Courtesy of Def Jam Records

Kanye West’s Plan to ‘Re-Think’ the Music Industry

“You have to adapt,” he tells Billboard in an exclusive interview. “You can’t have old rules for new games. No other business in the world would suggest you don’t adapt to a completely new supply chain and income sources.”

For a little over a week, Kanye West has waged a one-man war against the music industry as we know it. At a time when the value of both recorded music and publishing rights are skyrocketing and the Black Lives Matter protests are shining a light on the inequities that African-American artists face in the music business, West has taken to Twitter to demand the rights to his master recordings back from Universal Music Group, the label group he has been signed to since 2004 and sued last year to get out of his contract. (That lawsuit is ongoing; at the same time, West sued music publisher EMI, now owned by Sony/ATV, in a case that was settled last fall for undisclosed terms.)

Along the way, he’s criticized label deals, shared his own contracts, and suggested ways to restructure the music business — some of which may be more practical than others. (West has tweeted about the idea of a “Y Combinator”-style venture that could invest in albums, but companies that invest in startups also tend to do so on terms that favor them.)

What he hasn’t done is explain the ideas behind his social media posts. Until now.

In an exclusive interview with Billboard, West elaborated on his feelings about recording contracts, as well as his efforts to reform the way the music business structures them. At West’s request, the interview was conducted by text, through an intermediary, but West’s identity was verified by video. While he answered most questions, he didn’t respond to queries about whether he intends to re-record songs from old albums, as Taylor Swift plans to — or whether he’ll try to change the contracts of acts signed to his label G.O.O.D. Music, which don’t currently own their own masters, according to two executives familiar with the terms of those deals.

West says that will change soon. Just after 3 p.m. EST on Wednesday (Sept. 23), he announced on Twitter, “I’m giving all Good music artist [sic] back the 50% share I have of their masters.”

Although West has sparked a vital conversation about the fairness of major label music contracts that has captured the attention of industry figures and fans alike, it’s worth noting that he does own at least some of his recordings, according to the contracts he posted, as well as an executive familiar with the deals. West began his career as an artist signed to Rock the World, a production company run by his manager at the time, Gee Roberson, who in turn negotiated a deal with Roc-A-Fella Records. He renegotiated his deal after his first album, according to a source familiar with the negotiations, and again as he became more successful, as many artists do, in order to get better terms befitting the star he had become. In 2012, as he was making Yeezus — after his deal with Rock the World had run its course — West signed a new deal, directly with the UGM-owned Def Jam, that allows him to own his own recordings and license them to the company for a period of time. The label has not held any formal discussions with West since he started posting about his contract on Twitter, according to a source familiar with the situation.

To Kanye, though, this is bigger than his own deal — it’s about all artists, all contracts, and the whole way the entire business works. “The balance of power is too off, the gap between major label profit and artist profit too wide,” he says, “and I will work to re-think the design of the entire way we move in this space.”

Billboard: What inspired you to post your contracts? What has the response been like, and has it had the effect you wanted? I saw on Twitter that Loud Records founder Steve Rifkind reached out; are other executives rallying behind you?
Kanye West: The desired effect will only be achieved when every artist owns their masters. I’m Team “Free Artists.” I’m committed to doing whatever is necessary so artists own their own copyrights. The response is awesome because everyone knows this is a broken system that needs to be fixed. Currently, artists take advances to make records and yet when they repay those advances the record company still owns the records. Imagine a bank lending you money to buy a house and then when you’ve repaid that mortgage, them telling you they still own it. [Prominent music lawyer] Joel Katz showed up; [Hipgnosis Songs Fund founder] Merck Mercuriadis showed up; Steve Rifkind showed up. I’ve put together a group of advisors to get me the information I need to succeed on behalf of all artists.

Has Universal Music called? What have your conversations with them been like so far?
We are in discussions but I don’t want them to just fix my situation. I want this to be about fixing everyone’s situation.

It looks like you’re talking to [Universal Music parent company] Vivendi, too, right? What can you tell me about those conversations? Can you elaborate on how the concept of the startup accelerator Y Combinator might apply to music contracts?
My brand and influence goes way beyond just music and that of course is meaningful to Vivendi, as it is to Adidas and many other conglomerates. If that helps me be able to help free all artists, of course I’m going to use it.

Are recording contracts, by nature, predatory? Is this “enslavement,” as you suggested on Twitter?
You only need to look back to the early days of the record companies and see how predatory they were. Old execs admit it. The contracts are almost the same now. The shape, the terminology… And yet, in that time we moved to a completely digital age. Has the attitude of the labels and the structure in which our music moves on our side changed to that degree? No, it has not. You’re locked in; once you’re locked in you can ask no questions. Name me one contract which allocates the amount of time you get with the finance team? It’s audit or nothing. Insane.

I read the guidelines you shared on Twitter to new music contracts. Is this a privileged position to take? You can afford to buy back your masters now, but could you have built a career like this without such a deal? Doesn’t your success essentially pay for the label to take risks on the artists who don’t make it? And what happens to that in an industry without those kinds of deals?
What I outlined was in no way linked to me being successful and fortunate in my success. Asking for major labels to adapt their royalty portals is for everyone, especially those unable to afford a team. The music business is new now. You sign to a major, you put your songs in a huge pot of titles they use to negotiate with. Their power now comes not only in selling but INVESTING our songs into Apps, DSP platforms and so on. We create their value in getting our songs to earn us sales, but also equity. Removing things like [label-wide licenses] is just me pointing out the old deals cannot just [change] by adding the word “streaming” in the sales section. The business changed. Our catalogs, combined with other catalogs, equals POWER. If we contribute to that power, we get paid. Period. That’s for all. Every single record involved in helping get an equity play over the line is a shareholder in the equity it gained. Small, large, makes no difference. Break the model. The ARTIST IS THE EQUITY!

The music industry is very different from a decade ago, or five decades ago. Are your proposals about the new opportunities for artists, or could they have applied through history?
You have to adapt. You can’t have old rules for new games. No other business in the world would suggest you don’t adapt to a completely new supply chain and income sources. And yet we are tied to a contract formula for vinyl. We can be nostalgic and respectful of those times but we must look at how we create in this new world, and how we make money in this world. How do you think a young artist stays creative when he or she can’t eat? Or he or she feels completely frustrated or confused about the business? How does this help the Artist? Do they care? No, they have other Artists. Artists have ONE career. Majors have millions. No disrespect — MULTIMILLIONS. The thought has to flip to the individual.

I understand you’re working with Joel Katz on this now. How were you connected with him, and what does working with one of the most powerful entertainment lawyers mean for your cases against UMG and Sony/ATV?
Through a constituent Ameer Sudan — Here’s the thing: Whether it’s Joel Katz, Merck, Steve or others, I hire and work with people who are not afraid. Not afraid to remove everything they have been told is the status quo and move. It means I am looking at this from the best perspective, with those unafraid to do the same.

You’ve made this issue bigger than you, about all artists. What happens if you get your rights back? Will you continue to fight for other artists’ rights?
I will help set precedents, I will help develop better royalty portals and deal shapes. I will design how this flows with them. It won’t just be an ecosystem & numbers.

You said on Twitter you’d help Taylor Swift get her masters back. Why do you want to help her? Have you talked to Scooter about this? [In July 2019, in a deal reported to be worth upwards of $300 million, manager Scooter Braun’s Ithaca Holdings bought Big Machine Label Group, including Taylor Swift’s early albums, which the singer has unsuccessfully tried to buy back.]
All artists need to be free and own their rights. Taylor Swift deserves that, just like everyone else. As I mentioned before, Scooter Braun is a friend and we’ll be having that discussion

Will you no longer work with UMG and Sony/ATV, even on more favorable terms? And if you won’t work with them, how about their parent companies? And under what circumstances would you work with them?
I will work with anyone who treats artists fairly & righteous. They do that, I will partner with them in bringing music to life. I will redesign the whole process.

What’s your strategy now?
Free All Artists by any means necessary. I will work to rip apart the structure we are attached to that pays people for music. We cannot have designed streaming, but not designed a new method for payment and ownership around it where we all benefit. Predominantly the EQUITY I.E THE ARTIST!! The balance of power is too off, the gap between major label profit and artist profit too wide; and I will work to re-think the design of the entire way we move in this space. Streaming re-invented the wheel and we all stuck on the sidewalk wondering if we have cab fare. We have to get out the Matrix. It will happen: Remember, Ye told you so !!

[Billboard]