Warner Music Group is starting two incubator operations -- one for hip-hop and one for rock -- to offer label services to baby bands on indies or within the WMG family.

Warner Music Group is starting two incubator operations -- one for hip-hop and one for rock -- to offer label services to baby bands on indies or within the WMG family.

The rap and hip-hop operation, which will go through WEA, has revived the Asylum name. Todd Moscowitz, a partner in Violator Management, and WEA senior VP Ron Spaulding will head the new Asylum.

Fred Feldman, owner of Triple Crown Records, will head the rock operation, which has yet to be named. It will be distributed by Alternative Distribution Alliance, WMG's indie distribution arm.

Both operations will report to WEA president John Esposito.

Moscowitz and Feldman will maintain their respective affiliations with Violator and Triple Crown; Spaulding will leave WEA for the Asylum role.

Asylum's initial deal is with the Hypnotize Minds label, owned by Three 6 Mafia. The Hypnotize Minds roster includes Lil' Wyte and Frayzer Boy. Asylum has also signed Hot Wright in conjunction with Atlantic Records.

The rock operation has yet to sign any deals, although Feldman's Triple Crown will switch distribution to ADA in December when its distribution deal with Razor & Tie ends. Triple Crown, which has released albums by Brand New, Hot Rod Circuit and Northstar, will use the new rock incubator services.

Both labels will be based in New York. Each will start with eight to 10 employees.

In addition to allowing WMG to get involved with independent labels and bands at an early stage in their development, the system will allow for upstreaming to the company's major labels, should a project warrant it.

The move is part of a trend by the majors to get involved in the independent sector, which is expected to gain strength in the wake of the Sony-BMG merger. The move also duplicates a system pioneered by Sony Music's indie distribution arm, RED. In the '90s, RED created Red Ink (for rock titles) and RUMM (for urban titles) to provide marketing services for independent labels and for the U.S. release of Sony's international repertoire.

Koch Records has also been successful with this strategy, particularly on the urban side, through its Koch Entertainment Label Alliance.

Universal Music Group appears to be moving in a similar direction. The mandate for its planned independent distribution company, Fontana, is not yet clear, but observers expect it to take an approach similar to WMG and RED.

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