Steve Stoute Talks New United Masters, NBA Deal, And The Death Of Record Labels
"Our objective is to help artists get much better at turning their streaming revenue into other forms of revenue."
Perpetual trailblazer Steve Stoute is ready to bring independent artists into the new reality of the entertainment industry. Today (Nov. 8), Stoute’s United Masters and the NBA announced a global partnership that will enable independent artists to have a direct connection to the men’s professional basketball league to get their music featured on the NBA’s digital platforms, including Twitch, Facebook, Instagram, YouTube, and Snapchat. As part of the multi-year partnership, the distribution company will also offer the opportunity for independent artists and their music to be featured in NBA highlight videos, exposing the NBA’s social community of 1.5 billion to new artists.
“I think the NBA is like the new MTV. The new music videos. That's how I feel about it,” Stoute told VIBE. “Because I find myself watching them over and over and over again. I know what's about to happen, but I still watch over and over again.”
There’s a lot of credence to that proclamation. The NBA has more than twice as many YouTube subscribers, and nearly three times as many Instagram followers, as ESPN. The average Instagram user is on just the Android app for 53 minutes a day, while the average American household spends under 8 hours watching all of TV, which doesn’t leave much time for an MTV that has been hemorrhaging viewers for the better part of this decade.
His United Masters company is built to be a direct competitor to the traditional record label model, providing artists with distribution and reams of analytics to help bring them to their target audience, for a fee, while allowing artists to maintain full ownership of their master recordings; pretty much unheard of in a major label system.
In an extensive interview with VIBE, the music industry legend spoke about arena-sized visions for the NBA partnership, why the idea of record labels is dying, how artists selling just music isn’t enough anymore, and how the new MTV is more than music.
Why is this partnership with the NBA so meaningful?
As a fan of music, the relationship between the NBA and music, it just feels so synonymous to me. When I first got into the advertising business, one of the first commercials I ever did was this spot with Jadakiss and Allen Iverson. Do you remember that?
With the basketball? That's classic.
Yeah, with him rapping to the sounds of the basketball. I've always seen it that way. I’ve always seen the world that way. So, when I decided to build an independent distribution company to really help independent artists, I was like "How can I take what the NBA has -- the fanfare, the global reach of it all -- and connect these independent artists so that they all can be able to get into that level of opportunity?" Wherever you walk around the world and you're watching Kevin Durant go off, Steph Curry on fire, and LeBron dunking the ball. All these things that you see. Putting the soundtrack behind those moments, to me, is what music—specifically rap music with the NBA—does that really well. It's synonymous. They speak to one another really well.
So I wanted to be able to take all these independent artists and give them an opportunity to not only be heard on a global level but to give them visuals that actually allow the audience, when they see, to connect to it. I think the NBA is like the new MTV. The new music videos. That's how I feel about it.
I find myself watching them over and over and over again. I know what's about to happen, but I still watch over and over again. You go to a game, and you look at all these guys on the sideline. It's everybody from the music business. Or you watch the relationships between the NBA athletes and the musicians. The entire thing feels like one holistic thing where the NBA and the music business is one. Those videos that come out every day, I know if you get the right music behind them—and you're tagging these artists, and it's sending you to a playlist—not only is your music there, you're being tagged and getting recognized, but then all of sudden, they're pushing you to the playlist where that music is located, and you're an independent artist. I think that's the best promotion in the world.
How are those artists selected? Do they opt-in?
The artist submits their music to UnitedMasters.com. Then, we listen to it, and go through the selection process, and pick them to be a part of the program. So it's not everybody. There’s a submission process.
Then you find out which video the artist and the music should go to? How is it going to look for artists?
The NBA has 19 billion views each year. There are 19 billion video views of NBA content that comes out each season, and United Masters' artists exclusively have that opportunity. It's a nonstop operation, to be quite frank with you. It's a 24/7 operation of getting the music cut to the films.
United Masters was announced in November 2017 and you already have a partnership with the NBA. How did that come about and how long did it take?
Well, fortunately for me, I've built a long career on working with partners, and over-delivering for partners. So, when I reached out to the NBA and told them I had the idea, it was really about how can we get this done and how can we help all these independent artists get an opportunity to be heard. It took us about three months.
Just so I can get a little more clarity on this. The press notes say artists’ music will be featured on the NBA's digital properties. Is it going to be a situation where the NBA does their highlight packages where there will be music from United Masters' artists in it?
Yes. That's right, and we're going to extend this stuff into the arena as well.
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So United Masters' artists will be getting played in Madison Square Garden and things like that?
Yeah. Don't tell me you're a Knicks fan. (Laughs)
Yeah, I'm a Knicks fan. Come on, man. Kevin Knox is the future.
By the way, Kevin Knox could be the future, for sure. I don't know what the hell is going on with Porzingis. Is he hurt? Is he not? It's unclear to me.
He's probably just trying to make sure New York doesn't mess him up with his contract.
Like the Kawhi Leonard thing from last year.
Do you have any plans to make a stamp at the All-Star Game with United Masters? Anything brewing right now with this partnership?
(Laughs) Throughout the NBA season, there is going to be a series of events that connect the partnership, for sure. I don't want to be specific, yet, obviously. I think whether it be to the All-Star Game or the playoffs, our job is to help make these artists [and] promote these artists whenever we can and however we can. It's a good time of year, being that the season is picking up, to help get these artists in front of these fans who love the NBA and obviously love music as well.
I've been following United Masters since its inception and I remember a Billboard interview you did in March where you revealed United Masters helped 2 Chainz see a 60% bump in merchandise sales. In the last six to seven months of United Masters being around, have there been any other similar success stories?
When we first announced the company in November  we announced the company and really were focused on talking about our fundraising. We wanted to build something to give some light education around when you should post [and] when you shouldn't post. Looking at your socials and trying to get a gauge of how to maximize your social footprint. We ran some tests, I call them “tests,” with 2 Chainz and Future, specifically around their merch. We sold their merch stores out. It was very important because what I believe our objective is is to help artists get much better at turning their streaming revenue into other forms of revenue.
So—A: get them attention and get them heard. B: give them an opportunity to get more reach and create more revenue. I think it was very important to get cases that show examples of how we did that, to help certain individuals. 2 Chainz is a very good friend of mine. We did it for him. Him and his manager, Tek, were extremely happy with the results...they would have just opened up their merch store and tried to find people to get with them to see who was buying the Gucci Ghost stuff or whatever. We actually put a system around it to help find the people who were streaming music and loved them. We sold more merch for him in two or three years than he had sold previously through his merch store.
There’s no reason for artists to sign to record labels anymore. 🗣 pic.twitter.com/FOLQVxcyzV
— UnitedMasters (@unitedmasters) November 6, 2018
In 2018 and beyond, do you feel like record labels are necessary or useful?
I think record companies are really important, and they matter, for certain artists. If you want to build a business and own your rights and own your masters and be able to hand something down to your kids, if that matters to you, you shouldn't sign to a record company. But, if you're looking to stay in the best hotels, fly fancy, and all that other stuff, and that matters to you primarily, if that's the primary thing that matters to you, then you should probably sign to a record company.
T.I. just did an interview last week, and he said it really well about why he decided to go independent versus being with a record company with releasing his music. It just doesn't feel like, outside of the advance, you're getting your true value. I think you're starting to see, and correct me if I'm wrong, more and more artists are celebrating not being in a record deal than I've ever seen before. Young Dolph turning down $22 million or whatever it was. Even down to Iggy Azalea saying she's out of her record deal and how happy she is. To me, that's a brand new thing. I mean, I've been doing this for a long time. Artists are waking up to the fact that they should have more control and not be locked into this agreement that is not necessarily 100 percent in their long-term best interest.
As you said, you've been in the industry for a while. What artist or situation do you wish could have benefited from something like United Masters back in the ‘90s, when you were in the industry as a record executive?
That's a good question. What artist? I probably would say the industry at large, because back then... Let me rewind that. I would say back then United Masters probably wasn't going to be something that would have taken hold in the industry because you still had to make CDs. You still have to ship them to different warehouses. You still had to do all of those types of physical labor issues that require a lot of money, and a lot of manpower, which I think would have been labor intensive. The amount of artists [music] that were being released at that time, there was so much money because people were paying $16.99 [for an album]. Everybody was getting bags, and everybody was like, "Okay, well, why do I want to go through the effort of doing that?” Everybody wasn't looking to get sneaker deals or these type of deals. They were selling their music and making a lot of money.
It's now, today, where with streaming music you could do well if you have an outstanding smash. To make a lot of money from streaming is hard. But to use the influence that you have from streaming to go on tour, or to sell sneakers, or to sell merch, to me, that's the new business. And in order to do that, I think you have to link technology with culture. This is not about just helping the artist get down with the NBA. This is about linking technology and culture together so that you can be able to do what I did for Future. Put some music out, people like your sh*t, people like you, they listen to your songs. But then that's not where the money is going to be. The money is going to be at selling out that merch store. I don't think that was the focus or the emphasis of the industry at the time. You had Sean John, you had Rocawear, and you had a few guys like that. But the industry at large wasn't on it like that.
What analytics did you provide the NBA to get the deal to go through? How long is this deal going to last?
Well, the deal is several years. Yeah, there was a lot of analytics involved. The analytics came from a very simple place: Is there a crossover of NBA fans and music fans, and how can we connect those two together? Once we knew that, it was sort of not just you and I knowing it because we are fans of both hip-hop and the NBA, but actually going through the NBA system, [emphasizing] that this thing is a real symbiotic relationship between these two audiences. That was what we had to prove before we could move forward.
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Is this NBA deal a test case for United Masters bringing artists to other sporting leagues?
I don't want to show my hand. You don't want me to show my whole hand.
You left the music business for advertising with your ad company Translation. What made you want to get back into music?
I think there's a great opportunity for independent artists right now. I think that independent artists have an opportunity to be heard. I think independent orders are the next great creators of our generation, and if I can put together a platform that gives them the opportunity to make money doing what they love then, to be frank with you, that's what I've been trying to do my entire life. I've always been pushing culture forward. I've always been the first guy to say, “Let's go do this. Let's make a Jay-Z sneaker. Let's work with McDonald's. Let's do our own fragrance. Let's do Carol's Daughter.” I've always been that person. I see all these artists trying to get out there. They realize that they don't need to go to a record company, Instagram is MTV, and Apple and Spotify are the new Tower Records. I'm seeing that. How can I build a bridge to connect those two for them so they don't have to go to a record company anymore?
Speaking of merging technology and culture. These new entities you mentioned, Spotify and Apple, are gaining influence in the music industry. There's been a discussion around if these streaming services are getting big enough, should they become their old record labels? Spotify just made it easier for independent artists to get their music on the platform. Do you see Spotify becoming a record label?
No. I don't. I think that the record label thing is going to go away entirely. I think artists should sign to themselves. It's not about a record label or anything like that. I think every artist should sign to themselves. They should be their own record business themselves. There should be hundreds of thousands. [Like] Chance the Rapper.
Speaking of Chance The Rapper, he says he made $6 million from his "3" hats he sells. Deals like that have put the idea of independence into question. What is your idea of what independent means in 2018?
I think independent means, right now, is owning your future.
In 2017, artists reportedly took home 12% of the $45 billion of revenue the music industry generated, mostly from live performances. With artists making a sliver of the music energy revenue and streaming services becoming more influential on what is successful in music, how have those discussions between United Masters and streaming services been as of late?
Great relationships with streaming services. I think the streaming services realize the same thing I see that more artists could go direct. More artists don't need, you know, record companies to do what they were going to do. The relationship between independent distributors and the Spotify’s, Apple’s, and Tidal’s of the world is amazing.