Three Quarter Offers Musicians New Model: ‘We Run The Business, You Run The Art’


Three Quarter is a new music startup with a hybrid business model. They describe it as“part record label, part venture capital firm, part management firm, part marketing/pr firm.” A catchier take, also provided by Three Quarter, goes, “3/4 runs the business, the artist runs the art.” Founded by David Airaudi, former Strategy and Business Development Executive at Interscope, Three Quarter is an important step forward out of the quagmire of current music industry practices.

David Airaudi, with whom I spoke this week, has a relatively low profile on the web. Most often mentioned as a partner with Christian Clancy co-managing Odd Future, Airaudi is now focused on working with a growing roster of emerging acts at Three Quarter (aka 3/4 aka 3qtr aka naming issue).

He told me that he’s never going to be the guy that gets his picture taken at industry functions. His focus is on taking care of business for 3/4 artists and that’s quite a job, given 3/4’s unique business model.

3/4’s Approach to Building Businesses In Partnership With Artists

Though 3/4 is associated with Odd Future via his co-management relationship with Clancy, he is developing 3/4’s approach with such artists as Bass Drum of Death, Phlo Finister and Crass Mammoth. Airaudi says he has been focused on finding young artists who want to be in control of their careers and intellectual property without having to take care of the details of running a business.

Interestingly enough, this business model has also led to an unintended A&R model. He says the acts who are drawn to this approach are constantly putting out new music and improving in the process.

Such artists are not interested in signing with a traditional label, major or indie, because they give up too much IP and control in the process. But they also don’t want to go totally DIY and have to be constantly dealing with the wide range of issues that come with that approach.

Developing a Third Path Beyond Label Deals and DIY

3/4 offers a third path with the artist functioning as CEO and Airaudi as COO in the creation of a new business designed to further each artist’s career based on the kind of career they envision. 3/4 is not designed to chase hits or build superstars though that may be the outcome of the work artists do.

The basic concept is that 3/4 exists to help artists develop their career as they see fit whether that means simply making a decent living while pursuing their art or pushing to get to the top of the charts.

If artists have other interests, whether that’s fashion or some other business or creative interest not typically associated with music, 3/4 provides the support to make that happen.

Envisioning New Business Models While Working With Jimmy Iovine

Airaudi developed this model over a 7 year post-MBA major label career, first doing business development at UMG (North America) for a year followed by 6 years with Jimmy Iovine at Interscope. He says he treated this 7 year period as the “world’s greatest internship,” learning as much as he could along the way.

At UMG he got a look at every business deal that came through the door.  With Interscope he had visibility and/or involvement in a wide range of deals and business relationships at a time when they were expanding far beyond music and also exploring new approaches with artists such as partnerships and 360 deals.

During this period he began to pursue the concept of “Life Post-CD”, discussing new business models that he hoped Interscope would consider. Over time he recognized how unlikely such changes would be and, when he found Odd Future, he realized that they were already pursuing similar ideas.

Odd Future represented a whole crew of young people who handled all the aspects of their business in collective fashion. These combined factors inspired him to leave Interscope a year ago to found 3/4, though he says he loved the job and loved working with Iovine who he described as the “most progressive exec out there.”

Developing the 3/4 Co-Ownership Business Model

Initially he thought of 3/4 in terms of an incubator but eventually developed the current model in which he establishes an individual business for each artist, co-owned by the artist and 3/4. The artist functions as a creative entrepreneur and has control of the direction of their career.

Airaudi says 3/4 is, in part, the answer to the dilemma facing artists who are supposed to build careers as they sell little bits and pieces of their assets and parts of their careers to disparate third parties who often have conflicting self-interests.

Typically, artists have to go through an extensive period of building before they can reestablish control of their careers and intellectual property as musicians such as Radiohead, U2 and Madonna have done. He feels artists should have that control from the beginning.

Though Airaudi knows of others exploring related models, they are all focused around single acts and are either at the height of their career, like Radiohead, or pursuing a team building approach to establishing themselves. Though we did not discuss The Parlotones, based on my interview with manager Raphael Domalik, I think they are pursuing similar territory for an emerging act.

Airaudi’s goal is to scale 3/4 to be able to work with a much larger number of acts. However, he doesn’t speak in terms of owning the game. He feels he is pursuing one viable direction but that the real answers lie ahead and will require lots of different bands and businesses exploring the possibilities. In fact, he regular reaches out to business people pursuing related models not in order to make deals but to share knowledge and help develop new approaches.

Keeping Music at the Center of the Music Industry

Airaudi also insists that, at the end of the day, music should be at the certain of the music business. Since he doesn’t make music, he feels blessed to have a way to work with musicians and help further their careers.

Airaudi says he looks at each artist as a riddle, one that requires individual attention to create a unique path based on their artistic desires and the realities of doing business.

If you’re interested in keeping up with 3/4’s development, check back in a month or so when their website will relaunch with a full Topspin integration. You can also keep up with 3/4 on Tumblr and check out the music on SoundCloud


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