Record Labels vs. Music's DIY Revolution - Rolling Stone
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Everybody Wants Some (Hits)!!

Indie artists dwarf label-signed artists by sheer numbers — so why hasn’t the onslaught of DIY music killed the record label yet?

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Jabari Jacobs; Christaan Felber; Mark Peaced; Shaquille Kokumo

This story appears in Rolling Stone‘s 2021 Future of Music issue, a special project delving into the next era of the multibillion-dollar hitmaking business. Read the other stories here.

People wrote off Lil Nas X as a fluke. His self-released country-and-rap medley “Old Town Road” had pulled in blockbuster streams in 2019, but it was a novelty, surely a one-hit thing, and Columbia Records was making a bad bet by signing him to an expensive record deal.

Yet Columbia threw Billy Ray Cyrus on a remix and poured gas all over the song, fanning it into a global beast of a hit. Then in 2021, Lil Nas X, under Columbia’s watch, vaulted back to the apex of music charts with the pointedly raunchy “Montero (Call Me by Your Name),” surfing wave after wave of controversy. (Gimmicks included a blood-stained, “satanic” Nike shoe and a music-video lap dance on the devil’s groin.) The 22-year-old’s masterful antics as a rapper and puritan-baiting troll are the stuff of his label’s dreams — because they show why DIY artists should still sign corporate record deals.

Today’s young artists have more freedom than ever before, thanks to the streaming-era boom in cheap music production tools and marketplaces. According to Midia Research, DIY artists — those who self-release music via upstart platforms like TuneCore, Amuse, or DistroKid, as opposed to signing a record deal and handing a company a big chunk of their royalties — generated $1.2 billion in recorded-music revenue in 2020; research groups expect that number to take another big leap in 2021, cutting significantly into labels’ market share. Last year, DIY artists released eight times the volume of the major music companies (Universal, Sony, and Warner). Add in YouTube and SoundCloud artists, and Midia estimates there are 14 million global music creators right now — and that’s not even counting the newest crest of amateur musicians from Covid-19 lockdowns.

So if the collective commercial power of DIY artists keeps rising, rising, rising, what happens to the good old record label?

Apologists of the current industry hierarchy — namely, label executives — scoff at the idea that anyone could ever topple their reign. A sea of self-releasing artists snuffing out music’s powerful gatekeepers? A busted flush. Ambitious artists will always jump to upgrade their careers, they say: Just look at Lil Nas X, Arizona Zervas, Yung Gravy, Still Woozy, all of whom got into the air as indie acts, then hopped into a label’s cushy first-class cabin. And the three majors collectively pulled in $15 billion from recorded music in 2020 — no shabby feat, since this was up $750 million from 2019.

The anti-label crowd dismisses these points as simply the last roar of a dying species. “What record companies have that independents don’t is huge promo departments whose only job is to push records to radio,” says Andreea Gleeson, co-head of TuneCore, which currently pays out $400 million a year to artists. Gleeson points out that radio, and mainstream media at large, grows less valuable by the day as social media steps in. “The paradigm shift that we will see in coming years is in the number of artists who reject the typical record label model and whose measure of success is tied to remaining independent. These artists don’t need radio to have hits! Music is going viral across social media and radio is becoming less relevant.”

To be sure, the three majors’ tunes are still the ones that dominate Top 100 charts, even though DIY releases swamp them in the market by total number. But Gleeson points to standouts like Russ, an independent market who has notched 10 billion streams worldwide. Russ signed with Columbia in 2017, released three records, then returned to TuneCore as a DIY act. “Russ remains fiercely independent, owns all of his masters, and maintains complete control over his career,” says Gleeson.

There’s also Brent Faiyaz, with nearly 10 million Spotify listeners, who has cracked charts with “Gravity” and inked campaigns with Gap and Calvin Klein. Faiyaz releases music via the startup Stem, which offers advance financing based on artists’ current streaming income. Milana Rabkin Lewis, CEO of Stem, points out that Stem’s artists receive label-like promotion services alongside cold hard cash — while keeping autonomy.

But veteran industry figures, like longtime music mogul Kevin Liles, CEO of 300 Entertainment, have a different take. The Alphabet-backed 300 recently popped champagne on its success with artists such as Megan Thee Stallion, who was the most popular artist on TikTok in 2020. Liles rejects the burgeoning creator economy as a threat, arguing that modern “independence” is more about mindset than the technicalities of contracts.

“The myth I want to [quash] is, just because you say you’re independent doesn’t mean you’re doing it by yourself,” says Liles. “Just because you work with a company, it doesn’t mean you’re not independent. You can be independent but not alone, as my man Chance said.”

He’s referring to Chance the Rapper, who became the most visible DIY artist when he won a Grammy for Coloring Book in 2017. The industry quibbles with his status as an independent artist, since Apple Music paid him $500,000 for a two-week exclusive and ex-manager Pat Corcoran claims he pumped $2.5 million of his own money into Chance’s career. To unlock the next level, then, DIY artists may still need to seek out teams and industry expertise — and big money.

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From top, left to right: Paras Griffin/Getty Images; MSCHF; McDonald’s; Jerritt Clark/Getty Images; 6lack Market; LEGO; Fortnite; Nabisco; Nifty Gateway; Pokémo; Maciej Toporowicz/Getty Images; Anheuser-Busch

They hold more of the cards when they come to the table, though. For example, armed with newly affordable professional tools and heaps of self-understanding, young artists are starting to ask for short-term licensing deals for 10 or 20 years instead of handing over their rights in mainstream record deals. And as these fledgling artists gain success, they can renegotiate for more favorable splits or shorter time frames, the same way high-profile actors can sway more lucrative contracts on film projects than their more obscure peers. In this hybrid label-and-DIY model, the two parties could actually work in tandem rather than opposition.

Rumors also suggest Stem’s model — distribution plus financing, without control — could soon play out at Jay-Z’s streaming service, Tidal. Jack Dorsey, who is a personal friend of Jay-Z’s and whose company Square recently majority-acquired Tidal, has praised its vision of artist leadership as “refreshing and right,” and said the vision would only grow “stronger as it’s matched with more powerful tools for artists, inclusive of new ways of getting paid.”

Yet even with “powerful tools,” another danger looms large: With 60,000 new tracks flooding Spotify each day, how do unsigned artists get noticed?

Raine Group partner Fred Davis, whose company invested in indie safe haven SoundCloud, staunchly believes in the success of the DIY world, but thinks “major labels are still the best platform to have global hits.” Raine’s research in 2020 suggested that the DIY market would soon be worth over $2 billion a year, taking a significant chunk of the pie away from labels — but Davis points to major labels’ huge A&R budgets and marketing prowess as unrivaled advantages (see: Lil Nas X). “In the future, in the U.S., I do think the number of artists who stay independent will increase. That said, I do not think these numbers will be significant enough to ‘replace’ the majors,” Davis says.

On the flip side, TuneCore’s Gleeson doesn’t see the market saturation of DIY artists as a problem. “It used to be that audiences looked to music critics and DJs to dictate the music to listen to. We don’t see that as much anymore. Music discovery [now] is through word of mouth, with social media being the vehicle. It’s a leveling of the playing field.” So maybe the true DIY success stories will be the artists who have a gut understanding of business and advertising — like a label.

Says Lewis: “If you think about it, brands are the ones that build trust with fans and are the tastemakers. Labels and streaming platforms are brands with a ton of resources and a head start compared to anyone else. But that’s the thing — today, any brand can be a label, and anyone can start a brand.”

In This Article: Future of Music 2021


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