AllHipHop.com Editorial  

Time Warp: 2010 Artists Using The 1990s Business Model

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While some have tried to use Nas’ scathing letter to Def Jam executives (http://allhiphop.com/stories/editorial/archive/2010/10/07/22425459.aspx) as more evidence to condemn the music industry’s exploitative practices I saw it as a teachable moment on the subject of artist responsibility – an opportunity to explain to today’s young artists how important it is to think more like an entrepreneur and less like a rap veteran, or fan, and take control of their business education, and apply strategy and tactics necessary to surviving and thriving in today’s economy.

Aside from enjoying Nas’ wit and intelligence, and even courage to come out in public like this, I was actually saddened by the letter because it demonstrated to me how many of us (myself included) simply don’t realize our own power and end up following a path that is not suited to our strengths. Earlier this year I referred to Nas – creatively and politically -as the most dangerous MC in the world so I don’t have to re-state that argument (read it here: http://www.allhiphop.com/stories/editorial/archive/2010/05/26/22237455.aspx).

But in terms of building a team infrastructure and forming strategic alliances that would truly allow him to go places no other MC has, the most dangerous MC in the world has struggled. Nas has never been able to capture what has awaited him outside of the corporate music industry, in terms of his untapped ability to lead the masses and in terms of his unique marketing profile and position that would have allowed him to enter into business arrangements best suited for his artist-leader profile.

Although he intellectually understands it as well as anyone, Nas hasn’t been able to resist the allure and appeal of ‘mainstream success’ long enough to maneuver outside of the music industry’s caste system. To understand more of what I am saying, and why someone like Nas – with the right team – is potentially an even more influential and successful rapper than Jay-Z read my “Chris Lighty Is Not A Sell Out! The Music Industry Caste System” (Hip-Hoppreneur ™ Commentary November 4, 2009) [http://www.cedricmuhammad.com/chris-lighty-is-not-a-sell-out-the-music-industry-caste-system-hip-hoppreneur-%E2%84%A2-commentary-november-4-2009/].

Again, this is not just Nas – I and every other artist and entrepreneur wrestle with the problem of getting real money quietly versus our desire for psychic income (applause, appreciation, fame) and the external problem of not having good help around you. One of the most painful experiences can be trying to build a team, professional and disciplined enough to execute your most passionately-held ideas and plans.

I devote an entire chapter to it in Volume II Of The Entrepreneurial Secret, called, “The Secret of Team: The 9 Personality Types” (http://theEsecret.com/).

Recently I’ve been traveling – building and negotiating with artists from all over the world interested in becoming clients of my forthcoming Hip-Hoppreneur ™ advisory service.

Convinced that the new endangered species is the artist who 1) cares little about business 2) doesn’t want a leadership profile developed, and 3) can’t accept that selling music alone is not enough these days; it has been sobering and even sad for me to see 20-something year old artists so ignorant of the business and marketing process .

Still fascinated with the dying major record label, corporate radio playlists, and elusive video channel rotation – it is almost depressing to see how unoriginal, unimaginative, and afraid to take creative risks so many young talents are. Sadly, they study the industry from the outside in, rather than from the inside out – in terms of soul and business models. Their superficial conclusions are: do whatever they see the top 5 biggest artists doing.

It took me a few meetings and negotiations to realize what the problem is – just what exactly it is making these young’ins more conservative than Ronald Reagan so early in life. To put it bluntly, they are in a time warp.

Yes, it is rap’s equivalent of the hot tub time machine.

As if this were still 1994-1999, these artists think that whatever worked for Bad Boy, Death Row, Wu-Tang, Roc-A-Fella and Cash Money is the same thing that is working for Nicki Minaj, Waka Flocka Flame, Gucci Mane and Flo Rida. They believe that what worked for Snoop in 1993 is what will work for 40 Glocc today; that what worked for Nas in 1994 will work for Jay Electronica now; that what worked for the Clan will work for Yung Money; or the assumption that the tactics 50 Cent used in 1999 can be applied 100% to the career of Freddie Gibbs.

Almost unbelievably, so many of these young artists who want to be ‘put on’ either have no working knowledge of, or are ignorant of the lessons of the demise of the Mom and Pop record store (can a 20 something fully appreciate the symbolism of the closing of Fat Beats: http://allhiphop.com/stories/news/archive/2010/08/18/22340622.aspx?); the birth of the mixtape as a rap marketing tool; the blunders the music industry made regarding file-sharing; the impact the Internet has had on branding artists; the need to capture an International market (especially in non-Western countries where teenagers are the vast majority of the population); and why music and lyrics made during the era of Clinton aren’t as relevant and won’t resonate with people living during the Great Recession and two wars under Bush and Obama.

In short they don’t understand that in terms of today’s business model, it is less important to study the negotiations between Lyor Cohen and Jay-Z over the Def Jam joint venture with Roc-A-Fella back in 1996 and more important to understand the negotiations between Lyor Cohen and Todd Moscowitz over the resurgence of Asylum Records as an ‘incubator’ label.

Yes, I am saying that for a 20-something year old trying to understand today’s music industry it is more important right now, to master the lessons of the label that gave us Mike Jones and Paul Wall, and which currently put out Gucci Mane and Waka Flocka, than the label that gave us Beanie Sigel. Asylum’s success has had a greater impact on the prominent business model of choice today – ring tones, digital singles, incubators and independent record labels.

[And I won’t even get into how important it is to understand what independent artists like Tech N9ne have been able to do under the radar, while we’ve been focused on the gossip, sex life, and manufactured ‘beefs’ of the most well-known artists.]

That is why what I enjoyed the most about Jay-Z’s recent Wall Street Journal feature (http://online.wsj.com/article/SB10001424052702304023804575566644176961542.html) was not what he had to say about his past success (as important as it is) but his forward-looking vision for the industry.

The time warp is understandable when one considers that the biggest forces impacting the music industry have come from outside of it – things like technological advancement (the emergence of the mp3), demographic change (use of the mobile phone and social media by teens), stock market activity (record labels being part of mergers between larger multi-national corporations), and Supreme Court court cases (MGM v. Grokster ) – and that business and economics is not taught on a mass level.

But that still does not mean that it is acceptable for artists who operate inside of the industry to be ignorant of these dynamics or to rely 100% on their business manager or entertainment lawyer to explain it all to them.

That Nas is still locked into the Old Economy is understandable.

He is an artist who first signed a multi-album contract with a major record label back in the 1990s. That’s the industry he was born into. Yet even with that he has still gone on to become a legend and made millions of dollars. He’s a success regardless.

But, that’s no excuse for a new generation to get into that hot tub.

Out with the old and in with the new…

Cedric Muhammad is a business consultant, political strategist, and monetary economist. He’s a former GM of Wu-Tang Management and currently a Member of the African Union’s First Congress of African Economists. Cedric’s the Founder of the economic information service Africa PreBrief (http://africaprebrief.com/) and author of ‘The Entrepreneurial Secret’ (http://theEsecret.com/) . His Facebook Fan page is: http://www.facebook.com/pages/Cedric-Muhammad/57826974560?ref=ts and he can be contacted via e-mail at: cedric(at)cmcap.com.

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