Art and Electronics (A&E) was a joint venture between Mobile Fidelity Sound Lab, the Union of Composers of the USSR, 'Soyuzconcert' (the concert-booking agency), and 'Electronica' (the Soviet manufacturer of consumer electronic goods). The result was a recording company focused on Soviet classical and jazz artists, which became the first independent alternative to state-owned label Melodiya in the Soviet Union. A&E was based in Moscow, with a state-of-the-art recording studio maintained by Mobile Fidelity in the Moscow Conservatory, and had a branch office in Vilnius, which split off after Lithuania's independence to form the label Art & Electronics (2) (under the same name). The label's releases were distributed in USA by MCA Classics.
The initial agreements between Melodiya, the world's largest record company at the time, and Mobile Fidelity came in 1986, when Herbert A. Belkin, president and owner of MFSL, signed a contract to become an exclusive distributor of Melodiya recordings in USA. In return, Mobile Fidelity Sound Lab would provide the Soviet side with audiophile quality digital remasters. After digging through Melodiya treasure trove of tens of thousands classical recordings, MFSL team soon discovered a remarkable collection of jazz. Mobile Fidelity immediately launched the USSR Jazz Showcase Series, becoming one of the first international presenters of this historically significant realm of Soviet music, practically unexposed to Western audience before. Other pioneers in the same field include a prolific Leo Records in UK, mostly focused on avant-garde and free jazz in their archival ex-USSR series.
Apparently, not all artists were happy with Melodiya re-distributing their records in the United States. In 1991, Dmitri Hvorostovsky and Philips Classics sued MCA Records for $4 million, claiming that MCA released an allegedly unauthorized recording of a 1989 concert performance of Tchaikovsky's 'Queen of Spades' in which Hvorostovsky sang the secondary role of Prince Yeletsky. According to the lawsuit, Melodiya never had any right to re-sell the concert recording, since Dmitri Hvorostovsky only gave permission for radio and television broadcast of this record in the Soviet Union, as per his contract with Philips. MCA paid less than $20,000 for the master tape, and Art & Electronics released Queen of Spades 3xCD right after Hvorostovsky's critically acclaimed American debut recital at New York's Lincoln Center in March 1990, while Philips Classics own album, released to coincide with this event, reached No. 3 on Billboard's classical music chart.