When James Vickery, a 24-year-old R&B singer from London, went viral on YouTube, he quickly landed record-deal offers from two major labels. But instead, he decided to sign his first deal with a relative newcomer to the record-label business: artist manager Jake Udell, who isn't going to manage Vickery at all.
"As a management team, they've got a certain sense of innovativeness and creativity that I don't think you get with a lot of labels," says Vickery, who in November became the first act to sign only to Udell's Th3rd Brain label, rather than its management arm, whose clients include ZHU and Gallant.
As streaming's healthy growth pumps money into the recorded-music business, Udell is one of an array of artist managers launching their own independent record companies or joint ventures and, in some cases, moving away from traditional management deals altogether. Scooter Braun -- whose management clients include Justin Bieber, Ariana Grande and Kanye West -- is now signing new artists to his Schoolboy Records label, for example, rather than managing their entire day-to-day businesses, sources tell Billboard, though some of the new indie-label deals managers are signing still include a share of touring, merchandise and other revenue streams.
Kei Henderson, longtime co-manager of rapper 21 Savage, recently joined artist managers Barry Johnson and Zekiel Nicholson to start the management/label/publisher Since the 80s, a joint venture with Motown/Capitol. The three said they did so to be compensated for the work they were already doing. Before 21 Savage signed to Epic Records in 2017, "our artist was independent for a majority of his career. We were the label," says Henderson. "I realized how much I was doing on my own, everything from merch design, web design, staffing a team [and] hiring radio."
There are a number of advantages to signing acts to label deals rather than pure management agreements going into 2019. One is job security. Indie-Pop Music founders Joshua Andriano, Benjamin Willis and Carlo Fox have worked as managers for a decade, but say they're now using their in-house label -- and their year-old joint venture with Atlantic -- to secure long-term streaming revenue even after label signees move on, something management deals don't necessarily guarantee.
"When you build a catalog of recorded music, that's something that continues to have value even after the relationship with the artist ends," says Fox. "As the streaming platforms became very powerful, we got to see artists and people like ourselves be able to take back the power of making money on the masters side."
Giving artists honest, constructive criticism can also be easier as a label head rather than a manager, some say -- given some managers' fear of being more easily fired and their closer entanglements in their artists' lives -- while in-house labels allow managers to work with more artists than they could otherwise.
"When we found James [Vickery], he already had a great manager, so there wouldn't have been a way to partner with him unless we had a record-label division," says Udell.
Fueling the labels is new funding. Spotify has offered advances to managers willing to license their clients' music directly to its platform, incentivizing managers to create their own labels. Meanwhile, alternative financing firm 23 Capital opened two U.S. offices in 2018, and offers lending "across multiple asset classes, including highly visible and predictable IP cash flows," such as music royalties.
Still, challenges abound for indie operators without scale. Being self-funded is "gruesome," says manager Ty Baisden, who runs his client Brent Faiyaz's Lost Kids label venture through Stem, software that handles distribution and payments. "I [have] planned to go to radio at [a certain time], but then couldn't go to radio because the budget didn't hit the way that it was supposed to hit. Or we did go to radio and now it's time to follow up with another record, but that follow-up is during the same month that we've got to tour." Splitting time between new label clients and those they've been managing for years is also tricky. "Kei has a superstar in 21 Savage, and maintaining that energy and being able to put some time and some thought into something else [is hard]," says Since The 80s' Nicholson.
And while managers who have joint ventures with major labels have more resources, they still must compete for space on radio's narrow playlists with projects that their major-label partners own in full. But Vickery's not worried: "The most important thing is finding someone who is as passionate about the project as you and shares that with the whole team," says Vickery.