Why Kanye West’s fight for his masters marks a changing music industry
Kanye #Kanye
In September, Kanye West took to Twitter to declare the music industry (and NBA) “modern day slave ships”, as he sought to regain the rights to his master recordings. He explained: “When you sign a music deal you sign away your rights. Without the masters you can’t do anything with your own music. Someone else controls where it’s played and when it’s played. Artists have nothing accept [sic] the fame, touring and merch.”
For West, owning his masters, some of which are held by label Universal Music and publisher Sony/ATV, is personal. “My children will own my own masters, not your children, my children,” he followed up. Since then, West has pledged that all artists signed to his own GOOD Music label will get back the 50% share he holds in their masters. He’s also proposed an eight-point plan for revolutionising the music industry that focuses on master ownership, short-term deals, an 80/20 split of royalty payments in the artist’s favour (it’s traditionally been the other way around) and transparency.
West’s argument is reasonable, but these shifts have been underway for some time. Historically, artists had little choice but to sign away their master rights to labels and publishers, in exchange for an advance to fund their music-making and the label’s promotion and distribution costs. They’d be contractually obliged to deliver multiple records unless the label dropped them and ended the contract – not an option artists could attempt without legal wrangling. Today, thanks to the rise of streaming and social media, which artists can use to build a fanbase without going through gatekeepers, the power balance has shifted towards the creators.
There are multiple success stories in recent years of artists who have topped the charts and won awards without signing to a major label, keeping hold of their master rights. In the UK, those include Jorja Smith, Little Simz, AJ Tracey, Gerry Cinnamon, Tom Misch and Skepta, to name a few. At the same time artists without any record label setup – ie those just using distribution services to get their music to streaming platforms and retailers – represent the fastest-growing segment of the global recorded music business, according to Midia Research. In 2019, DIY artists generated $873m (£675m) in revenue, a figure that’s up 32% from 2018, counting for a 4.1% share of the global music industry.
While this shift has been happening, a wealth of companies have arrived to service independent artists with deals that either take a relatively small cut of earnings or charge a flat fee. Publisher Kobalt is one of these, which also has a label called AWAL, branding itself as a transparent global music partner that offers all the services major labels and publishers do but on far more favourable terms. Artists and songwriters keep 100% of their rights, aren’t locked into deals, can see how much money they are earning via an online portal and can also access advances on future earnings.
In addition to Kobalt and many other “label services” companies that have similar offerings, there are several DIY services that act as distributors, some of which offer advances, such as Amuse, Stem, TuneCore and DistroKid, and self-proclaimed “fourth-biggest major label” BMG, offering artists a 75% share of revenue with 25% retained by the company. Well-funded publisher Hipgnosis Songs has been buying up high-value publishing catalogues, partly in a bid to have enough clout to demand better royalty rates for songwriters as the company grows in size and value.
Kobalt chairman and founder Willard Ahdritz says the growth of the independent services sector means that the music industry is becoming more democratic. “Historically, the music business was a little bit like Russian roulette,” he says. “Actually, it was worse than Russian roulette. You got an eight-week shot when [labels] were trying to break you and only 5% managed to break. Now, we have hundreds of artists, which I call the ‘middle tier’, who are making $100k or more [per year] and that means they can live off their art.” Ahdritz estimates that this middle tier will grow into a $7bn industry in a few years – the value of the independent recorded music sector overall as of 2019, according to Midia Research.
Singer-songwriter Gabrielle Aplin is one of these middle tier artists. She started her career releasing music independently through a distribution service before signing a deal with Warner label Parlophone. After two albums, she and the label parted ways (mutually and amicably, she says) and Aplin decided to retake the independent route. Today, she releases music through her own imprint Never Fade Records, which is licensed by Kobalt, and generates more than 250m streams a month. She feels more in control of her creative vision and career, and, thanks to streaming income, can still generate enough money to live off even with the lack of touring this year. “For artists, you can survive on a steady and consistent income,” she says. “It’s not ginormous but it is a genuine career option. By having short-term deals, good rates and owning my own music, I don’t feel like I have to have billions of streams to have a normal life.”
There’s evidence of progress at major labels, too (Universal, Sony and Warner declined to provide comment for this article), with artists signing favourable terms after building up traction by themselves. Stormzy signed a joint venture deal for his #MERKY label with Atlantic, and Stefflon Don did the same with Polydor via her own V-IV imprint: joint venture usually means profits are split 50/50 and owning master rights depends on the individual terms negotiated. A few artists we do know who have been able to secure their master rights when signing to labels include Taylor Swift under her new deal with Universal in 2018, and Pharrell Williams for his agreement with Sony label Columbia in 2013.
Andy Musgrave, manager of successful UK rapper AJ Tracey, says the deals he’s been offered from multiple major labels are vastly different to ones in the past. Part of the reason for that is due to the success they’ve had on their own, including a No 3 album and four Top 5 singles, which increases negotiating power. “Actual master ownership has become less common; major labels now are wary of even asking for ownership,” he says. “For an artist like AJ, the fundamental terms that we’re seeing is owning his rights and decision-making process and getting the lion’s share of the income. The long licence term for recording is more like short term, and the 80/20 royalty split in the label’s favour is completely reversed.”
Musgrave predicts this shift in power will continue, and result in major labels signing fewer artists and putting their full weight behind those they do, “because the windfall when something pays off isn’t going to be as great for them.” He continues: “With the artists they do sign, they are going to have to deliver everything they promised to. Every day you see examples of artists who are not allowed to release their project or do anything outside of the deal, and that’s not only damaging for a career, it’s also damaging for someone’s mental health.”