The president of K-Tel International, the Winnipeg-based company best known for putting out compilation albums such as Goofy Greats, Looney Tunes and Dumb Ditties and must-have household products such as the Miracle Brush, the Patty Stacker and the Veg-O-Matic, was in the right space at the right time to reinvent his firm for the new millennium.
"Our big business is the downloading business," he said.
K-Tel has accumulated a massive music catalogue since the 1970s and now 20,000 of its songs are available on iTunes, the online music store owned by Apple Inc. A few hundred (and growing) songs from its catalogue can be downloaded as ringtones from companies such as Bell, Rogers, Telus, Verizon and AT&T. A few thousand more songs will be converted to ringtones shortly.
The song list runs from the 1960 to the '90s and includes Jenny (867-5309) by Tommy Tutone, The Twist by Chubby Checker, Good Golly Miss Molly by Little Richard, The Bird of Paradise by Little Jimmy Dickens, Obsession by Animotion and At Last by Etta James.
"The business was kind of slowing down a bit, and boom, in came iTunes. God bless (Apple CEO) Steve Jobs. He gave us a new way of marketing our product," Kives said.
Every month, K-Tel gets a cheque and a statement from iTunes detailing which songs were downloaded, how many times each song was purchased and from what country. Currently, downloaders are in Canada, the U.S., Mexico, Australia, Japan and Europe.
In the days before the Internet, K-Tel used to ship records and CDs to hundreds of record companies but online sales eventually drove them out of business.
"The retail market just isn't what it was. Across North America, there's less and less shelf space dedicated to music. This is the next step in the evolution of music. Everybody is evolving to the digital world," he said.
K-Tel built up its catalogue in a number of ways. Some of the songs it bought while it commissioned the artists of others to go back into the studio in Nashville to re-record them once the contract with their original label had expired. Samantha Kives, Phil's daughter and the company's Toronto-based business development manager, said each singer's motivation for forming a partnership with K-Tel was different.
"They could need the money or maybe they didn't get along with their original label and we can give them a better deal. Some artists just love being in the studio, too, and others feel like they could do a better job than the first time around. There's better (music) technology today," she said.
K-Tel's target market isn't just those toting iPods around. Samantha Kives said the company also licenses songs to television shows such as Mad Men, True Blood and Chuck, as well as Hollywood movies. She said she's waiting for the final paperwork to be signed to provide three tracks for an upcoming feature film.
The company was briefly a stock-market darling and made headlines back in the spring of 1998 when its shares experienced an improbable run-up in price after the company announced it would sell music over the Internet. The stock jumped from about US$4 to more than US$30 before eventually falling to penny-stock status. It was subsequently delisted from the Nasdaq exchange and is now a privately held company.
K-Tel is also making final preparations to its new website, which is scheduled to be launched early in the new year. In addition to directing surfers to iTunes for song purchases, it will also feature hundreds of old K-Tel commercials, most of which were produced by Kives himself. (The hands operating the Pattie Stacker and Veg-O-Matic, for example, are his, too.)
K-Tel employs about 20 people in offices in Winnipeg, Toronto, Minneapolis, London and Germany. Back in its heyday, it had more than 200 employees on the payroll.
to the future
K-Tel International is reinventing itself for the digital age but it hasn't forgotten its history.
A new website to be launched shortly will feature hundreds of old K-Tel television commercials, most of them produced by company president Phil Kives himself.
Here are some other nuggets about one of Winnipeg's best-known companies.
"ö Its biggest-selling product was the Miracle Brush, which sold 28 million units in the late 1960s.
"ö Its most popular album was Hooked On Classics, which sold more than 10 million copies.
"ö By the early '80s, K-Tel had sold more than 500 million albums worldwide.
"ö K-Tel is also responsible for Mini-Pops CDs, which are compilations of hits of the day sung by kids. Last year, the Mini-Pops Christmas CD was a top-five seller at Wal-Mart.
"ö There are currently 248 K-Tel items available on eBay, including a 1982 Best of Friends cassette by the Smurfs listed at $6.50 and a Disco Nights album for $9.