The software maker, with investors including Alphabet, Apple and Andreessen Horowitz, allows musicians to upload to streaming services.
Stick to your knitting.
It’s the warm advice you expect from Grandmom, not Jimmy Iovine, the famous record label entrepreneur and one of the wealthiest men in Hollywood. Yet, UnitedMasters CEO Steve Stoute lives by Iovine’s words and explains it like this: Go to Grandmom’s house on a Sunday afternoon and catch her starting to knit — return weeks later, it’s likely you’ll discover a masterpiece or at least something that will keep you warm. But knitting is delicate and takes attention to detail and the ability to avoid distraction.
“That’s what entrepreneurs have to do when they build their business,” Stoute tells Forbes. If you take your eyes off the goal and start to chase “speed things” — such as social media attention — “because you don’t want to miss out, then you’re not knitting anymore. You’re looking.”
Hip-hop is celebrating 50 years of knitting legendary music and replacing rock-and-roll as the top genre. Along the way, the culture produced entrepreneurs like Def Jam Records cofounder Russell Simmons, Andre “Dr. Dre” Young and Shawn “Jay-Z” Carter.
Stoute, 53, wants to replicate their success and build on his own.
Have you ever heard the theme song to Fox’s 1992 hip-hop-inspired sitcom, Martin? (If not, here’s the link.) Stoute once represented the song’s creator, Steve Keitt. That sparked his three-decade career in music and marketing, including time at Interscope Records and Sony Music, managing stars Kid ‘n Play, Mary J. Blige and Nas. In 2004, Stoute started the creative agency Translation, sold the venture three years later for nearly $15 million, then repurchased the company.
In 2017, Stoute launched UnitedMasters, a software maker that he calls “a record label in your pocket.” It allows artists to upload music that gets distributed to streaming platforms Spotify, Apple Music and YouTube. UnitedMasters receives a percentage of streaming royalties while artists keep rights to original recordings, or “masters.” Competitors in the digital record-label sector include Brooklyn-based TuneCore, owned by French company Believe. In 2020, TuneCore reported it was paying artists $1.2 million per day.
UnitedMasters has raised a total of $170 million and employs over 200 people. The company says it has over 1.9 million independent artists using the platform, and investors include Google’s parent company, Alphabet, Andreessen Horowitz and Apple.
Stoute has said that UnitedMasters would break even this year. However, the company didn’t elaborate when asked specifically about revenue and how much it’s paid artists.
“We’re walking and about to run,” says Stoute. “We’ve learned a lot. We’ve had a lot of successes and failures.”
UnitedMasters does have a mobile app for artists to upload music and says it collects consumption data, allowing individuals to market to potential superfans. However, previous complaints in the Apple store comment sections indicate errors in uploading music and lack of payment transparency. Stoute suggests the issues are resolved after UnitedMasters spent $100 million on technology infrastructure and hiring engineers.
“The pressure is on,” Stoute says. He says marketplace conditions favor UnitedMasters, as up-and-coming stars remain independent and avoid the tangle of record contracts. “The adoption of being independent and owning your masters is set,” says Stoute. “That’s now the new normal.”
Watch the video to hear Stoute’s vision for UnitedMasters.
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