Jay-Z's rise to success is nothing but remarkable. In June, he became the first ever hip-hop billionaire artist ever.
There is one thing in particular that Jay-Z did early on in his career that he later called a “genius” move.
Early on when he was getting his start, Jay and his camp of Damon Dash & Kareem Burke went to all the record labels hunting down a record deal. The early 90s were a tough period to break into the music business and get a record deal.
There was no social media, no streaming platforms for you to upload, and the only way to get a buzz is to get the streets talking.
Your path to music distribution was heavily gated. Music was only sold in record stores and having the access to gain that distribution was a battle.
All the record labels shut them down. Jay was quoted in Forbes saying “The genius thing that we did was we didn’t give up. We used that ‘what do they know’ approach. We didn’t give up at that point.”
After being turned down by all the labels, Jay-Z, Dame Dash, and Burke started their own label, called Roc-A-Fella records, in 1994.
Jay released his debut album called ‘Reasonable Doubt’ through his own label in 1996. The sales were slow in the beginning, but the album caught the attention of label executives.
“I think that was the genius thing we did. We started selling our own CDs and built our own buzz,” Carter said in 2010. “Then, the record companies came back to us.”
Def Jam (a label that has now worked with artists like Justin Bieber and Kanye West) tried to offer Carter a deal at the time, according to The Wall Street Journal.
In response, Carter replied, “I own the company I rap for.”
“We had a different negotiation, it wasn’t the same artist-label relationship,” Carter said at the 2010 summit. “Now, we retained ownership in our own company, and it was the best thing for us.”
Instead of signing with Def Jam, Jay-Z and his partners sold Roc-A-Fella records to them. Def Jam bought the label in 1997 for $1.5 million and bought the remaining half for $10 million according to MTV.
In 2008, Jay founded his entertainment firm, Roc Nation, as part of a venture with Live Nation. Roc Nation represents talent in music and in sports. Star talent include NBA star Kevin Durant, and Rihanna. Jay-Z is still the CEO of Roc Nation today.
His ventures that catapulted him into billionaire status are his ownership of D’usse, a cognac he owns with Bacardi; Armand de Brignac, a champagne, and Tidal, a music streaming company. He also has a stake in Uber that Forbes estimates is worth $70 million in June.
Takeaway: There is so much opportunity today for artists to forge their own lane and build an audience online. The need for a record label isn’t as important as it was 25 years ago. Artists now have the power to go independent, distribute their music through their own channels and keep all of their earnings.
Jay-Z was a trailblazer in going the independent route. Technology wasn’t as prevalent as it is today for independence to catch steam in the early 90s as it has over the past 5 years. With the technology we have today, we are seeing more independent artists because we have access to them and information.