The Black New Deal: Re-imagining the “label deal” for African American start-ups.
Beginning in 1970’s, born out of a need to compete with the prowess of Motown Records, major labels have partnered with small production companies led by young African American entrepreneurs emerging out of Philadelphia, Atlanta and New York. The model for this approach was based on a recommendation by Harvard University grad students to Columbia Records. Those creative start-ups are now legendary staples in the business. Names like Philly International Records, LaFace, Uptown, Bad Boy, Death Row, Murda Inc., Roc-a-fella, Cash Money, Quality Control, TDE and LVRN have supplied the industry with a financial boon for the past four decades.
Today, Hip Hop and R&B music are the biggest drivers in the resurgence of the music business and the hefty valuations of the companies who finance the music’s development.
This arrangement of a “label deal” is a fond aspiration for young music entrepreneurs; however I would argue that it is time for a new deal in the music business.
In 2020 it is time for labels to invest in African American starts-ups on the tech side of the business to provide solutions for the music industry’s biggest challenges.
The recent civil unrest due to the death of George Floyd and investigation into Minneapolis police officers charged with his murder, has prompted the big three record companies to promise commitments of $225 million to combat racial inequality in society. Pair these issues with the pandemic, (which had already revealed a severe impact on African American businesses) and there’s never been a greater opportunity to tackle strategic investments and diversity recruitment for the business.
By aligning with these founders, labels can tap into the deep well of leaders who are just as familiar with driving business innovation as they are at understanding the nuances of Black Twitter.
Companies like Angela Benton’s Streamlytics looks to allow fans to be compensated for their engagement with streaming services like Netflix and Spotify. While Ryan Leslie’s Superphone ventures to solve mobile CRM for artists and labels.
Steve Stoute’s United Masters app, provides distribution and artist services for emerging talent. Google invested $70 million into the startup which also serves as an audience segmentation and targeting tool for brands and media partners, like iHeart Radio. And while he has made a concerted effort to tell artists they do not need a label, his service has managed to up stream at least one prominent artist to a contract with Warner Records.
Having that balance of young smart leaders on both the business and the creative side is important for the music business as labels become more and more reliant on software and technology to engage and understand audiences.
Here are a few a pointers for business development teams to uncover the next generation of business innovators:
Where to Find Them:
- AfroTech — If you’re not aware is juggernaut of a convention which showcases and empowers black tech founders from just about every vertical with networking, funding, mentoring and business expansion opportunities.
- Blacks In Technology — This is a global platform for Black people in technology. The organization works to establishing standards for world class technical excellence. BIT serves members through community, media and mentor ship.
- Alumni Networks — Historically black colleges & university (HBCU) Alumni organizations and the National Pan-Hellenic Council governs black fraternity and sororities. These are strong business networks that extend well beyond the college experience and serve as a key source for business development.
It’s time for a new type of talent discovery in the music business. The companies who are paying attention and tapped in to this new network of business leaders stand the best chance for innovating for the future.