January 20, 2007
DJ Dramas || Parallel Economies
Close followers of hip hop, the music industry or the sidebar to this blog are probably well aware that the suddenly rather aptly named DJ Drama and his associate Don Cannon were arrested earlier this week and charged with the rather dubious felony of selling hip hop mixtapes. Drama was at the absolute top of his game, producing some of the most spectacular mixtapes of the past few years, most notably of late catapulting Lil Wayne into the role of hip hop's crown prince. Quite coincidentally (or perhaps not?) Drama was also about to receive some serious big journalism coverage, exposing the mixtape underground to a large audience almost completely outside it's standard base of operations. The Recording Industry Association of America (RIAA) was the prime driving force behind Drama's arrest and quite clearly they saw a threat in both his own rise and in the rise of mixtape itself as both an artistic and economic endeavor.
Over the past couple years the mixtape industry has grown into a rather uneasy but working relationship with the traditional music industry that the RIAA represents. The mixtape world was a place to find new talent, test new songs, and build up street level buzz for artists. For artists like 50 Cent, T.I. and the Dipset crew the result was millions of dollars for both the artists and the record labels. Many of the songs on those mixtape cds may have been unauthorized and living in a legal gray area, but their existence was sparking the sales of those officiated CDs that make the dues paying members of the RIAA their money. That relationships clearly is no longer, although it's rather unclear whether RIAA ever quite realized what sort of relationship many of its member had with the mixtape industry, ironically enough DJ Drama was due to release his first major label back mixtape.
Culturally the RIAA's actions are about as hamfisted and assbackwards as it gets. They just went out and arrested a friend and associate of some of their best artists and members and alienated even more of their customer base. But economically it's a whole other story. The mixtape industry operates in what could be called a parallel economy. It's products circulate in shadowy networks, it's transactions off the record, it's details unreported. One can imagine situations where big rappers get paid by DJs to appear on mixtapes, and one can also imagine situations where rappers pay DJs to place them on mixtapes. What actually goes down is pretty much behind the scenes and off the books.
The music and mixtape industries may have had an uneasy but working relationship, but now that the RIAA has gone on the offensive one can see just who really threatened who. The music industry has been running scared since Napster first rolled on the stage like the chupacabra, and the mixtape world is just the latest, and quite possibly the greatest threat yet. Peer to peer file sharing threatened the music industry right were it hurt the most, the area of distribution, the point where the record labels were taking in all their money. But distribution is only one part of the music industries much larger business structure. They are also in the business of what they call A&R, the finding, filtering and amplification of new talent. They provide high risk financing to artists. They are in the manufacturing business, creating the physical products for sale. And they are in the marketing business big time, hyping up artists and getting them the attention they often want, and almost always need in order to sell large amounts of music.
What is some remarkable about the mixtape industry is just how thoroughly it threatens the established recording industry. The mixtape industry has a manufacturing base, the ability to make hundreds of thousands, and most likely millions of units. DJ Drama alone had 80,000 CDs taken from him during his arrest. More importantly though it has a distribution network, the ability to get it's products into the hands of retailers across the entire US, and those retailers are for the most part completely outside the RIAA's standard sphere of influence. Then there is the A&R, a role that mixtape DJs played so well that more than a few have been recruited to the major labels, and sometimes even given their own imprint to develop. All that the mixtape industry lacked was large artist development and marketing budgets of the major labels. But even with marketing the mixtape players were in all likelihood selling far more CDs per marketing dollar spent than the labels, and with that sort of result the artist development budgets might well be there sooner than later. In other words at least within the world of hip hop the mixtape industry has just about every component they need to replace the traditional music industry completely. If an artist can make as much or more money on the mixtape circuit why bother signing with a major label at all? Given how much more vital and exciting mixtape music is compared to the overproduced major label product it'd probably be a good thing. Of course a more likely result is probably closer to a semihostile merger/takeover than a slaughtering, but no wonder the RIAA is scared of the very mixtape DJs who are threatening to revitalize the world of music. The recording industry has lost everything on the cultural and artist side of things, all they have left is the money and lawyers to bully the real competition; at the expense of just about everyone else out there no less.Posted by Abe at January 20, 2007 12:43 AM