Local rappers ink major-label contracts, only to be left wondering: Deal or no deal?

And some St. Louis hip-hop artists take their future into their own hands.

Released on the strength of the ubiquitous single, "Chain Hang Low," the album itself has sold modestly, barely cresting the 125,000 mark — far short of the 500,000 units required for the Recording Industry Association of America (RIAA)'s gold imprimatur, the entry-level benchmark of an album's success.

In that sense the album's anemic sales mirror an industry trend that last year saw total CD sales decline by 5 percent, according to Nielsen SoundScan data. Meanwhile, digital downloads from sites like iTunes surged by more than 30 percent in 2006, according to David Card, a music industry analyst with the research firm JupiterResearch.

Still, Jibbs' sales history reflects a recording industry in transition, in which a "hit" is no longer defined by strong album sales, but rather by respectable sales across a variety of media: Jibbs' may have sold only 125,000 copies, but "Chain Hang Low," his hit single, sold more than 500,000 downloads at roughly 99 cents apiece. More remarkably, that single sold 1.4 million ringtones — at as much as $2.50 apiece. That's platinum.

Wally, a co-owner of Basement Beats, is convinced the labels' search for "the next Nelly" will dead-end in "little old St. Louis."
Jennifer Silverberg
Wally, a co-owner of Basement Beats, is convinced the labels' search for "the next Nelly" will dead-end in "little old St. Louis."
East-side rapper Raw Resse signed to Rap-a-Lot records more than year ago. He's still waiting for an album release date.
Jennifer Silverberg
East-side rapper Raw Resse signed to Rap-a-Lot records more than year ago. He's still waiting for an album release date.

"Ever since CD sales started declining in 2000, no one's really sure how it's going to shake out. We know there's a semi-revolution going on here, but no one's really sure how to make money off it — yet," says entertainment attorney Emmett McAuliffe. "The record companies obviously want to get with it and make money on the next opportunity, but then the traditional model is getting short shrift, and artists are getting back-burnered while they try to figure out new media."

Last year digital downloads accounted for roughly $800 million in sales, according to a report released by JupiterResearch. While this represented a 30 percent increase over the previous year and the firm estimated that by 2011 digital music will account for $2.5 billion in sales, the report's authors stressed that digital sales are not compensating for declining CD sales — a market that shipped an estimated $10.5 billion worth of product in 2005, according to the RIAA. Downloading remains a small revenue stream for record companies, whose total combined CD and digital sales declined last year by 1.2 percent.

Clearly, downloaded music is eroding the primacy of the CD, which has been the recording industry's economic bedrock for two decades. RIAA representatives say they do not have the ability to calculate the economic impact of pirated digital music, though the trade group speculates that, conservatively, physical counterfeits (chiefly illegally reproduced CDs) cost the industry $300 million annually. Most telling: According to SoundScan, the top 100 albums in 2005 cumulatively sold 128.1 million units at record stores, compared to 153.3 million units in 2004.

In this new landscape where songs may be sliced, diced and reproduced ad infinitum, labels are retrenching, concentrating less on strong album sales and opting instead to concentrate on micro-sales — those 99-cents-a-download songs at services like iTunes, or those $2.50 ringtones that seem to be everywhere on the Internet.

Shifting media, declining profits, belt-tightening, a market crowded by other media such as video games and movies combined with an increasingly fickle fan base — record labels aren't in a gambling mood these days when it comes to artists.

"If you're not creating that buzz, they're not going to put you out," says Cordell Baham, a distributor with Houston's Ground Floor Music Group. "To release an album on a major label costs at least $2 million. They have to be able to guarantee plain and simple — once those wheels start turning with the studio time, the radio, the video, the publicity — that they're going to make money on the album."

Whereas once upon a time a label might have worked with an artist — providing studio time, cranking up the promotional machinery, backing tours, expecting two or three albums before the artist broke big — today's artists understand that a label will let them languish on the roster until they show they can sell.

"There's no more 'from scratch.' When you're in a situation with a label, they want you to come in with everything ready-made," says Potzee, who says he intends to submit an album that's all but finished. "You're not just going to be a raw talent that they'll develop. Those days are over."

Eunice Davis, Potzee's friend and artistic collaborator, agrees.

"Now they sign you, and they say, 'Get your city behind you,'" says Davis, who performs as Youvee. "They want you to have substantial radio spins in your area. They want to see that you've got a local fan base and that you've sold records in your region. Otherwise, you don't have nothing goin'."

Youvee and others worry that even if they do manage to get enough radio spins to merit an album release, the labels' concentration on ringtone sales and bite-size digital downloads will force them — if they're lucky, that is — into a short-lived, one-hit-wonder stardom.

"People are not buying Jibbs; they buying 'Chain Hang Low,'" says Youvee. "They not selling albums anymore; they selling ringtones; they selling songs. Fans are not getting to know artists; they're getting to know songs. They'll know the song, but they won't know who sings it. If you want a career, you've got to build your fan base."

It would be hard to overstate the effect that the 2000 release of Nelly's Country Grammar has had on St. Louis' hip-hop scene. On the one hand, the album's club-friendly tracks put the city on the nation's radar, igniting the labels' interest in the city's rap scene. It also spawned a host of fevered fantasies that St. Louis would produce another star of equal wattage.

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