Steve Stoute’s UnitedMasters is partnering with the NBA
Artists give UnitedMasters 10% of their revenue in exchange for distribution support
Last week, UnitedMasters, an independent artist services company announced an interesting partnership with the NBA. UnitedMasters’ stable of artists will now have the opportunity to get their music featured on the NBA’s digital properties. These artists give UnitedMasters 10% of their revenue in exchange for distribution support, like this new NBA deal offers. But unlike a record label, UnitedMasters doesn’t own the artist’s masters. The artists keep them.
Why This Matters: This move is a natural play for Steve Stoute, the company's founder and CEO. The music and advertising executive has built his legacy on merging the worlds of basketball and hip-hop dating back to his deals with Reebok in the early 2000s. The NBA partnership gives UnitedMasters an advantage in an increasingly competitive space. But it begs the question whether the NBA itself was the best digital property for the year-old company to partner with.
As UnitedMasters continues its quest to create “250,000 Chance The Rappers,” it resurfaces the conversation about artists paying companies in exchange for placement and exposure. Stoute himself compared playlist exposure to UnitedMasters’ NBA deal in a recent interview with DJBooth.
If a weekly playlist like Spotify’s (SPOT -1.95%) RapCaviar spun off from the streaming service and formed its own entity, it could monetize by charging artists for placement the same way other playlists do. The key difference between UnitedMasters and the hypothetical ‘RapCaviar LLC’ is that Stoute’s company is a third party between the artist and the outlets offering exposure, while RapCaviar would be a direct channel for the artist.
Situational Awareness: Would the UnitedMasters/NBA deal be perceived differently if the NBA itself offered artists direct placement on its digital properties in exchange for a small cut? Of course it would. The definition of ‘payola’ will continue to be cloudy and subjective. But in the meantime, UnitedMasters and its competitors should continue innovating to disrupt the music landscape. These deals ultimately push the industry forward.
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