As the music industry continues to experience a complete evolution (perhaps revolution), artists, labels, and streaming services alike have searched for find the right way to monetize and advertise music.
Everyone is trying to figure out how the hell to use the infinite resources provided by the internet in order to make more money, but also most effectively market artists.
The advertising world has seen a similar transition of late. The old techniques of the Mad Men era of advertising are slowly disappearing as boutique digital marketing agencies find new ways to communicate to the younger generation of buyers.
So it only makes sense that Steve Stoute, one of the most influential minds in modern music and advertising, would step into the directionless void and come up with an answer.
Stoute worked as a record executive at Sony Music and Interscope during the 90s and managed artists like Mary J. Blige and Nas before founding Translation, his own ad agency, in 2004.
Translation has become an advertising giant, creating ads with hip, youth-focused campaigns. Stoute used his contacts in the music industry to bring flair to ads, like the McDonald’s “I’m Lovin’ It” jingle, which was written by Pusha T and produced by The Neptunes.
Stoute knows the music business, he knows the advertising business, and he knows consumers. With this collection of skills, Stoute has started United Masters, which may change the entire face of the music industry as we know it.
The idea behind United Masters is simple. The company, which just took on $70 million in funding, aims to remove major record labels, and connect independent artists to their fans.
By using consumer data, United Masters will help artists track their following and identify their key demographics, but also do the same for brands, at times packaging rising artists along with a brand (think The Black Album, brought to you by Nike).
Instead of eschewing streaming platforms, or trying to find a way around them, United Masters will work directly with them. The Wall Street Journal reported of Stoute’s venture:
“[United Masters] will help up-and-coming artists get their music on streaming platforms like Spotify and Pandora and use online tools to market the musicians and help them reach fans. The group, and the data it gleans, will also help brands target certain types of music fans.”
In his time at Interscope, Stoute clearly picked up a few ideas on disruptive innovation from the label’s former head Jimmy Iovine. United Masters is ultimately about artist empowerment, but it also aims to make these artists (and brands) a shit ton of money. Stoute told the Journal,
“We want to build a business that helps musicians, which is my passion, and also helps brands find a much more specific way of investing their money in the category of music.”
The idea of being an ‘independent artist’ has muddied a bit recently. Record labels have long been able to woo artists by promising major distribution and marketing deals that only they could provide.
In the good ol’ days where labels sold directly to radio stations, being signed to a major label was virtually the only way to gain exposure and mainstream success. That’s no longer really the case.
Chance The Rapper isn’t signed to a label, but had an exclusive $500,000 deal with Apple Music for his most recent album (Chance also has an advertising campaign with Kit-Kat).
Young Dolph has built his career without a label, funding his music with his own money. The internet and streaming services have lessened the importance of major label distribution.
This is to say that independent artists are no longer “missing out” on something larger by not signing with a major label. Artists can now make money on their own, but Stoute and co. want to maximize indy artists’ bottomline.
Ben Horowitz, co-founder of venture capital firm Andreesen Horowitz (an investor in United Masters) told the Wall Street Journal that Stoute’s company will help provide answers about how to “convert cultural capital into financial capital.”
And part of that is being intimately aware of the consumer. Horowitz said,
“This idea is particularly relevant in that we’ve gotten to a time when businesses really know their customer. It’s very powerful information that drives a tremendous amount of revenue, and musical artists have no idea who their customers are.”
To that end, Spotify has launched a platform Spotify For Artists, which allows musicians to see who is listening to their music and look at trends in their fanbase’s listening habits. This idea naturally goes hand in hand with advertising.
Brands are continuously searching for more information about their consumers, so United Masters combining the data of music fans and consumers to create ultra-specific ad campaigns is a fascinating idea.
But ultimately, this is about music. Stoute told the Wall Street Journal about using data to make the relationship between artist and fan more intimate (and profitable),
“Brands are spending hundreds of millions of dollars trying to get to young people by using music as the vehicle. Being able to use music data and making it actionable so they can target and speak to these fans, that’s super important.”
Targeting fans is all well and good, but first you need artists. United Masters has the name of Steve Stoute to attract acts to join the firm, but they also have a branch of A&R that’s scouring the internet for new musicians. The Wall Street Journal reported,
“Artists can create accounts with UnitedMasters, but the team and its technology are also working to scour platforms like music-streaming site SoundCloud and YouTube to discover promising new talent. The group is working with 1,000 musicians, according to Mr. Stoute, who added that the artists will still own the rights to their music.”
It’s hard to imagine major labels disappearing, but they are losing influence. Artists are seeing their creative and financial prospects grow by not signing with labels.
Stoute and his team at United Masters are capitalizing on this trend and ideating a new way to give artists an independent platform that helps musicians and brands alike appeal directly to the consumer.
Steve Stoute might’ve just fucked around and changed the game.