Twenty years ago Apple launched the iPod and promised to put 1,000 songs in your pocket.
Now the tech giant has made a big bet on a company that wants to put an entire record label in the same space.
Late last month, independent artist distribution platform UnitedMasters secured an Apple-led Series B investment of $ 50 million, with additional funding from two existing backers: Google parent Alphabet and Andreessen Horowitz. The new investment followed a $ 70 million funding round led by Google / Alphabet in 2017.
UnitedMasters, headquartered in New York, was founded four years ago to provide music distribution services to indie artists, as well as tools for analysis and royalties. Today it is said that it has a million “artist partners” on its platform.
Steve Stoute, founder of UnitedMasters, former EVP of Interscope and founder of the successful New York marketing agency Translation, explains to MBW that UnitedMasters is on the “mission to become a full-service music company in your pocket”.
Two recent developments from UnitedMasters underscore this goal. The platform introduced a subscription tier last July that allows acts to withhold 100% of their license fees for digital services. In August 2020, UnitedMasters announced a contract to become the first music distribution company to be integrated into the short-form video app TikTok.
Stoute is excited about the rapid growth of the self-emptying arts sector, which generated an estimated $ 1.2 billion worldwide in 2020. The UnitedMasters boss insists that “there are no opportunities that signed artists at record companies have over independent artists”.
“It used to be a stigma. If you were an independent artist, it was more of a home industry, ”he says. “But now that we have the support of a company like Apple, that’s a big statement [about] how the playing field is leveled and all opportunities are evenly distributed. “
“GOOGLE, ANDREESSEN HOROWITZ AND APPLE BELIEVING IN THE FUTURE OF INDEPENDENT MUSIC IS A BIG DAY FOR EVERY INDEPENDENT COMPANY IN THE WORLD.”
STEVE STOUTE, UNITEDMASTERS
Commenting on the Series B round and the participating investors, Stoute told MBW: “Making Google, Andreessen Horowitz and Apple believe in the future of independent music is a great day for any independent company in the world.”
“I don’t care if you make music or not,” he adds. “This shows that independent creators have a chance now, better than ever, and that they are in the spotlight.
“The world’s largest companies are looking for them and are taking steps to ensure they have the same opportunities as everyone else.”
Here Stoute MBW shares what Apple’s investment means for UnitedMasters and independent artists, and gives us his predictions for the future role of record labels in the music industry …
WHAT CAN YOU TELL US ABOUT THE IMPORTANCE OF APPLE’S INVESTMENT IN UNITEDMASTERS, and will the “strategic partnership” you have announced go along with it?
There is a growing community of independent creators. And from an audio point of view, we need to be able to accommodate their growth and demands.
There is more supply and demand than the old record companies can handle.
“This partnership will help us expedite all of the tools and services we offer.”
Our intention was to create a platform that would help independent artists spread their music, partner with brands, [makes it possible] to sync their music; essentially build a system in which [UnitedMasters] is a record company in your pocket.
This partnership with Apple will help us accelerate all of the tools and services we offer.
SINCE THE UNITEDMASTERS RETURNED IN 2017, THERE HAVE BEEN SOME HIGHLY PROFILED ARTISTS WHO HAVE PROBLEMS ABOUT THE PROPERTY OF THEIR MASTERS. TAYLOR SWIFT AND KANYE WEST, for example. DO YOU HAVE AN INCREASED FREQUENCY OF SUPERSTAR ARTISTS TALKING IN PUBLIC ABOUT THIS ISSUE?
Oh yeah. I mean, it’s been like that since Prince. Prince wrote ‘slave’ on his face, let’s not forget that.
[What Prince was commenting on] was the injustice of an artist who did the lion’s share of the work but gave away a lion’s share of the profits and gave up his rights. Intellectual property is the most valuable aspect of the asset.
“Why should record companies ever have your rights? That does not make sense. “
There have been complaints on this issue for years. There have been films on the subject. And now you see the next generation of artists complaining about it.
It’s becoming increasingly obvious that record companies could have had a plausible argument [for that contractual setup] when they were doing something as costly as making vinyl or CDs and distributing those CDs to thousands of music stores.
They don’t do this anymore, so how could they have the lion’s share of the profit? Why should they ever have your rights? It makes no sense.
You previously told MBW why, in your view, the value that a record company offers has declined. WILL YOU SEE VALUE WHEN YOU SIGN A RECORD COMPANY IN 2021?
Maybe if you are a pop act. If you’re trying to be the next Ed Sheeran, maybe. Things like that where you really rely on radio and the label monopoly [of that format] through their historical relationship with radio.
“I don’t know why you would ever sign up for a record company.”
But think outside of an artist who needs radio to make a career. Think hip-hop, reggaeton, dirt, or afrobeats, whatever it is, these art forms don’t need a radio to get started.
Those [artists] are broken by social media and their distribution platforms.
There are certain types of artists [where] Radio desperately needs its existence. If you’re not that kind of artist, I don’t know why you would ever sign with a record company.
What will the relationship between record labels and artists be like a decade from now, given the rise of the independent artist sector?
In the future, large companies will only be catalog managers. I don’t see a need for a record company [beyond that] exist. Unless it changes from what it currently is to something completely different.
If record companies are just trying to keep the model they have now of buying artist rights early in their careers to own their intellectual property, then in my opinion they will only be managing the intellectual property that they have already received and stored in the collected over the last 50 years.
Your ownership of the artists’ intellectual property will decrease.
DO YOU THINK THE PANDEMIC HAVE GAINED THE SONG DRIVEN SIGNATURE MARKET? ?
The record company’s A&R system really has mostly relied on buying viral hits and overpaying for them. It’s like buying a lottery ticket and paying too much for something because it’s buzzing.
This creates a bidding war. These are just record companies fighting for market share regardless of what it costs.
“The record company’s A&R system has really been largely about buying viral hits and overpaying for them.”
In general, the labels’ business is fueled by overpayment or bidding wars for viral hits started by the artist himself. [Then] The label comes after and says they are going to do it global and make it the biggest thing in the world, put their engine behind it.
There are still some great A&R people in the industry. And the A&R skills are very valuable skills. There are some special talents in the industry, some who work with us and some who work with the labels.
MANY CELEBRITY INDEPENDENT ARTISTS SIGN RECORD DEALS or JV deals with important labels. HOW CAN UnitedMasters CONVINCE ARTISTS TO KEEP THEIR INDEPENDENCE AND AVOID THESE BIG MONEY DEALERS?
Many artists will still do that. Many old artists should probably quit.
If you’re a legacy artist and you have a name and a brand, I don’t know why you would ever sign one [new] Record deal. You don’t need a record company, you already have a name.
But if you are an artist and you want to get the bag, take the bag. If you are giving up your rights on a big check and you think it’s worth it, then I’m not trying to change others’ minds.
“If you’re a legacy artist and you have a name and a brand, I don’t know why you would ever sign one [new] Record deal. “
This isn’t even about changing people’s minds, it’s about creating another option, an impressive option. Not something that is considered poor and guarding. That’s really what it is about.
This is not a game that says, “Do you think UnitedMasters and Independents are going to put the record companies out of business?” No, I am not even making that comment.
The comment I am making is that the fastest growing segment in the industry is independent artists. And independent artists won’t be that stigmatized underclass.
What advice would you give to artists hoping to become superstars, but regardless?
Whether or not you sign a record deal, you just know you have to get the job done. It’s a very, very important truth: whether or not you sign a record deal, it’s extremely hard work.
I know and know the greatest stars in the world. You work extremely hard. They don’t rely on the record company to make them stars.
Every touch point of your brand is something you need to manage. Whether it’s your music, the content you make, the videos, all of your social media platforms, and what you post, you need to act like a star. You have to act as such, 24/7 as such, because that is exactly what the world’s greatest stars are doing.
The times when a record company was needed to do these things have become less and less viable.
“There is no secret button that record companies push [to promote a song] and then suddenly it works. “
You can’t even imagine independent artists powering their videos on MTV 25 years ago. The thought of it just sounds crazy. But 25 years later, MTV doesn’t matter anymore.
What matters are your social media accounts. This is the new MTV and how you appear on it and how you approach it and your strategy behind it is extremely important.
There is no secret button that record companies push [to promote a song] and then suddenly it works.
It’s about work. It’s the engagement to your fans. That is what will connect, and that is what you continue to build. That will make you a star.Music business worldwide