CBS Corp. is reaching into its past for its latest business proposition: the Tiffany network is launching its own label, CBS Records.

The label is starting out small with three artists and plans to grow the roster to eight acts by the end of the year. Likewise, staffing will be kept at a minimum with five hirings expected in January and the possibility of five more by the end of the label's first year. In addition to outsourcing some functions, the label will be a part of, and draw upon the existing infrastructure of CBS, and that of CBS Interactive.

In a statement, CBS Corp. president and CEO Leslie Moonves said, "CBS is one of the most powerful entertainment brands in the world, and music represents a natural and complementary extension of our content assets."

CBS bought Columbia Records in 1938 and then sold its CBS Records business in 1988 to Sony Corp. for $2 billion in a deal engineered by then-label chief Walter Yetnikoff. While CBS is hoping to latch onto some of the magic it created during its 50-year stewardship of Columbia, the start-up will leave the traditional record label model as the last step in its sales process. Instead, the new CBS will concentrate on building an imprint to take advantage of digital sales and distribution capabilities, and the power of television.

Jack Sussman, executive VP of specials, music and live events for CBS Entertainment, will play a big role at the label.

"Its a unique moment in time," Sussman says. "While record labels are shrinking, consolidating and dropping acts, television wants more music integrated in its programming and in a bigger way ... In primetime television for one season on CBS, there were 2,200 unique song placements -- and that's not counting daytime or shows that air any other outlets. Digital sales are getting bigger and prime time television is still the best place to sell anything, even music."

CBS executives envision the integration of songs from CBS Records artists into the network's programming, with call outs at the end of the shows providing artist and purchase information. Larry Jenkins, a consultant for the new label who runs his own management company, LJ Entertainment, says music will be sold through cbsrecords.com, Apple's iTunes store, and other digital or wireless merchants.

"Our artists will have access to an incredibly powerful medium-television-to drive music sales," explained CBS Paramount Network Television Entertainment Group president Nancy Tellem in a statement. "Our television producers will have greater flexibility to use music as a creative enhancement in their shows: and our company will be able to reduce the network and studio's music licensing cost center while transforming it into a new revenue stream."

Sources familiar with the television industry suggest that, thanks to synch licensing deals, if each artist gets enough songs placed in television shows, the record label could be at breakeven before it sells its first download or CD.

While the label will report to Tellem, the network will continue to use music by other record labels and independents artists as well, the executives say. If digital sales warrant it, CBS Records will offer physical product. But executives at the company say they will do so sans long-term deals; Jenkins says the label will work with their artists and their artist's managers to decide what sort of distribution deals make the most sense. Sometimes that might mean the label will put the record out itself through an independent distributor, or it might mean going through an existing label, or a retailer.

"We will do those deals on an artist-by-artist bases, and maybe even a project-by project basis," Jenkins said.

So far, CBS has signed Will Dailey, P.J. Olsson, and indie rock band Senor. Dailey was named best male singer/songwriter at the 2006 Boston Music Awards, and will soon release his debut album "Back Flip Forward." Already, "Grand Opening," a song on that album, was featured in the Nov. 29 episode of "Jericho."

Senor Happy's "I'm" Sorry" album will be released by CBS Records in January, and one of the songs on it, "Love If You're Real," will be featured on the Dec. 15 episode of "Ghost Whisperer." Olsson has released three albums since his 1998 self-titled debut, and is recording an album for the label.