So… do new artists really need to sign to a record label?

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“The old model is on the way out. I’m building the new music industry structure.”

Kobalt boss Willard Ahdritz has never been shy about proclaiming his company’s model – that of artists and writers holding onto their own copyrights – as the future of the music business.

Now a new film from The Economist delves into the pros and cons of musicians disregarding the traditional label deal – ie. receiving advance money in exchange for a lifelong portion of their royalties.

Nick Raphael, President of Capitol UK, makes the case for the defense of major record companies in the mini-movie, part of a series called The Disrupters.

Says Raphael: “We invest millions upon millions trying to find the next superstar, the next brilliant artist… ultimately, the songs that will make the soundtrack to your lives.”

Nick Raphael“We invest millions upon millions trying to find the next superstar.”

Nick Raphael, Capitol Records

He adds: “We make all the investment, in terms of skillset and money…. and we take the risk.”

In the past couple of years, UMG’s Capitol UK has broken Sam Smith and Five Seconds Of Summer to multi-platinum success worldwide.

Raphael sums up the strongest argument against the ‘artist services’ model that Kobalt offers: that it is yet to truly develop a global new superstar.

“What Kobalt, in my opinion, offer is for artists/writers who do not need advances [or] development,” says Raphael.

“That’s great for the privileged few that can afford it. But actually if a new writer comes along and needs development, time, money and nurturing… that’s not their strongest point.”


Unsurprisingly, not everyone agrees with him.

Sam Winwood, SVP of Creative at Kobalt, comments: “That whole idea of owning your own records and getting someone to market and distribute it for you is the biggest threat to traditional major record labels.

“We’ve said to people… ‘You don’t have to give away your rights to earn money. In fact, you’ll earn more money if you don’t give away your rights.'”

His point is at least partly backed up by Jacob Whitesides, the YouTube star from Knoxville, Tennessee, who boasts over 2m followers on Twitter, 1.5m on Instagram and 1.6m on Facebook.

Whitesides last year launched a joint label with BMG that saw him maintain ownership of his copyrights.

Jacob Whitesides“My fans [share] my music… People pay hundreds of thousands of dollars to get that kind of promotion.”

Jacob Whitesides

“The fans are more powerful than most any label or bit of promotion you can buy,” says Whitesides in the documentary.

“They post my music, they find other people searching for new music and send them my [tracks]. People pay hundreds of thousands of dollars to get that kind of promotion.

He adds: “A lot of artists don’t need deals; if they can establish a solid touring foundation, they can make money, pay their bills; the fans you’ve already capture create that freedom. I feel a lot of artists lose that when they jump straight to a major label.”

“I have 100% creative control. That’s the one thing I wanted, and that’s not a popular thing in most deals…  [BMG] saw the leverage I had and that I didn’t necessarily need them – that it was a partnership.

“The most important thing was going in [to the deal negotiation] with something instead of nothing.”


Ed O’Brien from Radiohead – a band now signed to XL/Beggars but who for years were on the Parlophone/EMI roster – appears to recall his own major label contract with some anger.

“Artist contracts were so weighted in favour of the record companies [in the past] – it was just hugely unfair,” he says.

“I don’t think anyone in the record companies would dispute that… they might [say] we’ve put in lots of investment. Yeah, you have, but let’s talk about [a deal structure] that’s truly fair.”

“I have never liked bullies.”

Willard Ahdritz, Kobalt

That opens the door for Kobalt’s Willard Ahdritz to kick the majors – and make the pitch for Kobalt’s sterling reputation when it comes to the technological management of an artist/writer’s income.

“I have never liked bullies,” says Ahdritz. “I don’t see why bullies should [be able to] walk around and make other people’s lives bad.”

He adds: “Kobalt has a big mission… it’s simple, but a big mission: to take the music industry into the digital age with transparency and trust. ”


Other music biz figures featured in The Disruptors episode include Moby, who snaps: “Major labels thought they were more important than the artists, and they never were.

“Now, as the artists leave, they’re clearly seeing that in the world of music, nothing is bigger than the music itself.”

Elsewhere in the video below, you’ll spot Snow Patrol’s Jonny Quinn, Sony Music UK’s VP of Strategy Fred Bolza and Brian Message from Courtyard/ATC management – who discusses Radiohead’s controversial pay-what-you-want release with In Rainbows in 2007.

Screen Shot 2016-07-19 at 19.23.15“Major labels thought they were more important than the artists, and they never were.”

Moby

“If you were in the camp of being excited by innovation and change, you loved it,” recalls Message.

“Clearly, within the recorded music business there’s a lot of people who are not that way, and are still not that way.

“That kind of change is a little bit of a threat.”

Music Business Worldwide

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  • RS

    The Kobalt model is only good for established artists, If you’re a relatively unknown, artist it’s probably still worth signing with a label if they have a good press and PR department — and are going to use it to promote you. (I mention the latter point as there is an artist pecking order on labels which means the label’s pres and PR resources might not actually go to you.) Radio play is still significant, for instance, and that’s difficult to pick up without a dedicated radio plugger, which would be too expensive on your own.

    YouTube breakout stars, and so on are so unusual, they are outliers in statistical terms — they don’t t really reflect what is going to happen to 99 per cent of artists.

  • peta

    Funny thing, i looked on the radio add & I seen JACOB WHITESIDES, & he has one radio Add on the board. I’m sure they’re blown away on how much it coast to go for Adds since their coming out of pockets. The money they made off his tour would still not match how much they would spend if they went on a full blown radio add. internet success only takes you so far, you still need a machine. Some acts Like Chance the rapper “who has a Multi-Millionaire backing him” are finding out the hard way the cost of rolling out a album the way a major does it.

  • TONPROJEKTION

    Kobalt controls Youtube income, and they have the best connection to Spotify.
    That’s what the industry needs

  • Susan Hout

    Warner had monthly upcoming releases, for every genre on VHS, 10 to 15 videos a month, I beg Time, Sony, Warner and every other part of the Industry to sell Music Videos, New releases, top 100, and concerts in stores that also sell movies. The Music Industry in the USA has been suffering for many years now, MTV and VH1 had fazed out music, Now MTV is bringing classic music back in August. Many musicians are lost in indexes all over the internet, and a lot of them are lost in the You Tube indexes, I do not think the answer to save the industry is to block videos from being viewed on You Tube, or other websites, but to keep them from having the ability to be put on a cd or dvd from the internet. I want to see the Music industry rise again, and also want to see musicians make money for their work, if downloading and stealing songs could be stopped, without ruining peoples ability to view and hear the videos, that would be awesome. it would also help people to find a video they like, then buy it in a store. 🙂

    • sandra Cochrane alexis

      Why not just putting a sample of a song on the internet and not the whole song may be that can help as well

  • sandra Cochrane alexis

    How can i get a record deal i have over 28 songs, sad to say i’am 50 i want to do this but i don’t know if you will let me do it my songs are love songs
    Help me here

  • sandra Cochrane alexis

    I own one hundred percent of my songs and they are cater to matured lovers relationships that have been around, my age is just perfect for the stage.
    You can leave the kids at the babysitter are take them with you and go and pickup the grandparents and go to the concert this is what my writing is all about.
    It is to keep the family together i want to see love all over the place.

  • sandra Cochrane alexis

    It appears to be in the music industry you only cater for one ordinance the fetes,how about the group up?we are here, what we notice as on artist becomes certain age they leave the industry and as soon as they run out of money they think they can come back and pick up the pieces from where they left off,when the fans is gone they are gone, i will be here until the doctor say no more bring me in i love you all

  • sandra Cochrane alexis

    This is just what i think
    All ways publisize your self that is one of the key to make money constantly.
    Not disappearing like out of site out of mind.
    All ways keep in touch with your fans be great full for there help.
    All ways have a concert at times,it is your jod love what you do and how you make your living.
    Stay out of trouble don’t allow your self to become gullible.
    Bring me in i’am here love you all

  • sandra Cochrane alexis

    This is just a short sample of one of one of my songs.
    Here is a song about the one i love no one can take the place of you my love
    I have gone away for moment from you having many sleepless nights with out you
    Dont run away waite for me
    Dont get weary waite for iam coming
    Dont faint and utterly fall
    Iam coming to guide you
    Iam coming to help you
    I’am coming to show you the way don’t runaway Waite for i’am coming to you
    My beloved
    All this time my heart longing for you you hold the key to my heart
    I’am here waiting for you my love
    I’am my belove and my belove is mine who can take the place of you my love
    No one can cheese this heart of mines
    So come back to me my sweet one i’am waiting on you memories of you i love
    By lady sandra

  • sandra Cochrane alexis

    Give me a record deal lady Sandra call me 268-770-5074
    This what we call mature love

  • sandra Cochrane alexis

    You are going to pay for this
    Restless
    Iam here restless for you now Baby i want you here with me

  • sandra Cochrane alexis

    I hope if you all don’mind if I put some of my songs in here i will like to sell this
    This is some what between fast and slow.
    You are the one i keep running to
    You are the one that keeps me worm
    You are the one i hold on to when i’am in deep trouble
    You are the one you are the one
    I will search the intire heaven to fine some one like you
    I will clime the higherst mountin just to be with you
    You are the one i been waiting for
    When my night is cold and dark i can allway look to you
    I can hold onto the future and can allway call on you
    How can i leave you you are my sweet tomorrow and my guiding star
    By Sandra cochrane

  • sandra Cochrane alexis

    To the music industry
    My name is Sandra Cochrane goes by the name of lady Sandra, for the pass few years i have been working on some love songs,the lyrics and melody is something that can be blend universally.
    Iam fifty year old i’am ready to explore the world with these songs,i’am a hard working person i know what hard work is like,my mother and i were the ones that keep the family together by small farming.
    I’am bless with two grown up children iam all yours!!!sincerely yours lady Sandra.

  • sandra Cochrane alexis

    My opinion
    Financial lostes on your part
    Allway remember an older artist fans don’t get younger they grows old with the artist,as long as the artist want work let him or her work,if the fans is still there he or she still have the stage,why get rid of artist if the fans is still there?