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The Potential Economics of Drake Going Direct with Spotify or Apple

The Potential Economics of Drake Going Direct with Spotify or Apple

 

God may have a plan, but so it seems does Drake.

Many music industry observers think Drake will be leaving the Young Money/Cash Money label, which is distributed through Universal Music Group’s Republic Records. With his latest album release — the 25-track “Scorpion” — Drake is at the end of his contractual obligations to Young Money/Cash Money.

In fact, on the song, “Is There More,” he raps: “Soon as this album drop I’m out of the deal.”

If he does exit the label, Drake could be raking in some pretty good money as a so-called “free agent.” He has several options open to him, especially since he has been incredibly successful thus far.

“Scorpion,” released on June 29, “is already well on its way to being the biggest debut of the year, with an estimated haul of 749,000 album equivalent units,” Variety reported. “That includes some 770 million total U.S. streams, dwarfing the previous record-holder, rapper Post Malone, who logged 431 million streams of his latest album ‘Beerbongs & Bentleys’ back in April (worldwide, Drake made history surpassing 1 billion streams in a week).”

According to some accounts, Drake could pull in $20 million per album.

“According to high-ranking label executives, Drake could easily command a per-album advance of $15 million to $20 million. Historically, only superstar artists like Whitney Houston ($100 million for five albums, signed in 2001) and, Bruce Springsteen ($150 million for seven albums in 2005) have received such sums. In hip hop, Lil Wayne, also signed to Cash Money, has gotten top dollar–$150 million four albums in 2012. Drake, who has his own label, OVO, could also go through that imprint and its distribution partnership with Warner Bros. Records,” Variety reported.


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The ball is in Drake’s court.

“Drake has the bargaining power to negotiate a net-profit split with the best deal terms and a humongous advance up front,” Music attorney Dina LaPolt told Variety. The LaPolt Law firm represents Britney Spears and Aerosmith’s Steven Tyler,

Drake could opt out of signing with the same record company or a new one, and go a different route. He could sign a deal directly with a streaming service like Spotify or Apple Music. Others artists have, like Frank Ocean did with his 2016 album “Blonde.” He inked an exclusive deal with Apple Music.

“Drake’s deal would not have to be exclusive beyond a given window–he could cut separate arrangements with other digital service providers–and pact with a label of his choosing for physical product. Drake’s stature could also allow him to make a more favorable deal than most artists, possibly for as much as 70 percent of revenue,” Variety reported.

Event backing is another way Drake could go.

“The last noteworthy signings to Live Nation include Jay-Z in 2008 ($150 million for a 10-year deal) and Justin Timberlake in 2013. In 2017, Drake earned a per-show gross of $1.1 million based on average sales of 13,303 tickets, according to Pollstar. In May, he announced an expansive tour with Migos,” Variety reported.

Drake
Drake poses in the press room with his 13 awards at the Billboard Music Awards at the T-Mobile Arena on Sunday, May 21, 2017, in Las Vegas. Drake won for Top Artist, Top Male Artist, Top Billboard 200 Album for “Views”, Top Billboard 200 Artist, Top Hot 100 Artist, Top Song Sales Artist, Top Steaming Songs Artist, Top Rap Artist, Top Rap Tour, Top Rap Album for “Views”, Top Streaming Song (Audio) for “One Dance”, Top R&B Song for “One Dance”, and Top R&B Collaboration for “One Dance”.(Photo by Richard Shotwell/Invision/AP)