EMPIRE: The Distribution Company That Turned Music Streaming Pennies Into Profit

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Young Dolph (left), Ghazi Shami (right) - photo courtesy of EMPIRE

Young Dolph (left), Ghazi Shami (right) - photo courtesy of EMPIRE

Originally published September 26, 2016 on Forbes.com.

Prior to streaming sites positioning themselves as the go-to place for fans to consume their favorite album, musicians without major label backing had two ways of distributing their music to the world: either convince local mom and pop stores to stock a minimal amount of albums on their shelves, or sell CDs out of trunks, backpacks and at shows. However, as the number of traditional brick-and-mortar music retailers began to decline, and as CDs became ancient artifacts, the push for acts to get their music to online retailers and streaming sites became imperative.

Where music industry veterans saw the rise in streaming services as a financial threat to the music industry, Ghazi Shami saw an opportunity. In 2010 Shami launched EMPIRE Distribution in San Francisco, CA. Initially, EMPIRE provided digital distribution to major streaming platforms and online retailers. As it expanded, the company became an integral piece in providing support for like Top Dawg Entertainment - specifically Kendrick Lamar’s Section.80 album - and has championed releases from acts such as 2015 Cash Kings list honoree, T.I.

Before EMPIRE recruited hip-hop heavyweights, Shami was a go-to audio engineer for Bay Area rap artists. While working on his client's songs, he was exposed to the D.I.Y. album release plans that included selling CDs out of the trunks of cars. Though proud of the independent roots of the rap scene, Shami believed more could be done in order for his hometown artist’s music to be heard by the masses.

Shami soon blended his knowledge from time spent as a consultant for digital distribution company INgrooves, with an extensive career history in Silicon Valley’s tech landscape. The foresight for his digital distribution venture took advantage of the fact that consumers were spending less money on music and more time on the internet. “I felt like most people [in the music industry] weren’t prepared for it, and I could be at the forefront of a format change,” Shami said.  

Today, there are a number of digital distribution aggregators that present record label-less musicians the opportunity to upload their projects onto online retailers. For a small administration fee, sites like TuneCore and CD Baby offer musicians the ability to upload their songs onto all major digital platforms. While EMPIRE offers similar services, the company takes their relationship with clients from a faceless transaction to a mutual partnership.

Talent is curated by a staff that keeps an ear open to emerging musicians and independent record labels. Once a client is onboard, EMPIRE's staff relentlessly champions each release by fighting for home page positioning and top playlist placements.

“We move quickly,” said EMPIRE's former A&R and marketing director, Jonathan Master. “We really fight hard for placements [because] we want to be a home for great artists. Whether an artist sells 500 albums or 500,000, they should be housed in the same place and treated with the same level of respect.”

The typical deal structure is an 80/20 split, in favor of the artist. Contrary to common industry practices, EMPIRE imparts non-exclusive partnerships. This means there are no repercussions if a client feels that their next release could be better serviced by another distribution company. But rather than losing artists to competitors, their transparent, open-door policy has expanded their roster, and inadvertently pushed them to become as versatile as a record company. Although it is simply a distribution company at its core, their current model has the infrastructure to sign and develop new talent through radio promotion, press campaigns and publishing administration.

“I felt like they understood independent music better [than major labels] in terms of how flexible we needed to be, and how quickly we got things done,” said Dame Ritter, co-founder and former CEO of a now-defunct independent record label, Funk Volume. Essentially, EMPIRE's current framework allows them to be as hands-on as their partners want and need them to be.

“The most exciting about what we’ve done in the past six years is that there are no duplicate stories,” Shami said. The company takes pride in taking on acts like Kendrick Lamar, who went from a relatively unknown emcee to a Forbes Cash King honoree who brought in $18.5 million in 2016. Additionally, they’ve succeeded in regenerating the careers of matured acts such as Fat Joe and Remy Ma. With the help of EMPIRE, the two’s 2017 single, “All The Way Up,” went platinum in just six months, making it Fat Joe’s first Top 40 hit since 2008.

“You try to meet all the criteria to set yourself up for success and then look for a little magic,” Master added.

Shami believes that there is no magic, or secrets, to their success: “It’s a lot of hard work, effort, making phone calls, writing emails and trying to influence who have we have relationships with to believe in the artist the way you believe in them” Ritter and Master both agree that Shami’s long-standing relationships in the music industry are integral to the company’s prosperity.

EMPIRE has not come without its share of trials, however. In 2015, the company engaged in a legal battle with Twentieth Century Fox due to the confusion between EMPIRE Distribution-branded products and services, and Fox’s music industry-based TV show, Empire. Titular confusions aside, Ghazi Shami's company understands the needs of an independent musician and offers exposure of a major label.

“At times I might have been overly passionate about things that I did,” Shami said. “People would ask me, ‘What are you doing over there? Building your own little empire?’ And I would just chuckle and keep it moving. The irony is I really did build my own empire.”