Reading this article sparked some quick research. Since we all have witnessed his career unfold in real-time from one angle or another, it’s only right us enterprising creatives draw some kind of jewel from it .
First phrase I googled was “music vertical integration” and clicked on an article titled “Everything Old Is New Again: Vertical Integration Returns to the Recording Industry?” It’s a reflection piece on a Citigroup report from 2018 that lays out the old (pre-tech) vertical integration structure of the music industry, and envisions how the new model can potentially evolve. The old record label centric model was essentially a record company that housed the following:
- Production department (producers, engineers, editors,etc.)
- Artist & Repertory Division (artist management, artist a&r department , marketing department)
Given that the end objective of this system was to manufacture “stars”, this is where I turned my attention to the Forbes article on Mr. Carter, along with partners Dame and Biggs, started their own record label with one of the objectives being to manufacture their first star…Jay-Z.
So with all respect due to the visionary process, discipline and execution involved, we fast forward several million albums sold, several business ventures started and (some) exited, and we are now speaking to the 2019 “blueprint” of JAY-Z:
- Roc Nation
- JAY-Z Music Catalog
- Armand de Brignac
- Art Collection
- Real Estate
- Cash & Other Investments
Looking at this “blueprint” side-by-side with the old music industry model and you can see how he adopted a system that was designed to manufacture stars, and over time evolved his own model that strategically embraced tech quite early. Remember the Magna Carta distribution deal with Samsung? We can argue that despite his “elder statesman-esque” brand facing an uphill battle at the time, this deal allowed his music profit & loss to stay profitable (not to mention his balance sheet) while the rest of the industry still wrestled with licensing and physical vs. digital distribution.
A shrewd move indeed, and even controversial to many at the time…his very next album release was not only distributed digital, but it was digitally distributed EXCLUSIVELY through the streaming platform that he purchased and relaunched as Tidal. Real top of the food chain talk; artist & brand vertical integration poised for 2020 and beyond.
Hov, the Billi-GOAT.
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