5106 Whitman Way, Carlsbad, CA 92008
K-Tel International is a pretty unusual company.
It has specialized both in selling music and consumer products and is known for having made over half a billion units in sales.
It’s based in Winnipeg, Manitoba in Canada and it’s been there since it was founded in the 1960s.
Let’s take a quick look at the history of K-Tel and why it matters to the history of music.
K-Tel was founded by Philip Kives, he was a door-to-door salesman who had previously worked in a department store and as a pitch-man on the world-famous Boardwalk in New Jersey’s Atlantic City.
In 1962, he decided to go into business for himself and he created a company that was all about the demonstration-style television advert.
His first product was a frying pan. To make the deal pay off, he had a local department store carry the product and struck a deal with the TV station regarding the volumes of advertising based on sales revenue.
From there he dove deep into consumer products and by 1965 he sold a million copies of the Feather Touch Knife and his own product the Miracle Brush would sell 28 million units!
K-Tel wasn’t formally incorporated until 1968 but in 1966, the company released the first of its famous compilation albums – 25 Country Hits.
It was an unexpected success, and the company sold every company that they’d printed.
So, it was swiftly followed by K-tel’s second release – 25 Polka Greats!
And while that style of music may not be as popular now as it was then – it shifted 1.5 million units!
Check out their commercial for their “22 Explosive Hits” for an example of this style.
Kives knew when he was onto a good thing and he recruited Don Reedman in Australia and Ian Howard in the UK to increase the reach of the K-tel record label.
They built a business model based on “20 original hits! 20 original stars!”
All the music they sold was produced under license directly from the artists and labels that had made the songs into hits.
This meant that they also added the music to the K-tel catalog for the long term and this greatly increased the value of the K-tel record label.
Not everything Kives touched turned to gold though and in the 1970s, K-tel tried its hand at distributing foreign movies within the United States.
They also made their own feature film which flopped.
And in the early 1980s, Kives launched the K-tel Software brand which had some modest successes before closing down in 1984.
Kives continued to press his luck in the 1980s and sadly, diversification didn’t turn out so well.
The company had sold over $150 million in albums in the years running up to 1981. But instead of focusing on the music, Kives opted to focus on real estate, oil exploration, and buying up a rival label (and then, lost a fortune when that label’s clients refused to pay their bills).
By 1984, K-tel International was bankrupt. Kives lost control of the company and the record label and it would take until 1991 for him to regain control after settling the majority of K-tel’s debts.
Their “club mix” approach to music in the early 90s helped ensure K-tel became profitable again and they had several gold and platinum hits.
But in April 1998, Kives once again landed in hot water. His interest in the emerging internet market, saw K-tel’s stock go through the roof in what we now know as the “Dot Com Bubble”.
The company went public and then saw its share price collapse. It barely held on from there until Philip Kives took the company private again in 2007 – it completed a 1:5,000 reverse split offering reducing the total number of shareholders to 300 and which saw its delisting from the stock exchange at the same time.
Philip Kives passed away in 2016, but his company lives on.
Today, K-tel’s revenues come mainly from the company’s catalog of hits and licensing them out.
The songs appear on radio as well as in movies, TV, and commercials.
They also have their own music group – a Canadian children’s act called Mini Pop Kids. This act has sold millions of records and performs shows across Canada almost continuously.
K-tel helped change the way that people purchase and enjoy music.
They were essentially, as Forbes magazine puts it, The Spotify of the Seventies.
Dave Grohl of The Foo Fighters and Nirvana says that a K-tel recording changed his life.
We’re not sure that they had as much impact on us, but there’s no doubt that the industry owes a debt to K-tel and its founder when it comes to packaging up hits.