Tag Archives: 360 degree contract

It’s Not Selling Out, It’s Ca$hing In

Hip hop is far from the first culture to be infiltrated and subsequently mined for profit by corporations, but the trends, rhythms, fashions, and lifestyle of hip hop has global effect, from suburbanites in the Valley to hustlers in Brooklyn to cab drivers in Africa.

With a global audience, it was only a matter of time before corporations reached out to hip hop to validate their image.  To this end, corporate America has met with unparalleled success, securing rap godfather KRS-ONE and all-around mogul Jay-Z as two of their biggest spokesmen:

KRS-ONE Interview: Rap Merges with Major Brands

Jay-Z Co-Brand Director of Budweiser Select

As more hip-hop celebrities become spokespeople for brands, we see a dovetail with earlier trends (reference “Remix!”) and the artists’ answer to recording studios’ new 360 degree contracts.  As individual album sales may drop due to open source technologies, artists both become and represent brands.

Artists can certainly profit in this manner, but is this trend (a) good for the culture the artists propagate and/or (b) a risky attempt to trade on “street cred” for major companies?

Perhaps some other dons of hip hop, the Wu-Tang Clan, have the answer embedded in the lyrics to their banger “Protect Ya Neck”:

First of all, who’s your A&R
A mountain climber who plays an electric guitar?
But he don’t know the meaning of dope
When he’s lookin for a suit and tie rap
that’s cleaner than a bar of soap
And I’m the dirtiest thing in sight…

REFLECTIONS

1. When worlds collide (e.g. hip hop culture and corporate America) in pursuit of a common goal (profit), at what point is the relationship between credibility and profit no longer linear and exponential?

2. How can businesses draw on the talents and experiences of artists to profit in a respectful and reciprocal manner?

ACTION

Keep it Real.

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Remix!

This blog’s first post, “The Honor System,” profiled the artist Radiohead as an innovative example of musicians bypassing big labels and putting their trust (and profits) directly in the hands of consumers Radiohead Bypasses Labels.

Faced with an exodus of top talent, big labels have had their existence challenged Fast Company: Can Big Labels Survive? (see esp. post by Karen McGrane, echoed on MusicNews.com R.I.P. CD?).

Warner, Sony BMG, and Universal have all heeded the advice of McGrane and are working hard to adapt and invent, using Web 2.0 to their advantage (see post entitled “Web 2.0, SoJo, and Horatio Alger”) and striking a landmark deal with MySpace Business Week: Record Labels and MySpace Cut a Deal.

Big labels have also introduced the “360 degree contract,” which is all-encompassing (merchandise, tours, etc.) as opposed to merely CD sales The Economist: A Change of Tune: 360 Degree Contracts.

What ultimately happens to big labels remains to be seen. Yet recent events evidence that several labels are trying, in open-minded and innovative ways, to adapt and ensure their survival. As of now, a Barenaked Ladies chorus is the final arbiter for the industry: “And it’ll be great, just wait–or is it too little, too late?”

REFLECTIONS:

1. Consider the effects of competition among big businesses as they attempt to stay relevant to the consumer (e.g. Apple/iTunes, record labels, musicians). Does this competition help or hurt the consumer?

2. Does this kind of “consumer based competition” encourage or discourage innovation? What, in turn, does this do for everyone involved (artists, labels, consumers, etc.)?

3. What would be the effects of consumer based competition (as opposed to relative price fixing) in other industries (e.g banking, credit cards, etc.)?

ACTION

Focus on and trust your consumer base to drive innovation and a competitive advantage.

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