Tag Archives: ben thompson

Can Jay-Z kill the middlemen?

jay z

It would be impossible to pinpoint the exact moment when celebrities with already-established fan bases began to realize they no longer needed the middlemen media companies on which they’ve historically relied for distribution, so I’ll just settle on July 2000, when Stephen King started releasing chapters of a never-before-seen novel on his personal website. It was called The Plant and had been largely written in the 1980s. The book, ironically enough, takes place in a struggling New York publishing house and details the consequences when its characters reject the manuscript of a crazy person who then sends them a mysterious plant with magical powers. King’s model was simple: He’d publish a chapter once every few weeks. If you downloaded a copy of the chapter, you were expected to mail King $1 to an address he provided on his website. I remember, as a 16-year-old, visiting his site every day to check whether a new chapter had dropped, and then mailing an envelope with a single dollar bill to King’s P.O. box.

Today, self-publishing is a rapid growth industry, one that has steadily gained mainstream acceptance, but back then such a move was unheard of. Did this spell the end of New York publishing as we knew it? As Stephen J. Dubner (of later Freakonomics fame) wrote in a New York Times profile of King:

Despite the novel’s plot — a writer sends a man-eating plant to a publishing house that rejected his manuscript — Big Publishing did its best to appear unruffled. ”I don’t feel particularly threatened,” said Susan Moldow, the publisher of Scribner, King’s offline publishing house. The literary agent Mort Janklow told a reporter, ”That’s a fellow sitting up in Maine having fun, but it’s not a way to run a business.”

I remember reading a (since-deleted) note King published to his website claiming that, all in all, the experiment brought in about $600,000 in revenue. Sure, this was less money than he’d make from a standard book advance, but it wasn’t bad considering it was released before the invention of Kickstarter, back when the internet population was minuscule in comparison to what it is today. Imagine if King were to repeat the experiment today, armed with the distribution and payment services from Amazon, the Barnes and Noble Nook, and Apple’s iBooks? Something tells me his print publisher would be much less sanguine in regard to his decision.

Over the next decade, famous artists would occasionally dip their toes into the self-distribution arena. In 2007, Radiohead released its album, In Rainbows, under a “pay-as-you-want” model. According to Wired, it netted the band about $3 million. In 2011, the comedian Louis CK released a stand-up special on his website for $5, and it raked in more than $1 million. “My goal is that I can reach the point where when I sell anything, be it videos, CDs or tickets to my tours, I’ll do it here and I’ll continue to follow the model of keeping my price as far down as possible, not overmarketing to you, keeping as few people between you and me as possible in the transaction,” he wrote on his website.

Every time a celebrity experiments with the self-distribution route, we see a wealth of think pieces about what this means for the future of content. But while those cheering on the demise of traditional media might have found such experiments heartening, they’ve been largely anecdotal, and we never quite knew whether these celebrities’ successes were in large part reliant on the novelty of the endeavor.

It’s only within the last year that we’ve seen a vast acceleration of this process, whereby celebrities have increased their leverage by peeling away the middlemen to such a degree that we can truly begin wondering if the landscape is forever changed. The New York Times recently profiled the Player’s Tribune, a site owned and operated by former pro baseball player Derek Jeter. After years of rising tension between sports journalists and the stars they cover, the Player’s Tribune offers a vehicle through which athletes can bypass the traditional press completely and speak directly to the fans.

And now we have the (re)launch of Tidal, a premium music subscription service (a la Spotify) that was purchased by Jay-Z and is notable not only because it’s owned by a music celebrity, but also because more than a dozen other top stars have retained a stake in the company. The move followed Taylor Swift’s own departure from Spotify, and it represents a much larger shift in power than a single band launching a pay-as-you-wish album.

It’s my belief that this represents the next stage in what’s been commonly called the “great unbundling.” Typically that term has been used to describe trends in the cable and newspaper industry, where subscribers have “cut the cord” with these major bundlers of content and moved toward more niche products that better fulfill their needs. But even when a cable subscriber cuts the cord from a major corporation like Comcast, he’s simply moving to a much smaller corporation like Netflix. A middleman still exists, even if it’s a much more efficient and cost-effective middleman.


But what Stephen King’s experiment taught us was that if you’ve already benefited from the outsized exposure that delivers you millions of fans, you can then bypass the entire media apparatus completely and sell directly to the consumer. In 2014, Ben Thompson wrote about the smiling curve, with publishers existing on the lower end of the curve (representing their decreasing value) whereas the writers/artists and the distribution technology (Facebook, Twitter, YouTube) both exist on the high ends. What this next stage of unbundling represents is the elimination of the publishers completely so that the curve becomes a straight line between two points.

The question now is what this means for the content itself. It’s not like I’m the first person who has contemplated what happens when the New York Times’s star journalists realize they no longer need the Times and split off to form their own news destinations. Defenders for the traditional system argue that these middlemen institutions provide a vital filter for quality and accuracy. A disintegration of the media company is a disintegration in journalist standards. At the same time, every journalist has experienced the unnecessary changes of an overzealous editor, and every music, television, and film artist has dealt with the soul-crushing compromises forced upon them by the studios to which they’re beholden. Given that the stars on which these studios have traditionally relied are increasingly concluding that these compromises are no longer needed when they control the means for distribution, perhaps we should stop asking what value the middleman adds to the equation, but instead ask how the middleman can continue to put food on the table in a world where he’s utterly obsolete.


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Simon Owens is a tech and media journalist living in Washington, DC. Follow him on TwitterFacebook, or LinkedIn. Email him at simonowens@gmail.com. For a full bio, go here.

Image via Style Bistro