Record Label Exec Predicts Industry Trends

Island Def Jam executive Steve Gawley gave an insider’s account of the changing strategy of record companies to a packed lecture hall at Harvard Law School (HLS) Friday.

Gawley, an HLS graduate, focused his talk on the highly publicized all-in-one contracts of big-name stars such as Madonna and Jay-Z.

He said that despite the threat of music piracy to CD sales, the music industry continues to thrive with profitable tours and merchandising.

“Music has never been more popular,” said Gawley, adding that he is not convinced by claims of the record industry’s imminent demise. “The music industry will survive, but in what form?”

As consumer spending shifts from albums to live shows, Gawley said, celebrities like Jay-Z have left their record labels in favor of all-inclusive contracts with concert promoters such as LiveNation.

These promoters purchase the rights to an artist’s entire profitable output­—CDs, tours, T-shirts, and even collectible bobblehead dolls—for one lump sum.

Gawley predicts that record companies will ultimately embrace these so-called “360 deals” and will be best equipped for these contracts because of their experience in brand management.

Friday’s talk was hosted by the Harvard Law School Recording Artists Project (RAP), which provides legal services to local artists and hosts lectures on legal issues in the music industry.

According to RAP co-director Ethan B. Schiffres, lawyers will play an important role in the negotiations of these emerging 360 deals.

“Artists’ attorneys will continue to fight to allow more creative and financial control for their clients and will continue to play a role in the creative process of scouting and shopping acts,” Schiffres said.