Kola 1 Amalba Kola Professor Vancour Music and Media 13 May 2015 From Selling Out to Sold Out: Learning from Beyoncé’s Release Strategy The rising focus on the monetization in the music industry has led to serious concerns regarding the infrastructure of music production and distribution. The convergence of music conglomerates has made it difficult for musicians to succeed without the help of a major label name, thus resulting in the homogeneity of the music available for consumers. With such similar music, it becomes difficult to differentiate and predict what type of music or artist will be successful, and therefore record labels focus on optimizing unique marketing strategies, in order to spread awareness and drive sales. As a result, the industry is becoming preoccupied with investing more time and money into the marketing of an artist or album, rather than finding a quality artist, or developing a masterful album, with the emergence of contracts like 360° deals. Given these changing dynamics between the musician and their label, it is clear that “most musicians make very little money from CD sales and wealth is becoming more and more polarized toward the industry” (Park 27). Artists must now combat these issues with smarter and more innovative techniques in order to reconstruct a business model that values hard-working musicians and recognizes quality artistry. Beyoncé’s self-titled visual arts album is an outlier in this modern music landscape, which invites music industry experts to consider another type of release strategy: one that puts the musician in the position of power, and capitalizes on the power of social media networks. Beyoncé’s secret album release serves Kola 2 as a powerful example of how artists can challenge the modern economy of the music industry and still yield successful results, without sacrificing their artistry and sales to music conglomerate executives. Record labels band together to create a market with less competition and more control over pricing strategies. The ‘Big Four’ companies, consisting of Sony- Bertlesmann Music Group, Warner Music Group, Universal Music Group, and Electric & Musical Industries, “set prices and create ‘barriers to entry’ against competition by lowering prices or by using their cross-promotional power to advertise their products over those of potential competitors” (Park 23). With such a high concentration of professionals working in so few companies, costs for production and distribution are dramatically reduced because they “can easily cross-promote its own content, as well as earn revenue from sales of electronic products” (Park 21). Beyoncé’s case is a unique one because she is both signed with Columbia Records, an independent label under Sony Music Group, as well as the founder of her own independent label, called Parkwood Entertainment (Park 26; Gensler 2). The motivation to branch out into smaller, independent record labels stems from a Post-Fordist ideology, which emphasizes production on a smaller scale in efforts to increase revenue. Music conglomerates and independent artists drive the acquisition of independent record labels because it outsources aspects of production and affiliated expense to other companies that are not contracted union workers, which ultimately has “negative consequences for musicians by polarizing wealth between manufacturers and laborers” (Park 31). It is critical to look into Beyoncé’s partnership with Columbia Records, because their joint venture has allotted her the freedom to fulfill her artistic vision, and also to reap fair profits from the finished product. Typical royalty Kola 3 rates for big-name artists, like Beyoncé, are estimated to be about 20%, but through her joint venture, Beyoncé was able to turn a much higher profit (Greenberg 1). Barker notes, “‘Beyoncé’ is impeccably constructed and calibrate, suggesting whatever money her team may have save on promotion was funneled straight back into production” (3). While the exact numbers are unclear, “even assuming that she co-financed a whopping $5 million budget, the album’s opening weekend alone would have earned Beyoncé and her label a multimillion-dollar profit to split,” deeming the creative risk well-worthwhile (Greenberg 2). Jim Sabey, who is the head of worldwide marketing at Parkwood entertainment states that the company is responsible for producing, “the content that we put on our website, and...[for] our brand partners -- we produced webisodes and even a Super Bowl commercial for Pepsi, with whom we had a partnership,” which further illustrates how powerful of a force an independent label is for an artist in terms of regaining control for how they are represented (Flanagan 2). Here, Beyoncé’s album poses as an example of how an artist can use his or her own finances to dictate the trajectory of his or her own work. While independent labels, like Parkwood Entertainment, grant artists the independence and freedom to express their artistic vision, they also fall at risk of not performing as well because their methods towards creating an album are unconventional and not pretested. Beyoncé’s motivation to start her own label came from the desire to make her own name in the music industry, and avoid being constrained by big management companies. This way, she is able to control her own money and success and maintain artistic integrity, instead of individuals in major companies, who use the traditional business model to drive profits (Gensler 2). Park states that “owners ultimately make Kola 4 decisions that influence not only the music people hear, but also where and how they listen to it,” and in the case of Beyoncé, who was in charge, she was able to dictate her own unique sound to her audiences directly (19). In an interview, Beyoncé stated that she, “miss[es] that immersive experience...of watching music videos like Michael Jackson's ‘Thriller’ as a family, as a mass event….“Now people only listen to a few seconds of a song on the iPods and they don’t really invest in the whole experience. It’s all about the single, and the hype. It’s so much that gets between the music and the art and the fans” (Hampp 2). With this neglect of an authentic music listening experience as her primary driving force, Beyoncé’s mission with this album was to remove audiences from their modern music consumption practices and harkens back to a time where the song and the music video were not mutually exclusive. On December 13th, 2014, Beyoncé shocked fans and music professionals alike, with the release of her surprise, visual-arts album, simply titled Beyoncé. While most pop music relies heavily on marketing campaigns that can last for almost a year, Beyoncé’s release challenged this traditional model, and the risk garnered remarkable results. “Becoming the fastest selling album ever on the iTunes store,” Beyoncé’s album “sold 828,773 copies in its first three days of sale, and was number one in 104 countries” (Stedman 1). The album was featured exclusively on iTunes and was available only as a full album with “almost no marketing or fanfare other than a press release and a banner at the top of the digital-music store” (Knopper 2). Beyoncé’s surprise strategy echoes earlier release strategies, such as that of Radiohead’s 2007 album In Rainbows. Their strategy allowed fans to purchase their album based on a “pay-what- Kola 5 you-want” model, which gave consumers the power to decide the true value of the music themselves. This was a risky move for the band, especially after they produced this album without the help of the financial backing of their record company, EMI, due to an expired contract (Karubian 395). In the case of Beyoncé and Radiohead, these artists sought to regain control of their music distribution and focus attention back to the value of their music rather than profitability. Jagger comments that “the iTunes structure has changed our perception of worth” and does not adequately consider how much time and effort goes into producing an album (1). Specifically, with the increased importance of the hit single, audiences are becoming less inclined to invest in the album as a whole, which undermines the overall artist’s value. Instead, audiences look to a ‘blockbuster phenomenon’ to peak their interests and “the ultimate result of this hyper-commercial atmosphere for consumers will be the further erosion of the fine line between art, free expression, and advertising” (Park 51). Beyoncé’s marketing-free album seems to be a retort to this traditional model, and her resulting success poses a serious threat to the foundation of the very strategies that musicians and their labels are employing today. It is important to note that Beyoncé’s secret strategy is one that most artists cannot entirely replicate, due to the fact that they do not have a similar financial empire. Therefore, they must fund their albums through contracts and record labels that will grant them optimal exposure to targeted audiences, while also actively combating issues affecting sales, like the rise of piracy with the evolution of the digital media landscape. A report by the International Federation of the Phonographic Industry in 2009 revealed that 95% of music is illegally downloaded,” which results in considerable losses for musicians and their labels, and also speaks to the new capabilities that digital media has Kola 6 allotted to consumers (Karubian 397). As a result, industry executives have adopted different strategies for bolstering sales and maintaining the artist’s value, one of which is through contracts, called 360° deals. These deals are intended to integrate “components of an artist's career that have traditionally been handled by separate contracts with different companies,” including but not limited to, merchandising, promotions, and touring (Karubian 399). This all-inclusive package helps to bring lesser-known artists to the foreground, and also helps maintain a dominant status for already established artists.