Jay-Z Writes New Rules for Music Millionaires

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Jay-Z says he’s writing new rules. But for whom?

The multi-millionaire rapper created a firestorm of PR by launching an innovative deal with Samsung to distribute 1 million copies of his new Magna Carta Holy Grail album through a special app exclusively on Samsung phones before the album went on sale publicly July 9. Samsung reportedly paid $5 for every album, meaning Magna Carta Holy Grail sold $5 million before a consumer purchased a single copy. Samsung became a music distributor overnight. And the Recording Industry Association of America was inspired to change the way it tracks the sale of digital albums to account for the 1 million units sold instantly.  It’s no wonder Jay-Z has been tweeting about creating #newrules, and Billboard has gushed about “Jay-Z’s New Blueprint.”

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Essentially, two big brands, Jay-Z and Samsung, are distributing music together as Jay-Z and Nokia did 10 years ago. But how repeatable is the Jay-Z model for the entire music industry? The example of Radiohead is instructive. Radiohead, another music superstar, made headlines for allowing fans to name their own price for the band’s In Rainbows album in 2007. The model made waves at the time, but it never caught on. Why?  Because everyday bands lacking Radiohead’s massive following can’t afford to take that kind of risk.

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As music authority Bob Lefsetz wrote, “Radiohead could do name your price . . . once, and then the paradigm was dead.”

The Jay-Z/Samsung deal is about two rich brands getting richer. Meanwhile, the reality for the record industry is that the have-nots are scratching and clawing to find an audience for new music. Artists such as AM & Shawn Lee really are making new rules for the music industry by creating innovative, critically acclaimed music — yet you won’t see them on the cover of Billboard or being noticed by Samsung.

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As Shawn Lee told me recently in an interview about being a musician and a dad, “I would love for both my girls to play music if they want to, but in terms of trying to make a career out of it, I certainly would not encourage that! It’s always been a tough business but making a living out of it gets harder and harder for everyone.”

The musicians who are really trying to change the game are relying on touring, merchandizing, content creation, and social media to build fan love. I’m talking about:

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Daria Musk

Meanwhile, Jay-Z has created some backlash for working through Samsung to push albums. Gartner Analyst Mike McGuire characterizes the deal as “either a mixed bag, at best, or a bustfrom a mobile marketing standpoint. He notes that the Samsung/Jay-Z app has sparked criticism for being obtrusive, clumsy, and vulnerable to hacking.

Say this for Jay-Z: however imperfect the Samsung deal has been, it’s a creative way to monetize a dying format, the record album. He truly is writing new rules for himself — and an elite group of megastars. When his approach becomes more widespread, I’ll believe new rules are being made for the recording industry at large.

By the way, have you heard Magna Carta Holy Grail? If so, tell me what you think of it. I’d love to know whether you think the album itself is breaking any rules musically or building fan love.

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