What Jay Z's LIT Method Investment Can Teach Other Artists
Last week, Jay Z's Marcy Venture Partners invested in fitness company LIT Method, which focuses on low impact training. LIT and Jay Z both have partnerships with Puma, where Jay Z is head of basketball operations. It's another example of Jay Z's teaming up with companies that strengthen his interests elsewhere.
The cell phone partnerships. In 2017, Jay Z sold 33% of Tidal to Sprint for $200 million. The deal included a $75M budget to fund exclusive Tidal content. That "exclusive Tidal content" became Jay's 4:44, which dropped five months later. Sprint has vested interest to maximize the success of 4:44. He turned the album into a B2B product.
Jay has done other albums partnerships where he was compensated for exclusivity, like Samsung and Magna Carta Holy Grail. But Sprint is unique because the buyer had equity in a company that Jay was the primary owner and, arguably, one of its most popular content creator.
There's an opportunity for more moves like this in music, even at the non-superstar level.
The decentralized wave. Washington Post's VP of commercial technology Jarrod Dicker wrote a thoughtful essay on how media company operators can shift to a decentralized ownership model. He envisions a world where creators, operators, and consumers can all coexist as co-owners in collectives that are part of the same journey and contribute to it in different ways.
For artists building careers, NFTs have become a model for consumer ownership. But selling one-off NFTs is not a strategy.
A strategy example is if an artist's EP is released everywhere, but ownership in the EP is sold through NFTs. Casual fans can still access the songs on any digital streaming provider, but superfans would now pay a premium, which grants them a share in the song's revenue—both direct and derivative. It's a form of crowdfunding that's more tied to the end product than a typical Kickstarter campaign would be.
Read more about this model, read Dicker's Why Subscribe When You Can Invest?
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