Kurt Deutsch didn’t mean to get into the record business.

The self-described “total theater guy” grew up in St. Louis going to theater whenever possible (usually at The Muny) and then studied directing and acting in college. His big break came when Evan Handler had to leave the Broadway production of Neil Simon’s Broadway Bound for health reasons (he was diagnosed with leukemia, survived, wrote a fantastic book about it, Time on Fire, and went on to star in, among other things, Sex and the City, so there’s a happy ending here).

Deutsch replaced Handler and did the show for a year and half, and then went on to Aaron Sorkin’s A Few Good Men.

After he moved to Los Angeles, Deutsch met the woman who would become his wife, actress Sherie Rene Scott, while working on Randy Newman’s musical Faust. The show didn’t go anywhere, but the relationship did.

When Scott was getting ready to do Disney’s Aida on Broadway, she was offered a record contract – every performer’s dream, right? – and Deutsch looked it over.

“I thought it was ridiculous,” he says during a phone interview. “I thought we should just do it ourselves, and one thing led to another. I had no intention of doing cast albums or any of the stuff we ended up doing. I was just going to do a record with my wife.”

That was eight years ago, and Sh-K-Boom records, co-founded by Scott (the Sh) and Deutsch (the K), has become a major force in the realm of Broadway music. Originally the label started as an outlet for Broadway performers to show their musical colors outside of cast albums. Scott, along with the likes of Adam Pascal of Rent and Alice Ripley of Side Show, released pop-rock, singer-songwriter albums.

Then original cast albums began to creep into the picture as Deutsch began to learn more about the music industry, recording contracts and business models.

“The usual recording contracts are awful,” Deutsch says. “The record company pays for the record, but then the artist never makes any money off the record. The same kind of contract is given to shows. The royalty deal is horrible because you have to sell so many records to see any money off of it. I thought it was so unfair. I couldn’t believe producers would sign these things. I realized cast albums could be an asset and make money, theoretically. Producers spend all this money creating the shows, why wouldn’t they want to create their own cast album? So we created a different model for producers to share in the revenue from cast albums in an equitable way.”

The music industry is an industry in turmoil. Technology has wreaked havoc with traditional means of recording and distribution – thank you, iTunes. Deutsch has had to be creative and to develop a mission.

“When I go see the shows, there are two aspects I’m considering: preservation and money making,” Deutsch explains. “I know certain shows will probably never make back their investments. I’m very honest with the producer or the not-for-profit that is producing it. We then find angels to support the cast album, which is probably the most important tool if the show is going to have a life beyond this production. If a recording exists, productions will happen.”

Deutsch, of course, is not running a not-for-profit organization. He has to make money to stay in business. But he has gotten good at helping shows find money, whether he taps a moneyed believer in the show, the music publisher or other sponsors.

For releasing cast albums, Deutsch created a separate label called Ghostlight Records (named for the single bulb lamp left on stages after a performance), and among the cast albums he has released are this year’s Tony-winner for best musical, In the Heights, Legally Blonde, The Drowsy Chaperone, The 25^th Annual Putnam County Spelling Bee and another recent Tony-winner, Passing Strange, which was recorded live and has the distinction of being the first original Broadway cast recording released in a digital format before it was released to brick-and-mortar stores.

“There will always be something physical people will buy, especially collectors of recordings,” Deutsch says. “Some people will always want to read the lyrics, see photos to get a sense of the show or just have a souvenir of the show, a tangible thing.”

But there’s no denying the fact that the digital revolution has made things easier for distributors: there’s no manufacturing cost, no shipping and customers around the world can acquire the product with the click of a mouse.

With this summer’s airing of MTV’s reality show search for a new lead in Legally Blonde, Deutsch says that Blonde music sales, already one of the label’s strong sellers, increased, with about 50 percent of sales going out digitally.

There was one potentially major gaffe associated with the conclusion of the MTV show, which revealed the winner and new Blonde star to be Bailey Hanks. Deutsch and his crew had already recorded Hanks singing the show’s “So Much Better,” which was scheduled for release the day after she was crowned the winner. But someone at Amazon.com didn’t get the memo and posted a 30-second clip of Hanks’ song days before they were supposed to. There was no name on the clip, but anyone watching the show would recognize Hanks as the singer.

“I was on vacation in Italy and got this frantic e-mail from the executive producer of the Legally Blonde show,” Deutsch recalls. “We had had to sign a confidentiality agreement with the show, and a mistake like that one could have cost us $500,000. They eventually took the clip down. Hopefully someone was fired.”

Part of Deutsch’s creative mission with these recordings is to make original cast albums vital again. He gave away a copy of the Dirty Rotten Scoundrels disc with every ticket sold during the show’s Broadway run. For “In the Heights” he created radio-friendly three-minute versions of some of the show’s songs. And Passing Strange went digital in time for its award-season appearances.

He also takes risks, like he did with the musical bare (which will have its San Francisco premiere next year). The small-scale musical about teens in Catholic school, was generating buzz off-Broadway. After meeting with producers, Deutsch recorded a 12-track disc that was essentially given away, mostly to youth groups and summer camps.

“We spent $50,000 to make the record and market it,” Deutsch says. “The idea was to create buzz to get the show to Broadway. Then the money fell apart, and it never opened on Broadway.”

Upcoming releases for Sh-K-Boom and Ghostlight include an archival recording of Patti LuPone’s legendary concerts at Les Mouches (Nov. 11), Michael John LaChiusa’s
Little Fish (Sept. 9) and Orfeh’s What Do You Want from Me (Sept. 30). Recent releases include Kelli O’Hara’s Wonder in the World, the cast album for the first Broadway musical of the season, [title of show],
and Lea Delaria’s The Live Smoke Sessions.

“The whole point of this is that we’re part of the community,” Deutsch says. “Sheri is part of the Broadway community. We have a lot of friends in the Broadway community. We’re performers and producers on Broadway, not some big, bad record label guys. We want to help grow Broadway and off-Broadway. This is a great time in history with a lot of great people, and we can help make something to remember them by.”

For information visit www.sh-k-boom.com or http://shkbuzz.wordpress.com