Before you could own music, you had to go see it. There literally wasn’t any other option because in 1937, if you wanted to hear a song, you found a room it was being played in and you stood in it because music was an event, just like a Broadway play, not an object yet.
Then in 1948, Columbia introduced the vinyl LP and for the first time an entire symphony could live on a 12-inch disc you kept in your house and played whenever you wanted. This was the iPod of it’s day and changed how people thought about the music business. Music became something you could own instead of something you had to just witness. We took a spiritual moment, froze it in time and started selling copies of that frozen moment at a made up price.That wasn’t a bad thing and it created one of the greatest creative industries in history. The vinyl, the cassette, the CD and eventually the MP3 all built on the same idea, the recording itself was the product.
The problem is we’ve spent the last 25 years trying to protect that model instead of asking whether the model itself has expired.
“Music” was never the product
This is the idea I keep coming back to as I build companies and consult at labels. Music, the actual moment when someone connects to something bigger than themselves and turns that connection into sound that moves another human being, isn’t a product that shit is magic.
The recording is the product or the artifact from that magic. It was the souvenir people could take home after experiencing that moment. Technology has eventually made those artifacts infinitely reproducible and streaming has turned recorded music into something much closer to a utility. We pay one monthly subscription and get access to almost every recorded moment in history the same way we pay for electricity or running water (which I think that model eventually needs to change to metered usage, but that’s another article I need peer reviewed)
Spiritually, I actually think streaming is a good thing, hundreds of millions of people now have access to music they never would have heard or maybe had the money to listen to so humanity gained something great.
But economically, artists and the industry at large lost the transaction. The issue is that the people who built the modern music business built it around extracting value from the artifact, not around expanding the value of the connection that created it. And if we’re getting into the real history of this biz a lot of that era was gangsters cleaning up money through their lawyers and not giving a fuck about the artist or the music, but I’ll digress. Once those artifacts became infinitely available, they became commodities, and commodities are eventually priced around distribution and convenience rather than holistic value (Instagram did this to photography)
The more I talk to execs, I think we’ve been asking the wrong question for years. The goal isn’t figuring out how to make recorded music expensive again, it’s understanding what role the recording plays now. The recording is your loss leader the same way it is for tech companies and CPG companies. It’s the thing that introduces people to your universe, earns their trust and creates demand for everything else you build. Once I started looking at music that way, almost every problem the industry keeps trying to solve started looking different.
The question isn’t how do we save recorded music as a product, that shit is over and now we’re mostly arguing over different ways to gate access to that product digitally. The better question is what plays the role the LP played in 1948. What’s the next ownable extension of that connection that’s valuable enough that people actually want to pay for it?
The funny thing is this isn’t a new issue, when I was researching for my “music industry needs a strike” article I came across James Petrillo calling for a strike against every major record label in 1942 because he believed recorded music would eventually replace the need for working musicians. The strike lasted two years and ended with RCA and Columbia agreeing to pay into a fund that supported musicians because even then they understood that once a performance could be frozen and sold infinitely, you needed a separate mechanism to keep paying the people who created it.
80 years later we’re still trying to solve the same problem at it’s core. We never rebuilt that mechanism for the streaming era, we just hoped touring, merch and sync licensing would make up the difference.
The crystal glove, the Marathon, and the YZY 350
Michael Jackson didn’t just release Thriller and let the music speak for itself even though artists and some Twitter historians will have you believe that. He built a universe around that album. The crystal glove wasn’t just a piece of merch tied to an album cycle, it became an artifact inside the world he created. Forty years later, people still buy replicas because they’re buying into something much bigger than a song. The question is how much of that did Mike build and own.
Nipsey understood this better than almost anyone in modern music. He sat down and intentionally decided to build a lifestyle brand that the music could serve as a revenue generating loss leader for in comparison to the rest of his enterprise and called it The Marathon. The music was the invite, but the music was never the entire business.
He opened The Marathon Clothing on the same block where he used to sell CDs out of his trunk, eventually bought the plaza it sat in and kept expanding what The Marathon meant. He owned the brand from day one, then let the music create customers for everything else he wanted to build.
That’s why six years after his death Blacc Sam and the rest of the team could open Marathon Burger, The Marathon Cultivation and continue expanding the universe without rushing to release another album. They weren’t relying on posthumous recordings or making any desperate moves to keep the business alive, because the recordings had already done their job by introducing people to the world of Nipsey Hussle.
Nip even talked about this years ago, when he referenced the Hello Kitty ecosystem. His point wasn’t that artists should make cartoons, it was that characters and worlds create businesses that survive beyond a run. He asked why Snoop couldn’t have a theme park but I don’t think most people understand how serious he was because he was thinking like a founder not just an artist.
Ye eventually arrived at the same conclusion from a different direction. There came a point where he didn’t want YZY to exist only because he released another album. Jordan Brand doesn’t need Michael Jordan to play basketball anymore because Jordan stopped being basketball merch decades ago. It became its own company, with its own identity and demand, because it creates the artifact of magical sports and cultural moments we all cherish.
That’s the opportunity I think artists have now, not to sell more “merch” but to build businesses where the music creates trust, the trust creates devotion and the devotion funds something artists and their team can own long after the album cycle ends.
The tools exist for the new model but the financing and underwriting models don’t
I’m sure it’s someone in Huntsville, AL or Savannah reading this and saying “That sounds great if you’re Kanye”. But God honest truth I actually think the opposite is true, it’s never been easier to build a real business around your art than it is today.
Shopify, Printful and dozens of print on demand companies can manufacture and fulfill hundreds of products with almost no upfront capital. Ghost kitchens let someone launch a food concept without signing a lease, with AI software has become dramatically cheaper to build. Manufacturing can be outsourced and distribution is global. For the first time an artist doesn’t need millions of dollars or millions of fans to test whether people want to buy something they created.
The barrier isn’t infrastructure that a company can hide from you anymore; it’s just whether you have the imagination and taste it takes.
Most artists still think the business starts after they finish the album, when in reality the album should be introducing people to the business they’re building, I’m not saying it has to be a clothing line or food.
For an artist It just has to answer one question, what exists because I exist and is an extension of me that can live on beyond me?
That’s a much more interesting question than what we can print an album title or artwork on.
The longtail problem that’s still broken is how artists and their team finance any of it. Right now, if you want capital in the music industry, you’re probably taking some form of an advance. Even from the most innovative music finance companies, the transaction usually boils down to selling all of tomorrow’s guaranteed cash flow for money today at a discount.
That model can be useful depending on how you built your shit out but it just isn’t entrepreneurship to me. Imagine if every founder had to sell all or the lions share of future revenue every time they wanted to launch a product or lease an office. We’d all recognize that as a broken financing system for any real innovation to happen.
Music normalized a short sighted zero sum mentality that most other sectors don’t allow. Banks lend against businesses because they expect the business to create future value and be a long term partner that they can lend more money to over time.
Music companies are giving artists $50 and a box of honey buns and then acting surprised when these kids and their teams are churning out half baked music and rushing to sign to the next company to survive. The cash advance sector in business is looked at as the cesspool of finance, but in music business it’s just the standard.
I don’t think artists or managers have an earning problem as much as they have a capitalization problem. Until someone builds better underwriting models, the teams that win will be the ones who use the cash flow they already have to slowly build businesses that become less dependent on recordings over time. Otherwise we’re going to keep making outliers the use case for the model not being broken, “The music industry is fine, look at (_______ artist) they’re a millionaire and made it”. But industries are sustained by the median, not the exceptional.
The goal isn’t replacing music, it’s giving music another outlet. Instead of asking every album to support your entire career, let it become the engine that introduces people to the wider net of things you’re building.
Because I think more than just the money that came from recorded music being sold was the connection and independent artist felt. Selling CD’s hand to hand made you look someone in the eye and exchange your talent for sustenance.
Master P wasn’t watching a dashboard update every morning when he was selling units out the trunk. He was looking another human in the eye, handing them something he created and watching them decide it was worth paying for. There’s something deep and spiritual about that exchange to me and we’ve lost the celebration of that.
An artist who produced and wrote their own song can get 1M streams from 700,000 people but feel like it means nothing because they only made $4,000 and never had to look at anybody to do it. Building something people can wear, eat, collect, experience or participate in brings that relationship back into the physical world.
I think whether they know it or not, artists are hungry to feel that connection again.
The role each of us play in this new age
If you’re an independent artist between 10,000 and 200,000 monthly listeners, stop thinking like a musician with merch and start thinking like a creative founder who hit product market fit. The most overlooked asset in music isn’t sitting with Drake, Taylor Swift or legacy artists to buy their catalogs. It also isn’t distributing a million artists hoping one becomes the next Drake or Taylor Swift either because that shit is like penny stocks. It’s building a business that sits with the thousands of artists who have quietly built audiences at the early stage.
That’s already enough demand to begin validating real businesses beyond the sound recording and touring economy itself. Music, album merch and concert tickets shouldn’t be the only things people can buy from you. They should be the reason people trust everything else you build and more importantly, stop expecting every album to carry the financial weight of your entire career. That’s a burden no art form should have to carry anymore because it somewhat taints the reason you make music in the first place, that spiritual tether to a higher source.
The opportunity is to let music become your first economic engine in your flywheel that creates demand for the second and maybe even third engines.
If you’re managing new artists at this level, your job has changed too. You’re still managing releases, relationships and opportunities, but you’re also becoming a co-founder of an ecosystem.
The managers who win over the next decade won’t necessarily negotiate the biggest advances or best reversion periods. They’ll help build businesses their artists actually own and can get adequate financing for.
It’s important for me to say that if you believe in my thesis here, artists are going to have to learn how to build a strong team. Trying to build all of this alone almost guarantees you’ll either burn out or spend your best creative years operating a company instead of creating the work that gives the company value in the first place.
Build your team earlier than you may think you need one, and make sure their hard skills, soft skills, effort and values are aligned with yours.
For 75 years the recording itself was the business because the latest technology at the time was only able to produce a finite amount, with that entire issue gone the artists who thrive over the next twenty years won’t necessarily be the ones with the biggest first weeks, the biggest advances or the biggest streaming numbers. They’ll be the ones who understand a song is a top of funnel activity that can introduce someone to your entire world.
Go build something