Breaking Down the Mechanics and Politics Behind Streaming Exclusives

The topic of streaming exclusives is indeed a hot one these day. In her recent in-depth Billboard piece, Shirley Halperin offered some real insight. Here are some excerpts:

 

“Universal Music Group chairman Lucian Grainge spent the weekend of Aug. 20 thinking long and hard about his business. As Twitter buzzed with will-he-or-won’t-he speculation about the imminent release of Frank Ocean’s oft-delayed sophomore album, Blond -- an Apple Music exclusive, paired with pop-up shops in four cities, that officially dropped that Saturday -- the British executive could take little comfort in a UMG act headed straight for the top of the Billboard 200 on the strength of 225,000 to 250,000 equivalent album units earned in the week ending Aug. 25. That’s because Ocean -- signed to Def Jam for his previous Grammy-nominated album, 2012’s Channel Orange -- was no longer on the label, having maneuvered out of his contract by reimbursing the company for the $2 million-plus spent on Blond and releasing it to iTunes via his own Boys Don’t Cry imprint.

All Def Jam got for its trouble after an anxious four-year wait? A streaming-only “visual album” called Endless, released the day before, that is ineligible for the Billboard 200. But it will fulfill Ocean’s contractual obligation to the label, multiple sources confirm, with one insider asserting that the label had not known about the existence of Blond. Marvels an insider: “He is emancipated, and all proceeds and kudos go directly to Frank. Pretty f---ing ballsy.”

The Ocean salvo comes in the wake of several high-profile UMG artists who, in the last six months, have aligned with streaming services Tidal and Apple for the initial distribution of their music. Among them: Drake (for Views) and Kanye West (The Life of Pablo), and, slightly further back, Ariana Grande (Dangerous Woman), Rihanna (Anti) and U2 (Songs of Innocence). While not every rollout has been smooth (both West and Rihanna saw hiccups upon release -- the former self-inflicted by insisting the album wasn’t ready for consumption, the latter with an accidental leak hours before it officially dropped), it was Ocean’s album that signaled a last straw for Grainge, who in turn issued a corporate mandate to label heads that UMG would no longer allow album exclusives to one platform and on a global basis.

Frustration for UMG, the world’s biggest music company, stems from the belief that exclusives inhibit maximum sales and revenue potential. For some artists and managers, however, taking advantage of the streaming companies’ high-stakes, high-spending battle for market share offers a portal into direct deals with retailers that could make an affiliation with labels look redundant.

But while streaming exclusives can hurt a record company’s bottom line, for certain artists -- chief among them Drake, who has the second-largest-selling album of 2016 in the United States, with 1.4 million (only Adele’s 25, with 1.5 million sold this year, is ahead of Views) -- the success of such a campaign is evident.

Still, there are those like Russ Crupnick, managing partner of MusicWatch, who question the logic on a more macro level. “There’s been too much conversation about exclusives,” he says. “What is the real core benefit of Tidal? It’s not having a Kanye or Beyoncé exclusive; it’s the fact that I can use it to listen to any kind of music that I want, on demand, in any order. That’s the reason why people sign up for subscriptions.”

“It’s the Wild West,” adds one manager of top-tier stars. “Some artists have had great results -- like Beyoncé, Chance the Rapper, Future and Drake -- but they are few and far between. It’s a strange environment right now for most acts, who have to hear, ‘Give us an exclusive even though we’re not going to give you much.’ ”

 

Read the full article here

 

 

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