Public Enemy's New Wireless Order

The hip-hop group sees wireless music as a way to air its radical views -- and make a little money

Public Enemy has always found a way -- mainstream or otherwise -- to get its radical message across. Debuting in the 1980s, Public Enemy moved rap beyond the realm of party music with an explosive mixture of avant-garde, jazz-like mixes, and a message of African-American political revolution. The band's influence peaked with the release of Fear of a Black Planet in 1990.

The record included the anthem "Fight the Power," the theme song of Spike Lee's film Do the Right Thing. But the group was soon overshadowed by more commercial forms of hip-hop loaded with sex, violence, and drugs. "We've gone from 'Fight the Power' to [Snoop Dogg's] 'Gin and Juice,' and we've not gone back," says Walter Leaphart, who manages Public Enemy leader Chuck D. "There's no balance."

The group has continued to make music since then, operating largely outside the mainstream music industry. Public Enemy made early use of MP3 files, distributing its music for free over the Internet. Chuck D has been a strong supporter of file sharing, which is fiercely opposed by the Recording Industry Assn. of America.


  Just as it pioneered the use of MP3s, Public Enemy is now an early adopter of the wireless phone network as a distribution system for music. On Nov. 28 the group will make the music from its new album, New Whirl Odor, available through wireless phone networks using distribution technology from privately held m-Qube.

"This is the best revenue-generating market that exists today. It's like the Internet in '98, but with a business plan," says Leaphart. Just as important, he views wireless as a way to bring PE's alternative black voice to the public.

At first the songs will be available only as 30-second ringtones. By the second quarter of next year, U.S. carriers will be distributing full-length versions of the songs, catching up with carriers in Asia and other international markets.


  The album has been available through Best Buy (BBY) and the Web site RedEye. Leaphart says wireless distribution can help Public Enemy produce music at a fraction of the cost of mainstream companies. Ringtones often sell for a dollar or more. While that might sound like a drop in the bucket, it's a huge markup over the incremental cost.

Leaphart says the economics are comparable to the music publishing and catalog businesses -- the unglamorous, behind-the-scenes sectors where lots of money is made.

From the artist's perspective, emerging distribution platforms such as wireless are often more lucrative than the traditional music business. M-Qube already provides a platform for the distribution of thousands of songs, as well as news, entertainment, sports scores, and other forms of mobile data. In most cases, the only money artists receive from the record label comes in the form of an advance. Since many costs, including video production, are charged against the advance, "it's easy to sell a million records and still owe the record company money," Leaphart explains.

That's why Public Enemy has supported free file sharing. If nothing else, it helps PE get its music out there. And that might not happen otherwise.


  Wireless distribution of music is just taking off. Digital music is still dominated by Apple Computer (AAPL), with its iPod players and iTunes Web site. But ringtones already generate hundreds of millions of dollars in revenue, and that figure could hit more than $9 billion by 2008 (see BW, 4/25/05, "Ringtones: Music to Music Moguls' Ears"). That's possible because music has barely begun to crack the vast cell-phone market, where there are 180 million units in the U.S. alone.

As technology from m-Qube and other companies evolves in the coming months, that ringtone market will evolve into a full-fledged platform for delivering full-length pieces of music. Wireless carriers are rushing to get into a digital music market, hoping to turn cell phones into an alternative to Apple's ubiquitous iPod.

Cingular, a wireless venture of AT&T (SBC) and BellSouth (BLS), is distributing music with iTunes-enabled phones (see BW Online, 11/16/05, "Orchestrating a Revved-Up ROKR"). Meanwhile, Sprint Nextel (S) has teamed up with music partner Groove Mobile (see BW Online, 10/27/05, "Sprint Races into Mobile Music").


  Leaphart says mobile music will work for the consumer, too. The price of a CD has doubled over the last decade or so, but consumers still complain that a given CD contains only one or two songs they like. It's no surprise that CD sales are on the decline (see BW Online, 11/21/05, "Online Music's Elusive Bottom Line").

As up-and-coming platforms such as wireless and the Internet break the music industry's business monopoly, Leaphart says he hopes that new ideas will enter the marketplace as well. "Chuck has something to say, and people really need to hear it," he says.

"Ninety percent of radio and MTV is coming from the negative, thug, pimp, base mentality," Leaphart adds. "The fact that it's acceptable to say 'bitch' in a song is crazy." He views PE's dense music with jazz-laden elements and overtly political lyrics as an alternative. "It's about empowerment; it's about people being open, about thinking for yourself."


  He isn't optimistic that mobile music distribution will quickly change society. He believes that the culture of violence will be tolerated as long as record companies make money. He doesn't think the violent deaths of hip-hop stars Biggie Smalls and Tupac Shakur produced a meaningful backlash against music with violent themes, because those stars were black.

Would the industry tolerate violent music if white recording executives were at risk? He says no way.

Leaphart views wireless as an important way to shake up a music business in need of a revolution. "Digital distribution is an integral part of getting the message out. Wireless is an extension, and hopefully a more profitable one," he says. This revolution might not be televised, but it is coming to the miniature screen.

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