The music industry has changed quite a bit over the last 10 years. It has changed quite a bit over the last 2 years even! The biggest change that artists and music entrepreneur’s notice is the change in revenue streams. Selling records is not as a lucrative way to generate revenue as is was in the past. People just do not buy music like they used to. I mean honestly, ask yourself when was the last time YOU bought music? And when you did, was it actually physical CDs or new releases? Was it a full album or s single? Today, most people purchase music on a song per song basis. They buy it as a download for approximately 99 cents. Any business savvy musicians is aware of this trend in the music industry, and needs to look else where to figure out how to monetize on their music. Mega-Superstar and music mogul Jay-Z is a prime example.

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It was recently announced that Jay-Z (born Shawn Carter), has struck a lucrative and groundbreaking deal with Mobil conglomerate Samsung for the release of his much anticipated and hyped upcoming album, Magna Carta Holy Grail.” His partnership with Samsung is the most recent sign of how recording artists are finding new ways to generate revenue from their music. He is well known for boasting the clever statement, “I’m not a businessman, I’m a business, man.” Jay-Z continues to leverage his name and brand with clothing, liquor, a record label, venturing into video game production, owing an NBA team (part owner of the Brooklyn Nets), and a host of other ways he continues to exploit his ever popular name. His Roc Nation Agency manages major artists like Rhianna and Shakira. Anytime an artist tells me they are too busy being “an artist” to focus on the business, I always ask them, “well do you think Jay-Z has more hours in the day than you??” Jay-Z and Samsung will be giving away his album to the first 1 million users of the new Samsung Galaxy S III, Samsung Galaxy S2, and Samsung Galaxy Note II phones on July 4th, three days before the release to the public. The news was shared in a 3 minute commercial aired during Game 5 of the 2013 NBA Finals on Sunday.

Check out the commercial here:

resizedimage250331-NARM-2011-Pro-6Doing album releases like this has become the cutting edge and trendy way to launch a new releases for a top-level artists. According toNARM (National Association of Recording Merchandisers) Jim Donio, the Samsung partnership is sexy and effective way for major recording artists to launch a new release. Donio said, “For an artist whose album release is an event in itself…they carry with them a much wider profile in the marketplace that they speak to, so their audience and all the things they do affords these unique opportunities.” Jay-Z is not the first artist to attempt something like this. Previously in 2011, Lady Gaga took a huge risk and thought outside the box when she launched the release of her 2nd album “Born This Way.” Gaga sold over 440,000 copies of her album on Amazon for only 99 cents for the first 2 days of the release. This helped her album sell 1.1 million copies in its debut week. An extraordinary number in today’s music market where many people do not purchase full albums anymore. She has NOT been the only artist to try something of that nature, she was just the only one at the time to do it during its release week. Phil Collins sold his greatest hits album for 99 cents last year for a period of time, which caused it to place at number 6 on the Billboard Top 10. R&B and Hip artist Bruno Mars, and former American Idol contestant Demi Lovato both sold their previous album releases for 99 cents on Amazon, causing them both to jump over 100 spots on the Billboard Charts.

Country and Pop Superstar Taylor Swift tried a similar approach, but very unique one to jump-start the sales of her current release ‘Red’ in 2012. She developed a partnership with not one company, but three! Target, Walgreens, and Papa’s John’s Pizza all had promotions that included the ability to purchase her album. I guess you could order a large pepperoni pizza and a new music releases all at once! Could you pick up your antibiotics and also get a CD at once with her partnership at Walgreen’s? This all proved to be extremely effective for Swift. This ensured the Grammy winner to be able to have her second platinum selling debut week. According to Donio, this was not only to sell more records through partners like Papa John’s, it created an incredible amount of exposure for her new release, which in today’s music business can be difficult for artists. Donio was quoted as saying in this article here, “ Even if you didn’t purchase the CD, her face was still on the box.”

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Even music icon Prince tried an “outside the box” approach for the release of his “20Ten” album in 2010. He stuck copies of it inside the UK newspaper “The Daily Mirror.”

A new and emerging artist might have a difficult time launching a partnership like this. Having a solid fanbase and a demand for your music helps you have leverage, which will allow deals like this be more effective. Jay-Z is still a bonafide superstar, and even transcends music. This is a major reason why Samsung partnered with him on his upcoming release. Samsung’s goal is to take a larger portion of the market share from Apple, with their Galaxy phones. Mobile companies understand the lure music has to phone users, so they are relying heavily on music to sell more phones. Apple announced last week that it would debut their heavily anticipated iTunes Radio this fall. There are still many questions consumers, fans, and music industry insiders have regarding the groundbreaking Jay-Z deal.

We all wonder will those 1 million 1st week sales count toward overall sales and guarantee him Platinum sales in the first week of it’s release? According to a recent statement made by Billboard in this article from Reuters, it probably will not count toward overall sales. It is considered promotional. Jay-Z will probably sell in the 6 digits outside of the Samsung deal during the first week of “Magna Carta Holy Grail.” Will he set a new record for week of release sales total breaking N-Sync’s 13 year old record of 2.42 million albums sold in it’s first week? There is alot of uncertainty surrounding this partnership, but there some things we are certain about. We know that artists need to think outside the box and be entrepreneurs to generate revenue today. Artists cannot only rely on traditional album sales to make money in today’s new music paradigm. Take a page from major artists like Jay-Z, Taylor Swift, Lady Gaga, and Prince…all their albums would have sold well either way, but they see the writing on the wall and tried something different to launch their releases. If you are an emerging artist trying to break it into this biz, be creative, think outside the box! Because almost all other artists are not, and if you are the one of two doing that, you will inherently stand out! Try to do a promotion like this with a local business. Ya, it might be hard to have Samsung of Papa John’s partner with you for you upcoming release, but maybe not the local clothing store, restaurant, bar, café, etc. Think about it! Try something new and different. What do you have to lose?

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2 Responses to I’m Not a Businessman. I’m a Business, Man!

  1. Nikki says:

    I have just been thinking about making new rules. Just yesterday I thought, I want to change the “game”. I work with hip/hop artists a lot and they “pay to play” these days. I want to stand my ground to say that is NOT a game changer. I know its exposure, they say they have A&R out there, but to be honest, I’d rather hold my own destiny in my hands and be the prodigy of my own making. I see the “business” as a game, and I want to win. This article shows how creative you need to be and take those chances to see what will work. I have learned I should never be afraid to take those chances because YOU NEVER KNOW what could happen! 🙂

  2. Change is a constant reminder to everyone in any business. You must stay on top of everything, because you could overlook the small key to un-lock the biggest prizes.

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