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Crank it up: Russell Simmons, Universal Music launch label -- on YouTube

EXCLUSIVE: The man behind Def Jam, who brought hip-hop to the masses, is out to create stars on YouTube through the newly-created All Def Music. And he's teaming up with the world's largest music company to do it.

Russell Simmons Rush Communications

Russell Simmons, one of the founders of hip-hop behind such acts as LL Cool J and the Beastie Boys, is getting back into the music business after more than a decade "sitting on the sidelines." And he's getting back in a big way to take advantage of what's arguably become the most powerful showcase for music on the planet -- YouTube.

Simmons's latest venture, a YouTube multichannel network called All Def Digital -- which he and business partner Brian Robbins announced at the Consumer Electronics Show in January but which has yet to officially launch -- has teamed up with Universal Music Group to create a new label, All Def Music. When it rolls out later this summer, All Def Music will become the first label created to discover and develop artists on YouTube that's tied to one of the majors, a move that Universal's CEO is betting will go down as a key moment for his company.

"Finding new artists in different ways and in different places has to be the common denominator of what we do," said Lucian Grainge, the chairman and chief executive officer of Universal Music Group. "It's our cardiac function, what keeps the blood pumping. ...We believe that we can add a new dimension and bring something new in the same way that the talent contests did a decade ago."

Turning a YouTube music destination into something on the scale of "American Idol" sounds like tall talk. But after a decade mired in the post-Napster doldrums, as CD sales plummeted and music labels contracted, the recorded music business is at long last infused with optimism -- even if the major labels still suffer an image hangover from such tactics as suing college kids for downloading pirated songs.

Universal Music CEO Lucian Grainge with Katy Perry UMG

All the three major labels (down from six in the 1990s) are embracing new digital opportunities, and Grainge is positioning Universal to lead the pack. That YouTube has become the outlet with the biggest potential comes with a nice narrative twist, considering that the labels once viewed it as nothing short of the Antichrist -- a freewheeling venue that emboldened people the world over to upload licensed music. Shortly after YouTube emerged in 2005, Universal Music's then CEO, Doug Morris, who now heads Sony Music Group, threatened to sue YouTube for copyright infringement.

We know how that standoff ended. Today, Google-owned YouTube boasts more than 1 billion monthly viewers, and music videos are consistently among the most popular content. Most importantly, YouTube has become the go-to place for young people to find, listen to and share music -- not just from the majors but from aspiring artists hoping to break through all the noise. Which, in short, is why Simmons and his team knew they needed to be there.

In Simmons's view, the world he knows best -- urban, hip-hop -- is crying out for some professional help. Future stars lurk across YouTube in all genres but are usually ignored until they become Internet phenoms, such as happened with Psy and Justin Bieber, both of whom, incidentally, are now Universal artists.

"When I looked at this, I saw a big, giant white space," said Simmons, who, at 55, speaks with the enthusiasm of a man who's just getting started. "There's a lot happening online that's not being managed properly. These artists are in separate worlds, and not everything bubbles up to the top. That's my job."

To take this on, Simmons has brought in another icon of urban music: Steve Rifkind, who is responsible for breaking some of hip-hop's biggest acts, such as Wu-Tang Clan, is now president and CEO of All Def Music and ADD Artist Management. And Robbins, who Simmons refers to as "my boss," is a veteran Hollywood producer and the founder of AwesomenessTV, a YouTube network that Dreamworks paid $33 million for in May -- less than a year after it launched. If you don't know AwesomenessTV, don't fret: It just means you're beyond your teen years.

Data mining for stars
The team at All Def Music will marry years of old-school experience with new technology, watching every decision along the way with analytic tools developed by both AwesomenessTV and Universal. UMG has been investing in such tech for the past five years, and while the company won't share details of how it all works, people there say little goes unnoticed.

"There isn't anything we can't monitor or can't track," said Rob Wells, who heads digital for Universal Music. "That may sound Orwellian, but that's just what the digital environment empowers us to do."

And Simmons, whose track record for picking stars is unparalleled, knows full well that the Internet might prove his gut wrong. "All Def is a combination of instincts and the people's will," he said. "The Internet will surprise you. All the things we're starting to put up, you just don't know what's going to pop."

That means ADD might spot an artist, on YouTube or even in a brick-and-mortar club, then make a video and decide where to go from there. It all depends on what the fans and the data tell them. "We can move so much quicker," said Rifkind, who in the 1990s pioneered the street team concept of building buzz. "We have too much at our fingertips. We like something, we put up a few videos, get the feedback from the community, then go in and make changes. I really feel this is a slam dunk."

Buying into YouTube
Simmons hadn't expected his next big venture to be on YouTube. In fact, a couple of years ago he was set to buy a cable network on which to build out new acts. Then he met Robert Kyncl, who heads of global content for YouTube. Kyncl helped convince him that YouTube was the place to be.

Simmons began exploring the idea. He turned to Robbins, who was building out AwesomenessTV, for advice. The two had been friends since Robbins directed a hip-hop documentary in 1995 called "The Show," which featured Simmons. They ended up creating All Def Digital, which now carries the tagline, "If you don't have ADD, you're not paying attention." And last Fall, ADD became one of dozens of online channels receiving Google investments to create original content.

Brian Robbins of AwesomenessTV and All Def Digital AwesomenessTV

The success of AwesomenessTV has, in the vernacular of the day, been nothing short of awesome. And that's what ADD wants to replicate, albeit for a different audience. The parallel is this: Robbins took an underserved market -- the millions of teens and tweens on YouTube -- and brought together YouTubers and created original programming, shows like "IMO" and "Truth or Dare," that it posts daily.

AwesomenessTV's programs have spread the usual way, by kids sharing them across the Web, and the results would make any old-media exec drool: The main channel, which launched just over a year ago, has 700,000 subscribers; and the multichannel network, which went live in December, has 21 million subscribers, who together have logged 1.2 billion views to date. An Awesomeness show then jumped to old-fashioned TV, and when it premiered early this month on Nickelodeon, it drew 1.7 million viewers.

"We feel we can do the same with ADD, to create an urban destination," said Robbins. "There is a giant hole in the marketplace."

Since announcing the creation of ADD in January, Simmons has been snapping up acts, and shooting videos for the launch, which he keeps pushing back -- "I want to know I have a smash," he said -- even as his partners are eager to get started. There will be All Def Comedy, All Def Lifestyle, All Def Poetry, and now All Def Music -- all on a single destination, or multichannel network, the likes of which have been proliferating at a rapid clip. Networks such as Tastemade, for instance, is going after for food lovers; Maker Studios is also aggregating YouTube pop entertainers.

"I couldn't do All Def Digital without playing in the space I know best," said Simmons, whose career includes producing such hits as the HBO series, "Def Comedy Jam."

"All Def Music had to happen," he said.

So Simmons approached Grainge at Universal. It was a logical choice. Simmons's biggest success was his first effort, Def Jam Recordings, which he launched with producer Rick Rubin in the early 1980s and which became the pioneering rap label. Through a series of mergers, Def Jam ended up as part of Universal Music, which is a division of the Paris-based conglomerate Vivendi. Simmons left Def Jam in 1999.

If the venture plays out as planned, All Def Music will become a thriving feeding ground for Universal, which can then try to supercharge artists' careers across all outlets globally -- through various music services, radio, video outlets or promotional deals.

"Our farm team is for them," said Simmons. "What we develop further is for Lucian. What Lucian has, we can develop, too."

So far, the first signings to ADD Management include John A. Baker Jr., known as "Spoken Reasons," a poet, comedian and musician, who has almost 1.4 million YouTube subscribers. ADD is also developing an unscripted music-themed show with rapper Asher Roth titled "Lemonade." Roth has garnered more than 20 million views on YouTube.

From ADD's offices on Sunset Boulevard in Los Angeles, Simmons and his small team are always on the lookout. One of their latest finds is New Orleans rapper 3D Na'Tee, who's had some success but isn't backed by a label. To get a sense of what All Def Music is all about, check out this video of Simmons watching Na'Tee:

"You can't tell me she can't rap," Simmons almost shouted into the phone. "But do you know how expensive it is to make Na'Tee a star? You need to dress her, and, oh, she needs to get her hair done. She needs somebody like to me to pay attention to her at the early stage. Because if she's running around in sweatsuits, she's going to be just another girl, even though she's fantastic. Nobody wants to sign her. Nobody wants to give a break. I want to give her a break. But she needs to be styled and she needs the best producer on the planet."

All of which Simmons and All Def Music can provide -- unless, of course, the fans and data tell him he's betting on the wrong rapper.