Mimi Xu is tired. But even though she's just come back from DJing in Ghent with 2 Many DJs, she's eager to chat about her new venture, top French production company Première Heure's record label Kuskus, which launched in April. It's her passion for music, along with her role as PH's head of communication that led the former Modular and Kitsune label exec to start a new type of imprint with the founders of Schmooze, the ad and film music division of PH.

"Record labels are under so much pressure at the moment to make physical sales," explains Xu. "They sign the artist, they put a lot of money into them and they then expect a certain return. Sales are crumbling, especially in France, because the quality of the albums isn't great and people are downloading. Bands are making money from gigs, synchro and publishing but not really from record sales."

Kuskus, she says, offers an alternative. Bands like Housse De Racket, the company's first act, sign a hybrid publishing and record label deal that includes crafting music for brands. That allows them to earn money by making music for ads while developing their album. Thus, they are not under pressure to have a hit the first time around, often necessary for traditional record labels to recoup the huge financial outlays made in developing, marketing and distributing music. "It's a nurturing environment for artists," says Xu.

Kuskus is further insulated from financial pressures by the clout attached to its multi-million-euro silent partner PH, which offers them unparalleled inroads to agencies through long developed relationships that other labels lack. PH also offers access to top directors, music video and live recording production facilities at cost price.

In turn, signed acts benefit from the free and increasingly lucrative marketing reach of a commercial for a generation accustomed to consuming music through myriad avenues. Case in point is Housse De Racket's recently completed track for a Paco Rabanne spot, directed by Stephane Sednaoui (incidentally, not produced by PH). It's a large part of the reason the band signed with Kuskus after a fierce bidding war with label giants Universal and Sony BMG, says Xu, who points out that both offered the band more money.

It's representative of a huge change in music industry perceptions. Bands who previously would never dream of sullying themselves by associating with an ad are embracing the lucrative commercial realities. "We give the band the first news about a commercial and they can do it and make enough money to buy equipment and tour. They know we can give them leverage," she says. She also stresses that bands are under no contractual obligations to undertake any projects.

Central to Kuskus' strategy is treating physical sales as secondary. The label promotes its bands by giving away a small run of vinyl and CDs to tastemakers and DJs followed by tracks that are initially made available for free online. Finally, it offers paid-for tracks and albums as interest picks up.

"How would a 15-year-old kid from Ohio find out about this band if it's not from downloading?" Xu says. "For me it's an amazing promotional tool that a lot of record labels are still shy about. We want our artists to give their music away for free. It's a different philosophy from a regular record company."

Looking forward, Xu is keen to keep the company small and nimble, looking at having just three artists. Although coy about details, she did say that plans are already afoot to work with a sneaker brand and a designer clothing label.

Kuskus http://www.myspace.com/kuskusmusic