business model analysis of Def Jam Recordings

1. Def Jam Recordings
Business Model
Sarah Weymouth

2. Value Proposition
Subsidiary of Universal Music Group
providing artists management,
promotions and distribution for
primarily hip hop and R&B artists
Differentiator: Def Jam is know for the
best representation of hip hop artists
and signing the newest popular talent

3. Channels
● Music distribution through Universal Music Group
● Merchandise made through UMG partnerships, sold
through Def Jam website and at shows
● Communication with artists as customers through A&R
reps

4. Revenue Streams
● Sales and streaming
● Publishing and licensing
● Royalties
● Merchandise
● Booking tours/shows

5. Cost Structure
● Fixed costs: Materials for
merchandise, employee
salaries, etc.
● Variable costs: Advances
for artists, distribution
costs

6. Customer Segments
● Artists: The artists signed to the label are customers as
they are receiving services in exchange for money from
the label
● The fans: Those purchasing merchandise, concert
tickets and music from artists signed to the label are
customers of the label

7. Customer Relationships
● Building relationships with artists: This is the job of A&R
representatives for the label to scout talent and begin
building a relationship
● Building relationships with fans: Labels use marketing
and promoters to promote artists and merchandise
from the label

8. KeyActivities
● Marketing
● Sales
● Promotions
● Booking
● Licensing

9. Key Partnerships
● Universal Music Group
● Freelance A&R and managers
● Artists represented by the
label

10. Key Resources
● Investors
● Materials for merchandise
● UMG executives

11. Future Opportunity
Incorporating new signees together to make a mixtape of
the hottest new Def Jam artists, twice a year to promote
their newest endeavours
Def Jam sells merch packages for different artists, they
could make a new talent merch package

12. References
(n.d.). Retrieved from https://www.defjam.com/artists
Duncan, L. (2020, February 24). How Do Record Labels Make Money? We
Reveal All. Retrieved from
https://www.musicindustryhowto.com/how-do-record-labels-make-mon
ey-we-reveal-all/
Label Manager. (n.d.). Retrieved from
https://www.berklee.edu/careers/roles/label-manager
Record companies discover, nurture and promote artistic talent. They are
by far the largest investors in artists' careers. (n.d.). Retrieved from
https://www.ifpi.org/how-record-labels-invest.php