Music business plays with discord
The shoo-in for No. 1 on Billboard’s next album chart is Frank Ocean’s “Blonde,” which has charmed critics and enthralled fans who had waited four years since his last record.
But the release of the album this month, through an exclusive deal with Apple, has also roiled the industry, bringing to the surface longsimmering tensions that record companies have with streaming music services, and sometimes even with their own artists.
Within days of the album’s release, a series of revelations about Ocean and “Blonde” emerged that portray a business deeply in flux. Ocean, it seemed, was no longer signed to Def Jam, his record company, when “Blonde” was released. He had apparently fulfilled his contractual agreement with the label with the release of a separate “visual album” the day before “Blonde”
came out — a move that cut Def Jam and its corporate parent, Universal Music Group, out of the profits for one of the year’s most-anticipated albums.
At the same time, Universal’s management decided to clamp down on the growing practice of releasing new music through exclusive deals with digital outlets like Apple Music and Tidal, a move that reasserted the label’s control over the music its artists produce but also risked alienating top performers who benefit from such promotions.
As the industry has struggled to interpret the fallout from “Blonde,” one thing is clear: In the streaming age, the complex series of relationships that the music business relies on to function have become anything but harmonious.
“The unprecedented run of exclusives by digital music services has put a tremendous strain on the relationship between artists and their record companies,” said Larry Miller, an associate professor of music business at New York University’s Steinhardt School. “We are seeing that play out in public now.”
The details of Ocean’s exit from Def Jam are unclear. But the story began to take shape when fans noticed that the label’s name was nowhere to be found in the credits for “Blonde.” That album had come out just a day after the release of Ocean’s “Endless,” a 46-minute “visual album,” also an Apple Music exclusive.
Despite its idiosyncratic format, “Endless” — one long streaming film, whose songs (different from those on “Blonde”) were not available separately — fulfilled Ocean’s contractual obligations to Def Jam, enabling him to release “Blonde” through Apple without any involvement from the label, according to three people with knowledge of Ocean’s deal who spoke on the condition of anonymity because they were not authorized to discuss it publicly. The financial arrangement between Ocean and Apple is not known. Apple, Def Jam and a representative for Ocean’s managers all declined to comment.
It was still not known whether a CD version of “Blonde” would be made widely available, and if so, what company would handle its distribution now that Ocean is no longer on the Def Jam roster. (In another twist to the unusual release of “Blonde” — whose cover art spells it “Blond” — a relatively small number of CDs were included with copies of a printed publication called Boys Don’t Cry that were given away for a limited time in pop-up stores in New York and three other cities.)
Independence may be particularly attractive to an artist like Ocean, who is revered as an innovator but has been a reclusive and enigmatic figure; he has also complained in the past about Def Jam. But the way “Blonde” was released is viewed as representative of a wider shift in the power dynamics between artists, record labels and technology companies.
It follows a year of deals by streaming music companies like Apple and Tidal focused on exclusive album releases. Used by the streaming outlets to attract attention and subscribers, these arrangements — in which an album is available on only one service for a limited period, usually a week or two — have also been viewed by artists as ways to finance new projects, since they often involve a significant financial commitment from the streaming service to pay for videos or other forms of promotion, according to music and talent executives who have negotiated the deals.
Over the last year, major albums by Beyoncé, Drake, Kanye West, Dr. Dre, Rihanna, Future and DJ Khaled were released first through exclusive streaming deals of various kinds. Apple has carved out a particular role in paying for videos by stars like Drake, the Weeknd and Taylor Swift.
But deals like these have also often irritated fans, since they sequester music on a particular subscription service — even if only for a limited time. Record labels also often dislike them because they limit sales and frequently lead to piracy.
They are also seen as examples of digital services interfering in the labels’ relationships with artists, a connection that in decades past was absolute but has already been chipped away by declining record sales and the rise of the concert business as a major source of revenue for artists.
The tide may be turning against exclusives, at least from the perspective of the labels. After the release of Ocean’s album, Lucian Grainge, the chairman of Universal Music Group, sent a private memo to top executives at the company’s labels calling for an end to long-term exclusive deals with a single service, according to a person who has seen the memo but spoke on the condition of anonymity because it was an internal document. Yet that edict may still leave the company plenty of room to negotiate more limited deals with digital services. A spokesman for Universal declined to comment.
Executives at two major record labels said that Spotify, which has resisted exclusives, had recently told them that it had instituted a policy that music that had benefited from such deals on other services would not receive the same level of promotion once it arrived on Spotify; such music may not be as prominently featured or included in as many playlists, said these executives, who spoke on the condition of anonymity in order to discuss private negotiations. Spotify declined to comment.
Others in the music world have called for a truce between labels and digital services when it comes to online distribution, particularly when it concerns young artists like Ocean, who at 28 has no experience with the record industry before its digital disruption.
“Artists want to be fully empowered to control their careers, and they don’t want the old school to tell them what to do,” said Doug Davis, a music industry lawyer. “Ultimately there has to be a resolution between the major labels and the artists that allows them to control their destinies and cash in on the financial opportunities that are out there.”
“Artists want to ... control their careers, and they don’t want the old school to tell them what to do.” Doug Davis, a music industry lawyer