K-tel International

K-tel International is an “As-Seen-On-TV” company, which is most noted for its compilation music albums, such as “The Super Hits” series, “The Dynamic Hits” series and “The Number One Hits” series. It is also known for “The Record Selector,” “The Micro-Roast,” “The Tote-a-Tune portable stereo,” and many other products.


The company has been in business since the late 1960s and is based in Winnipeg, Manitoba. They also have subsidiaries or other controlled entities in the U.S., the UK and Germany. In the UK the company is known as “K-tel UK Limited.” In the U.S. and Canada it is known as “K-tel International,” with US-distributed compilation albums distributed from Plymouth, MN.

The founder of K-Tel was Philip Kives. Kives, a demonstration salesman who had previously sold cookware door-to-door and in a department store, used television advertising in 1962 to sell Teflon-coated frying pans to a large-scale audience. Kives bought and marketed a number of other products from Seymour Popeil, father of Ronco founder Ron Popeil, such as the “Dial-o-matic,” a type of food slicer that allowed the user to “dial in” the thickness of slices produced, the Veg-O-Matic, and the “Feather Touch Knife.”  The combination of inexpensive goods, mail-order distribution and a simple sales pitch were a novel combination in television advertising in the early 1960s. Kives took his “Feather Touch Knife” on the road to Australia starting in August 1965 and by Christmas had sold one million knives with a net profit of one dollar a knife.

K-Tel was formally founded in 1968. After a successful decade in the 1970s, the company expanded rapidly both through acquisitions in its core area of business and diversification into other areas. Kives’ cousin Raymond Kives was president of K-Tel USA from 1967 to 1977, and president of K-Tel Europe from 1977 to 1984. K-Tel diversified in its early years, and Raymond began to concentrate on building the USA market and music sales while Phil concentrated on housewares. The company acquired rival Candlelite Records in 1980, and also formed subsidiaries in areas such as real estate and oil exploration. By 1984, the high-risk ventures had sapped the company’s fortunes and K-Tel was unable to meet the payroll. The publicly-traded U.S. entity K-Tel International filed for Chapter 11 bankruptcy protection.

Mickey Elfenbein, Mr. Kives’ nephew was appointed CEO of K-Tel International in 1993 Elfenbein remained CEO of the company into the late 1990s, during which period the company achieved a resurgence in worldwide sales primarily of music-related products and had a successful NASDAQ IPO trading under the symbol KTEL. Elfenbein was recognized by Business Week Magazine in 1994 as the CEO of the 7th best publicly traded company in the US, based on growth and profitability.

Music business

In 1966, Kives released the company’s first compilation album, a collection of 25 country songs titled 25 Great Country Artists Singing Their Original Hits. Kives never intended K-Tel to be a music business, saying “I had to do something else, I thought why not do a music album? I thought it’d be a one-off. Everybody said ‘that won’t work’. Now all the major labels do compilation albums, but mine was the first.”

Ray and Phil Kives and K-Tel recruited Australian Don Reedman (Don is the twin brother of Peter Reedman who was already working in the Australian office) help set up the UK-based division of K-Tel Records in the early 1970s, with Ian Howard as Managing Director of the U.K. operation. Ian Howard recommended to Phil Kives that he hire Don Reedman as Ian Howard and Peter Reedman worked together as Managers’ of the Australian boutique at Expo 67 in Montreal, both worked together back in 1966 for Australian retailer David Jones Limited prior to joining K-Tel.

The company built the business of releasing compilation albums that combined material from a number of popular artists onto a single theme album using the tag line “20 Original Hits! 20 Original Stars!”. The company could earn revenue in this way, because they negotiated directly with artists and labels for the rights to reproduce their original recordings, in the process also securing a long-term asset through adding those recordings to their catalog. The compilation albums largely relied on the pop charts of the time but concentrated on a specific musical genre: 20 Power Hits, for example, released in 1973, mostly concentrated on rock, though it had “Yesterday Once More” by The Carpenters on it. Some compilations were made for the disco music market (Night Moves, 1979), whereas others featured older music (Summer Cruisin’, made in about 1976, featured mostly 50s music).

The company also created original records, the most notable of which were the Hooked on Classics series of classical recordings with the London Symphony Orchestra. In 1995, the company released the “Club Mix” dance compilation series, which became the highest selling music series in the company’s history, with several RIAA Gold and Platinum certifications. The Club Mix dance series was created and initially produced by Elfenbein’s son, Mark Elfenbein, who was VP of A&R for the company in the early 1990s.

Today, K-Tel remains a memorable brand associated with TV marketing and the music industry. The company now leverages their significant back catalog in a digital rights and distribution offering that supplies content to large online music retailers such as iTunes, Puretracks and Amazon.com.

Dot com bubble’s effect on K-tel

In mid-April 1998 during the Dot com bubble, news that the company was simply expanding its business to the Internet sent the thinly traded stock shooting from about $3 to over $7 in one day (3:1 split adjusted). In spite of the early gains, the company was deemed by many to be a complete bomb, and the short interest of the stock swelled. The price of the stock peaked at about $34 in early May, and began to decline, reaching $12 in November and eventually pennies. The vicious advance was fueled mainly by a massive short squeeze that financially devastated traders who held short positions and were either “bought in” or simply forced to cover the positions at very high prices because of the great losses.

K-Tel was unable to sustain the growth and profitability. The company completed a 1 for 5000 reverse split on July 18, 2007, reducing the number of public shareholders to under 300 and allowing the company to delist itself.It changed its symbol to KTLI and moved from the NASDAQ market to the Over-The-Counter market.



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