By Sammi Elefant
In the past year and a half, the music industry has shifted dramatically – not only in the way consumers engage with music, but also in the way artists create and produce it. With the birth of streaming services such as Apple Music and TIDAL, exclusive releases have reached an all-time high, and they often come unannounced both the consuming public and the big labels. The problem is that the more these streaming services push the envelope, the more they start to look like a record company.
Last month, Frank Ocean caught everyone by surprise when he released his second studio album “Blonde” as a timed exclusive on Apple Music and iTunes. At the time of the release, Ocean was signed with Def Jam, however, he dropped “Blonde” through his independent label Boys Don’t Cry. The day before, Ocean dropped a visual album titled “Endless” apparently to fulfil his contractual obligations to Def Jam and Universal Music Group (UMG) its parent company.
There is a lot at stake here for UMG. The company provided the resources: studio time, sound engineers/mixing, as well as sampling costs. At first glance, it looks as though Ocean is in breach of his contract with UMG. Many major label contracts include a minimum-delivery clause which require artists to deliver a certain amount of music within the term of the contract at a quality that is deemed appropriate by the label. Further, many of these delivery clauses give complete control to the record companies where substantial advances are involved. Through this clause, music publishers may have the right to control who releases the record and where the record will be available. What this clause looked like in Ocean’s contract has not been made available to the public however.
Ocean did fulfill his duties in consideration of his contract with Def Jam and UMG with the release of the visual album “Endless.” Further, he repaid all of the costs for the production of “Blonde” thus absolving him for any recoups he might’ve owed the label otherwise. Depending on what Ocean’s minimum delivery clause looked like, UMG might have grounds to sue if the clause designates a specified amount of time before an artist can release an album with another label. In this case, Ocean’s albums were released within a 24-hour time frame. It wouldn’t be farfetched to infer that a contractually binding timeline would be longer.
Although UMG has yet to announce whether any legal action will be taken against Ocean, the company has stated that it is banning all future streaming exclusives. It is not clear what the contract between record companies and streaming services look like, but UMG’s move to cease exclusives indicates a strong interest in mitigating future monetary losses like those incurred from Ocean’s maneuver.
With the quick turnaround from music production to the delivery of product to consumers, streaming services are highly attractive to artists. Presumably, if artists such as Frank Ocean leaving the big labels and releasing music on these platforms – the contracts must be favorable to the recording artist. Many artists hold stake in the companies, for instance TIDAL is an artist-owned coalition. This essentially means that artists finally have a say in what they can deliver to their fans without having to report to the men upstairs.
What we are witnessing with TIDAL and Apple Music is not new, rather these services exist to create a better, sustainable, music industry. The shift in power that technology has offered artists over record producers is substantial. Forbes estimated that Frank Ocean earned more than double what he would have if he released “Blonde” with a major label. How will major labels protect themselves from profit? Terminating the contract for exclusive releases on streaming services is one option, but it may not be sustainable.
Student Bio: Sammi is a 2L at Suffolk University Law School. Sammi is also a staffer on the Journal of High Technology Law and a member of the Sports & Entertainment Law Association.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
