Interscope Gets Credit for Music It Didn’t Make

Interscope Records is No. 1 -- with an asterisk.

The Vivendi Universal-owned label just locked up the title as the nation’s top seller of new hits so far this year, though not by cranking out another blockbuster album.

Instead, Interscope executives directed Nielsen SoundScan, the music industry’s top market research firm, to credit Interscope with sales of an estimated 8 million albums released in the last 11 months by DreamWorks Records, a label Vivendi plans to acquire.

As a result, Interscope leaped to the front of the pack Wednesday in the scramble for market share -- and bragging rights -- two weeks before the end of the holiday shopping rush.

That outraged rivals, which said Interscope, part of Vivendi’s Universal Music Group, had padded its performance and was unfairly taking credit for sales of albums it didn’t produce.

Universal has proposed buying DreamWorks Records from DreamWorks SKG for $100 million, with plans to fold the label into Interscope. The purchase is awaiting approval from federal regulators.

Interscope’s zoom to the top “is artificial. It’s make-believe. It’s not accurate,” groused one industry insider who spoke on condition of anonymity. “This is everything that’s wrong with the record business.”

Interscope executives downplayed the significance of the numbers shift, saying it was the fallout of a complex corporate reorganization that began this summer.

In June, Universal dissolved MCA Records and sent MCA’s remaining artists and staff to Geffen Records. A small operation within Interscope at the time, Geffen had long been receiving credit for sales of DreamWorks’ albums, which since 1995 have been packaged and shipped by Universal under a distribution deal.

After MCA’s shuttering, Universal told Nielsen SoundScan to start counting sales from the suddenly bigger Geffen on their own -- instead of lumping them in with Interscope’s.

Universal officials said they had always planned to one day have Nielsen SoundScan assign DreamWorks’ sales not to Geffen but to Interscope, which over the years had provided support to some DreamWorks releases.

“It was our choice, several months ago, to separate the labels,” said Steve Berman, Interscope’s chief of sales and marketing. “We chose to separate them based on who worked the records.”

Nielsen SoundScan is paid by the five major record conglomerates to tally sales figures, and it allows them to determine how sales are divvied among individual labels.

In its weekly report Wednesday, when Nielsen SoundScan added DreamWorks’ sales to Interscope’s ledger, Interscope picked up an extra 2% of the new-release market. Interscope was credited with 8.3% of new sales, pushing it ahead of another Vivendi label, Island Def Jam, and Sony Corp.’s Columbia Records.

According to the report, all the labels that operate under Interscope’s supervision -- including Geffen, DreamWorks and A&M; -- have together so far this year produced 11.3% of new-release sales. That is more than the new-release sales claimed by British music giant EMI Group and isn’t far behind the Sony Music Entertainment tally.

Nielsen SoundScan officials declined to comment.