NEAR TRUTHS:
DEAL WHEELS
THE DEAL WHEEL: As we’ve noted many times before, new artists dominate the business, and the money thrown off by the streaming of young acts is the biggest piece of the industry’s current revenue (especially with touring now dormant). With the renegotiation of deals by many successful new acts coming up, the contractual terrain has become riskier than ever before for the majors, as artists demand extraordinary terms regarding master ownership and profit percentage splits.
The time between releases has radically decreased. In olden times—i.e., up until a few years ago—a three- or four-album deal with a hot act could take a decade or more to be completed. The act would release an album, tour the material for 18 months to two years, take six months off and record a new album, lather, rinse and repeat. Labels enjoyed the advantageous terms of the initial deal for years on end, and when the time came for renegotiation, more albums were added in exchange for big advances, and everybody was happy—until the bottom fell out of the business and things began to change.
This new-artist phenomenon coincided with the re-signing of the biggest-selling acts of this century—most of which ceased to dominate the charts in the streaming era. These two developments set up a further dynamic that impacted the system dramatically. Today’s younger hit artists, swimming happily in the streaming economy, turn out product much more quickly and consistently so as to feed the insatiable machine. Two albums in subsequent years is a common occurrence; two albums in a single year isn’t terribly unusual. Assorted discrete tracks, mixtapes and/or EPs might fall in between. (At present, touring is moot, but even when it’s up and running again—and they become big enough live attractions to mount treks in significant venues—these acts aren’t going to embrace the antedated release model.) As a result, they burn through their preliminary deals at a much more rapid clip and return to the bargaining table loaded for bear.
That said, a blazing-hot artist who’s had multiple hits over several years is very unlikely to get a bigger check from the competition than from the original rights holder. That’s because the latter retains the catalog of prior hits that will keep generating big revenue via streaming’s long tail. Who would overpay to get the artist without that hit catalog? Hence the incentive to remain with the one who brought you to the dance. The alternative is to go DIY with no check at all—which may be easier to do now that new material can bring instant streaming revenue, but still goes against the one fundamental truth that hasn’t changed: Artists will always follow the money, and the field is littered with DIY casualties that lacked the necessary muscle.
Meanwhile, with today’s biggest breakouts enjoying a briefer shelf life than many of their pop predecessors, their near-term leverage is tempered by the fact that they have a shorter window for that windfall money. Which is one reason for labels that have huge streaming marketshare to play poker with some of their biggest current acts.
MORGAN CHASE: Speaking of deals, after a very competitive contest for Nashville breakout Morgan Wallen (on indie Big Loud), whom virtually every major player was after, Monte Lipman’s Republic has prevailed. Wallen’s performance has been impressive by any metric and staggering for a country act—his current single, “7 Summers,” bowed at #3 on our Streaming Songs Chart with a blistering 24m streams, quickly establishing itself as the fastest-streaming country song yet; it’s only the latest in a string of big Wallen tracks. Monte’s collaboration with Seth England and the Big Loud crew on Florida Georgia Line is thought to have been a factor.
WE JUST REMEMBERED: One of the hottest label deals in the biz is up, and a line has formed to wave an exceedingly large check at the exec behind it. Everyone’s in this one, and while the outcome may be uncertain, the likelihood of said exec becoming wealthy is not.
NO TRANSLATION NEEDED: With “Dynamite,” K-Pop standard-bearers BTS are breaking through the glass ceiling that previously limited the success of even the subgenre’s top acts. The Big Hit group’s first all-English single (via Columbia, which is en fuego—or perhaps we should say muji deobda) debuted as the #1 single in the U.S., had the biggest Spotify debut of 2020 and bowed inside the Top 25 at Pop radio after an innovative bus campaign brought top PDs (literally) on board. The BTS fan “army” is among the most active and fervent on earth, and the group’s already enormous social footprint is about to get much bigger.
