How Adidas Is Setting Itself Up To Be The Next Big Record Label

Kanye West’s partnership with adidas wasn’t new by any means. It was for loads of money and it offered West the opportunity to chase his passion for fashion and design outside of music. But, it wasn’t foreign territory for adidas, a brand that’s been riding with rap for decades dating back to Run-DMC.

What the Yeezy-adidas deal did do was signal what could be considered as a new phase for music. It offered a new reality where big brands could supplant record labels as the financial patrons of musicians across all genres. adidas just happens to be one the pacesetters for the non-traditional approach by pulling in the likes of Snoop Dogg, Pharrell Williams, Katy Perry, 2 Chainz, Missy Elliott, Big Sean, A$AP Ferg and others along with Kanye to create a fruitful relationship between sight and sound. And they did it all during a time when a creativity boon helped the company produce the kind of footwear and apparel buyers started to lust over, most notably with their Boost technology, which is heaven for the feet.

One of the figures orchestrating the Stripes emergence in the lifestyle arena was Jon Wexler, the company’s VP of Global Entertainment. He and his team were the ones who recognized the opportunity created when music labels struggled to stay afloat. adidas hopped on the chance to work with artists and tap into their existing fanbase while offering musicians a window to a wider audience with consumers. For Wex, as he’s known in the shoe community, it’s all part of a larger plan.

“I can envision that 5-10 years from now,” he said in a new interview published by LinkedIn, “with the erosion of the marketplace for music, and the erosion of record labels, brands could become the new record labels, an entirely new platform for artists to get their music out.”

Wexler described ingenious ideas such as using wearable technology that incorporates products as part of the delivery system for artist goods. There are other presentations as elaborate as getting behind Kanye’s Yeezy Season fashion shows or as simple and effective as putting Pusha T on stage at the Tunnel for a special performance that doubled as an event for the release of his special edition kicks and a preview of his King Push album. They’re offering fans experiences and tangible goods.

As album sales continue to decline and streaming services jockey for fans’ money via subscriptions, a lot of money is left on the table when it comes to tour merch, apparel collections, and other unique branding opportunities. adidas realizes they’re only scratching the surface, but they know they have a lead on brands like Puma, Reebok, and Converse, who all have existing relationships in the music community with the likes of Rihanna, Meek Mill and Future along with creative series like Rubber Tracks. Even when a competitor like Nike is mentioned, the biggest draw they have is Drake, who has a deal with Jordan. After that, they don’t have a stacked hand like adidas.

“I think that adidas is years ahead of where other brands are in that respect,” Wex said. “In the last five to ten years, we’ve gone from working behind the scenes to working next to, and alongside, and being on the leading edge of, the music scene.”

He continued, “For us, what maximizes opportunities with our partners is when we go deep into those relationships and then link back to the brand. We look at these people as true partners. There have to be as many opportunities on the individual partner’s side as there are on the brand side. Everyone’s winning. If only one side is winning, it’s not a good relationship.”

“It’s about newness, freshness, relevance,” Wex said. “[A]s a brand, you have to be willing to try new things, as a differentiator. adidas, as a brand, is constantly evolving, and we’re evolving in a music space as well. It’s just so great to be working at a place that is so open-minded and willing to experiment.”

The company’s seen a return on their investment with their earnings increasing by 5% last year with the company’s CEO crediting Kanye and Pharrell for their tremendous boost in the lifestyle sector. Williams goes unsung but he’s helped revive the company’s rich archive and made it cool – and profitable – again. For ‘Ye, it doesn’t hurt that the Yeezy Boost causes a frenzy with every release and the shoes end up going for hundreds and thousands in the secondary market, too. For the rapper, he gets the worship for his creativity that he craves. For adidas, their name is attached and along for the ride.

Right now, no one knows exactly where that ride is headed. But, adidas is in front and leading the way.