labels as Dunhill release are too small to interest the major record companies that usually own the recordings. A hit record from a new artist can generate millions of dollars in sales; a successful reissue might generate $100,000 or more.

Lower Overhead

Richard Foos, president of Santa Monica-based Rhino Records, one of the leaders is reissuing old rock, said smaller labels can often make money more easily on old recordings than larger ones can because they have substantially lower overhead costs and because they specialize in marketing such recordings.

“It’s economy of scale. For Dunhill and ourselves might break even at 10,000 units. At a major record company, it might be 30,000 to 50,000,” Foos said.

Thus far, Dunhill has signed licensing agreements with major record labels, such as CBS and MCA, to use their master recordings, typically paying from 55 cents to $1.50 per disc sold as a royalty. A portion of the royalties is advanced to the owner of the song, ranging from $500 for obscure recordings to more than $100,000 for a collection from a top artist.

Part of Dunhill’s growth is attributed to the coming of age of compact discs, a technology that was greeted with skepticism when it was introduced in 1982, in part because technology buffs had been disappointed in the 1970s by the unfulfilled promise of “quadraphonic” sound systems. But consumers have taken to compact discs and today 1 in 11 American families own one, according to figures published in May by the trade magazine Optical Information Systems.

Prices Fall

Compact Disc player prices fell from $1,000 in 1983 to less than $250 now, with the discs falling from nearly $25 each to as little as $10. As a result, music stores have pushed the sale of compact discs while de-emphasizing the sale of traditional records. By the early 1990s, industry analysts expect that sale of compact discs will far exceed sales of records and cassettes.

Credit for Dunhill’s big increase in sales and profits mostly goes to Ray Charles, the blind soul singer known for such classics as “I Can’t Stop Loving You” and “Hit the Road Jack.” Dunhill has reissued five discs of Charles’ music, including two greatest hits albums. Altogether, Blonstein said, Dunhill has sold some 500,000 discs of Charles’ recordings.

It also helped that one of the discs included a rare version of Charles’ “America the Beautiful.” Charles first recorded the song in 1972 on an album that flopped, but the song gained in popularity as television producers frequently used it in sports events.

Charles’ version also inspired a fledging movement to replace the “Star-Spangled Banner” as the national anthem with the song. Dunhill has issued a 3-inch single of Charles’ “America The Beautiful,” which Blonstein said has sold 25,000 copies.

Charles is pleased with the discs and their sales. He said that because of his disability, he considers himself to be acutely aware of sound imperfections in recordings. He credits Dunhill with substantially improving the sound of his recordings, some of which date back to the late 1950s.

“Hearing is my thing. I hear extremely well, so I’m very aware of the sharpness and the clarity. This is very much cleaned up,” Charles said.

Limited Selection

Foos said larger record labels are becoming more interested in reissues on compact discs. As a result, he said, the number of recordings made available to such companies as Rhino and Dunhill is limited.

“In most cases, if they have a substantial artist from the ‘50s and ‘60s, they will release it themselves. Most of the major artists are off limits if you are doing a greatest hits package, although you can license individual tracts. That leaves the more minor artists,” Foos said.

Music industry people call such recordings “reissues” and “catalogue” recordings. Mitch Perliss, director of purchasing and marketing for the Music Plus chain of music and video stores, dubs them “evergreen” because they always sell, albeit in small numbers.

Companies such as Dunhill and Rhino also release anthologies of hit songs built around a theme, such as surf music or party songs. Surf recordings or rock anthologies have been around since the 1970s but are only just beginning to appear in large numbers for compact discs.

One Dunhill offering is “Toga Party,” a collection of rowdy songs from the 1960s, such as the Kingsmen’s “Louie, Louie” and The Swingin’ Medallions’ “Double Shot of My Baby’s Love” and Steam’s “Na Na Hey Hey Kiss Him Goodbye.”

Dunhill became a public company in late 1987 through a merger with a Total Capital Corp., a shell company in Colorado that had no ongoing operations. As a result, Dunhill ultimately may tap the public market by selling stock. Thus far, its stock has sold for less than 5 cents a share.

Blonstein owns about 20% of Dunhill’s stock and counts as his partners movie producer Bobby Roberts, whose credits include “Death Wish,” and Joseph F. Hrudka, who founded the Mr. Gasket chain of car parts centers in the 1960s.

Charles has been Blonstein’s biggest money maker, but he would not disclose details of Charles’ contract. He did say the singer, who owns the rights to the master recordings, received a “6-figure” advance and that Charles stands to make some $500,000 in royalties from the sales of the discs so far.

“I think it is a good revival,” Charles said. “It does allow you to have a chance to hear what people did at that time that is about as close as you can get to live,” he said.