Virgin America, a division of struggling British music giant EMI Group, has cut an estimated $15-million joint-venture deal with Barry Hankerson's Blackground Records, home to such acts as Aaliyah and Timbaland & Magoo.
Virgin is counting on Hankerson's label to put EMI back on the map in the black music business and to help beef up its abysmal 7.4% share of the U.S. record market. Virgin co-presidents Ray Cooper and Ashley Newton negotiated the pact with Hankerson after his distribution arrangement ended with Warner Music Group's Atlantic division.
The deal comes as EMI, home to Virgin and Capitol Records, ranks a dramatically distant fifth in sales of current albums behind Warner, Sony, Bertelsmann and industry leader Universal Music Group, which controls 28.4% of the market, according to SoundScan. Things are so bad at EMI this year that individual labels such as Sony's Columbia and Universal's Interscope have sold more albums in the U.S. than the entire British conglomerate.