If 2016 has taught us anything in regards to the music industry, it’s that 1) streaming is bigger than ever and here to stay, and 2) the power music labels yield is diminishing. Moreover, these two developments are deeply intertwined, presenting drastic changes to music release and consumption that labels must adapt to in order to avoid being the Kodak or Nokia of their industry. Let me explain.
The year started in a rather bizarre fashion, with Kanye finally dropping The Life of Pablo after months of name changes and delays in February. While the content of the album was almost universally applauded by fans and critics alike, what did bring about a barrage of contention was the album’s rollout. The album was first presented to us through Kanye and friends passing around the AUX cord at his YEEZY Season 3 presentation, a setting resembling some sort of distorted high end fashion show cross exclusive listening party (as exclusive as a global live stream can be). From here, no album download or physical release was made available, with the only (legal) way to listen to what we had of Kanye’s album being a replay of the fashion show on Tidal. The album was later released on Tidal and subsequently other streaming platforms, with Kanye proclaiming that the CD was officially dead and that all future releases from him would be made available through streaming services only.
I was thinking about not making CDs ever again… Only streaming
— KANYE WEST (@kanyewest) March 7, 2016
the Yeezus album packaging was an open casket to CDs r.i.p
— KANYE WEST (@kanyewest) March 7, 2016
uuuuuuum, so there it is… No more CDs from me
— KANYE WEST (@kanyewest) March 7, 2016
These claims are backed by the most recent statistics showing CD sales continue to sink to new lows while the opposite is true for streaming. In fact, due to the exponential growth of streaming this year, 2016 is set to become the music industry’s most successful year since 2009 with almost 500 million albums units expected to be sold in the US – a monstrous total that signifies a disruption to the declining trend experienced by the music industry lately and a gargantuan paradigm shift in music distribution. Argue that Kanye’s taking credit for a noticeable trend after the fact all you want but the fact is his claims are materialising in front of our eyes and ears.
A further repercussion that TLOP produced was the destruction of the idea of a finished album, a notion made possible by the digital progression streaming embodies. When is an album finished? Can changes be made after an album’s release? Should they be? When Kanye started making changes to an already released album, these questions began swirling around the corners of the internet. Kanye’s actions of adding background vocals, adding lines to verses and even adding complete new songs to the album’s tracklist (more than 4 months after its release at that) caused the music industry to realise another implication that streaming birthed in that it allowed for the relatively easy modification of the content listeners consume, and not only method of consumption. Imagine Jay-Z going back and removing that god-awful Blueprint 3 cut “Reminder” or tweaking the tracklist to his 1997 album In My Lifetime, Vol. 1, a desire he has publicly expressed in the past. Is it fair to do so now? Is there a time constraint to which these changes must occur within? Kanye doesn’t provide answers to these questions with TLOP, but we have to appreciate that we wouldn’t even be asking them had he not released the album as he did.
Fixing Wolves 2day… Worked on it for 3 weeks. Life Of Pablo is a living breathing changing creative expression. #contemporaryart
— KANYE WEST (@kanyewest) March 15, 2016
It’s important to note that even though Kanye is signed under his own label GOOD Music (parented by Universal Music Group), Roc-A-Fella Records and Def Jam Recordings, his elevated status in the music world and insanely broad fan base give him the musical freedom reserved only for independent artists. When Chance the Rapper dropped his pièce de résistance in Coloring Book back in May, it brought with it a similar whiff of independent strength and the lingering scent of things to come. Mirroring the earlier sentiment of his mentor West, Chance so eloquently refuted the current structure of the music industry, vouching to be “the people’s champ” of the rap world by continuing to deliver free music to his fans. He even so kindly provided step-by-step instructions to his social media followers on how to take advantage of the Apple Music free trial to permanently download the project. Coloring Book became the first streaming-only album to chart on the Billboard 200, opening in the top 10, and is hotly tipped for a Grammy nomination, after Chance himself successfully fought to make streaming-only albums and songs Grammy-eligible earlier this year.
This acknowledgement appeared to be the final domino to fall in the recognition of streaming as a fully accepted music distribution method, marking the end of an era of naysayers dismissing its benefits to artists through its devaluation of music. While I am the first to admit the royalties paid to artists by streaming companies is way too low ($0.006 per listen? Really?) the infrastructure for simple music distribution that streaming provides is undeniable. We now know that it also has the capacity to get you out of an unsavoury label agreement (See: Frank Ocean).
The narrative that emerged following the release of Frank Ocean’s two new albums in as many days in August was unlike anything we’ve seen before, a fallout directly caused by (low and behold) streaming. The initial release of the single-track “visual album”, Endless, was said to be Ocean’s fulfilment of his Def Jam contract (under Universal Music Group) and thus enabled him to release his actual sophomore album, Blonde, independently. With this savvy move, Ocean was able to almost double his profits from the album, while Endless appears to have provided no financial gain whatsoever for UMG as it remains unavailable for purchase. As a direct reaction to Ocean’s unearthing of this contract loophole, UMG CEO Lucian Grainge swiftly informed the heads of all child labels that streaming exclusives would be banned from this point on, globally.
This entire fiasco not only represents the other significant music industry paradigm shift of 2016 – that artists are taking back the power from labels – but also reflects an emerging trend followed my many artists: get signed, build a following, fulfil contractual obligations and retain your freedom by going independent. We saw this exact series of events play out for Big K.R.I.T this year, with him delving into his label troubles and tribulations under Def Jam on his latest release, aptly titled “Free Agent”.
Returning to the earth-shattering year that Chance the Rapper has enjoyed, we realise that all his achievements – from having his own sold out festival to playing at the White House – have come without him selling his soul to the metaphorical devil music labels are commonly branded as. In this way, Chance represents a signpost for the massive shift that is currently underway within the industry, making things that were previously impossible for independent artists a reality. This is not to say that this option is for everyone; so many talented artists don’t get their moment in the sun, making the option to sign with a label and get some immediate financial reimbursement for their talent a tempting one. Yet what Chance has done is prove that there have never been more ways to generate revenue from music – be it merchandise, touring, or commercial endorsements – and that not having the backing of a label doesn’t inhibit your ability to get paid. The way he has done this is to make himself a human networking machine, nurturing meaningful relationships with people from all walks of life within the industry, from business managers to entertainment lawyers to Beyonce. Some may argue that this isn’t the job of the artist and distracts from their creative process, and to those people I say sign with a label. Simple. But be willing to pay the price.
It’s no revelation that independent artists retain a larger proportion of profits from their music sales then signed ones, with the main basis for this being that signed artists have the luxury of greater exposure, superior marketing, and wider distribution, which in turn translates to a higher fee being paid to labels for providing said luxuries. However, the economics of signing with a label is a particularly troublesome topic and is arguably based on outdated and intrinsically flawed foundational precepts. The battle between artistic freedom and label control has existed ever since labels were around, just look at Chuck D or Prince. But before I can expound on exactly why the notion of signing to labels is based on almost baffling concepts, the basics about music ownership need to be explained.
Essentially when artists sign to labels, they sign over both the publishing and master rights of their music. Publishing rights refer to the composition of a song – the lyrics, the arrangement of chords and instruments etc – so if another artist sings a line from another song or does a full cover of that song, they owe publishing money to the owner of publishing rights. On the other hand, masters refer to the physical recordings of songs meaning that when other artists sample the actual recording of the song in their own song, a masters payment is due. The notion of signing away your intellectual and musical property, and in exchange receive the many services that a label provides for artists (marketing, promotion, radio play, distribution etc.) is severely outdated, and is based on the fact that these services were historically very hard to do. In the age of CDs, the period during which music labels seemingly prospered, not everyone could go out and print 500,000 copies of their albums on CDs. Getting your song on the radio revolved around (and still largely does) industry relationships that only label personnel held. However, as we have moved into the age of the internet and specifically the newfound era of streaming, uploading your music onto the internet and streaming platforms such as Soundcloud enables an almost infinite pool of listeners to hear your music. It’s easy, and most importantly, it’s free.
This is a notion that Chance has encapsulated: the idea of the free come up. Furthermore, he has devised tools to take many of the typical label responsibilities off of their hands. Take for example his RapperRadio initiative, a crowd-sourced campaign to help get independent artists on the radio in the US. Again, Chance is reflecting the sentiment of Kanye here, with Kanye publicly pleading on twitter for radio stations to play good music even if it isn’t necessarily stemming from a label based incentive or isn’t a typical radio-friendly song.
If anyone at radio really loves music … Come together and pick your favorite Frank Ocean song and play it at least 10 times a day.
— KANYE WEST (@kanyewest) August 23, 2016
These examples simply illustrate that with the introduction of streaming and the general direction artists are now going, many of the services that labels have traditionally provided are no longer exclusive services. This revelation translates to the recognition that the transaction of an artist giving away ownership of their music for a recording contract has become a lopsided deal, or as Chance would class it, “goofy as hell”.
This is not to say that labels are dead. Not by any means. Not all artists are prepared to put in the behind the scenes man hours that are involved in being independent. As Roger Gold of 300 Entertainment points out, “it’s no secret that you don’t need a label of any kind for access to distribution.. [but] what labels do provide still is funding, marketing and promotion, radio promotion itself as a service and the personnel who have the relationships.” As Dan Wiesman of Roc Nation explains, the resource of radio promotion is something that major labels “still have on lock” to a large extent. However, recent years has started to upset this trend (remember 2012 when you couldn’t drive 5 minutes without hearing “Thrift Shop” on the radio) and major artists in the game are seeking to loosen the stranglehold that major labels have on radio airplay. But until then, labels still do hold great power within the music industry and continue to foster some of the greatest musicians of our generation. Case in point: The Weeknd. Without the directional push by Republic Records to pursue a more mainstream market, it’s safe to say that the once anonymous Toronto crooner would have never been heard by the vast majority of his current fan base. However, since labels are no longer able to provide certain services as exclusively as they have in the past, a reconfiguration is required and they may no longer expect artists to give away ownership of their own artistic property. Similar views have recently been floated by notable figures in the music industry such as radio host veteran Sway, who admits that “record labels typically function on a blueprint that was set decades ago,” and suggests that they are now “less important to artists.” Potential path many labels may travel down is the idea of acting as more of an agency, where they can provide a pool of marketing, promotion, and publicity managers as well as access to photographers, videographers and other media resources in order to provide personalised assistance for artists at a cost that excludes the transfer of ownership rights.
This is actually a realisation that has materialised within the music industry, with various emerging artists acquiring distribution deals that do not relinquish the rights to their masters. Denzel Curry signing under Loma Vista with this exact contract clause is a prime example, with Frank Ocean seeking to land a major distribution deal for his new independent release being another. Deals of this nature mark a turn of the tide in the way labels interact with their artists, and the rights they expect them to surrender in return for their services.
The way we package music is constantly changing; as Chance puts it, “all of these ideas and constraints in terms of records and intellectual property and the legality of using that music or moving that music is very new…music is not.” Once we take a step back and observe the music industry from this perspective, the notion of artists taking back ownership of their own material is not as farfetched as it sounds, and begins to become an indubitable next step. In years to come, 2016 may very well be seen as the year that music artists took back control of their work and truly flourished financially and creatively, with the streaming boom occurring concurrently acting as the coal to their artistic flame.