How does the music industry work? Planet Money started a record label to find out
Earlier this year, a musician named Kinny Landrum sent Planet Money an email, and he made an unusual proposal.
Back in the 1970s, Kinny explained, he was the keyboardist for an instrumental funk band called Sugar Daddy and the Gumbo Roux. This was the height of the "stagflation" era, when stagnating growth and skyrocketing prices were wreaking havoc on the American economy. The band collaborated with a singer named Earnest Jackson, who had written a song with lyrics that captured that era's zeitgeist. The song was called "Inflation."
Sugar Daddy and Gumbo Roux recorded a demo of the song in 1975 at a famous studio in New Orleans called Sea-Saint Studios. The demo, however, was never released. The band broke up. And the song disappeared. So did high inflation, after the US Federal Reserve hammered it down in the early 1980s.
Fast forward to 2021. "Inflation" is making a roaring comeback. And Kinny gets a text message from a friend, Arthur Rouse. Kinny had given Arthur a cassette copy of "Inflation" decades before. The surge in prices rekindled Arthur's memories of the song — and, it turned out, he still had the copy. All of a sudden this dusty recording had resonance again.
That's when Kinny reached out to Planet Money, and requested we do something with the song. Of course, Planet Money is not in the business of publishing records or promoting musicians. We make podcasts. But we began to investigate the story behind the song and brainstorm what we could do with it.
Many of the members of Sugar Daddy and the Gumbo Roux went on to have solid careers in the music industry, playing in successful bands, writing jingles, and scoring movies. The most famous member, Randy Jackson, went on to be a music executive and co-host of American Idol. But, sadly, despite his incredible talent, Earnest Jackson (no relation to Randy) never made it. Even worse, he's felt burned, exploited, and cast aside by the music industry.
But now Planet Money is trying to change all of that.
The creation of Planet Money Records
Because we love Earnest Jackson — and we love his incredible song about the economic trend of our times — Planet Money has decided to back him (and the band) to try to right the wrongs, and give him his shot at stardom.
To make this happen, we licensed the song and became our own record label. Planet Money Records has the sole purpose of releasing and promoting Jackson's "Inflation" song. The journey to create that label was a dizzying and intimidating leap into the unknown for us, and it gave us a unique opportunity to explore the business and economics of the music industry from the inside.
In setting up our own record label, Planet Money wanted to avoid the shady practices that are all too common in the music business. It's an industry where artists regularly get pennies on the dollar for the songs they create. That has always been the case, but the death of physical record sales and the rise of digital streaming has only made things worse for musicians.
We learned that the typical record contract hands only about 20 percent of profits to the artist and the other 80 percent to the label. We decided to do something radically different, which you can learn about in our series. You may decide we made a terrible business decision, but, to be fair, we're not in the music business!
Of course, it wasn't enough to license Earnest Jackson's song. We also have hopes to create merchandise, plan a music tour, and figure out how the heck to make this song popular. In the coming months, we're looking to explore topics like how streaming has revolutionized the music industry, how payola works, and how to manufacture a hit.
We hope you'll tune into our series. Perhaps more importantly, you should check out the song! "Inflation" is a throwback funk tune that speaks to the current state of the global economy. You can find it on Spotify and Apple Music.
Greg Rosalsky, Sam Yellowhorse Kesler and Arielle Retting contributed to this story.
Planet Money explains the economic forces that shape our lives. Subscribe on Spotify, Apple Podcasts, YouTube or wherever you get your podcasts. You can also keep up with us on TikTok and Instagram, and subscribe to our newsletter!
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