Hip-Hop.com

Should An Artist Sign A 360º Deal? via Hypebot
From the man that brought you Managing Musical Artists in the new Digital World comes Should An Artist Sign A 360º Deal? In this new video, Peter Malkin grills a “label executive” on the kinds of services and knowledge they should have before he’ll agree to let his artist enter a 360 deal with them. It makes you wonder if Malkin hasn’t had this conversation more than once in recent years. Take a look:

Should An Artist Sign A 360º Deal? from Peter Malkin on Vimeo.

Think hip-hop’s dead? Think again: it’s the 3rd largest genre – ahead of pop, and behind rock and country. And, it accounts for more than 1 out of every 10 dollars spent on recorded music, according to the latest S&P Media and Entertainment report (double that if you count Urban/R&B). The monetary staying power of this genre simply cannot be ignored, but why? Take a few lessons from the adolescent of major musical genres…

1. Guest Appearances Make 1+1=3…

One of rap’s best-selling albums of 2010 – Drake’s Thank Me Later – has more cameos than a Tarantino film. Guest appearances are one of the greatest positive feedback loops in music, not to mention an unparalleled artist development pathway that no other genre has fully taken advantage of.

Take a look – there are no less than seven platinum-selling artists and one developing artist – Nicki Minaj – on this album. Marketing literature calls this “brand alliances,” and for two well-established artists, this is an easy way to share fans and cross-sell content. For a developing act, pairing with a big rapper is arguably more effective than an expensive and risky traditional radio campaign.

2. DJs are the Ultimate Tastemakers…

DJs play several roles in the rap and hip-hop community. Most importantly, they bundle tracks and release mixtapes for free. But mixtapes don’t take the place of studio albums and shouldn’t be viewed as a threat to full-length albums. Instead, most people listen to mixtapes the same way people read magazines or newspapers.

And, DJs are great filters that can act as very influential tastemakers – almost the way that traditional radio jockeys did in the past (just look what DJ Khaled did for Rick Ross). Best of all, most mixtapes are viral and lead to more mixtapes. Free doesn’t hurt either.

3. Recording Processes Are Modularized…

Traditional artists pair with a producer, head to a mountain retreat, and come back with 12-15 songs. Oh, and release an album every two years. Not rappers. Lil Wayne records every night on his tour bus, and rappers can pick from a large and liquid market for instrumentals from the end of the tail (20dollarbeats.com) to rock star producers (J.U.S.T.I.C.E. League). And 12-15 songs? Rappers can spit that out in a month.

4. Hood Support Pays…

You can hardly listen to a hip-hop song without hearing mentions of different cities, streets, and neighborhoods. But this is more than just hometown pride: active local music communities provide a basis for support and competitive musical invention, and a hyper-local connection with fans. That generates a level of fan ownership and engagement that isn’t replicated in rock or pop.

5. Greed is Good (and Encouraged)…

The willingness of fans, artists and the media to embrace the inherent materialism in rap and hip-hop has obvious benefits. Forays into brand partnerships, merchandising, miscellaneous joint ventures and sponsorships are accepted by fans and generate money to keep funding new artists and material.

6. Hip-Hop Is Oozing With Culture…

When you listen to a Drake track, you hear lines from a T.I. track that has lines from a Lil Wayne track that has lines from a Jay-Z track. No one’s copying here, but the analogies and references keep the culture and body of content alive. This sort of interconnectivity goes far beyond “I can hear a Radiohead influence in Muse…” Instead, listeners feel “privy” to the idiom and part of a community.

7. Remember These Psychological Power-Levers…

A large corpus of the rap and hip-hop genre can be boiled down to a small number of very simple themes, all of which evoke emotions tied to purchase behavior. The first is the struggle to overcome poverty, often intertwined with equally powerful and romanticized themes of violence and drugs.

And, sex. In the same way that Budweiser sells beer with images of men drinking Bud and pulling gorgeous women, hip-hop promises the fulfillment of sexual desires in a manner more explicit and emotionally poignant than any Bud ad.

…and, drumroll…

8. Fans Are Continuously Engaged

Rap’s level of fan engagement has never been seen before in the music industry. Hip-hop artists produce copious amounts of music that is distributed by third parties, labels, brands and online properties. Look at allhiphop.com, and the artists that release the largest number of free tracks are overwhelmingly the highest selling artists.

Lil Wayne made this statement very loudly in 2008. After an insanely productive 24 months of guest appearances and free material (he gave away an amount of material for free that traditional artists don’t typically produce in their entire career), Wayne released an album that sold over a million copies in its first week. He was first artist to reach that feat in years.

The lessons from this genre are clear, but best summarized by this last item – taking advantage of reduced production costs by releasing more material, more often has enormous benefits in this highly attention-deficit driven online world.

Is Universal Music Group facing an avalanche of increased royalty obligations, thanks to a recent victory involving Eminem and FBT Productions?  The mega-label says no way, and a suspiciously ‘anonymous’ commenter on Digital Music News recently shouted down the possibility.

Except, this is a very real possibility, at least according to one well-respected attorney.  ”If downloads are the way of the future, this is going to have massive implications,” attorney Gary Stiffelman (Ziffren, Brittenham LLP) told the Detroit Free Press. “It changes the playing field.”  Stiffelman has represented Justin Timberlake, Britney Spears, Toni Braxton, Prince, and Eminem himself, and has also helped to structure a number of prominent licensing deals and partnerships.

The pivotal question is whether digital formats like downloads constitute licenses – similar to TV or film – and therefore require much larger royalty percentages.  Drawing on the language of the contract, the US 9th Circuit Court of Appeals determined that Em and company were “unambiguously” owed more money.  But how many other contracts have similar language, and would therefore fall under this precedent?

Plenty, according to Stiffelman, who noted that older agreements are a major vulnerability for UMG.  Of course, Universal has vowed to reverse the decision.

Major & Indie Labels Likely To Suffer Major Losses

(UPDATED) Documents released as part of the recent bankruptcy filings by Playlist.com show that both major and indie labels are likely to suffer major losses. While Universal Music topped the list with an unsercured debt of $16.6 million, independent labels represented by rights licencer MERLIN made the list of top 5 creditors and are owed $1.68 million.

Google has hired well known music attorney Elizabeth Moody to negotiate with record labels, music publishers and other rights holders for a planned Google Music service.

Sources close to recent negotiations with the label groups concerning similar music streaming services say that each of the four major labels are voicing different concerns making uniform – and profitable – deals difficult. Moody, a true music industry insider with deep experience working with most of the majors, backed by the deep pockets and prestige of Google, may be able to break the log jam that has kept Spotify and others of launching in the U.S.

“This is a really big deal,” a former Moody client told TechCrunch. “She and (her law partner) Fred did everyones deal. That is a great hire for Google. The flipside is that I interpret this as another nail in the coffin for music startups…”

Major labels are mass marketing power giants; it’s what they do. Before the advent of the social web, they were the only way to reach the masses. Due to their influence on commercial radio stations, big-box retail outlets, and television, much of this remains to be true. If an artist wants the general public to become familiar with their music and know the all words to their songs at the next show, then having the financial support of a major label will help them achieve this feat.

What’s interesting though, is that despite decades of experience in breaking new artists, major labels still have no idea whether or not their mass marketing is working until the end. Online analytics, small boosts in sales, viral YouTube videos, and conversations—these all serve as little cues that something is starting to happen, but there’s no way to tell when the point of reaching critical mass been achieved. That is, until it actually occurs. The blockbuster album.

Now, contrast this with the experience of a direct-to-fan marketing manager and an indie artist they represent. Through its easy for both parties to default into thinking like a major label, to try and reach the masses and put off the moment of understanding how successful their marketing has been until the campaign is over—that’s just not how going direct-to-fan works. From the very beginning, the direct-fan-marketer knows if their promotional efforts are working. Why? Because they must get it right in the small. An email can be sent to 100 fans and if it gets a great response rate, only then can it be mailed off to several thousands more.

“Get it right for ten people before you rush around scaling up to a thousand,” writes marketer and author Seth Godin. “It’s far less romantic than spending money at the start, but it’s the reliable, proven way to get to scale if you care enough to do the work.” In other words, artists need to remind themselves not to go for the masses, when they can go direct, one fan at a time, slowly scaling up, until their message and their music is truly ready to be hard. After all, a failed marketing campaign is much easier to fix early on. If an artist is trying to reach the masses, then like a major label, they won’t know if they’ve failed till the end.

Live Nation’s stock fell another 11.78% today down $1.20 to close at $8.99.  Today’s drop contributed to a 20.23% overall decline in the stock ‘s price for the week.  Most of the fall came in the last two days after company executives admitted that this summer and the last quarter of the year would end with a 10-15% decline in ticket sales for it’s top concerts.

Company President Michael Rapino promised aggressive cost cutting in September, which many believe will include major reductions to their already stretched staff and a decline in the number of club and smaller shows that the company does each year.  Executives also acknowledged fan dissatisfaction with high ticket prices and even higher ticketing fees and vowed to work with artist to improve both.

Meanwhile the broader market closed the day mixed with the Dow down just 2.52%