Are Major Labels Cooling On Viral Artists?

After years of paying big for songs going viral on social media, labels' strategies may be shifting.

BY ELIAS LEIGHT

On Feb. 4, the rapper Superstar Pride posted a 19-second clip to TikTok of a somber song called “Painting Pictures.” He was basically unknown — with less than 1,000 on-demand streams in the U.S. in January, according to Luminate — but TikTok is famous for its ability to help newcomers attract eyeballs. The unadorned clip, just a rapper and a microphone marooned on a tennis court, quickly passed 1 million views on the app, and the week ending Feb. 9, on-demand streams of “Painting Pictures” leapt from negligible to over 130,000. Pride posted another popular video eight days later; the following week, on-demand streams ballooned to more than 4 million.

“There was this crazy conversion to streaming,” says one senior label executive. “[Pride] made the rounds; every label was talking to him.” But in the end, the rapper announced that he was staying with United Masters, which initially distributed the single.

Some artists prefer the independent route. “[Superstar Pride’s success] is just another example of an independent artist finding tremendous success without the need to give up his rights… to a record company,” United Masters’ Steve Stoute told Billboard in March. (The rapper’s path was also complicated by the fact that the Faith Evans sample underpinning “Painting Pictures” wasn’t cleared initially.) Still, some in the music industry saw this episode as a demonstration of the major labels’ more cautious approach to viral phenomena. 

“Three or four years ago, if that bidding war had happened, it undoubtedly would have come to fruition,” the senior executive says — somebody would have made the rapper an offer that was too big to turn down. In 2023, however, “some labels are disillusioned with their viral pickups,” according to one music attorney who spoke on the condition of anonymity. “There have been a lot of losses. Buyers are going to be a little more deliberate.”

For several years, the mainstream music industry appeared fixated on signing acts with viral momentum. During interviews, executives described the process of combing through heaps of song and artist data from streaming and social media platforms, especially TikTok, identifying tracks with hockey stick graphs — numbers racing up and to the right — and scurrying to lock in a deal before their competitors. Privately, some expressed surprise that their job seemed similar to stock trading, while others criticized this signing strategy as basically buying up market share but foregoing the tough work of artist development.

Labels have been aware of social media’s power to drive wild surges of interest in songs for more than a decade — at least since Psy‘s “Gangnam Style” in 2012 and Baauer‘s “Harlem Shake” in 2013, if not before. In the years since, social media and streaming platforms have become far more potent, and labels invested heavily in honing their research, hiring data whizzes to develop tools that scrape these platforms top to bottom.

Every big label had access to the same pool of information from the social media partners, more or less, so speedy outreach to artists was essential. Even so, bidding wars were common. Especially in 2019, 2020 and 2021, “it felt like every single day another artist signed a deal that was a gazillion dollars,” says another music industry lawyer who requested anonymity to speak candidly. And in the mad rush to beat out the next label, the song or artist being signed sometimes seemed secondary to the data. “People are spending huge on sound effect records,” one senior executive grumbled in 2020. 

The checks were big, but so were some of the hits — none more so than Lil Nas X’s “Old Town Road,” an early beneficiary of a TikTok craze that went on to become the longest-running No. 1 in Billboard Hot 100 history. Still, even with a massive supply of data, forecasting the future remained notoriously difficult. Months of robust streaming for one single may say nothing about the fate of the artist’s follow-up. 

Despite artists’ and labels’ best efforts, it’s now standard to hear that engineering a trend on TikTok is about as likely as buying the winning lottery ticket from the local corner store. And it’s a lottery that appears to have diminishing returns: Viral trends in 2022 did not translate to streaming platforms as effectively as they did in 2020. “All you can do is drop music consistently — and pray,” says another senior executive at a major.

Taking these factors into account, entertainment attorneys say the industry is  starting to look more carefully at viral phenomena. “There’s a lot of viral stuff now that doesn’t get as much attention as it did a year or year-and-a-half ago,” says Leon Morabia, an associate at Mark Music and Media Law. “A lot of things that should’ve been signed to single deals, labels signed to record deals, and they ended up having to replicate the success and it was virtually impossible. And so they ended up with all these artists on their rosters that they had to service that weren’t actually more than a song. It was bad.”

“The market has been correcting,” adds Helen Yu, founder of the music law firm Yu Leseberg. Labels “are backing off in terms of just chasing a number. At some point, it’s coming back to recognition of talent.”

That could be why music lawyers are noticing a new set of behaviors. “For a while there was a lot of signing going on sight unseen,” Morabia says. (The pandemic temporarily made this a necessity, but the need for speed meant the practice continued.) “I see a return to wanting to meet artists in person,” Morabia continues. “I’m hearing questions — ‘Can we meet the kid?’ ‘Can you send us the unreleased music?’ — much more than I did before.”

John Frankenheimer, chair of the music industry practice at Loeb & Loeb, is a veteran lawyer who jokes he’s “been doing this since dinosaurs ruled the earth.” “Opportunities like this always create a frenzy because people are curious to see how they can grasp the latest lightning rod,” he says. “Then everybody has to take a deep breath and start looking at this stuff a little more closely.”

BILLBOARD MAGAZINE: Are Major Labels Cooling On Viral Artists?

Top Lawyers: Helen Yu Of Yu Leseberg On The 5 Things You Need To Become A Top Lawyer In Your Specific Field of Law

Thank you so much for joining us in this interview series. Before we dig in, our readers would love to get to know you a bit more. What is the “backstory” that brought you to this career path in Law? Did you want to be an attorney “when you grew up”?

I always loved music and I started as a musician. I played keyboards and I was in a band in high school. We recorded an EP at Westlake Studios on Beverly Blvd in Los Angeles. We would play local high school parties and it was a ton of fun.

I got my first professional introduction to the music business when I was 15. My best friend’s father helped me land an internship at a record company not far from where I grew up at a label called Enigma Records. It was a great way to start. I didn’t even drive yet, I was 15. My mom would drop me off. That’s how I started at this very cool indie label. It was run by two brothers, Bill and Wes Hein. This was pre-Silicon Valley, but Enigma Records was set up in a large warehouse space with a ton of desks around the room for all their departments (now this was the 1980’s and no one worked in offices with that setup). They had all the departments there — radio, retail, distribution and finance. This was my first introduction to how a record company worked. I did whatever they needed me to do, answer phones, box stuff up, called retail record stores. Back then, labels did data gathering by calling retailers to find out what records were selling. The internet didn’t exist, so it was super old school.

In high school, I wanted to be a musician or in the creative field somehow. My family really discouraged it as my parents wanted me to be a lawyer, as that is something they understood, not being a musician.

When I started taking driving lessons — it’s funny, you never know where the inspiration is going to come from — I was learning how to finally drive so my mom wouldn’t have to continue to drive me around. This older hippie gentleman was my instructor, Ian, and he asked me ‘What do you want to be when you grow up?’ I told him I wanted to be in a band, but my parents wanted me to be a lawyer. And he said, ‘Well you know, there’s lawyers that do that.’ And I said ‘Yeah, you’re right, there’s lawyers that come in! They handle the record company’s legal business. I think that really was it, it was a way to contribute to the arts and still satisfy what my parents wanted.

Can you tell us a bit about the nature of your practice and what you focus on?

Entertainment law is really a conglomeration of contracts, corporate transactions, and intellectual property, usually trademarks or copyright based in entertainment and media agreements. Music, I feel is more complicated than television, film, or other digital media, as there are about 50 different types of royalty streams. Music deals are also very diverse as there are no real standards, and very little unionized work (unlike SAG-AFTRA in television and film). The focus of my job is to negotiate deals, skillfully navigating business strategies and advising on various types of transactions. Specifically, I advise on brand and endorsement deals, new technology agreements, worldwide recording and music publishing deals, licensing, merchandising and management agreements. I’ve been very fortunate to have had the distinction and honor of lawyering many Billboard Hot 100 Top 10’s and Billboard Hot R&B Top 10’s throughout my 30-year career, along with representing some of the most talented artists, producers and songwriters of our generation. I am grateful each day that I’ve had the opportunity to serve my clients, many of whom are my closest friends and mean family to me.

You are a successful attorney. Which three-character traits do you think were most instrumental to your success? Can you please share a story or example for each?

Determination, Detail Orientation and Trustworthiness. A successful music attorney must have all three to secure the best deals for clients and to build a reputation as someone artists will trust to help manage their careers. You must be very detail-oriented with a high level of reading comprehension. You also need to be a good creative writer. The difference between “and” and a “or” in a sentence is huge. You can’t say “this or that” or “this and that,” the difference is enormous. If you miss one zero it’s the difference between 10,000 and 1,000. You can’t make mistakes, so you have to check, and you have to re-check, and you have to be very detail oriented. Even where you put your punctuation, where does that comma go in that sentence can make the sentence have a different meaning.

What unique qualities do you have that others may not?

First and foremost, I’m a creative and a musician. So, I understand where my clients are coming from creatively, emotionally and of course in terms of business. I believe I am unique in the same way that old saying goes: “Where There’s A Will…. There’s A Way”. That’s me. If I want to manifest something and make it happen, I have been blessed by God with the ability to make it happen. Some people call it tenacity, others call it ingenuity.

I have built a successful law practice in the music industry despite traditional ethnic and gender power structures. Most lawyers in the business do not look like me. Early in my music and law career, I was often intimidated and lonely because many who I considered colleagues, were dismissive because I didn’t fit in and had “no tribe.” I knew I could not settle for being ‘good’ at what I did, to get a seat at the table. I had to be extraordinary. This meant I had to keep my head down and let the results speak for themselves. I don’t want the next generation of lawyers to feel like I did when I first started my legal career.

I am the first and only Asian-American woman led music law firm in the United States. A first-generation Los Angeles native, whose parents came from South Korea in the 1960’s to attend graduate school at the University of Southern California, I initially had to overcome the cultural expectations of my family, then move on to push the boundaries of limitations in both music and law.

What are some of the most interesting or exciting projects you are working on now?

You will have to see. Unless the deals are finished, it’s all attorney client privilege. I am handling a lot of catalog sales and valuations now. It’s been very exciting.

Where do you go from here? Where do you aim to be in the next chapter of your career?

The next chapter, I hope, will be one in which I can use my experience to help lead the next generation of artists who need guidance and a great lawyer. I have received so much from music. I’m hopeful that I may also start to give back in other ways to the music community through taking a leadership role at a music company making immense strides in this business, using my knowledge and experience to really implement lasting changes in the industry.

Without sharing anything confidential, can you please share your most successful “war story”? Can you share the funniest?

Not sure if I should be laughing or crying about this one. I’m a peacemaker for the most part, not a war victor, but one of the biggest wars I have won was recovering the Marc Bolan/T. Rex U.S. copyrights on the seminal album “Electric Warrior.” For those that do not know, Marc Bolan is essentially the Kurt Cobain of the U.K. He died young, tragically in a car crash in the middle of London in 1971, with his girlfriend Gloria driving the car. Marc Bolan will forever be one of the coolest rock stars in music history. I represented Marc Bolan’s son in finally getting his father’s copyrights, along with access to an offshore trust in the Cayman Islands of over $30 million dollars containing Bolan’s royalties, all of which benefited his son. Four decades of Bolan’s family chasing these monies and copyrights, with many lawyers trying. I was finally able to recover the whole enchilada in 2016. His son lived a very meager existence before I was able make the recovery for him. Despite the most incredible work I had done over a period of 3 years (which the family had been working on for four decades), Bolan’s son did not want to pay our firm from the recovery. Our firm had to finally file a lawsuit, take the son to trial… so it’s funny that someone who should have been so grateful to me for recovering over $30 million dollars in fact wanted every single penny for himself. At the time, I thought it was awful, but what a funny paradox. There is even BBC documentary about Marc Bolan’s royalty earnings and how no one could ever recover the money, which they said went into the Bermuda Triangle!

How has the legal world changed since COVID? How do you think it might change in the near future? Can you explain what you mean?

So many things have changed since COVID. In terms of legal, a lot of people are working remotely from home. With working from home, I think there is loss of connectivity, so we are back in our offices working. I don’t know how things will change in the near future. I know for our firm, we need to collaborate on the projects with different people in our office, so for us, despite COVID, we still want to keep that human connection with our co-workers and our clients by keeping our offices open.

Based on your experience, how can attorneys effectively leverage social media to build their practice?

Our clients rely on social media to share their music and build their brands so it’s important for music lawyers to have a presence there too. I am working to build my Instagram and TikTok content so I can engage with my current clients and connect with new ones.

What are the 5 Things You Need To Become A Top Lawyer In Your Specific Field of Law?

Commitment, tenacity, creativity, passion and honesty.

AUTHORITY MAGAZINE: Top Lawyers: Helen Yu Of Yu Leseberg On The 5 Things You Need Become A Top Lawyer In Your Specific Field Of Law.

This week In the Hot Seat with Larry LeBlanc: Helen Yu, principal attorney, Yu Leseberg, A Professional Law Corporation.

What do clients mostly come to you for?

Oh my gosh. Everything. I’m a talent-based lawyer so I’m on the side of artists. We are usually doing things like management agreements, recording agreements, and publishing deals. All kinds of licensing. Brand and sponsor deals, merch deals. Basically, the same type of things.

How much staff work at the firm?

We have 7 people. We have three lawyers. We have two support staff. We have an IT person. We are in an office at the corner of Hollywood and Vine (The Broadway Hollywood Building at 1645 North Vine Street). We are catty-corner (diagonally opposite) from Capitol Records. It is a 1923 art deco Empire building. A historic Hollywood landmark. They refurbished the building, and they built all of these amazing lofts.

After nearly three decades of legal work what surprises you these days?

What surprises me is the number of people–producers—that are curators of tracks, and not creators. Young producers sometimes will get tracks from other producers that created the underlying musical bed. People will bounce files. Germany to the UK, wherever, Mexico, anywhere.

What ends up happening is that the folder of the producer that has the track, even though the artist is cutting in the room with that producer, that producer may have acquired that track, curated that track, or received that track from somebody else. From across the country, across the world, and then, maybe, added some things. Maybe added a drum overlay or added some instrumentation. But the basis of the musical bed is from somebody else. When I go out, and make a deal for the artist, even though my artist was only in with the one producer that had access to the artist, I’ve got two, three, four people on the track sometimes, producers on the track. That happens quite often.

How much time do you spend drafting contracts?

A lot of time. A lot of time, and with all of the digital streaming, the volume of work has increased tremendously. Back in the day when I first started, when I was working at Virgin, the (release) cycles were very different. You had singles that were going to come out, and you had albums. All of those albums had to be completed; all of the label copy and all of the clearances done. You had to be done a minimum of three to four months ahead of time. Then you had to get the product ready. You had to get it manufactured. You had to get it shipped. You had to get it delivered. You had all of these distributors. You had to have stock in the stores. All of that in terms of a very long lead time, and the production, the supply chain, and distribution.

So many pop and hip-hop songs today are co-written by a team of collaborators. And then someone else came in later, and there are six names attached to the song. What is the state now when you have 5 or 6 songwriters or producers involved? With producers putting together a track, then working with songwriters and artists, it often comes down to who did what? What’s the publishing and recording split? Is it still kind of crazy?

It can be. It depends on who the players are. There’s definitely an art to figuring out who is writing, who’s on the song, and who did what. I don’t think there’s a one-shoe-fits-all answer. If you kind of know the personalities, and the backgrounds, with all of your music knowledge, you can usually make people come to see, come to understand.

You started your practice servicing the hip-hop and rap, and Latin communities. Why? Because these genres were being underserviced by the legal community?

Yeah, I think so, Yeah, I think that is really what it is. They were underserviced. They are minorities. They needed somebody that was really going to look at them, and that had the requisite expertise to take their matters seriously.

Your parents came to Los Angeles from South Korea in the 1960s to attend graduate school at the University of Southern California?

Yep. My mom went to law school, and she and my dad ran various businesses. A lot of real estate, real estate investment, accounting, and a trucking company. They were entrepeurials.

Where in South Korea are they from?

Seoul.

Have you been to South Korea?

I have.

Being born and raised in Los Angeles did you feel like a fish out of water there?

No. You know what is amazing about it is that the buildings, the architecture, the public art, the styling, the food, and the fashion are much further along than here in the United States. Because after the war they had such a big growth spurt. They had nothing, and they had to use their ingenuity, and resiliency to rebuild that country. So, when you go there, it’s like looking at these beautiful buildings that you see in Singapore or somewhere like that. Each building has public art or sculpture, Everything is very designed, and styled. That is really important to them.

You started off at Enigma in the publicity department.

I started out with an internship, and I did whatever they wanted me to do: Answer phones, box stuff up, called retail stores. Back then, we’d do a lot of data gathering by calling retailers to find out what records were selling. When I started there, the internet didn’t exist. There wasn’t a lot of competing media.

After college, you worked in private practice at the notable Los Angeles entertainment firm Cohen & Cohen under the mentorship of Martin “Mutt” Cohen. The law practice primarily dealt with music and copyright matters. How did you come to meet the great Martin Cohen?

I took a class after I had graduated from law school on music publishing, and he taught the class. Then I became the TA (teaching assistant). I couldn’t afford to take the class, and he needed a TA. I said, “Okay. So can I take your class?” And if I assisted him, I could take the class.

Why study music publishing, which I and others refer to as “the Dark Arts?” Most law graduates seek out other more attractive areas of entertainment.

I really wanted to know about music publishing. I didn’t know much about it. The only thing that I knew was that it had to do with royalties and income streams. I knew that was important. I didn’t know much else about it. It was very interesting.

TikTok is not only nurturing new talent and new releases, but it has become a factor in returning old songs to the forefront, boosting the value of music catalogs, and new releases as well.

It is an important platform in music. It is an important discovery platform. It is an important promotional platform. Music is a real part of their business. They need to be cognizant of that, and figure out a way to share and compensate, not only the labels, but also various artists. I think that something that is going to be a process over time that they are going to have to get used to because nobody ever thought that TikTok would be as important as it is. But I think to try to put a hammer down on them, it’s not going to be effective.

You have worked with estates in recovering copyright revenues for heirs - Including Rolan Feld, the son of T, Rex frontman Marc Bolan.  A lawsuit in California federal court sought a declaration that Rolan was the sole owner of many of his father’s famous T. Rex/Marc Bolan songs like “Bang a Gong (Get It On). The defendant, Westminster Music Ltd., doing business in the U.S. as Essex Music International, objected.

What happened in that case?

I was able to get all of the U.S. copyrights back.

The copyrights were held in a separate umbrella company in the U.S.?

They had Essex and The Richmond Orgazination (TRO), but I got all of the U.S. copyrights back. Basically, it was a 40-year fight for him (Rolan Feld). I was very proud of myself. I worked really hard on that. I probably never had a more complicated brain teaser case than that. Many lawyers that I respected, who I considered experts in the business, and who were even senior to me had tried over decades. Now I’m getting along being one of the senior people

When you opened Yu Leseberg in 2010 what were your clients looking to you for?

They wanted guidance in terms of publishing. How that monetizes. What the best deals were. How that networks because that is really the mystery of what we talked about. You talk about “the dark arts.” Everybody knows that it’s money. Nobody knows exactly how it (music publishing) monetizes or how it should be monetized. That was one of the clear areas of expertise that I had and still continue to have.

CELEBRITYACCESS: This week in the Hot Seat with Larry LeBlanc: Helen Yu, principal attorney, Yu Leseberg A Professional Law Coporation.