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Is what Jay-Z doing further disrupting the industry?

By June 28, 2013Opinion

Jay-z disrupting the music industry


Would I do the same deal for $7.5 million (out of the overall $30 million), instantly recoup the album, but sacrifice appearing on the chart first week. Oooh… go on then. You had me at $7.5 million to be honest.

As the Billboard article mentions this isn’t new. Band and Brand deals are done regular. Pepsi leverage these regularly back with Michael Jackson through to Gaga and Beyonce nowadays. I don’t actually think that giving your album away for free through a paid ‘sponsorship’ arrangement is particularly new. I certainly remember Prince gave away 2.5 Million copies of his 20TEN album free to readers of the Daily Mirror back in 2010. His first album in ten years no less!

That’s the interesting part of this deal with Samsung. The shear scale involved. The company with one of the largest ad spends Worldwide and possibly THE largest musician and brands in the World at present. The scary part is that Jay Z will in all probability STILL enter at #1 in the US Charts having lost 1 million chart-ineligible downloads to the free Samsung promotion. The odd part about this is that I wonder if there would be quite such a stir in the industry over this deal if the million tracks had still counted towards the chart – somehow this is seen as quite a brazen move. More on that later though.

I attended the Musexpo conference in L.A. a few years back where Will.I.Am was on a heavyweight panel of A&R and record label head honchos. He happily let the Major Labels know that they had no one to blame but themselves for being in a declining position. Ultimately, they forgot their primary purpose was to sell their hardware, and the carrot to draw people into engaging with their specific hardware was the music. EMI (originally Electric & Musical Industries) started with hardware, Sony had the monopoly for a while with both Sony Walkman, and Sony Discman, but then the record companies took their eye’s off the ball, and Apple came in with the game changing iPod and a format that they couldn’t touch initially. Now, Samsung have really thrown their hats into the ring by going for the largest advertisement that they can find to place their hardware in a strong position moving forward. Perhaps not exactly using music as quite the loss leader I’m suggesting, but a shrewd piece of business all round.

Do Labels ultimately matter? 

Of course they do. As a manager and an independent label owner (Dryden Street) myself the major labels are still very influential for their artists.

However do not use old thinking and confuse current labels with traditional ‘record companies’. We are all aware that they haven’t been in the business of purely selling music for some time, with 360 deals, and yet we often continue to think of the label as a dying breed alongside a format such as a CD. Slowly the majors and independent music companies have evolved into lean marketing companies – dealing with music, branding, touring, merchandising, and publishing right too if they can. I visited one major label in New York and was introduced to their various departments. They had an A&R and promotions team of 5 but a Digital marketing team of 25. Their business is now marketing, and whilst Jay Z and his management company can broker these scale of deals, many artists will rely on their Labels to help in searching for Brand partnerships, in addition majors labels are still very influential in their retail, sync, and promotional fields too.

What does it mean for the chart? 

I cannot speak for the Billboard chart, but in general let’s be honest, the chart means little outside of the industry now. It’s fantastic as a statistic and a barometer for industry folk to throw around, but could anyone in the general public actually tell me who’s currently in the Top 3 in the NZ singles or albums charts? I’d be very surprised. Long gone are the days of huddling around for Top 40 countdown to see who’s pipped who for the #1 spot weekly.