March 9, 1999 11:05 AM PST

Chuck D maps music's Net future

NEW YORK--No one is happier to see the Web's altering effect on the recording industry than Chuck D, the always outspoken and often incendiary baritone from rap group Public Enemy.

At the end of last year, Chuck D stepped into a different kind of spotlight when his then-record label Def Jam sent him a letter threatening a lawsuit after he posted audio clips from the still-unreleased Public Enemy album Bring the Noise 2000 in the MP3 (MPEG 1, Audio Layer 3) format on his Web site.

In December, Chuck D parted ways with Def Jam to focus on his own production company, dubbed Creamwerks. Through this venture, Chuck D will use the Web as his distribution channel as well as for promoting new and existing talent.

Bring the Noise 2000 will be released in April with the help of "four strategic alliance partners," who have yet to be named, he said.

Chuck D is one of a growing number of popular recording artists who have endorsed and embraced the Web as a means of distributing their songs and interacting with their fans. Acts such as Tom Petty and '80s rocker Billy Idol have released songs on download, news, and community site MP3.com to give fans access to some of their new material online. Also, the band They Might Be Giants recently made available a number of its albums and unreleased tracks on GoodNoise in the MP3 format.

CNET News.com caught up with Chuck D at the New York Music and Internet Expo, where he touched on the role he sees the record industry playing down the road, his Creamwerks venture, and the Web's importance for new recording artists.

CNET News.com: When did you break out of your contract with Def Jam?
Chuck D: First week of December. I waited until I was able to break my Def Jam contract, or get out of it after we delivered the He Got Game [soundtrack]. Your contract conflicts with your freedom on the Web and the Net.

So now are you signed with any major labels?
No. I've had offers, but I've turned down deals because my whole thing is to make a statement for Public Enemy as opposed to being one album out of 500 albums in the musical glut. It makes more sense. It's almost like there are a lot of basketball players--well, let's start the ABA.

What about your new Creamwerks venture?
Creamwerks is an overall production company that handles Public Enemy, which means the site and everything connected to it; Rap Station, which is like the ESPN of rap music and hip-hop; and Slamjams, which is a label.

Does this mean you're going to do more behind-the-scenes production?
I've always done behind-the-scenes production. I'm going to do it a lot more because the Internet has allowed me to understand that we can knock out a lot of products. I've started five studios, three in Long Island, two in Atlanta, all G3 Mac-based. And the reasons for starting this many studios and having one-man engineering situations and signing a lot of artists is the freedom of the Internet allows you to cut and put up [songs] quickly without going through record retail and radio station politics.

How do you think the Web is going to change the way music is distributed?
Well, I'm fortunate to be connected to a genre that runs parallel with technology. As far as rap music and hip-hop, it can provide a service that really does not exist in over 90 percent of its music.

Right now, hip-hop and rap music has gone top 40 and mainstream, and maybe 10 to 15 percent of the music is skewed that way to fit black radio and urban radio formats, a little bit of MTV when they select it. But also it remains under the top. So providing a service there, and being involved in the distribution of the music--musically and also the programming of the music--I'm involved in commodities and taking it to the next level. It's like I couldn't tell you how to sell a Shania Twain record on the Net, but a hip-hop group out of Cleveland who probably wouldn't get signed in L.A. or New York I probably can.

In terms of the hip-hop scene, how wired is it? And is MP3 widely used?
Considerably--it's wired a lot, but you don't in any kind of process, you don't count now. You count a year later. And the transition from vinyl to CD was a five-year transition. They thought it would happen over a ten-year period. It happened in five years. The transition from going to the store and picking up a CD and picking up downloadable music is probably going to be a three-year transition, from here to 2002. And that's why the majors are paranoid or scared.

Today, it's a different conference because it's kind of like an open-to-the-public kind of thing. But my thing is to encourage entrepreneurship, artistry, and also technology. You know before the major companies used to mastermind those three areas, now they just have to share it.

About these major recording companies, last December recording label heads sat down and said they were going to develop their own secure music initiative?
Two-minute offense. They were already trailing by 14 with 50 seconds left. They're not going to stop just technology, and even if they do come up with standards. People are inventing more standards to distribute more digital music.

So you're saying the momentum has already been achieved?
Yeah, they have to figure out how to co-opt it rather than attack it. They got to figure out how you're going to run your fans by going with the wind as opposed to going up against it.

You mean they are going to adapt to what you guys are doing, to what has already happened on the Web?
Well, they're going to have to figure it out some kind of way. I mean, the majors, I think their biggest blunder was when their accountants and lawyers took over the business. Their biggest blunder was to take something as low cost as a CD, Mac that technology, and then wholesale it as high as $10 and sell it retail as high as $17. Although they made something so cheaply, and with less damage return rate, they still sold it for three times as much because they could.

But this is the situation where the chickens would come home to roost, and a lot of people are going to look at a situation where the overall cost for CDs, records, or songs comes down. That's going to get a lot more artists out there and a lot more labels out there that will distribute music this way.

Because a person that's got a CD-ROM, and they got a process that they can provide CD-burning for $100, which will probably be the going price next year, they'll burn their own CDs off their computer for a low cost--even if there's going to be a cost--for $3 or $5 as opposed to going to a store and picking one up for $13 or $17. There's nothing romantic about picking up something that costs a lot when you know you can get it cheaper.

Where do you envision this technology taking the music industry down the road?
More of the artists having joint ventures, challenging the territory lines in contracts. For example, looking at the territory lines and saying, 'What constitutes the universe and the world?' And the thing about it is most artists' contracts say that the territory that they control is the world and the universe. I'm like, that's crazy.

At the same time, it will give a lot more people the process of making records and getting them to the public. A lot of people will become acclimated to the process instead of becoming blind to the fact and receiving a check at the end of the day. Why not make this a process that is an addition to what already exists? You've got majors, you have independents, and nothing at all. [In the future] you'll have majors, you'll have independents, and you'll have this process.

Let's say the Broncos win the championship. A cat wants to make a Go Broncos celebratory song, right? Forget about it. You ain't doing it on conventional means. But on the Net you can. It can be slamming to the fact that it will bring artistry back.

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