A million bumpin' jams

5. Mario Warner and Steve Tallamy, Dino Entertainment Compilation CDs are where it's at for the happening businessman. By Paul Du Noyer

What is the measure of success in today's record business? Is it still the platinum and gold discs that hang on boardroom walls? In Acton High Street, west London, it is the sight of red lipstick on giant white underpants.

Kissed by teenage girls who pass it, there is a poster of a muscular black man in boxer shorts, advertising Volume 5 in the Pure Swing series of compilation albums. Mario Warner, the man whose idea the series was, smiles happily at the thought of all that high-street lust, a lovely local endorsement of the monster he created.

The Pure Swing sets - collections of essentially mellow soul and dance tracks by modern artists such as R Kelly, Jodeci and Smooth - have bucked the law of diminishing returns. The first four volumes, all released last year, rose in sales each time (170,000 for the first, 300,000 for the fourth) and have surpassed a million in total. The same male model appears on the artwork, always with his face concealed but usually with an appreciative pair of female hands caressing his oiled torso.

In their proud ascent they mirror the market for "multi-artist" compilations as a whole, for such CDs now account for one in every four albums sold in Britain. Shops stack product alphabetically, from Abba to ZZ Top, but the letter "V" - for Various - threatens to take over the premises. In the 1980s when it all took off, the running was made by LPs called Now That's What I Call Music!, batches of current chart hits put together by the giant firms EMI and Polygram. The Now series still dominates, rivalled by Virgin's genre-based collections The Best [Whatever] Album in the World... Ever! But at the cutting edge are smaller, independent outfits such as Dino Entertainment, the Acton-based originators of Pure Swing.

Mario Warner, 38, is the company's managing director and a self-confessed "white- socks soul boy". Housed in a glamour-free west London industrial estate, Dino is a record company without any pop stars; all of its tracks are licensed from other labels, and mostly channelled into TV-advertised compilations such as Rhythm Divine or Blues Brother/ Soul Sister. Dino UK began in 1988, brought here by Canadian businessman Ray Kives, who had formerly been the "K" in K-Tel. Today, Dino employs only 19 people, but by turnover it recently ranked fifth in a table of UK labels.

Having ancestors such as K-Tel and Ronco gave the compilation game an image problem. Tacky pop- hits packages were marketed alongside improbable kitchen gadgets and miraculous anti-fluff devices. So Mario Warner's Dino considers "credibility" to be all-important. Ruthlessly, they've even dropped the cartoon dinosaur from their logo. Inventing a brand such as Pure Swing, with its "20 Mellow Vibes" or "20 Bumpin' Jams" achieves that ideal two-in-one: hipness with a mass market.

The tracks are not always chart hits or even on UK release, but are suggested by a complex network of informants: specialist retailers from Leicester to Walthamstow market, punters on the company's 70,000-strong mailing list, and the Dino office girls who sit in the pub at lunchtime, watching black music videos on satellite TV. The latter group are close to Pure Swing's target market of mid-teen females, and have the additional perk of inspecting prospective artwork. "If they like the look of it, we know we're hitting the right note."

The categories of dance music are fluid and fast moving. As the New Jack Swing begat the New Jill Swing, so has handbag given way to hardbag, and there are compilations issued to capture the moment and define the genre in our mind. A fad of the moment is to peg albums around particular DJs or trendy clubs such as Liverpool's Cream. Mario Warner's contraction of Swingbeat into Swing was controversial at first: might consumers expect some Glenn Miller for their money? In fact, he notes, darkly, there are at least four rival firms adopting the Swing name now: "and the Pure word turns up quite a lot as well."

Just as Pure Swing appears on a separate Dino imprint, Pump Records, so have they diversified in other ways. Warner's commercial manager is an ex-record retailer, Steve Tallamy, whose pet project is the Dino offshoot label Nectar. Here is where Tallamy ("a sad trainspotter" according to his soul-boy boss) can revel in non-TV product for the serious collector - goth to gospel, psychedelia to bluegrass - at pounds 5.99 a throw.

Bigger than mere genres, though, is Love - as in "lurrve". Smoochy selections of romantic pop and soul, for those informal evenings on the shag-pile, these come with the obligatory artwork of Haagen-Dazs-style couples in a clinch, and a title with the L-word in it. The Love Album, When a Man Loves a Woman and That's Love are recent examples, but Dino's attitude is "been there done that". "We paid good money for strong shots of really top models," Warner recalls of his That Loving Feeling series. "Athena- looking couples. By the time we reached Volume 4 all sorts of products with 'Love' in the title were hitting the marketplace. Some were even finding out who our models were and using them. Our reaction was to drop out of the Love market."

Formulaic? Of course they are. But, as Steve Tallamy explains: "The TV market is conservative because it's such a huge initial investment in terms of marketing. If things don't work then they don't work in a major way." Yet there is still scope for ingenuity and quick-thinking opportunism. RCA has rounded up a clutch of very familiar classical pieces and called it Out Classics ("Seductive classics by eight of the world's greatest composers who just happen to be gay"). And the hit success of Robson & Jerome's "I Believe" prompted a CD of the same name from Dino's rivals Telstar: 20 Songs of Inspiration ranging from "Ave Maria" to Aled Jones's "Walking in the Air".

Dance music, meanwhile, has taken a bashing from Britpop but is still the single-buyer's favourite. The trouble with dance acts, Tallamy observes, is that people find them "faceless": "When I first worked in record shops, 90 per cent of people would come in and ask for a record by the name of the artist. By the time I left, 90 per cent were asking for it by title. That reflects the move towards dance product, where it's difficult to break major new artists as album sellers. You can get two Top 10 singles off a dance act yet you still couldn't give their album away.

"The obvious thing," he goes on, "is to compile them." Hence a big reason for the whole Various Artists explosion. If dance acts can't sell albums, just stick all those singles together. And then you flog them on TV, says Warner "in 100 miles-per-hour ads with a shouting voice, harder, faster, how many tracks can you get into 30 seconds?" Mind you, he did have a job reassuring the authorities that his ads would not cause epileptic fits.

Making compilations is an idle pleasure enjoyed by home-tapers everywhere. But professionals must stay legal, and that means licensing, or paying for the tracks you compile.

"Licensing," says Warner, "can be be summed up in one word: headache." A firm like Dino will start with a concept, then make up a wish-list of the tracks, expecting half of them to prove unobtainable. They put their requests to the record companies that own the original tracks, and negotiate a royalty - anything up to 25 per cent, partly payable up-front.

Sometimes the acts themselves have to be consulted. EMI, for instance, could not hand out a Beatles track to anyone who asked. U2 insist on having the package explained in detail. Queen and Dire Straits might give permission, but only if they are guaranteed to be the first track. ("So it's no use trying for both of them on the same album.") Even without the artists, a licensing request has normally to be approved by half a dozen executives, from the MD downwards.

Hardly any of the 6,000 singles issued in a year will make a profit. But getting your track on a compilation could transform its fortunes. Warner believes that a top dance single can earn pounds 1m in licensing fees - so, for a small-ish company, a phone call from Dino or its equivalent can be very welcome. And now that the compilation bug is biting in America and Japan, easily the world's two largest markets, the spin-off from licensing grows ever more lucrative.

If compilations are such good business, why isn't everybody at it? The answer, rather perilously for Dino, is that nowadays they are. Having watched the rise of indie specialists, the big record companies have set up their own separate divisions to market TV product. These majors have the advantage of owning a lot of the tracks they compile, so there is no one to ask, and no one to pay. No wonder Dino feels apprehensive when they put in a licensing request, and are asked to fax over the concept and artwork: "The great danger is that they like what they see. So they say, we're not going to license these tracks to you, we're going to do it ourselves."

Still, the Dino men insist, you can't beat a small company for dedication and good ideas. Take the Pure Swing campaign. With the cost of TV ads soaring, Warner and Tallamy are using other media, such as escalators on the London Underground. Above the bulging boxer shorts they tried the catchline "Coming Up?" but thought better of it. On the opposite escalator, the slogan "Going Down?" was, apparently, deemed acceptable.

Their ambitions know no limits. If Swing is not your thing, you need not feel left out, for going on sale shortly are the official Pure Swing underpants. The lipstick, of course, you still have to sort out for yourself.