When the labels were still licking their piracy-inflicted wounds, a rookie deal for an A$AP Rocky or a Bobby Shmurda might land in the range of $1 million to $3 million. The music lawyers I canvassed for this story generally agreed that the sizes of deals are trending upward in recent years, particularly for hip-hop artists. … We’re seeing more and more pretty crazy deals at the beginning of people’s careers.” “It used to be that you could get a crazy deal once you blew up, so to speak. They’re able to show that what they’re doing is actually working and actually generating income,” says David Jacobs, a music attorney at Grubman Shire Meiselas & Sacks. “Artists are able to show ‘research,’ for lack of a better word. These are metrics that would not have been as measurable or as monetizable just eight years ago, in the era when music fans traded songs on CD-Rs and quasi-legal file-sharing networks such as BitTorrent. Prior to his newly minted deal, Lil Pump had racked up 340 million streams for “Gucci Gang” on Spotify, 10 million followers on Instagram, and 585 million views on YouTube. The good times are being shared by artists like Lil Pump, who proved his popularity before releasing a proper debut album. “You definitely can see a new bounce in their step. “People aren’t walking around with quite such a grim face,” says Jeff Biederman, an entertainment lawyer at Manatt, Phelps & Phillips who represents country singer Dierks Bentley. The prosperity has led to a shift in morale at the majors, which have spent most of this century battling digital platforms rather than benefiting from them. Universal Music Group and Sony Music, the other two major labels, also enjoyed strong growth last year. Warner Music Group’s quarterly revenue surpassed $1 billion for the first time in more than a decade at the end of 2017. The harvest has finally arrived, at least for some. The industry’s bogeyman has become its savior.Įven when Spotify was being called “ the last desperate fart of a dying corpse,” the company promised that it was playing a long game that would eventually bear fruit for labels and artists. But all of them now have their most recent projects available on the service. People like Taylor Swift, Radiohead frontman Thom Yorke, and Talking Heads founder David Byrne have all disparaged Spotify with varying levels of vitriol. The industry’s decade of misfortune is quickly fading in the rearview mirror thanks to streaming, which not so long ago was the bogeyman threatening artists’ livelihoods. That followed the biggest spike in revenue in almost 20 years in 2016. record industry enjoyed 17 percent jump in revenue over the same period the previous year, according to the Recording Industry Association of America. But it may be getting tougher for less prominent musicians to stay afloat at the very same time. Spotify, which will go public in the coming weeks, has transformed the music business into an ocean of pennies that’s finally turned lucrative for the winners. At the same time, though, there’s evidence that the amount of money generated per stream is actually trending downward, putting pressure on both labels and artists to create music that scales to a huge audience. His payday signals that the money-making machinery of the record industry is revving up again, both for top-selling artists who are pulling in substantial revenue from streaming and the labels basking in their generous cut of the profits. 3 on the Billboard Hot 100, sparked a bidding war among the major labels, after his initial deal with Warner was voided due to his status as a minor. Pump, whose single “Gucci Gang” climbed from SoundCloud to no. One of the biggest windfalls so far has gone to Lil Pump, the 17-year-old Miami rapper who reportedly signed an $8 million deal with Warner Bros. In recent months, though, echoes of the fat-cat days of the ’90s and early 2000s have reemerged as major labels make big bets on young stars propelled by the internet. And the music industry was just beginning a decade-long tailspin that would wipe out half of its revenue and make the artist megadeal as archaic as the compact disc. Arista went through various corporate reshufflings until it was shut down in 2011. Houston recorded only three more albums before her untimely death in 2012. It was an agreement premised on the prosperous past, not the starkly different future. In August 2001, Whitney Houston signed a eight-album, $100 million contract with Arista Records, then the largest record deal in the history of the music industry.
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