Andrew Slater is not your typical music industry executive. A former manager and producer of artists such as the Beastie Boys, Don Henley and Macy Gray, Slater runs Capitol Records, one of the few labels in an unsteady era of file sharing that not only is stable but also has the rare distinction of substantial growth.

Since taking the reins almost three years ago, Slater and his hands-on approach to music making - from re-recording parts of songs to dissecting new videos - have transformed Capitol from a languishing heritage label best known for the Beatles and Frank Sinatra into a company that can once again develop hit artists.

He has almost doubled Capitol's market share through the middle of this month compared with the same period last year, the second-best performance of any label, according to Nielsen SoundScan, which tracks music sales in the US. (Capitol had 3.24 per cent of the market; Columbia, the leader, 6.9 per cent.)

But Capitol's recent victories rest primarily on albums by the rock band Coldplay (2002) and the hip-hop artist Chingy (2003), releases that are growing old by the calculus of the music industry, which demands a constant stream of hits. And its biggest release so far this year, Body Language by the Australian pop singer Kylie Minogue, who is a superstar almost everywhere but in the US, has failed to ignite in America.

That weak performance makes today's release of the second album by the Australian rock band The Vines particularly important to Capitol and Slater. "It says to everybody, both radio and in the industry, 'Hey look, we're here, you know, we're stable, and the label continues to be on a roll,"' said Max Tolkoff, a columnist for the trade journal Radio & Records.

There are some promising signs. The band is featured on the cover of this month's Spin. The album, Winning Days, received a favourable review in Rolling Stone, and its single, Ride, has been on a steady climb on radio. But the Vines have also been handed some stinging reviews of both their new album and their live performances, and the band's sophomore effort could disappoint the high expectations, much like the latest album from a similar retro-rock band, the Strokes.

When Slater became president of Capitol in May 2001 there was some doubt that his qualifications, which included stints managing artists like Henley, would translate into success. Triumphs in the studio do not portend triumphs in the boardroom, said Jimmy Iovine, the producer of U2 and Tom Petty. Iovine is now chairman of Universal's Interscope Geffen A&M group.

Antonio Reid, another producer turned president, resigned in January from Arista Records after four years, during which he developed hit artists but also amassed substantial losses, said executives at BMG, Arista's parent company. (He has since been hired to lead Universal's Island Def Jam Music Group.)

"You go from a very narrow playing field to a very broad one overnight," said Iovine, who has been a friend of Slater since the early 1980s. "When you're in the studio, what you're thinking about is a guitar solo for three days. And then you go into a record company and it's all of a sudden you're at the Mardi Gras or something. It's a different game completely."

Slater has not given up many of the duties of his former jobs, saying he envisions music not as a series of hits but as part of a package that unites music, style, album art, advertising and attitude.

"Rock'n'roll is about style and rebellion and sex and love," Slater said. "And in order to deliver those messages, there's an aspect of the two-dimensional image that has to addressed. The elements in a record package or a video have to define, help define, who that artist or that sentiment is."

His hands-on approach is reflected in how he oversaw a rough cut of the video for the Vines' Ride. He pointed out frames in the video that might bring the band unwanted comparisons to the look and work of Nirvana. The segments were cut.

Not everyone appreciates such detailed vision. "He definitely thinks he knows better than the artist, and that was one thing that always offended me," said a musician from a band no longer on Capitol, who spoke on condition of anonymity. "We're fairly capable of deciding what font our logo should be in."

The rock singer Liz Phair disagreed. "He permeates all offices, so to speak," she said. "And at the same time he lets everybody do what they do."

She said Slater was closely and helpfully involved in her controversial decision to recast her image from intellectual songwriter to sexy pop star for her latest album, Liz Phair. Slater even rerecorded - after hours - the bass and drums for the album's first single, Why Can't I?

Liz Phair has sold 321,000 copies since June; Phair's best-selling album, Exile in Guyville, has sold 430,000 copies in 11 years. Still, it's not the Top 40 pop hit Capitol and Phair were hoping to register.

Slater, who was reared in New York, said his affection for Capitol reaches back into the branches of his family tree. His maternal grandparents were in the audience when the Beatles played The Ed Sullivan Show in 1964, he said.

But when he arrived at Capitol Slater was baffled by the artists then signed to carry on the legacy of giants like the Beach Boys, the Band and Pink Floyd. Aside from the arty rockers Radiohead and the Beastie Boys, the label had few acts to boast about, he said.

"I saw Capitol as a great brand that had been tarnished," said Slater, who, in jeans and sneakers, with wavy hair combed back, could pass for a session musician.

He soon looked at which band under contract he could develop into a hitmaker the fastest. Judging Coldplay the best bet, he pushed its 2001 debut, Parachutes, which eventually sold 2 million copies.

Since then Capitol has issued a stream of steady-selling discs.

In the months before Slater took over, there were six gold acts (500,000 units shipped) or nearly gold acts on Capitol. Today there are 16 on a similarly sized roster, including Radiohead, the hip-hop group Westside Connection and the pop singer Lisa Marie Presley. But these pale in comparison with Chingy's Jackpot, which has sold almost 2.5 million copies, and Coldplay's Rush of Blood to the Head, which has sold 3.2 million.

Capitol's revenue in the US has more than doubled since Slater took over, said Jeanne Meyer, the senior vice-president for corporate communication at EMI North America, Capitol's parent company.

The music industry is eagerly anticipating Capitol releases from Coldplay and the Beastie Boys, and the complete package of music, video, art and style that will accompany any album issued on Slater's watch.

"It's being strategic about the records that you release, and how you release them, that will have the most impact on the business," Slater said.