Jay-Z’s Deal with Samsung: A Big F-You to the Traditional Music Industry

Jay-Z don’t need the money.  His personal fortune is already somewhere around $500 million.  Add in the estimated $300 million wife Beyonce brings in and you have a pretty formidable power couple.

He was this kind of dosh because at his core, Jay-Z is first and foremost an entrepreneur, an uber-capitalist who likes making deals even more than he likes making music.

Just look at what he’s done for his new album, Magna Carta….Holy Grail.  As part of a larger $20 million deal with Samsung and his company, Roc Nation, one million copies of the album were given away free at 12:01am this morning to owners of new Samsung Galaxy S III and Galaxy 4S phones and Galaxy Note II tablets.  They can grab the album through a free app available in the Google Play store.  Everyone else will have to wait another three days to buy the album.

Some observations:

1.  This is a super-shrewed marketing move that guarantees Jay-Z exposure and revenue.  Even if no one amongst those million downloaders ever listens to Magna Carta, Jay-Z gets paid.

2.  Because these million albums are free, they will NOT count towards chart positions.  There was much scrambling to re-write the chart rules on both sides of the Atlantic so that Jay-Z couldn’t have Samsung buy the album’s way to #1.  Jay-Z will, however, immediately be awarded a platinum album for moving one million copies of a record.

3.  Jay-Z’s deal pays him WAY more than he’d get through iTunes.  I mean, do the math.  One million downloads for $5 million.  That’s a royalty rate of five bucks per unit, paid in advance.

Yes, artists have given away records for free before (Prince with The Daily Mail, Radiohead, Nine Inch Nails) and app-based album releases are nothing new (cf. Bjork and Biophilia) but doing it the Jay-Z way is definitely different.

What does this mean for the future of music distribution?  More deals with corporations like mobile phone companies?  Will this cause legal issues since only Samsung owners will be able to have access to the record?  

Read more at Business Insider.

Alan Cross

is an internationally known broadcaster, interviewer, writer, consultant, blogger and speaker. In his 40+ years in the music business, Alan has interviewed the biggest names in rock, from David Bowie and U2 to Pearl Jam and the Foo Fighters. He’s also known as a musicologist and documentarian through programs like The Ongoing History of New Music.

3 thoughts on “Jay-Z’s Deal with Samsung: A Big F-You to the Traditional Music Industry

  • July 4, 2013 at 3:05 pm
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    In the long run, I don;t see this being sustainable. Samsung is getting a lot of publicity but how many users will download it versus how many Jay-Z fans have Samsung technology?

    Long term, I suspect that companies will recognize much less bang for the buck. Yes Jay-Z made out like a bandit here but this doesn't work for non-esstablished artists (at least not for that kind of money)and there are WAY more bands than there are Tech gadgets/companies.

    Will this sort of promotion happen again? probably. Will i be the new way the music business functions? I don;t think so.

    Reply
  • July 4, 2013 at 11:59 pm
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    hmmm i had a rap phase back in high school (late 90s early 2000s) and Jay-Z was one of my favourites, I always liked The Blueprint album. Never paid attention to Jay-Z probably in the last 8 to 10 years, this ploy probably will make me listen to the new album just cause it is at my finger tips.

    Reply
  • July 8, 2013 at 2:11 pm
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    I don't see how this gets Samsung anything other than a small ability to say, hey, we did something with Jay-Z.

    If they had said, "buy" a new phone and you'll get the album for free, I can see that, but they are giving it to people that already own the product. Or did I miss something here?

    –Pete

    Reply

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