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Increasing sales, fueled in part by the resources of new owners, have made contemporary Christian music (CCM) one of the hottest market segments. Sales of albums have grown from 31 million in 1996 to 44 million in 2000. Increased sales were an anticipated benefit of the buyouts—from 1992 to 1997, large secular corporations snatched up the industry's major labels. That growth has come at a cost—but not the cost many feared.

"I think the general perception is that a parent secular company comes in and buys the Christian company and will make them water down their Christian message," says Greg Rumburg, former managing editor of CCM magazine. "That's not what has happened."

Instead, industry observers say, the downside has been an unwavering focus on the bottom line. "In many cases, the parent company is saying, 'No, you need to be more Christian,' " Rumburg says. "They understand that the more Christian they are, the more appeal to the [listener], and the more money they make."

Word Entertainment was the first to go. It was purchased in the 1970s by ABC, which then sold it to Christian publisher Thomas Nelson in 1992. In 1997, Nelson sold it to Gaylord Entertainment (owner of the Grand Ole Opry) for $120 million and finally, after a three-year slide in profitability and creativity, Gaylord sold it for $84 million to the ever-growing AOL/Time Warner empire.

British media giant EMI bought Sparrow Records from founder Billy Ray Hearn's family in 1992. Sparrow became the cornerstone of EMI Christian Music Group, which also includes Forefront, EMI Gospel, and half of Tooth & Nail.

Zomba's Provident Music Group includes Reunion, Essential, and Verity Records and the mammoth Brentwood-Benson publishing operation.

Meanwhile, there are the smaller labels—like M 2.0/INO Records, Gotee, and Rocketown Records.

They remain independent and, they would say, more driven by creativity. "Independent labels always lead trends," says Rocketown President Don Donahue.

Donahue has worked on both sides of the industry, and his experience highlights the tension between secular and spiritual forces on Christian music.

His tenure at Reunion began in 1990 when it, too, was a respected independent. Michael W. Smith's managers had founded Reunion as a home for Smith, Rich Mullins, and others. Donahue left Reunion in 1996 after it had been sold three times and was nearly hobbled by corporate profit-seeking pressures.

Donahue and Smith created Rocketown to be like Reunion, and it quickly became one of the industry's most respected independent labels. Rocketown artists include Chris Rice, Ginny Owens, and Watermark.

"Everything started to impact lives for Christ," Donahue recalls. "Now you're getting heat—from people who don't believe the way you do— to grow your company, to make money. There's nothing wrong with making money. There's nothing inherently evil about corporate ownership—but when you mix it in with art and the gospel, it's a dangerous mixture."

EMI's partnership with Sparrow has clearly been the smoothest transition to corporate ownership. When Sparrow was sold to EMI in 1992, it was a $35 million company. Now, according to Bill Hearn, chairman of EMI-CMG and the son of Sparrow founder Billy Ray Hearn, it's worth $135 million, and sales have grown 100 percent in eight years.

In those eight years, EMI-CMG has purchased or started four other labels. It has let Forefront retain an independent, rock-oriented spirit, and intends to do the same with a recently purchased interest in Seattle-based Tooth & Nail, according to Hearn. But the company also shuttered Star Song, a Christian pop label it purchased in 1994.

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March 11 2002, Vol. 46, No. 3