Can there be more than one Chance the Rapper?
Major labels are good for radio and TV, but what if they’re not part of the equation? Chance made it online, without the help of the usual suspects, is this formula repeatable?
That’s what Steve Stoute is gonna find out.
Now let’s be clear, he’s not the first in this space. Remember Topspin? And Bandcamp? But maybe, like Rhapsody, never mind Napster, they were just too early. The techies did devour music distribution, they call that Spotify, it rules.
Now the major labels have one thing that cannot be underestimated, their catalogs, which are generating beaucoup bucks on streaming services, with all expenses paid, the money is gravy, featuring a low royalty rate in most cases. That’s right, if you signed your deal more than five years ago, you were screwed. Now there are no expenses, no manufacturing, shipping or returns, but your deal might still have a packaging deduction, even though there is none, it’s hard to get rid of legacy deal points, but not if you start all over with a clean slate.
And the important thing about catalog is the financial cushion, it keeps you afloat while you’re looking for hits.
But what if you’ve already got a financial cushion?
In this case United Masters is financed by Alphabet, i.e. Google, and Andreessen Horowitz, the clean slate people, from Silicon Valley, who’ve revolutionized our world. They don’t improve upon old ideas, they start with new ones, or refine new ones.
Kobalt is revolutionizing publishing. It’s all about their dashboard, you can see how your song is performing, what revenue is coming in, the company is pulling the rest of the publishing industry forward, they have to change, otherwise they’re going to be left behind. Furthermore, Kobalt writers testify that they make more per song than their cowriters with traditional publishers.
Kobalt was financed by Google.
But Kobalt is notoriously bad when it comes to synch, the people problem.
That’s what United Masters is trying to tackle. Google took people out of advertising, can the same thing be done in music?
Google created an algorithm, you bid for your ad space, the ad world has been revolutionized. Can the same thing be done with music production?
It’s all about the data. Like those ads that follow you around the web. How do they know? Imagine if you could target all your listeners, know who they are. That’s what United Masters is trying to achieve. With this direct relationship you can monetize your career in heretofore unforeseen ways. And maximize those ways that do exist.
And it’s all based on fairness and transparency, concepts which are anathema to the major labels.
But the major labels are banks. With usurious interest rates. But if you could monetize yourself, and keep almost all of the money, you could float your operation until you hit the big time.
Will United Masters triumph?
The devil is in the details.
But it’s truly the beginning of the beginning.
P.S. The majors use their catalogs as leverage. Just ask anybody who tried to create a company based on their wares. Spotify was successful because it gave the majors an interest in the enterprise. Hits also give you leverage, but in the past you could not get paid without a continuous flow of product. But now you can.
P.P.S. It’s a business of winners and losers, now more than ever. But the hope of United Masters is it can generate a living wage for the losers, and prop up those on their way to stardom.
P.P.P.S. Music is the canary in the coal mine, it’s always first. In the movie business they keep railing against the unfairness of Rotten Tomatoes, we’re past that stage in music, we believe in the facts, we’re entering the future. If you’re complaining about streaming you’ve already been left behind. Use the new tools to your advantage.
P.P.P.P.S. The internet is about cutting out the middleman, going direct to consumer. That’s what United Masters is doing.
P.P.P.P.P.S. Never underestimate fresh eyes. The labels are peopled by a very thin layer of overpaid, usually ancient execs and underpaid worker bees, but the newbies are not burdened by concepts that make no sense, like the aforementioned packaging deduction.
P.P.P.P.P.P.S. The labels tell you what to do, own your product, and pay you bupkes. This is a business? Once upon a time there were no options. But now there are. Do you want to be told what to do or do it yourself? Everybody’s an entrepreneur, everybody watches “Shark Tank,” if you’re not in control of your own destiny, you’re about to hit a wall of frustration.