Google Invests $70 Million to Destroy the Major Label Ecosystem

With a strong financial push from Google, United Masters may do away with record labels entirely.

According to Troy Carter, Spotify’s Global Head of Music, the music industry (and especially major labels) have unfairly harmed fans.  To listen to one or two tracks from their favorite artists, fans would have to purchase “highly priced albums.”

“We screwed over consumers for years.”

To maintain his artistic freedom, Chance the Rapper didn’t sign to a label.  Instead, he made his music available on streaming platforms like SoundCloud.  The decision has proven a successful one as the rapper is now worth $9 million.

So, who needs record labels?  Actually, a lot of successful artists.  And instead of cratering, the big three are now thriving, thanks to smart bets on streaming.

That’s great for labels, but not so great for Google.  After all, recording labels represent a major complication for Google Search and YouTube, both of which thrive when copyright is unrestricted.  Accordingly, Google now seems ready to do away with them entirely.

Say hello to United Masters.

Former Interscope Records president Steve Stoute quietly managed to raise $70 million from Google’s parent company, Alphabet.  20th Century Fox and Andreessen Horowitz also jumped in.  Soon thereafter, Stoute unveiled United Masters.

With a 40-person team, the San Francisco-based venture will help up-and-coming artists distribute their music on the internet.  Music will appear on Spotify, YouTube, and SoundCloud, among other streaming platforms.

The startup company will reportedly pay “the lowest price for distribution” to help artists reach fans.  In some cases, United Masters will “get a small percentage of the money the artists make when theirs songs are streamed.”

Speaking about his vision for the company, Steven Stoute said,

“We want to build a business that helps musicians, which is my passion, and also helps brands find a much more specific way of investing their money in the category of music.”

Stoute added that musicians will “own the rights to their music.”

Moreover, United Masters will provide tools to help brands “target certain types of music fans.”  For example, an automaker could get an ad in front of a certain demographic.  The startup company would look at the data and find who’s interested in a car.  Then, they would serve audiences “online ads that feature a song by that particular artist.”

Brands are spending hundreds of millions of dollars trying to get to young people by using music as the vehicle.  Being able to use music data and making it actionable so they can target and speak to these fans, that’s super important.

According to Stoute, Google’s Larry Page pushed Alphabet to lead United Masters’ $70 million Series A funding round.

People don’t know Larry was actually a drummer. He has a deep sensitivity for the artist.

Page, added Stoute, was stunned that artists couldn’t “keep track of the fans that bring in the most cash and retarget them.”


Featured image by United Masters (YouTube screengrab)

12 Responses

  1. Remi Swierczek

    Music as a fertilizer on digital advertising and streaming farms boutique style!

    Larry Page, Eddy Cue and his monks are too DRUNK with advertising and iPone cash to even think that MUSIC IS better and bigger digital CROP than digital ads or Steve Jobs propelled iPhone.

  2. Blobbo

    I won’t get within a million miles of ANY company that has ANY direct association with GOOGLE and YOUTUBE. As a creator, I can’t say F U to these two organizations loudly enough. These two have not just drive the value of music to zero, they have drive the value of ALL creative content to ZERO. Go straight to HELL United masters. Sounds like a great name for a huge swindle. Do not get anywhere near these people!

    • Remi Swierczek

      Larry Page, Susan Wojcicki, Eddy Cue, Daniel Ek the MASTER MONKS of digital medieval in cooperation with UNITED MASTERS!

      When the MASTER KNIGHT, Sir Lucian Grainge plans to wake up, UNITE with mega stars, and START the overdue music war of DIGITAL MEDIEVAL?

  3. Leon

    What a gross joke. Disturbed. The music that plays behind ads, tv, movies is not dynamic enough to stand on its own. Why should I invest a hundred thou in an album to just give it away? Whats the endgame? No one needs my fucking tshirt for shits sake. The music is the value.

    Albums are the creative vision of an artist. Plenty of shite bands made lousy albums but got lucky with one song.
    And if you didn’t like the album you can just buy your favorite song.

    • Remi Swierczek

      …and that ONE SONG should make at least $20,000,000 in first week after global opening in discovery moment monetization WORLD!

  4. We've Been There Before

    The further devaluation of music. Watch the fox build a hen house.

  5. Steve Jordan

    The only way this streaming consumption based model succeeds is if Google adjusts their royalty rates on streaming through their platforms. Chance The Rapper is one extreme example. There are few artists in the world that reach his level of success without mainstream support and/or financial backing from a brand or major label. Can you name 15? 10? 5? Surely there will be more independent artists rising in the future but financial success won’t be determined by streaming as primary driver under current pay system. There were +50 million songs uploaded to Spotify last year. How many of those artists reached streaming revenue substantial enough to recoup costs of producing and releasing the music? 2%? .005%? Need to learn more about this model but so far the promotion around UnitedMasters seems misleading and overpromising to developing artists.

  6. Irving Mindreader

    Your headline is broken.

    “Google Destroys $70 Million to Invest in the Major Label Ecosystem.”

    There. Fixed it.

  7. Jim

    Google, Alphabet, and Larry Page (who doesn’t give a damn about musicians) can go fuck themselves. Truly.

  8. Nishi

    You guys are stupid losers. No wonder you’re all a bunch of huge failures.