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With the advent of digital music and streaming platforms, recording artists must think outside the box to make a living. With free streaming services taking the lead in how young listeners (legally) consume music, artists have watched their income from music sales shrink substantially. While an artist can see a whole $8 in revenue from the sales of a self-produced CD that sells for $9.99, artist revenue from the $.99 sale of a single song on iTunes is closer to $.09, and artist revenue from a single stream on Spotify is a shockingly low $.00029, according to the First Class Alliance (FCA).
FCA points out that for an artist to make the income equivalent of the Federal Minimum Wage ($1,160/mo.), an artist relying on streaming services such as Spotify must have her songs played a considerable 4,053,110 per month on the platform.
So what’s a new artist that doesn’t have the established success of Taylor Swift or Beyonce to do? Darrell Miller of Fox Rothschild, LLP calls the solution the multi-hyphenate celebrity: artists can diversify their “brand” by doing more than just sing– they can also produce, license their celebrity to retailers, direct, write, or do any number of creative endeavors to make money outside the traditional model. Endorsement agreements have proven especially lucrative for celebrities; rapper 50 Cent famously made $100 million from his endorsement for vitaminwater, which paid him a flat fee plus a 5% equity stake in the company. At the time of the agreement, no one foresaw that the brand would take off with his signature “Formula 50″ flavored vitamin water and that Coca Cola would later purchase the company for billions.
One such licensing arrangement between Iggy Azalea and Steve Madden made headlines last week when the artist tweeted harsh criticisms of the brand’s creative direction. The pair collaborated on a shoe collection (available here) and Steve Madden, days before customer pre-ordering became available for the collection, posted some unflattering photos to (a now deleted) tumblr. The photos showed models wearing white socks with, in the words of Iggy, “neoprene Jesus sandals.” Iggy, horrified, tweeted rapid-fire about her disgust, saying:
“@SteveMadden kinda ruined the creative direction when u added those gross extra pictures to a random tumbler page I had no part in creating,”
“Everything in a collaboration is supposed to be mutually approved. But Steve madden did the most disgusting photo shoot ever and never even told me about it,”
From the perspective of an entertainment lawyer, one has to wonder whether Ms. Azalea has as much creative control under the endorsement agreement as she believes. Though we can’t see the agreement itself—artists, especially new artists like Iggy—often surrender much of their control over a product during licensing negotiations. Further, there are likely provisions in the agreement that would find Iggy’s bad publicity for the brand on Twitter as a breach of her role as a brand promoter or ambassador. Such a breach could affect her compensation, royalties, or future projects with the brand.
Iggy’s deletion of the scalding tweets and her response on Instagram are telling. The artist posted a photo of herself in the shoes with a paragraph-long (the pop star equivalent of the Odyssey) apology, blaming her rant on being “passionate and emotional” about the project and reassuring fans that she “love[s] Steve Madden as an individual and as a company.” Iggy wrapped up her apology by subtly mentioning she has three more seasons that she’s making with the brand and that she’s “going to enjoy it.” Since the apology, 5 out of 6 of her recent Instagram photos have been advertisements for the brand where she encourages fans to buy the shoes.
Though we may never get to read the endorsement agreement between Iggy and Steve Madden, it is likely that the artist will be much less vocal on social media next time she disagrees with the brand’s artistic direction.
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