NEW YORK August 18, 1998: 3:35 p.m. ET

BEVERLY SCHUCH, CNNfn ANCHOR: Now, we just saw some footage of Chic live at Budakon from 1996. I know it must be bittersweet for you to watch that because you lost your Chic co-founder and longtime friend Bernie Edwards at that concert.

NILE RODGERS, OWNER, SUMTHIN DISTRIBUTION: Yes. It was an interesting night because it was the kind of thing that was like, filled with so much electricity and so much magic, I had no idea that Bernard was really struggling like that to get through the show. You know, right before we went on we had a doctor come and see him and I think he had a 105 fever. It certainly wasn't less than 104.

SCHUCH: But you did decide, eventually, to have this as the first record you would distribute in your new company then.

RODGERS: Yes. Once again, it was a tough decision because being a producer and a perfectionist, obviously I wanted to retool the record and make it really spectacular, but as Bernard's best friend, I decided to just give it to people in its pure form. Just as a sort of a testimony to his greatness and our relationship.

SCHUCH: That's wonderful. A wonderful tribute. Now you have quite a resume yourself. You've written music for Madonna, for U2, Duran Duran, Diana Ross, Eric Clapton, the list goes on and on. You're switching roles now from that creative end. Perhaps keeping that as well, but going into the real business end of it -- the distribution end. Why?

RODGERS: Well, the thing is, I've been in the music business making records for some 20 years. And, I've just noticed that it felt a little cold to me. And this is just from my own perspective.


RODGERS: Yes. I feel that, you know, when I started out, it was very, very artist-driven. And when I went to Atlantic Records and I sat with Ahmet Ertegan, and he's telling me stories about Ray Charles and Aretha Franklin, and it was wonderful to me. It made me feel like I was part of a privileged few. Whereas nowadays, I feel a little bit more like I've got to be a good earner. You know, it doesn't feel like (you are) a good artist first and then we'll figure out a way to sell you.

SCHUCH: You want more control, also, of the whole end of it. But the music industry has been in a slump for several years now. Are independent distributors getting a leg up in the market share?

RODGERS: I think that the indies now are giving the artist that sense of comfort where you can come in and you can start exploring different avenues of music. It doesn't necessarily have to be mainstream. You can take an underground artist and actually expose them in such a way -- using alternative marketing techniques -- so the next thing you know, a group that was just some little outfit in some hole-in-the-wall state, is at the top of the charts. And I think only indies really can do that.

SCHUCH: And that, of course, is part of your job -- to discover new talent and new trends. What are the new trends, do you think, in music?

RODGERS: God only knows.

SCHUCH: That's been part of the problem, though. There haven't really been new trends.

RODGERS: The thing is, that once again, when I started out in the business, all of the higher-ups, all of the people who were at the top, were also in the trenches. You know, they were out at the clubs, they were meeting the new artists. Whereas now, they have people doing that for them. I'm definitely going to be a hands-on type of person and I think that you feel the vibe from the kids. And hopefully I'll feel the right vibe.

SCHUCH: Yes. All right. You just bought Touchwood Distribution and renamed it Sumthin Distribution.


SCHUCH: What are your plans for a profit margin for this year? Do you have one?

RODGERS: Incredibly high.

SCHUCH: Aim high.

RODGERS: Well, the thing is, when I purchased this company, I looked at it and I could see that it wasn't that the business was underfunded, it was just that the business didn't have enough exciting product in their system. So I thought that what I could bring to the party -- seeing how the infrastructure is really fantastic, I thought that maybe I could just give it that injection of artistic excitement. Going out finding new artists. Also, dealing with a lot of my relationships, my past friends. I think a lot of artists who've been in the business a long time know artistically what they want to do. And they need to do their own record labels.

SCHUCH: So, you're going to be doing labels as well. What type of artists are you going to go after?

RODGERS: It's tricky now to talk about people we're negotiating with because, you know, you sign a nondisclosure agreement until it's done.

SCHUCH: Well, you certainly do have the contacts there from the people that you've written for over the years.

RODGERS: Absolutely. And now is their time, because think about this -- an artist was traditionally only on a major if they sell platinum. If they sell a million albums, the profit that they would normally get if they were putting out the album themselves, is probably five times that. So artists that could sell a million albums, now can sell two or three hundred thousand and make more money than they would have if they were on a major label.

SCHUCH: And there's a lot more movement going on with the artists and the recording studios. There used to be more of a loyalty thing that you signed and you were there forever.

RODGERS: Well, the interesting thing is nowadays, with today's technology, a lot of the artists make their records at home and on the road. Especially when you get big stars. They make a lot of their records in their dressing rooms and just hanging out. Believe it or not, the quality of those recordings is fantastic. They need an outlet. They need a place where they can call up a guy and say, "Hey Nile, you think this is weird, you think this will sell?" And I'll say, "I don't care, do you think it'll sell?" I'm not the ultimate artistic judge. I'm just a sounding board.

SCHUCH: Now, in terms of distribution though, a lot of the studios are turning to the Internet to cut overhead costs.


SCHUCH: What's going to be unique or unusual about your distribution method?

RODGERS: Well, see, the interesting thing is that, of course, I believe in high technology and the advancement of alternative marketing concepts, but I'm retail's friend. I believe in that experience where a person walks into the store and fools around and turns the thing over and says, "Hey, can you play this for me?" I want people coming into the stores. I want people looking at our displays. I want to have creative techniques and sort of stimulating people's senses. I want to have my artists performing at retail outlets because a lot of the time, you know, the days of the big concerts are not that happening. Unless you're at Lilith Fair or the Stones, what are you doing?

SCHUCH: That's true. All right. We have about 30 seconds left. You're writing Diana Ross' next album? Tell us a little bit about that.

RODGERS: Well, I sat with Diana a couple of weeks ago, and we just started talking about where we've been and where we'd like to go. And it was very reminiscent of the first album that I did with her, which was called "Diana" and yielded those big records "I'm Coming Out" and "Upside Down" and all that stuff. I don't know the exact direction but I certainly know it's going to be innovative, and as Diana says, she wants to do something that makes people think.