When I think of Jay-Z’s best lyrics, I can’t imagine not mentioning the line “I’m not a businessman, I’m a business, man”, from his guest appearance on Kanye West’s 2005 “Diamonds of Sierra Leone” remix. As catchy as these bars are, they double as an accurate way to describe Jay-Z’s novel approach to the music industry. He is the former president of Def Jam Recordings, co-founder of Roc-a-Fella Records, and founder of entertainment company Roc Nation. Although in recent years he has received a great deal of attention for his ownership of music streaming service Tidal, one of the more interesting aspects of Jay-Z’s business ventures is his approach to music sales. Particularly with respect to his last three solo albums, Jay-Z synthesizes changes in music industry rules as well as cultural trends to aid in increasing album sales. It works exceptionally well for him; all of Jay-Z’s solo and collaborative albums, 17 in total, are certified Platinum by the Recording Industry Association of America (RIAA). Leaders who observe Jay-Z’s business tactics are getting a lesson in adaptive leadership.
Adaptive leadership is a leadership framework that helps individuals and organizations adapt and thrive in challenging environments. Well known adaptive leaders include Jeff Bezos, Luke Walton, and of course Jay-Z. Bezos is the founder of Amazon, which began as an online bookstore and is now the largest internet based retailer in the world. Luke Walton was an assistant coach with the Golden State Warriors during the 2016 season when head coach Steve Kerr had to take a leave of absence for health reasons. Walton was named the interim head coach and guided the Warriors to the best record in NBA history, 73-9. Jay-Z acquired Tidal in March 2015, but the company struggled much of his first year of ownership. Due to exclusive streaming rights to the work of artists such as Beyonce (Lemonade), Kanye West (The Life of Pablo), and Jay-Z himself (4:44), Tidal had a resurgent 2016 and 2017. Multiple times throughout this time period Tidal arose as the number one app on the Apple’s App Store. Although Jay-Z demonstrates adaptive leadership in multiple aspects of his professional life, it is particularly interesting to view the application of his leadership style to recent album sales.
Blueprint 3, Jay-Z’s eleventh studio album, was released on September 8, 2009. Top songs from the album include “Empire State of Mind” featuring Alicia Keys and “Run This Town” featuring Rihanna and Kanye West. At the time of its release album leaks, (the unauthorized early release of an album) were rising in occurrence. Album leaks advantage the fan through free content but severely harm the record label, artist, and producers by decreasing potential sales. Some people who get their hands on a leak will not buy the album upon official release because they already have it. This decrease in sales directly affects royalties that can be claimed on the album, financially disadvantaging those involved with its creation. Jay-Z adapted to the environment surrounding music releases by manipulating the financial tragedy of an album leak to his advantage, intentionally releasing his album as a preview. Jay-Z effectively used a controlled album leak to bring more attention to Blueprint 3, leading to Platinum level sales returns.
Magna Carta Holy Grail, Jay-Z’s twelfth studio album, was made exclusively available to Samsung customers on July 4, 2013, 5tand released to the general public four days later. Hits from the album include “Holy Grail” featuring Justin Timberlake and “Tom Ford”. Samsung bought a million copies of the album, at five dollars a piece, to reserve for the first million Samsung Galaxy SIII, Galaxy S4 and Galaxy Note II users to use the Magna Carta app. This deal made Magna Carta a platinum album before its official release. Although Billboard did not consider these initial sales in their album rankings, Magna Carta still debuted with a number one ranking on their charts.
4:44, Jay-Z’s thirteenth studio album, was released June 30, 2017. Notable songs include “The Life of OJ” and “4:44”, which appears to be an apology in response to Beyonce’s famed 2016 Lemonade album, which exposed Jay-Z’s infidelity. Upon its release, 4:44 was exclusively available to Sprint and Tidal customers. In January 2017, Jay-Z sold 33% of Tidal to Sprint, which explains the exclusive release of 4:44 to shared customers. On July 2 the album was made available to download from Tidal without a subscription, an atypical move considering that record labels, artists, and producers benefit based on sales generated royalties. This move enabled a much larger population to download the album. Due to the 2016 update to RIAA rules to include on-demand audio and video streams and a track sale equivalent in consideration for gold and platinum certification, these free downloads counted toward album sales. The sales equivalent scale is 1,500 on-demand audio and/or video song streams is equal to 10 track sales or 1 album sale.
By enabling 4:44 to be downloaded for free, without a subscription, from Tidal, the opportunity cost for pirating the album was eliminated. Almost ten years earlier, artists sweated at the likely possibility of an album being leaked for free and the financial toll it would bring, and now 4:44 can be downloaded for free and the downloads still count towards RIAA certification. 4:44 earned platinum in only five days, received almost double the first-week album sales of the previously fastest selling album of 2017, Kendrick Lamar’s DAMN. As album sales across the music industry continue to drop and streaming sales rise exponentially, streaming an artist’s work exclusively through a particular streaming service is the economically smartest way forward. Jay-Z is undoubtedly aware of these trends and took full advantage.
In addition to being considered one of the greatest rappers of all time, Jay-Z is one of the top entrepreneurial minds in the music industry. His manipulation of industry regulations, cultural trends, and business deals in order to sell albums keep him on top of the Billboard charts. All leaders can benefit from studying his practices; in order to be the most effective leader of an organization one must stay current with changes and manipulate them for the benefit of the group. The best adaptive leaders combine, skills, perspective, and guided effort in order to achieve excellence. Jay-Z’s success in multiple industries proves the efficacy of adaptive leadership. Considering his success it is no coincidence that Jay-Z is also one of the richest members of the rap world, ranking number two behind Diddy as they both attempt to become rap’s first Billionaires. Jay-Z may have 99 problems, but leadership ain’t one.