Risky Business

It's no secret that the music industry is struggling. Radio stations play the same six songs in endless loops. These songs are produced by the same three big studios, who serve up the saccharine tracks like sugary fast food. At the other end of the spectrum, streaming music services burden us with an overabundance of choice–refrigerators full of food we don’t want. The musicians, the creators themselves, have become almost an afterthought. 

Binta Niambi Brown, CEO of Big Mouth Records, believes that part of the problem is that the music industry, like the economy at large, has become a world of few haves and many have nots. But that doesn't mean there isn't hope. Identifiable problems have identifiable solutions. Brown is stepping into the fray as a potential savior. She might just have the vision, experience, resources, and relationships to innovate the music industry right out of this deep pit. 

Brown has walked a strange and curving path from corporate lawyer to music mogul (she used to work for Antonin Scalia!). In the two years since its inception, her label has already made waves. She is currently working on an album with Grace Weber, produced by Donnie Trumpet and the Social Experiment (Chance the Rapper’s production team). Weber also laid down vocals for "All We Got" (ft. Kanye West) on Chance the Rapper’s recent mix-tape, the critically-acclaimed, chart-topping "Coloring Book."

In this Breaker interview, we riff on music—Chance and Macklemore the difference between Jay-Zs and Kanyes, the problem of risk aversion—with a passionate doer putting it all on the line to save the art she loves.

Before you became a music mogul, what were you doing?

For most of my career I practiced corporate law, including nearly a decade as a partner in a large global law firm. On the side, I engaged in philanthropy—sitting on a number of different arts-related boards, making angel investments, and serving on advisory boards of different start-ups.  But what I really wanted was to work in music.  I started this music company because I saw that there was a problem that we could potentially solve.

What was that problem?

The music industry has been in decline since the 1970s, and has experienced several very deep recessions. It just didn’t make sense to me. Music came before the written word. It is an indelible part of our lives, part of our rituals and celebrations and almost every aspect of living and communicating. Yet it's one of the smallest industries.  It didn’t make sense to me that this potentially powerful driver of multiple revenue lines would be so small. I couldn’t accept the incapacity of current industry to unlock growth.

I didn’t accept that the problems were a function of technology or even of piracy, because both of those have always been elements of the music industry. There’s always been a displacing technology of some sort, and piracy has always existed. So the problem seemed more rooted in business practices than any of these other things that folks blame for declining revenues. So I said “Alright, I think there is a problem with the model. How can we build a different one?”

Binta with Big Mouth Records' first artist, Grace Weber

Binta with Big Mouth Records' first artist, Grace Weber

"Music is communication. When it is a copy of everything else, it loses its power as a form of expression and its relevance to music consumers."

Ok you have my attention. What’s your solution?

Some people may disagree with my opinion that the music industry being in decline since the 70s. What they’re forgetting is that there have been couple of things that helped it out; artificial, superficial influences on record sales. One was Michael Jackson in 1984. He saved CBS Records. "Thriller" was such a massive seller that it literally changed the perception of how well the record industry was doing. Just one album. And it did that because every single track on that album is great. Everything about it was beautiful and elegant. 

The other thing that helped out the music industry was the compact disc.  When the CD became available, people of a certain generation started replacing all of their vinyl albums and cassettes with CDs. The industry's upward trend wasn't because of investment and development in new music, but because people were replacing what they already owned.

For any industry, if you’re going to solve a problem or grow a business, you always have to have new offerings. When I thought, “What kind of model can I build?” I began appreciating two things. First, there’s historic inequity as between artists, their managers, and their label, and it’s an inequity that’s rooted in exploitation. Artists don’t own the rights to what they’ve created, the creative asset that is the driver of revenues. Instead, the artist is put into debt in the form of an advance. The artist can’t generate profit until they’ve paid that advance back out of royalties. The royalty rate is very, very low, and is not sufficient to enable an artist to recoup very quickly if they ever recoup at all. It’s the only industry that I can think of where the the creator of the product is immediately put into debt, loses all of their rights in the asset they have created, absorbs all costs, and can’t make any money on their own creation unless they reach sufficient scale where they’re selling in massive volume, which is unlikely.

Second, in understanding other businesses that have successfully changed the status quo in their industries, I noted the importance of an exchange, of removing costly intermediaries, and completely aligning the interests between the parties to a contract.  I thought we might be able to create a platform that aligns artists' interests with their financing source and removes bloated intermediaries who are also attempting to finance significant legacy costs of their large, less nimble businesses. 

So my model asks, “What if we restructure the relationship?” I’ve been in this start-up world for a while, and I started thinking—what if we treated an artist the same way an entrepreneur would want to be treated? By that I mean, what if we equitize the artist so that they’re keeping and maintaining the rights in the thing they’ve created? What if we invested in them—offered them the same recording budgets that they could get from a major? What if we follow through with a commitment to market so that they can actually make money? And what if we split costs? We started thinking about it the way angel investors and venture capitalists think about making investments, and that’s really how we’ve built our model.

I’m 100% on board with you! For writers it’s even worse, if you can believe it. Still, I’ve heard the equity idea, but I have yet to see it work in an artistic field. Why do you think it hasn’t worked before? 

I think that it hasn’t been done before because the record industry—like many other incumbent industries—makes a lot of money by what it’s doing, even if it’s not making as much money as it used to. The industry is very large, and a lot of times it’s subject to the desires of public shareholders. There are a variety of different constraints.

“The consequence of risk aversion is that things stay broken. Even if you’re one of the lucky ones who benefits from the brokenness, things are staying broken.”

Why did you call it Big Mouth Records? 

For us, there’s this sense of defiance, a loud rejection of the status quo. We are independent, and big mouths have a tendency to be independent voices, calling attention to a problem and offering a solution. Big mouths are often rebellious, and we’re unequivocally rebellious. Unafraid. Unafraid of doing things differently when we believe it is the right way, unafraid of expressing our perspective, and making the music we want to make.

In terms of independence, what do you think about what people like Macklemore have done? Where they’ve rejected corporate record deals and owned their own IP...

Macklemore and Chance the Rapper are very similar to us conceptually in that they have a similar philosophy about artists' rights and independence. 

Is Chance totally independent? I didn’t know that…

Yeah, he’s totally independent. He’s not signed to a major or independent label. He’s signed to himself.  If you look at the copyright information, it says “P. Chance the Rapper.” He makes his own music, he gets together all the different musicians and artists that he wants to work with, and then he puts it out! He’s got a fantastic manager, publicist, and booking agent.  And he gets partners who help ensure the music is heard. Like Apple was his partner—but he’s not signed to a label. He thinks very differently, and as a result, he’s maintaining all his rights. 

Macklemore is perhaps more similar to the model we are building because while he has maintained all of his rights, he also relied on Warner Music’s ADA for distribution. But as we understand it, that distribution deal didn’t come with Macklemore giving up any of his rights. 

I’m not opposed to doing distribution deals where an artist maintains her rights. In fact, I would welcome doing a deal with a major label, because it is more likely we’ll succeed at getting our music out to wider and broader audiences. We still believe in the power of radio, and major labels tend to have very good radio teams.  That's strategically important to us.  If we find a relationship where we can truly and collaborate to efficiently deliver what we've created to music consumers, then I think it would be foolish to turn the opportunity down.

What I’ve seen firsthand in my limited experience as a music journalist is this "math" mentality; the view that everything is an asset, and that everything must be hedged. It’s the commodification of art, with the the studios acting basically like art hedge funds. They take varying degrees of risk on x and y, and when something starts working they juice the shit out of it until they’ve received every cent that they can, then throw it away and find the new thing. They don’t put so much effort into the art part; for them, it’s much more worthwhile to play the number game and look at what works and what doesn’t. How can you disrupt such a well-oiled exploitation machine?

You’re right that what you see routinely is a wasting of an asset, or the absolute consumption of an asset as opposed to an investment. That’s a very important thing to think about because it’s exactly as you said. It’s exploiting the asset and wringing it dry until you can move on to the next asset, and taking all of the income and revenue on top of that and using it for your business so that you can finance the one after that. 

For us, in equitizing our artists and thinking of them as investments and not as borrowers, we are ultimately making sure that they have the resources that they need to make their art. And I think because we take that approach, it makes us a lot more appealing to serious artists. They’re attracted to the model because it’s the only one that lets them maintain a sense of dignity as an artist where their humanity is respected—and that’s for a few reasons. First of all, they’re equitized; they’re not giving up all of their rights. Second, our approach on working with our artists is about enabling them to be the artist they are as opposed to telling them that they have to fall into a lane, to become some commodity that is less risky and maybe easier to sell because it's been done over and over and over again. We’re trying to help people make what they want to make instead of a copy everything else that’s out there. That's important because music is communication. When it is a copy of everything else, it loses its power as a form of expression, and its relevance to music consumers.

That explains why artists would be drawn to you, but that’s only half of the equation. I think the reason why we’ve seen this model work for people like Chance and Macklemore is because those guys were smart enough to recognize how the game was stacked against them. But the reason we’re talking about them now is not because they’re independent, it’s because they’re fucking great artists. By giving your artists so much more, you’re taking riskier position than one of these massive studios, so you’re going to have to choose winners even more effectively than they do. What makes you qualified to make that decision? How do you know how to choose a valuable musician? 

It’s partially about having an ear, like how an investor looks at a new company. You develop a sense based on experience; whether you can make something of it or not. I grew up a musician, studied at a competitive conservatory, and still play music, read music, and make music. My own love of it definitely helps. In the same way that you’d hope the founder of a tech startup can code, I have enough of a musician's instinct that I'm comfortable deciding what people will want to listen to.  The other part of success is good solid strategy matched with a relentless commitment to executing against strategy.

For example, Grace Weber is the first artist signed to our label. She’s phenomenally talented, and responsive to development and investment. Part of it is catching the artist at the right time, when it’s the right time to make the investment and start developing them, and knowing that they can respond to it. Having a model so attractive to artists helps us do that. I get calls, people saying “I really like your model. Will you listen to my stuff?" There’s often a domino effect, one great artist we’re working with hears about us and our model, and they express interest in working with us as well—since we've started with quality, we’ve attracted quality. If I hear something in the music we’re sent and I think we could do something with it, I get to the next stage of meeting them and seeing what they’re about. Let me understand their values. Do theirs match with mine? If not, it’s not going to work out. And then it’s—let me see this person perform. What are they like? Do they have something that is compelling? 

“We make soul music, which means we have to insist on nourishing souls.”

I love that you’re talking about values. This is going to sound ridiculous, but to me the world is divided into Jay-Zs and Kanyes. Everybody is a Jay-Z or a Kanye, and I think you guys are looking for Kanyes. You want people who see the outside of the box…

Yeah, that’s exactly right. And it’s funny—I’ve actually said that before, so it’s cool to hear somebody else say that too because I don’t think a lot of people say it. We’re very much the Kanyes (although we do love some Jay-Z!). You asked why we’re called Big Mouth. We’re the folks who are going to say what we think is truth—not unlike Kanye. Some people are going to call it a rant. A lot of people are just okay with the status quo—make a lot of money with the status quo—they sort of play the game. But there’s not a lot of risk-taking, which means there isn't a lot of innovation or creativity. The consequence of risk aversion is that things stay broken. Even if you’re one of the lucky ones who benefits from the brokenness, things are staying broken. 

And Kanye—the thing with him is that he breaks things every day, and that’s the space that we’re in. Quite frankly, those are the artists who are attractive to me and who are attracted to us. And that’s really the difference between an artist and an entertainer. Who’s in it to build a career and keep creating as an artist? Or is it somebody who’s in it to make a quick buck, or fame? For some people it’s all about the glamour, a little bit of celebrity, a little bit of fame, but it’s not about creating. The people we work with are creators.

I think you’re talking about the difference between an artist and a craftsman, and I think there’s room for both, but we have just been dominated for so long by risk aversion, as you put so well. Man, I wish you had a literary division! 

I know! We need the arts! We need literature and writing and music to understand ourselves and understand one another. With that degree of risk aversion and complacency it means that you can’t advance society through art because you have a very low view of what it is, which means you kind of have a low view of human beings, which means we’re not feeding our souls. We make soul music, which means we have to insist on nourishing souls.

By Isaac Simpson

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