With $70M from Alphabet, United Masters replaces record labels
The records labels are obsolete. They haven’t kept up as music evolved from selling CDs to streaming songs to promote concert tickets and merchandise. Labels were meant to help artists generate albums, fame, and money. But now anyone can record themselves and no will “buy” it. So today that requires being a technology company, combining analytics with hyper-targeted advertising. And the old labels don’t have the engineering talent for it.
That’s why last year, the former president of Interscope Records Steve Stoute secretly raised $70 million from Google parent company Alphabet, prestigious venture firm Andreessen Horowitz, and entertainment giant 20th Century Fox.
Today, his startup United Masters emerges from stealth.
United Masters is ready to give musicians an alternative to exploitative record label deals. It produces and distributes the music across the internet, and splits the royalties 50/50 while the artist retains the rights to the master recordings. Then United Masters sucks back in all the analytics, identifies the listeners, builds artists a CRM tool, and helps them target their top fans with pinpointed ads for tickets and merch.
Stoute explains that the plan is to “Look at music like gaming. You monetize the game to all the people who are most engaged. I wanted to bring that theory and thinking to music.” It’s off those whales, those super fans, where musicians make a lot of their money. And finally someone built a way to deliver ads for what artists do sell to people who’ve listened to their album 50 times for cheap.
The startup world’s biggest rap fan Ben Horowitz is so smitten with the idea that he’s joining the board of United Masters. And it was Larry Page himself that pushed Alphabet to lead the startup’s $70 million Series A. “People don’t know Larry was actually a drummer. He has a deep sensitivity for the artist” says Stoute. Page was stunned that artists couldn’t keep track of the fans that bring in the most cash and retarget them. So Page worked with Google’s Corp Dev leader David Drummond, a former radio DJ, to give United Masters all it needed.
The company is now actively recruiting both tech talent in product, design, and engineering; and its first wave of independent musicians. United Masters is focused on emerging artists first who want to be digital natives in how they run their business. But evententually, it could sign established artists who want flexibility and control of their original recordings.
Educating artists that there’s another path could be United Masters‘ biggest challenge. Many musicians still think streaming is the enemy, cannabilizing their album sales, rather than as the inevitable progression of music distribution that can serve as marketing for their band as a brand. But once artists see that they’re not much different than Nike and their songs are like commercials, they realize they need help getting listeners to turn their passion into a purchase.
“It’s very important that an artist’s jobs is to be a great artist” Stoute concludes. “The infrastructure around them to should be helping them get more money at efficient rates, not owning their masters and taking from them.”