The Business of Lasers

Written by Soulbrotha. Posted in The Biz

Tagged: , , ,

Published on March 22, 2011 with 3 Comments

Lasers overcame an assault of negative assessment to give Lupe Fiasco his first ever No. 1 album. Lasers scanned 204,000 units on its way to numero uno and Lupe’s best sales week yet. That Lasers docked at No. 1 inspite of negative reviews is nothing new. What I find unique and interesting is that Lupe himself all but told fans to ignore the album and still watched it soar to the top. I reached out to hip-hop scholar and Houston-based rapper Soulbrotha to help us make sense of the business behind the situation. See his words below. – Rizoh

The Business of Lasers
The sound on Lasers is the predominant mainstream sound that is on radio which appeals to the masses hence its success. The sales of an album do not occur in a vacuum, so amidst the cacophony some people in several places (maybe around the globe) actually LIKE what Lupe did on Lasers.

Artists on major labels do not truly have full control over their own destinies. Even though Lupe hates this record and did not want to create it in this fashion, his hands were legally and contractually tied to produce an album that would generate revenue for his employer – the record label.

Music Business, Not Music Charity
People–and I mean fans of Lupe specifically–should understand that this is not the music charity or the music foundation, it is the MUSIC BUSINESS. The bottom line is to market musical product in order to generate the maximum amount of revenue possible. Say, for instance, neo-soul is what the masses demand, whether you as an artist desire to create that particular style/sound is irrelevant to the bottomline.

Record labels are not donors. They are real businesses. I like to think of them as glorified loan companies that give you all the financial resources possible in order for the artist to create marketable product (music) that will generate the most revenue.

Industry Rule #4080
To reiterate, a recording contract is legally binding. You honestly cannot just NOT record music and expect to get out of a legally binding record contract unless you have the funds to buy your way out of said contract. If you doubt this, ask Joe Budden and numerous other artists that “got out.”

From the little understanding I’ve been able to garner over the years about how recording contracts work is this: Record company A seeks or signs Artist B, Record company A gives Artist B an advance (a loan) of a fixed amount of money to record X number of albums.

Record company A promises in the contract to maximize every possible avenue and strategy to recoup the advance given to Artist B, gain interest (profit) on that advance by selling the music and/or music related paraphernalia.

Record company A also expects Artist B to make a similar commitment on their part and maximize their talent and resources provided by Record company A to secure the return on investment (i.e. advance – loan with interest).

If return on investment (record sales) is sizeable Record company A takes out their share (which includes advance and interest on advance) and breaks off a piece of that return on investment (record sales) to Artist B.

Where most of us miss it and get caught up in our emotion (which is honest and sincere), is we feel that the Artist should be allowed to create whatever they like at the expense of the Record company’s resources. After all, the record company is profiteering off the Artist’s talents and as such is putting something of a price tag on these talents. This does not always hold true. The artist just like the record company upon signing that legally binding contract has made a commitment to ensure that not only is talent maximized but the highest return on investment possible is also generated.

Here’s where things get messy. Sometimes the record company will “strongly suggest” the type of product the artist should put out. The artist more often than not will disagree because they believe they should (and in an ideal situation they should) be allowed to create whatever they choose to create and let the public decide on what/whether they like it enough to buy it.

Record companies are run by humans, and humans get emotional. If an artist refuses to accept the label’s suggestions, egos and feelings get in the way and artists get “shelved,” “forgotten” or just lost in the sauce. The problem for most artists, though, in these circumstances is that they are not financially equipped to buy their way out of the contract. Even though the CEO of Breakyourface records doesn’t like the fact that you completely ignored his suggestion of using tinkerbells on your lead single, he legally still owns you until you give him the albums you both agreed to give him.

The Bottom Line on the Bottom Line

Another problem is that the record companies have a bottom line to uphold. They have investors they must appease and a lot of times they WILL NOT take the risk of putting resources behind a project they do not believe in. This is where the artists end up on the losing side of the bargain and I believe this is where Lupe and his label were at odds.

I am not saying all of this to side with the labels. I am trying to get our fans out there to understand the nature of the business as artists we are in. It is tricky. On one hand if labels take uncalculated risks and projects are not well received they lose, go out of business and in turn the artists too end up broke. Doubt this? Some indie labels as I’ve read in recent weeks on Okayplayer have gone out of business as they can no longer afford to keep affronting the kind of music they love and support.

We live in an age where the old music business model is no longer working. Music these days for the average consumer is becoming more of an accessory and less of a focus. A lot of artists have to brand their music via corporate sponsorship in order to generate revenue. A feat such as Lupe’s is even rarer these days so I think it says something to either (a) an ardent/loyal fan base (b) a more accessible and acceptable sound format for his music. I like to think it was a combo of both.

I believe artists should be allowed to create whatever they want to create in order to keep their art “pure.” But artists should realize the moment they sign to a record label of any kind it is incumbent upon them to generate the maximum revenue possible for the label because in reality they are employees of the label. If the label gives you an advance it is not your pocket money, it is a loan that MUST be repaid back with interest and if you as an artist hope to profit off the agreement you have to not only be able to pay back that loan with interest but also generate enough revenue to keep for yourself as well. This is why Jay-Z buying out his contract from Def Jam was a HUGE and is still a HUGE deal. Most artists in my view, pretty much plead/beg their way out of it via legalese and back door agreements. Sometimes the labels may cut an artist loose and call it a loss but if there’s a contract there believe me the artist still has to pay/buy out the rest of the contract or get their new label to do so.

If the artist has a great lawyer though, they can ensure that their “escape route” is secure and written in such a way that will ensure that if they could not meet the contractual obligations required of them, the label and them could still part ways mutually without bad blood or hard feelings. Also, if an artist decides to take the “war path” without a plan of action in motion before hand the artist almost always will end up being shelved. Why? Humans run record companies. Humans have feelings. Feelings get hurt. When feelings get hurt, revenge is almost always certain.

Words by Soulbrotha. Follow him on Twitter @SoulB



There are currently 3 Comments on The Business of Lasers. Perhaps you would like to add one of your own?

  1. I honestly disagree. The reason that I believe Lasers was a success is almost entirely due to Lupe’s extremely loyal fanbase. These fans, including myself, will buy pretty much anything Lupe Fiasco puts out, largely based on the fact that his previous efforts (The Cool and F&L) were undeniably dope.

    Label politics always plays a part, and Lupe may have felt that he was ‘forced’ to do a few of the records. However, I believe that the ‘mainstream’ sound of Lasers DID NOT contribute to its first week sales. People who bought Lasers were people who had discovered and grown to love Lupe Fiasco over the past 5 years. The Show Goes On was a moderately popular single, but I dont think it contributed towards his album sales at all.

    Admittedly, I do not have much proof for this, except for the fact that Lasers is expected to plummet to 45K sold during the second week (i.e. casual fans are not buying his album) and that B.o.B, who also had a mainstream sound and had two massively successful singles did not post strong album numbers.

  2. i believe this. great article & very valid points.

  3. Hey kart go,

    Thanks for the comment. I get where you’re coming from with respect to fans….however, there was a lot of online backlash with regards to the record. Some (depending on the # which we have no way to take into account) detested the record and Lupe himself voicing his displeasure I’m sure didn’t help. I would assume though you were one of the many that I included in my sentence, “The sales of an album do not occur in a vacuum, so amidst the cacophony some people in several places (maybe around the globe) actually LIKE what Lupe did on Lasers.”

    So i don’t think we’re that far off in terms of perspective.

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