observations, reviews and ramblings about Hip-Hop culture, sports, politics and the industry and life in general.

Wednesday, June 01, 2005

It's Elemental, stupid

An excerpt from the editorial I just wrote for Elemental. Shout to Phat Matt and Michael for allowing me to contribute...

Recently I was having a conversation about the inefficiency of the music business with a VP from one of the few major labels whose brand I still respect. He said to me, “A record label is really a venture capitalist that is only interested in one revenue stream.” After another gin and tonic and margarita respectively we went deeper down the rabbit hole. We concurred that most artists and managers (which we both are/were) dealt with the label for a no interest loan and went about their business. That business being touring, selling merch, endorsing products, developing video games, starring in feature films, start their own labels, buy property and the list goes on.

While an enterprising artist can create all these revenue streams the label’s sole revenue stream is exploiting those master recordings. Record sales and licensing, that is about it. Ask for a piece of the publishing and you got a jihad on your hands. This would be somewhat acceptable if the master recording were not the engine that fuels all the hustles.

Without ‘Get Rich Or Die Tryin’ there would be no G Unit empire. But I wonder if Jimmy Iovine gets a piece of the ‘Bulletproof’ game or the Ecko Deal, or the movie deal, or the tour. Should he? Now I am not a proponent of indentured servitude so if 50 takes his royalty money and invests in Vitamin Water or Mike Tyson’s crib that is completely his business. However, a strong case can be made that revenues directly generated from Interscope/Aftermath/Shade’s investment should be redistributed to all parties with an interest. If Jimmy Iovine was a venture capitalist or 50’s Mr. Drummond and not his label head wouldn’t Jimmy ask for a comprehensive return on the investment?


Blogger Hashim said...

what exactly are you advocating? Few artists get those side deals you listed.

June 02, 2005 1:15 AM

Blogger Swifty said...

the whole article develops the idea more. But I am basically advocating consulting/management/label hybrid deals. They would be in the best interests of the artist and label

June 02, 2005 10:44 AM


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