Last week I mentioned that I was hesitant to write a complete eulogy for the packaged collection of recordings we’ve come to know as an album. Well, I’ve reconsidered. Here it is.

The album is dead. At least in hip-hop this is the case and, from what I hear, the same is true for other genres. So that Detox album you’ve been holding your breath for – forget about Dre. Blueprint 3? Move it from TBD to RIP. And for all the new signees that keep talking about their debut albums, they need to adjust their marketing and acknowledge the mixtapes are as close to an album as they are going to get.

The demise and death of the album should not surprise anyone. We’ve all done our part to deconstruct the machine that made this sort of packaging sell and we did it for a reason.

Personally, I’m not sad to see the album go. I believe a lot of us have this romantic idea of a classic album that can be listened to cover-to-cover, and that leads us to overvalue the concept as a whole. For every Illmatic, The Chronic or College Dropout CD that you purchased how many albums weren’t classics? I’m guessing a lot. If you’re like the majority of us whose purchases made the music business one of the strongest forces in entertainment, you probably spent a lot of money on a lot of CDs that had 1-2 songs you actually wanted to hear.

When Napster came along, Shawn Fanning became a hero for those of us with towers full of CDs gathering dust. He opened the gate to a world we didn’t know existed by giving us the freedom to pick and choose the songs we wanted and the ability to stop wasting money on things we didn’t need. Some say he killed the music industry; I say he saved the consumer.

What Napster has led us to is an open market of free distribution. The major record labels have all but given up on policing the situation and are counting their blessings every time they make a dime from one of their artists. The current state of the music industry looks something like the legalized drug market on The Wire known as Hamsterdam. We have people craving good music like a drug. We have capable artists, producers and labels able to supply these fans with what we need. And we have the means to make sure the suppliers and customers can find one another. Much like the fictional environment of The Wire in which a renegade commander took the City’s drug problem into his own hands, this same landscape has been created by the bloggers and file-sharing sites, and users have found themselves portrayed as criminals because of bureaucratic bullshit that offers no solution to the problem and would much rather pretend it doesn’t exist.

A lot of us in the hip-hop community like to portray ourselves as progressive thinkers. We kick and scream about how this artist is killing hip-hop, or how that executive is holding us back or how that label won’t embrace change. Then we simultaneously start talking about album releases. It’s one of the biggest contradictions one can make. You can’t be thinking progressively about this industry if you’re still talking about albums.

This sort of thought is what has brought us to the point we’re currently at in hip-hop — on life-support with a DNR already signed. I’m not going to go into the old “hip-hop is dead” cliché. What’s driving people away is that it’s boring. There are very few artists giving us anything to be excited about anymore. Fans have all but given up while waiting to hear material from promised albums that have had release dates pushed back repeatedly. It’s no wonder fans are marking time watching 50 Cent cartoons. If this trend continues, those of us who work in the music industry will need to start improving our drawing skills because while everyone is watching cartoons we’re losing jobs.

I’m proposing a stimulus plan that calls on some of hip-hop’s most powerful names to start releasing the music they have been holding back (and, by the way, do it for free). Dr. Dre, we need you right now. Jay-Z, let’s start getting those tracks from Blueprint 3 out to the masses. This message applies to everyone who is holding back gems because they are waiting for the climate to improve. I’m here to tell you the climate for releasing an album is never going to get any better. Hip-hop fans need to be hit by a barrage of new music that reminds us of why we fell in love with this culture to begin with. Our morale couldn’t go any lower.

The old heads and the new heads need to work together and ensure above all else that what they’re delivering is what the fans want to hear. Hence the word fans in that last sentence, as I think the powers that be seem to have forgotten who they are working for. I mean it’s time to cut out the bullshit, the “I’m a perfectionist” excuses that are given about project delays. This is what caused Guns N’ Roses to take 14 years to create an album that no one gave a shit about by the time it finally came out.

The artists and labels need to give up on the idea that they’re going to recoup the money invested in these projects and begin liquidating what they’ve got. Where are they going to sell these albums they’re talking about? I live in the heart of New York City and if I wanted to purchase an album, I wouldn’t even know where to look.

I believe that getting fans excited about the music again is the first step in revitalizing hip-hop culture. It would provide a renewed sense of optimism among hip-hop fans, which I believe would improve conditions throughout the industry. Much like the stimulus plan recently passed by the Obama administration, the results of this stimulus also may not be immediate.

This stimulus plan involves improving our psyche, rather than serving to benefit anyone financially. The money will come, but that’s not what is most important right now. We as fans need to love hip-hop again. Improving the quality of music and providing the industry with something we can truly be excited about will most certainly lead to a revised plan from the hip-hop community as a whole. While sales may not improve, it will actually encourage people to start thinking of ways to become profitable in this new age of music whether it’s from becoming smarter in tour packaging to creating new online revenue streams. The desire to fix the problem will grow stronger once the overall morale is improved.

Right now everyone is dumbfounded, looking for a solution to the problem of the internet. In case you haven’t noticed, the internet is anarchy. There is not going to be a solution, formula or even a game plan that works because we can’t control an environment that evolves through unfettered innovation. The best the industry will be able to do is quickly adapt to change. That means if your label, management company or agency isn’t staffed primarily by a bunch of internet geeks that are able to identify trends, stop on a dime and shift gears in the way they’re working, then you’re fucked.

The labels will no doubt eventually figure out that everything has changed, but what do fans do until then? Fans have to start pressuring the artists directly and demanding quality music. With citizen journalism at an all-time high thanks to blogs, twitter and other technological advances, it is now possible to create an instant world-wide buzz for a record. The smart artists will take advantage of this capability while the others will continue letting their records gather dust in the studio.

What we truly need right now is for every hip-hop artist to try to do something remarkable and to do it soon. Stop thinking about the dollar signs and start thinking about who you owe your success to. You owe it to hip-hop to do everything in your power to save the culture that created you.

PART II: Monetizing the Blogosphere

Thanks to the overwhelming amount of support for the first installment of the Hip-Hop Stimulus Plan, I’ve decided to continue to elaborate on my optimistic vision for the future of hip-hop.

To recap Part I of The Hip-Hop Stimulus Plan called for an overhaul of the hip-hip industry, starting with the reformation of the music distribution system. Stating what must be obvious to all but those in total denial, I announced that the album is dead. I also warned that the demise of hip-hop is to soon follow. The morale of the hip-hop community is at an all-time low thanks to the inactivity of artists and the failure of labels in adapting new technologies. I encouraged all creative parties to start liberating their best material, for free, in order to reinvigorate the spirit of the hip-hop community. I also suggested that major changes are needed in all label offices to properly begin profiting from the distribution opportunities created by the Internet.

In Part II of the Stimulus Plan, I illustrate a gaping disconnect between current marketing strategies of labels and the refusal to accept the emerging dominance of the Internet as the primary distribution network for hip-hop artists. Labels are facing problems with file sharing and free distribution while ignoring the possibilities of increased profitability.

As I discussed in Part 1, bloggers are the new gatekeepers of cutting edge hip-hop. Blogs may specialize and create individual niches, but the one thing common among most hip-hop blogs is an abundance of free music downloads. These downloads are never directly hosted by the site, however, and appear, instead, as links to sites specifically created to allow easy file-sharing like zShare, Megaupload and Sendspace.

Here is what the typical user experiences when trying to download a recent hip-hop track from a blog:

A user finds a song of interest while browsing through the posts in a hip-hop blog. When he clicks the download link, he is redirected to Sharebee, a file-sharing service that allows a single file to be uploaded to five different file sharing sites. As soon as the user hits the Sharebee link page, the page will attempt to re-direct him to a full-screen advertisement. To skip the advertisement, the user must hit a “Skip This Ad” button before being able to get to the next step. Additionally, Sharebee will launch at least 2 other pop-up browser windows promoting various advertisers. Before the user can access the actual links to other file-sharing sites, he will find a page plastered with banner advertisements. As if the process wasn’t already frustratingly slow, when the user finally gets to pick his favorite file sharing service in order to download the actual song — you guessed it — he has to repeat the previous process all over again before actually being able to download the track.

By the time a user is able to get an actual song download in queue he has been subjected to 15 banner ads, six pop-up windows and three page redirects. This equates to millions of consumer eyeballs on spam ads while creating mass amounts of revenue for the owners of the file-sharing sites. This process starkly demonstrates the perversion of today’s music business model: While the music industry is hemorrhaging money with each day that passes, sites like Sharebee and ZShare are getting rich from advertising dollars being generated by music they don’t own.

Why is this happening? Why have labels allowed this kind of perverse arrangement to develop? The answer to that question is a complicated one, but, I think, can be attributed to at least two factors: 1) the corporations that own major music labels are stuck in a 20th century business model, and 2) the people running the labels are more concerned with product control and litigation than growing business or developing artists.

Labels can go on bleeding out while businesses like Sharebee and Zshare thrive. Or they can wake up and start using a marketing system that already exists but apparently is not on their radar screen at all. In other words: Labels, stop being so fucking greedy and pay bloggers to get your music out!

The labels need to launch a file-sharing service of their own. They can easily take control of dissemination of products by piggybacking on a distribution system that already exists — Internet blog sites. Bloggers are already distributing music to millions of fans in much the same way that music stores of the last century delivered albums and CDs to fans. Label executives need to recognize the power of this distribution network. By adopting a marketing strategy that reimburses bloggers for distributing tracks, labels not only cut out the middle man (the file sharing sites) but also eliminate the use of spam ads.

It would be relatively easy to create a reimbursement system for driving this new marketing arrangement. A formula can be established to quantify downloads from each site, which allows each blogger to earn money based on the amount of traffic his site generates for the labels. High-volume bloggers who send a lot of traffic to these links would be paid in proportion to that traffic. Part-time bloggers would still have the opportunity to earn some supplemental income each month.

In other words, by using an existing distribution system already in place, labels would create a business model that acknowledges and embraces the Internet as the strongest marketing tool in the label’s arsenal.

Once bloggers are integrated into a new marketing strategy, the labels need to refine the current intrusive nature of the online advertising. Not only will refining this process build goodwill with frustrated users, but it also will improve profitability for the labels. Rather than flooding fans with pop-ups and spam attacks, the labels could simply strike deals with advertisers to place a 10-15 second ad tag at the beginning of each track which users will be required to listen to before hearing the actual song. The blogs would still host download links provided through the label affiliate program, but would be able to offer a quick and spam-free user experience.

Some might worry that bloggers would be inclined to remove the ad-tags from the beginning of the tracks and offer up ad-free versions, but I don’t think that makes much sense. Why would they host an illegal version of the file while making money for some faceless file-sharing company when they could be making money for themselves with the same content?

Under this system, the labels are still able to offer a high-quality ad-free version of the song through sites like iTunes and Amazon. I’m sure plenty of users will still be willing to toss the label some change for the ad-free version. Either way the label is at least in a position to monetize from the distribution of the material. This will allow them not only to openly support the free file-sharing model, but will encourage labels to work with rather than against the various blogs in order to jointly develop artists.

The same theory can even be applied to video streams. If the labels were to set up an exclusive video service resembling Hulu which would feature only high-quality licensed content from affiliated majors and indies, the labels could broker a similar performance-based deal with bloggers. The more streams, impressions and clicks the video gets, the more money the blogger makes. The blogger would finally have a legitimate use for all that site traffic they’re constantly competing for.

Let’s do some math and just see how quickly a label-owned video portal could begin kicking YouTube’s ass by aligning themselves with the blogs:

We’ll start with 10 blog sites who have become affiliates of this new video portal.

Each site delivers 100K page impressions per day for the videos they are hosting, which contain advertising that automatically appears on the embedded players.

The video portal pays each blogger at a rate of $0.10 for every 1,000 page impressions their embedded content receives.

For the 100K page impressions the blogger provides each day they are generating $10 in revenue and earning a total of $300 per month for hosting video content.

At the end of the month the label will have paid a mere $3000 in commission to have gained 30 Million impressions for ads that are producing revenue for them, while also assuring strong marketing assistance from bloggers who want to provide these videos with as much exposure as they can.

Again, this is just a hypothetical application using only 10 sites. It would be expected that there would be hundreds or even thousands of affiliate sites competing for the ad revenue being offered, which would make the numbers staggering.

Adopting this model for videos would clearly require a lot of cooperation and compromise by a bunch of greedy entities, but if the benefits of this type of model are not clear yet, wait until Hulu outperforms YouTube this year in ad revenue.

To make the whole thing work, I must reiterate what I said in Part I: labels need to stockpile a bunch of Internet geeks, web designers and programmers to run the show. Underlying the obvious short-sightedness of the whole industry seems to be a more basic problem of staffing. Executives have trouble understanding the type of people they need to recruit, so here’s a hint: It needs to be not what you have now. One benefit that has occurred from the economic crisis is there are a lot of young, Internet-savvy people out there now, so the talent pool would be thick.

To put this new business model in motion, the labels really need to rearrange the budgets on a couple of those phantom albums they know are never coming out. Once they do that, the whole business could see a turnaround within a few months. Inaction will not be an option much longer.