Thursday, August 25, 2016

Frank Ocean's release of Blonde marks the start of a major fight in the music industry

Written by Micah Singleton — The independently released Blonde may be the beginning of the end for exclusive album deals.

It was only a matter of time.

The release of Blonde marked much more than Frank Ocean’s musical return after four years away. After satisfying his Def Jam deal with the release of Endless, Ocean released Blonde independently in a move that marks the first shot in an inevitable fight between music labels and streaming services.

The relationship between an artist and a music label has been a notoriously fraught one, but until recently, there was nowhere an artist could run to when they tired of their label besides the next label down the street. Now, in a race to get more subscribers for their streaming services, the biggest company in the world and one run by an artist have positioned themselves as a friendly alternative for musicians. Meanwhile the labels, in a bid to avoid a future they may not be able to survive, may ultimately end up on the side of some fans who want music available through every viable medium.


This is the nightmare scenario for music labels. For years, labels have feared that as streaming services grew in power and scope, there could come a time when some artists could choose to forego working with the labels and engage directly with a streaming service to reach their fans.

Up until now this hasn’t been the case with an artist of consequence, for a few reasons. Younger artists need the structure and nurturing that a music label can provide, and established superstars have usually built up a rapport and are loyal to the group of people — most of whom work for the label — that have helped them become stars and simply choose to stay, after getting a big payday.

Beyoncé is a great example of this. She doesn't actually need to stay with Columbia Records, but her and her team have been on an exemplary run over the last decade, and there’s little reason to switch it up. Lemonade may have been released exclusively through Tidal, but you’ll still find Columbia Records in the credits.

But what Frank Ocean has done is different. This isn’t going independent while still using a major label for distribution, like Jay Z has done in the past. This is a complete avoidance of the traditional musical hierarchy. Ocean has a young, rabid fanbase that primarily interacts with him online; he doesn’t need to distribute physical copies of albums to thousands of stores like Adele or Taylor Swift. He is part of a small club of superstars who don’t need the label system, and who have the leverage to do deals with streaming services instead of re-signing their contracts. And that’s scary for music labels.


According to a newsletter from music industry insider and critic Bob Lefsetz, Universal Music Group, Ocean’s former label, has banned exclusives on the heels of the release of Blonde. If true, the ramifications of that change could be huge on the labels’ stable of artists — most notably with Drake, who has an exclusive deal with Apple Music, having released his last three projects through the service.

Why the dramatic move from UMG? A-list artists bring in a large chunk of revenue for the labels, and allow them to lock up younger artists who probably won’t move records on their first release with advances that they otherwise couldn’t afford. If those superstar artists leave the label system altogether for streaming services, it could throw a wrench into the already delicate financials of the music industry and cause a power shift that the industry hasn’t experienced since iTunes hit the scene in 2003.

For streaming services, nothing changes. This is no different for them than doing a standard exclusive when the label is involved, although it’s probably easier to negotiate with a single artist compared to an entire company. The modern exclusive deal for an album release has allowed the artist to get paid an upfront sum from the streaming service — money from Apple, an ownership cut from Tidal — while the label gets no direct financial benefit from the deal.


That relationship has worked until now — sales for exclusive albums have done well for everyone, due to the extra promotion and general hype surrounding the project. Just three months ago labels were singing the praises of exclusives on the heels of Drake selling 1 million copies of Views in a week on a single platform while setting a worldwide streaming record. But it seems like the pendulum has swung.

Is this the end of exclusives? Probably not. Though it's the biggest in the industry, UMG is the only label group to reportedly have banned exclusives so far, and there’s no guarantee Sony Music or Warner will do the same. But this is the beginning of a fight that may determine the future power structure of the music industry. Telling an artist they can’t release an album exclusively through Apple Music or Tidal when they’re offering them millions won’t be easily forgotten, especially when the artists look at the numbers and realize an exclusive blockade isn’t in their best interest.

Frank Ocean is only one artist, but it only takes one to inspire others. Does Drake need to sign another deal with Cash Money Records — who ironically just signed an exclusive deal with Apple Music for a documentary — or could he just release all of his content through Apple? Chance The Rapper, who is seemingly a superstar in the making has already said he won’t sign to a label and released his last project exclusively through Apple Music. When labels have become synonymous with drawn-out court cases and absurd contracts, does anyone need labels, other than labels? These are the questions that keep label executives up at night. The battle for the future of the music industry has begun, and it won’t be pretty.

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