SoundCloud, Third & Hayden Team Up for Joint Venture

SoundCloud has linked up with Third & Hayden, the Atlanta management and services company founded by music exec Kei Henderson, for a joint venture, the companies announced today (Dec. 5). The new venture will see Third & Hayden signing new acts to its label and developing them with the help of SoundCloud’s services division, which will provide marketing, A&R, distribution and promotion support, as well as financial backing.

The first two acts to sign to the new venture are Los Angeles singer/songwriter Jordan Hawkins and Atlanta-based rapper Key!.

The deal is the latest for SoundCloud’s new roster initiative, which has previously inked a joint venture with Quality Control’s Solid Foundation Management to work on new acts and has separately signed distribution deals with Lil Pump and Tekno to release forthcoming projects. Henderson, meanwhile, has an extensive background as a manager over the past decade, beginning with Key! 10 years ago, who then introduced her to 21 Savage in the mid-2010s; Henderson would go on to co-manage Savage for several years as he rose from the mixtape circuit into one of the most influential rappers of the past half-decade. Henderson then co-founded SinceThe80s, a joint venture with Motown/Capitol Music Group, where she first worked with Hawkins, and founded Third & Hayden, which also manages artists like Asiahn, Ben Reilly and Kenneth Whalun, among others.

“We want artists to find success as independents to set the foundation for long-term careers and move through their careers with leverage, and creative control. What we were able to build with 21 Savage early and again with SinceThe80s is the blueprint for the way we’re working with our artists and I’m so thankful to have been a part of both of these brands from the start,” Henderson said in a statement announcing the deal. “SoundCloud is typically one of the first touch points for indie artists and I feel a great part of my career has been brand building with artists from day zero — for this reason they’re the best partner for what we’re building. We’re being intentional on ground up development.”

In an interview with Billboard, Henderson further broke down the reasoning for going with SoundCloud, after previously working through Distrokid and then Epic Records for 21 Savage and with Motown/Capitol with SinceThe80s.

“I think it was the understanding that building isn’t an overnight thing,” she said. “It will allow me to fund their careers from a startup level in a way that includes advances, recording budgets and marketing budgets. We’re always gonna be scrappy and resourceful, but it’s always nice to have a little bit of money to be able to do certain things with. So we’ll be able to activate digitally a little more than we would be able to as a completely unfunded independent, and I like that, and it also allows me to have access to a full team. Because the team they’re hiring at SoundCloud looks like a label, but not everybody is from a label background, so the thinking is a little bit different and the approach to how we market an artist is a little bit different.”

In the past few years, SoundCloud has pivoted its business model away from being solely a streaming platform and more towards becoming first a distributor, then towards full-service artist and label support, a shift that is concurrent with similar moves across the industry. The company has also introduced user-centric royalties, what it calls Fan-Powered Royalties, that pay artists based on the number of streams that they accrue rather than through market share of total streams; in July, SoundCloud struck a deal with the Warner Music Group to allow the major’s artists to get paid in that way on its platform, in addition to indie artists.

“Kei has a proven track record of finding and fostering the next generation of talent, so partnering with Third & Hayden was simply the right fit,” SoundCloud’s global senior vp/general manager Jessica Rivera said in a statement. “We’re excited about developing this joint venture with such a respected industry leader and creative who shares SoundCloud’s dedication to providing solutions and empowering artists as they take their careers to the next level on their own terms.”

In addition to the joint venture, Henderson recently opened console by 2NDBDRM in Atlanta, a record shop, listening room and retail space in the city’s Ponce City Market for artists and music fans in the city to have a community space to come together, which will feature some small-scale performances and in-store appearances, consistentl with her idea of wanting to grow artists’ careers not just digitally, but through live events and in-person experiences.

“I don’t think what works for one artist works for every single artist, so we do take into consideration how the artist wants to build their career over a long period of time,” Henderson says about the approach the label will take. “Some artists may feel like, after three projects, I want to go to a major, and that’s perfectly fine. So I want to leave it open-ended: whatever you want to do, let’s put a team around the artist that gets us to that long-term goal.”

Overall, Henderson says, the goal is to build an actual audience for artists, a prospect increasingly difficult in a TikTok world where virality can mean a record deal, but not necessarily a dedicated fan base. “I think what we’re missing in the industry as a whole is, everyone’s in such a hurry to get their money back, and I get that from a business perspective,” she says. “But from a manager perspective, it’s like, some of you want to get your money back but you’re not actually building a fan base or building a connection between the fan and the artist. And sometimes that takes a little bit longer to get it done properly.”