What Is My Incentive
I am not sure if I understand KRS One’s argument completely, but I definitely agree that the major labels have dealt a crushing blow to hip hop. How did we get to a point where you only hear 5 different songs on the radio? How did we get to a point where you can only rap about money, drugs, and sex in order to get attention from a major record label? Well if we only look to how incentives are currently aligned, we can answer SOME of these questions.
As a record label (or any company for that matter) grows, more often than not they raise equity capital (money) to finance growth. When that happens there is a 3rd party (the shareholder) that has “equity” or an ownership stake in the company. From that moment on, the companies’ obligation is to the shareholders, not hip hop, or anything else. Investors want the highest return possible so they expect management to make decisions based on maximizing the money that they put back into their pocket.
Unfortunately, maximizing profit and preserving the creativity & diversity of mainstream hip hop has not proven to be completely correlated (yet). Record executives don’t feel they have a responsibility to hip hop. Their responsibility is to their shareholders and to the new Mercedes they want to buy.
How can we change this? Support independent companies that are dedicated to making good music (i.e. Funk Volume…haha). There are a lot of companies that are designing new business models that strive to preserve the creativity and originality of hip hop, and be profitable as well. At the same time the owners of these smaller companies need to be mindful of how they align incentives as they grow and do business with third parties.
Turn it up,
Dame
dame@myfunkvolume.com
