CBS Corporation (NYSE:CBS) on Friday said it is reintroducing CBS Records in an attempt to give its television producers lower production costs and to gain a share of the growing digital music market.
The New York-based media group announced the addition of the division would lower the networkâ€™s music licensing costs since it would be using its own artists. The initial focus will be digital distribution of music content. The new division has given top priority to Appleâ€™s iTunes Music Store by allowing it to be the first distributor (other than itself) to sell the divisionâ€™s music and music videos. Other distribution sites will be announced later.
With more consumers choosing the online download model as the preferred way to purchase their favorite songs, we have an opportunity to use our unique and broad collection of media platforms to create a new music label paradigm for a small price of admission, said Leslie Moonves, President and Chief Executive Officer of CBS Corporation.
The firm stated that the creation of the division was a complimentary expansion by the firm. The new label can use television to gain maximum exposure for its artists to sell their songs. CBS had previously sold the record label to Sony Music in 1998, which later stopped using the name.
CBS shares closed up 39 cents to reach $31.99 in Friday trading on the New York Stock Exchange.