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Irelio Cortez
Professor Kelly Turnbeaugh
English 1010
21 April 2015
Issue Exploration Essay

Record labels, an artists best friend or worst nightmare? The music

industry is being torn by its musical limbs trying to figure out this dilemma.
The inner musician /record label executive that lives inside of me attracts me
to this topic like a flock of vultures to a newly dead carcass. Something about
dying record sales intrigues me very deeply. Who or what is to blame for
this? Is it the internet? Piracy? Or for lack of better words, does the music
simply suck? I took a small leap into the world of the music business earlier
this semester when I wrote an analytical paper, based off a piece of writing I
found on the New York Times room for debate*. After realizing that music
streaming is the wave of the future and compact discs (CDS) are a dying
technology, as well as learning some of the pros and cons streaming offers
to musicians, I have finally asked the question. Are record labels a thing of
the past? Realizing that the world of music is a giant convoluted mess, I
decided for myself and you the reader that I would narrow this topic down to
my expertise, which is rap, Hip-Hop. Regardless of anyones opinion Hip-Hop has
transcended multiple music boundaries, became house hold music, and rose to
become a billion dollar industry. An industry being milked to this day, by both major

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and minor music labels. Do artists in this day and age truly need these once
almighty power houses or do they simply hinder their growth?
I was a child raised in the 90s, the Golden Era of Hip-Hop. The 90s saw a
fairly new music genre created in the late 70s/early 80s born in The Bronx, New
York by mostly African Americans, turn into a word-wide sensation that still
resonates in pop culture today. It went from being something with potential to being
the new Rock N Roll and the 1990s was when Hip-Hop went from pure, raw energy,
to something substantial of great value, both literally and figuratively. Hip-Hop the
music was mastered by many great artists in the 90s such as; Tupac, The Notorious
Big, Jay-Z, Nas, and many other great Rap legends. The music was not the only
aspect of Hip-Hop that was mastered; the business of Hip-Hop was also a finely
tuned cash machine. Hip-Hop label founders such as Russell Simmons, Rick Ruben
founders of Def Jam Records became multi-millionaires by the late 80s and early
90s. This lead to others such as Irv Gotti of Murder Inc. Records, Damon Dame
Dash & Jay-Z of Roca Fella Records to create these own personal labels. These HipHop exclusive record labels were responsible for hundreds of Hip-Hop acts that
would pop up in the 1990s, leading all the way through to this day. People outside
the Hip-Hop community also started to take notice. For example Jimmy Iovine which
founded Interscope Records. The now home of artists like Eminem, Dr. Dre, and
Kendrick Lamar. All of which have had great success in the Rap community. Fact is
however, that most of these record labels were subsided under already established
music labels such as Universal Music Group, Atlantic Records and Columbia records.
If a company like Roc-A-Fella Records (Founded by Jay-Z, Damon Dame Dash, and
Kareem Biggs Burke) did well financially as an independent label it would
eventually be absorbed by a major company such a Universal Music Group for more

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exposure and money. This would usually split the bottom line profits an independent
label would once have made. Another example of entrepreneurship was, Bryan
Birdman Williams and Ronald Slim Williams, brothers who owned a seven year
old record label in 1997 that they called Cash Money Records.* The label was based
in New Orleans where they acted as an independent Hip-Hop label until 1997when
they were approached by Universal Music Group about a partnership that would
practically give the labels music world-wide exposure.* They like many others took
the offer but not as your typical Here is my company do what you please with it!
type of way. They formed a partnership with Universal that gave them strictly
distribution and some publishing rights to Cash Money Records music.* This newly
formed deal worth an estimated 30 million dollars at the time allowed Cash Money
to own their masters as well allowed them to have nearly full control of the label,
the biggest part of the deal was how profits would be split.* Cash Money Records
would receive 80% of the profits and Universal would get 20%.* Cash Money
Records is still a major record label not only in Hip-Hop but in music. They are home
to artists like Lil Wayne, Nicki Minaj, and Drake. The point I would like to make is
that this was and is still an unlikely scenario for record labels of the past and of
today. There are more defunct Hip-Hop record labels from the 1990s today than
there are active ones. Labels such as Jive Records, Loud Records and Arista Records
all were met with ultimate demise. One could make the argument that those record
labels were only as strong as their flagship artist. The Wu-Tang Clan is a perfect
example of this issue. Due to their scorching hot buzz in the early to late 1990s the
Wu-Tang Clans first two multi-platinum selling albums (Enter The Wu:36 Chambers &
Wu-Tang Forever) were able to keep Loud Records afloat, which also allowed the
label to put out other artists music that was impactful at the time (Mobb Deep &

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Three 6 Mafia).* Their third album The W (2000) did fairly well commercially but it
was their fourth album Iron Flag (2001) that was rushed in order to salvage Loud
Records. The album was rushed with little publicity and timing which led it to do
poorly commercially and therefore putting the final dagger in Loud Records.* Larger
music labels have been able to withstand the test of time by their short term
commitments to these newly formed music labels. The music business is not about
what you have done but what can you do for me now. All this falls back on the
musical artists belonging to a particular label. If a music label signs 5 new artists
this year and does the work to get them proper album releases (budgeting &
promotion) and they all under perform by next year that roster of artists will have
been cleared out with a new one getting set to do it all over again. A record label
can only afford so many unsuccessful financial cycles before it goes bankrupt.
Without impeccable business structure, funding, and an amazing roster of artists, a
newly started record label is destined to fail.
With all the stats and information available in the world today it is easy to see
why so many artists now and days are going the independent route when it comes
to their musical careers. Due to the fact that music labels are taking a much larger
gamble today than they did in the 1990s when records were selling, they must now
take other measure to enforce their return on their investments. Newly formed
record deals known as the 360 deal add a clause to some recording artists
contracts that now guarantees a return for the record label on any income outside
selling records. Record companies are taking a cut of artists tour merchandise
sales, endorsements, and concert earnings in order to recoup artist investments.
These are all things that were unheard of in the 1990s. All this dabbling in the
artists pockets leaves many Hip-Hop artists not making money or possibly owing

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their label for an unsuccessful album. The difference between an artist like
Macklemore (Independent) vs an artist like Lil Wayne (Signed to Cash Money
Records/Universal) selling 1-million copies of their new album is substantially great.
Lil Waynes revenue must be split countless ways as opposed to Macklemore who
keeps all his revenue in house. Macklemore was able to able to release his album
The Heist in 2012 and due to the popular singles Thrift Shop, Cant Hold Us,
and Same Love he was able to sell over 2-million albums and over 10-million
singles worldwide, all independently. That is an astonishing number of records sold
all from the power of the internet. Macklemore was able achieve such a feat without
a major record label backing him through the music industry steps, allowing him to
keep nearly 100% of his income from record sales. Due to the success of
Macklemore and others a new wave of savvy, connected are taking matters into
their own hands and using the tools today in order to push their selves on to the
masses, asking for only one thing, to be heard.

Works Cited

http://en.m.wikipedia.org/wiki/Iron_Flag
http://www.xxlmag.com/xxl-magazine/2008/02/the-6-biggest-moment-

cash-money-signs-with-universal/
http://www.defjam.com/about/
Brown, Jake. Jay-Z And The Roc-A-Fella Records Dynasty. 1 July 2005