Jeff Leeds

New York Times, 4/17/06

When Robin Antin, a Los Angeles choreographer, decided 11 years ago to assemble a burlesque-inspired nightclub revue, she called it the Pussycat Dolls as a nod to her vision of "making everyone look like a real, living doll."

Interscope Records is taking her words literally.

The record company, which along with Ms. Antin revamped the act as an R&B-influenced pop group and released its first CD last year, has struck a deal with Hasbro, the toy maker, to create a line of fashion dolls modeled on its six members. The toy line — which aims to mimic the act's playfully risqué style — is expected to be on sale by this year's holiday season. Hasbro executives estimate the dolls, intended for children aged 6 to 9, will be priced around $15, with the label receiving a royalty on sales.

The deal is just one example of how record companies are seeking revenue-sharing arrangements that encompass far more than CD's. With sales on the decline, record label executives are pressing for a cut of artists' concert earnings, merchandise sales and advertising fees. Last year, for example, EMI agreed to pay about $25 million to buy an estimated 30 percent stake in the business generated by Korn, an established rock band.

But in establishing a new act, Interscope has been laying plans for a series of ventures that extend well beyond the customary ticket sales and T-shirts. In the Pussycat Dolls' case, the company struck a unique deal with Ms. Antin in 2003 in which the two sides split the profits from all the act's ventures. So far, the Pussycat Dolls' name has landed on a cosmetics line from Stila, until recently a unit of Estée Lauder, and on a nightclub at Caesars Palace in Las Vegas.

The toy line, however, reflects perhaps the most ambitious effort yet to generate extra revenue since the group achieved mainstream success. Managing to score at toy retailers would also illustrate how elastic the aura of a manufactured pop act can be, as the Pussycat Dolls straddle the image of late-night lounge dancers and child-friendly pop singers at the same time.

In that sense, the group emerged as envisioned by the Interscope chairman, Jimmy Iovine, who saw it as a cross between the film "Moulin Rouge" and the Spice Girls. Mr. Iovine struck the deal with Ms. Antin after seeing the dance troupe perform, at the suggestion of Gwen Stefani, an Interscope artist who periodically performed with the group.

The foray of Interscope, a unit of Vivendi Universal, into the toy market comes as young children are becoming an important audience for the recording industry. Music executives have been eager to appeal to fans who are (they hope) too young to download music illegally, and children are making their presence known on the Billboard sales chart.

The soundtrack to the Disney Channel TV movie "High School Musical" has emerged as bona fide hit, while "Kidz Bop 9," the most recent installment of a sing-along series, recently posted the biggest first-week sales of any album in the franchise.

The Pussycat Dolls did not start with a G-rated image. The group stormed the charts last August with its first big single, "Don't Cha," a steamy tease that included the lyric "Don't cha wish your girlfriend was hot like me/ Don't cha wish your girlfriend was a freak like me?"

But the act's next song, "Stickwitu," was a softer ballad that received airplay on outlets like Radio Disney. Since the group's album, "PCD," hit stores last year, it has sold more than 1.3 million copies in the United States alone, according to Nielsen SoundScan data.

Ron Fair, the head of Interscope's A&M Records unit and one of the album's main producers, said the act's more mature image was an asset in appealing to a wider audience.

"When you're dealing with children, if you shoot for that mode in the music you create, it's very, very difficult for it to translate up. Once it's branded as a tween thing, it's very hard to flip it up. But what the older sister and older brother like definitely trickles down to the kids. That's what's happening to the Pussycat Dolls."

Hasbro recognized that dynamic from the outset. Sharon John, the company's general manager for marketing, said she first talked with Interscope executives while "Don't Cha" reigned as the act's first hit. Hasbro executives viewed the Pussycat Dolls as a line that could sell to the same young girls who have gobbled up the Bratz, a line of fashion dolls with curvy figures and coy smiles, from a toy rival, MGA Entertainment.

Ms. John conceded the Pussycat Dolls packaging might be a bit racy for Hasbro consumers. "Bratz has pushed the envelope in this area and has been extraordinarily successful," she said. "I don't think we're trying to push the envelope any further, but we're trying to add an aspect of realism. These are people that have real careers."

Ms. John added that the company sought an alliance with the pop act while it appeared ascendant. "Most of the time, the toy item for Britney Spears, 'N Sync, is post the success of the act, way down the line. It's really the last thing they think of. We looked at it as, let's not wait for the Pussycat Dolls to become big hits and we take the tail end of the value chain."

As a result, the record label and toy maker are drawing up plans for a series of tie-ins. While the plans are still under discussion, the campaign is expected to involve the release later this year of a new Pussycat Dolls song that would double as a theme for the toy line's advertising, and probably wind up on a future CD.

If well received, a toy could be lucrative: the Spice Girls doll line generated an estimated $150 million in United States sales, according to the market research firm NPD.

Universal Music Group, the Vivendi division that oversees Interscope, had already been aiming at the children's market through a different route: releasing CD's branded by the Bratz. Last week, the company released "Genie Magic," an album linked to a new Bratz DVD. Universal's earlier Bratz album, "Rock Angelz," released last summer, has sold an estimated 255,000 copies. But the music company has no share of the actual toy sales.

Now, however, Interscope's pact with Hasbro provides a glimpse of how the label aims to stretch into new business lines. Label executives are working to produce their own television series, including one featuring the Pussycat Dolls and an urban drama series for HBO. Also in the works are consumer products, such as an electronics line branded by the rap mega-producer Dr. Dre.

"Were not going to limit ourselves to only traditional and new digital models for selling music," said Steve Berman, the label's president of sales and marketing. "We're going to look at every artist as a unique and special brand and look at what business relationships we can get into. Some artists, maybe none. Some artists, the doors are completely open."