Steve Stoute, UnitedMasters

**David Senra** (0:02)
Dude, I've been a fan of you for over 20 years, because I grew up listening to hip-hop, and everybody in hip-hop knows who you are, so I'm very excited to have a conversation with you.

**Steve Stoute** (0:09)
Yeah.

**David Senra** (0:09)
One of the fascinating things that Jimmy Iovine told me about you was you made a very unusual decision coming out of a record label. Like, you could have started your own record label, and you said, no, I'm not going to start a record label, I'm going to go full on into advertising and marketing. Can you tell me about that?

**Steve Stoute** (0:24)
It was 1999, and I get a lot of credit for seeing that, whether it was Napster or MP3s, were going to shift the music business from the CD.
We started to see signs of it, but it was in the fledgling stages of that. So I didn't quite see it. What I did see was an industry that didn't know the difference between good and great. What I mean by that is that when an industry is booming, sometimes when it's booming because of the business model itself, mediocre gets rewarded. And over time, it catches up. But in the beginning, mediocrity is applauded and financially awarded. And I knew that because we were selling CDs for $16 and people were paying for it when there was only one song on the album, that that wasn't gonna sustain itself. Like there was something wrong with that. Like why would you pay $16.99 and you only liked the first single? And executives were getting paid tons of money on that, you know, idea.
And they weren't even talented. And I'm like, this is gonna have to cave in. Outside of that, what I seen was an advertising business that felt like archaic. The advertising business at the time looked at the world through the lens of black, white, Hispanic.
And I'm like, that's not the way people relate to products and marketing. It doesn't, no one looks at them and goes, well, are they speaking to me because I'm white? Or like, that's how I preferred to get spoken to because I'm black. Like these things weren't real. And the music business did teach me that. The music business taught me that the idea that people listen to certain records had nothing to do with their ethnicity. DMX was selling in Iowa. The radio station in Iowa didn't play DMX.
Where M&M was being played, was being purchased in Harlem.
And had nothing to do with white and black. But why were products treated that way? Why would like, we're going to, you know, and you want to sell a Cadillac to a black person, you put a deep voice over like, the new Cadillac Escalade. Nobody wants that. And Spanish people don't want to add that just says, hola, like these things don't work. My whole idea was like, why don't you just find shared values? Like if you're an 18 year old African American from Compton, and you're an 18 year old white kid from Greenwich, Connecticut, and you like skateboarding, like it doesn't make a difference if you just speak about skateboarding, you're both going to find the shared value in the culture of skateboarding. But this other thing that was happening just felt like it was dying. And I knew that if I got into that industry, I could make a difference.

**David Senra** (3:27)
But what Jimmy, I think, admired most is that you didn't care what was expected. You didn't make the decision that everybody else was making or the decision that was expected of you. It's like you forge your own path.

**Steve Stoute** (3:40)
So I'm giving you the rational, how I seen it. The idea of seeing it that way and then jumping and to go into a business in which you didn't understand.

**David Senra** (3:50)
Exactly.

**Steve Stoute** (3:51)
Look, I can reference a lot in the Jimmy Podcast, not that I want this podcast to be the advertising for all your others, but you've had a lot of interesting people and there's a lot of six degrees of separation in the way we think. When the unknown is a better option than the known, run in that direction, run towards darkness. The unknown was what I didn't know, the advertising business. But the known was this industry that was going in the wrong direction. In a direction where they were selling one song for a lot of money, they had a monopoly on the distribution of CDs and they control radio and MTV. And those things didn't seem like they were going to last forever. So running towards the unknown became very easy. Not because, and also because I was 29 years old, right? And I didn't have a family yet. I didn't have kids. I had already made a lot of money. I had already done well. So I wasn't like needing money. And I didn't have like a family that was reliant upon me to like earn instantly. If I didn't make that decision at that point in time, I would have never made it at all to change industries. it. We own in the advertising business. And I had a big proof point. The proof point was when I was at Sony, I made the soundtrack. I was fortunate to make the soundtrack for the film Men in Black. I had known Will Smith and his manager James Lasseter for many, many years. And when they were making that film, they wanted to make the soundtrack. They were making it with Sony, who also distributed that film. I was a Sony executive and they said, look, Stoute, you do this. I wanted to do it. I was excited to do it. And the song became a hit. Right, here comes the Men in Black, with Will.