Many years before “uberisation” became shorthand for disruption across a plethora of industries, the music business was arguably an early poster-child for being caught short by the rise of technology. It took the considerable marketing clout and UX nous of tech companies like Apple and Spotify to build a new music ecosystem on the smoldering ashes of a post-Napster market. Now revenues from digital music, and streaming in particular, are driving the highest global rates of growth in the music industry since the IFPI began tracking the market in 1997. But while the times they are a-changin’ are record labels themselves updating the kind of experience they provide their artists, or is it the same old song?
Kobalt are one of the global success stories of a new approach to the music business which leverages data with the same rigor as the leading technology companies. The company is well documented as a tech-savvy disruptor to the long-established field of music publishing and neighboring rights, providing tier-one artists such as Skrillex with a dashboard of how their revenues are performing in real-time. While this transparency is not uncommon in the world of technology providers, it is a relatively recent development for the music publishing and licensing industries. Earlier this year Kobalt’s recordings company Artists Without A Label (AWAL) announced a $150 million investment into artist career development, technology updates and 100 new employees.
The business model behind AWAL is a significant pivot on the traditional “lock-in” music label deal in which a financial advance and ongoing support are agreed in return for as much control of an artist’s recorded repertoire and associated revenues as can be negotiated, for as long as possible. In contrast, the typical AWAL deal offers artists and independent labels a modular range of services without having to give up ownership or control, explains AWAL President Paul Hitchman, “We see our model as quite unique. Providing the services that you would get at a major label but also empowering artists to keep control of their rights and their career and enabling them to retain the majority of income. AWAL receives a share of the revenues we generate on behalf of artists so our interests are completely aligned, and we do not lock artists into long-term exclusive agreements.”
Hitchman reveals that their disruptive approach to business is driven by new technology, “There is an important shift taking place in the music industry in which streaming is enabling a much greater number of independent artists to have a long-term career in music. The old model was like the Hunger Games, 20 artists went in but only one came out successful and the careers of the other 19 ended prematurely. In the new model, artists are being enabled to take back control of their careers and build sustainable businesses.” Hitchman believes that this “new music economy” is increasingly being seen by artists, managers and creative entrepreneurs as a model which dovetails with their broader expectations of accountability and control, and this is good news for the global music industry. “Music is not a zero-sum game and the growth of digital music services is engaging more and more consumers worldwide and driving revenue growth,” he observes.
One notable convert to the AWAL model are The Kooks, a well-known UK band whose 2006 debut ‘Inside In/Inside Out’ went five times platinum at the end of last year. David Nicoll from their management team explained how AWAL’s model is different from the label relationships that the band was used to in the past: “First, AWAL has a global strategic approach, whereas the major labels are for some reason stuck in ‘start with just the UK’ mode. Secondly, AWAL insists you come armed with opinions and ideas to encourage debate but ultimately give you, the artist, the power to affect your destiny. Finally, the AWAL model is so much fairer in both business and creative, and the energy of this brings everyone together and makes it a real team performance and not an ‘us and them’ mentality. This has proven to be great for both label and artist.”
AWAL ran a series of exclusive promotions for The Kooks latest album “Let’s Go Sunshine” with some of the major players in the streaming market: three pre-release videos for Apple Music, a live EP for Deezer, and a live filmed Facebook Q&A with Amazon Music. The results of the collaboration have been impressive. The album achieved a top ten UK album chart position, their highest chart position in a decade, hitting over 15 million streams in the first week across 10 countries, and the music has been reaching a new demographic, as can be observed in real-time via the AWAL online reporting tools.
AWAL Senior Director of Marketing and Project Management Nathan Liddle-Hulme echoes Nicoll’s feedback on the collaboration, “It’s a partnership in which we can provide them all the services, and more, that they have had at a major label. They are in control of their campaign and AWAL provides the creative and strategic support they need. We’ve worked very closely with them on every detail of the campaign and we’ve built a strong working relationship based on trust and teamwork.”
The breaking artists now signed to AWAL include Lauv, Tom Misch, Bruno Major and Rex Orange County, while established acts R3HAB, The Wombats, deadmau5, Nick Cave & The Bad Seeds and Laura Marling are also embracing the new business model. Hitchman is ever the evangelist when reflecting on the company’s progress so far, and their potential to build and support the new music industry, “There is no limit to what artists can achieve globally whilst still staying in control of their career and retaining ownership of their masters. We’re in a different era.”