Short-form video has exploded in popularity the past three years, buoyed by TikTok. Copycat apps and features are now the norm across social media sites — Facebook, Instagram, Snapchat, and Instagram. MIDiA analyst Tati Cirisano joins me on this episode to break down the ongoing war between short-form video’s main players. 

The music industry is certainly keeping a close eye on the battle. Short-form video has been a boon for music discovery. Though, many music execs would also argue music has played a big factor in the rise of these platforms, and the industry wants to better monetize that.

Tati and I covered all this and more on the show. Here’s everything we hit on:

[02:59] Vine paved the way for short-form video

[05:56] TikTok filled void in social media

[06:53] Factors behind TikTok’s success

[10:19] TikTok is an entertainment platform, not social 

[13:20] Potential pitfalls for TikTok 

[23:10] YouTube’s biggest advantages 

[25:53] Overlap between YouTube’s short-form and long-form audiences

[29:37] Facebook and Instagram Reels are picking up steam

[35:19] Instagram Reels more natural to the platform than YT Shorts

[35:35] Meta’s advertising is both a pro and a con

[36:39] Active creator vs. passive watcher user bases

[38:35] In what scenario does TikTok lose top spot in short-form video war?

[41:50] Best platform for artists?

[43:08] Best platform for record labels?

[44:05] Best monetized platform?

[47:11] Will there be a new form of content consumption in the next five years?

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Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Tati Cirisano, @tatianacirisano

This episode was brought to you by trac. Learn more about how artists can bring web2 and web3 together for their fans at trac.co 

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TRANSCRIPT

[00:00:00] Tatiana Cirisano: One of my pros to talk about something that I've just, I don't know if this is still true, but something that I've heard from marketers, music marketers in the past is that, Instagram just has more trust with brands than TikTok and other platforms that are new because they've been using it for so long.

[00:00:13] They know what the deal is like. It just has, better relationships in that respect. but if that's also leading to more ads on the platform, then it's kind of a pro and a con.

[00:00:42] Dan Runcie: All right, today we have a jam packed episode that is about the short form video wars, which platform will come out on top. And I'm joined by none other than Tati Cirisano from Video Research. Welcome.

[00:00:55] Tatiana Cirisano: Thanks Dan. Good to be back. Thanks for entertaining another rant of mine,

[00:01:00] Dan Runcie: No, this is good. And with what you write about what you cover, you're the perfect person to have this conversation with. There has been so much focus as anyone listening to this podcast, who knows about the influence of short form video, what it does for discovery, for music, for artists, how record labels and all these companies are tackling it.

[00:01:19] Now we have several companies that are vying for that spot with similar but different products. But before we jump into TikTok, YouTube, and Instagram, I feel like we gotta give props where it is and give a shout out to Vine because I don't know if we were to be here if it weren't for Vine paving the way, so, oh, gone too soon.

[00:01:41] Tatiana Cirisano: you're giving me flashbacks to the Water Malone guy. I don't know if anyone else is gonna remember that, but the specific things that went viral on that platform. Oh God,yeah. We have to give the shout out to Vine.

[00:01:53] Dan Runcie: It was the perfect example of constraints, breeding, creativity, six, seven, second videos, and people had whole narratives of storytelling there. It was so unique to see what people were able to do. I feel like at its peak I saw it was 200 million monthly active users, which obviously is a drop in the bucket compared to the services we're about to talk about.

[00:02:17] But at that moment, that felt huge. It really was the platform. And obviously I know that Twitter had other objectives and things there, but. It's almost like a little too early as well. I just don't know if culture was like right there. And even music itself with artists, I feel like there was a lot of influencers, but there's a few artists, but not as many that really tapped in where it was really a huge discovery platform.

[00:02:41] Tatiana Cirisano: Yeah, and I think also like people weren't so comfortable with creating content at that time, or it wasn't something that was like so readily available. Like now I feel like every teenager just kind of create, thinks of creating content as, you know, just part of the social toolbox. Or maybe they want to be a content creator and that's, you know, that's like a sort of a new aspiration.

[00:03:02] But I think at the time of Vine, maybe that's another reason it didn't pop off, is it wasn't like the consumer behavior wasn't there. There were some people that loved to make videos, but I think most people were just watching.

[00:03:11] Dan Runcie: Right, and I feel like too, the people that really popped off on that platform, They never quite got as big as some of the people that are on the platforms. We're gonna talk about, thinking about whether, you know, you mentioned someone where thinking about Alphacat or like King Bach, some of the others that were big there, and I know they had moments, but again, it was almost a little bit ahead of its time in terms of them being able to really take off the way things did in the late 2010s and ever.

[00:03:39] Tatiana Cirisano: Mm. I'm also trying to remember now because one of the major things that usually comes up for me talking about like why TikTok was so impactful is how it's such, it was such a big deal that it opened to the for you page instead of like a feed of people, content from people you already know. But in my mind, it was kind of like the first major social media platform to do that.

[00:03:59] But was Vine actually the first, I don't remember how the feed worked. Was it people you followed or was it just random?

[00:04:05] Dan Runcie: I forget. That's a good point. I forget someone listening probably will ping back and say that, oh, it was this way. But yeah, I completely forget. I feel like I remember there are videos I knew from people that I would go back and follow cause they easily wanted to go watch it. But yeah, I completely forget. And even if it was there, I don't think the algorithm had quite enough content to be able to make that happen.

[00:04:27] Tatiana Cirisano: Yeah, that's true. But yeah, the history is really interesting cuz you had Vine and then Twitter shut it down and there was kind of this void for people that loved the platform not having something similar. And then musically came around, but it wasn't really the same. It was kind of all focused on lip syncing.

[00:04:44] It wasn't, you know, people just making random videos. and I feel like it also had kind of a younger audience, like it was more like middle schoolers than high schoolers. And it just kind of didn't have that same, it didn't reach like the critical mass of, no offense to middle schoolers, but like it didn't have that cool factor

[00:05:02] so it's interesting like that happened. And then the timing is so important because I feel like we can't ignore the fact that TikTok launched in the US a few years before the pandemic and kind of reached that critical mass of users right when Lockdowns began. so yeah, I'm glad that you started with Vine cause I think the history is really important to look at.

[00:05:24] Dan Runcie: Yeah, and I think the TikTok piece is unique because before TikTok ends up launching in the US, Instagram and Snapchat have stories, which obviously isn't the same as what we're gonna talk about with Instagram having reels. But that vertical video, and I believe that when Instagram first came out, it was 15 seconds, I believe was the limit.

[00:05:44] So there was a bit of that trying to copy what Vine was doing to that extent. But then TikTok comes up with, you know, an entirely new platform. And I feel like the concept of a TikTok post is what then brings you to it's, For You page, and just [00:06:00] having that endless content role. Which a reel is, but a Instagram story or even a Snapchat story I tried to do at points, but never quite got there, which is why Instagram and Facebook more broadly has tried to make a pivot into that.

[00:06:15] Tatiana Cirisano: Yeah. And it was more about like from music's perspective, it was about users engaging with the music that they're fans of like when TikTok first started to blow up in 2020, it was all dance challenges. It was all people kind of putting their own spin on the songs that they loved, and I feel like that's also different from stories and like the other sort of video, sort of short form video, tools that we had before where it was maybe about

[00:06:40] sharing music, but it wasn't about actually engaging with it and putting your own spin on it. And I think that was the other thing that TikTok did that was really powerful from the music discovery standpoint, is inviting people to actually put their own spin on the things that they love.

[00:06:54] Dan Runcie: Right. There was a culture that was created around the music and around the content [00:07:00] generation that did not exist in those platforms, right? Like to your point, yeah, you could have had music playing while you're sharing some video that you naturally wouldn't have wanted to share on your Instagram feed, but that wasn't the same as trying to do your own rendition of Old Town Road, right?

[00:07:17] Tatiana Cirisano: And there weren't trends like TikTok is so trends focused, which is a key reason why songs tend to go viral on the platform. So, yeah.

[00:07:26] Dan Runcie: Yeah. And on that note, we should dive into it. So for everyone listening, there's three companies that will do our breakdown on, so TikTok Meta. and YouTube and what they're doing respectively in short form video. And on that note, let's start with TikTok and just highlight some of the pros and cons there.

[00:07:43] And I think we talked about a few of them, the cultureyou also talked about just the likelihood of users themselves wanting to engage and create in a way that they wouldn't on others before that, what are some other things that stand out about, like why TikTok has been able to have a strong position here.[00:08:00]

[00:08:00] Tatiana Cirisano: I mean, definitely their algorithm, their algorithm is scary good.I know a lot of people will say like, oh, TikTok knows me better than I know myself. And it's true, I get recommendations that are so hyper-specific. and if, you know, it's such a major tool for discovery for that reason.

[00:08:16] It's not just showing you things, it's showing you things that you will probably like. So I think, TikTok's algorithm is a huge pro for them. but I also think. at this point, aside from the algorithms, all of these platforms pretty much look the same or have the same user experience. I don't know as much from the creation standpoint in terms of like video editing tools, but from the consumer standpoint, they're all pretty similar.

[00:08:40] So I think at that point, the thing that will differentiate you is the culture, and I think TikTok just has a lot more cultural capital than shorts and reels do, maybe because it was first, like so many trends tend to start on TikTok and then trickle down to the other platforms, to the point where I remember like a year ago [00:09:00] or months ago, there were so many reels, users posting TikTok videos that still had the TikTok watermark that reels actually deprioritize them in the algorithm to like try to get people to not do that.

[00:09:11] So I think it's something that's hard to measure and can change very quickly, but right now I think the cultural capital is with TikTok and that's a huge pro for them.

[00:09:22] Dan Runcie: Right when you're the dominant player, when people are watching videos on other platforms and they're repurposed for yours, that's when you know, we rarely see the opposite of that happen with TikTok and that speaks to it, right? I feel like the other part of where TikTok, I think just stands strong and further proof of that cultural piece is, I think back to the analogy I know that I've said, and others have said about how TikTok is the new MTV and just in terms of its cultural influence on where people find things, and even though it's not the only place that is that artists or, [00:10:00] creators can post short from videos, it's similar in that even back in the MTV days, MTV wasn't the only place that posted and released music videos. You could watch them on VH1, you could watch them on BET.

[00:10:13] There were other channels that had it. And while I do think that, at least with BET specifically, there was a culture around there specifically for the black audience and a lot of the people that were interested in those artists themselves. The MTV itself was able to have a bit of this more like mainstream pop rock aspect that also they were able to reach into.

[00:10:35] And I think even if you look at VH1, I think that trended a bit older. So even though I think there was still success to be had with some of those other areas, you still saw that MTV ended up still being seen as the dominant player, clearly not to everyone. I think that, as I mentioned, you know, BET still was more relevant to some audiences than others, and I feel like.

[00:10:55] There may be some of that. could be true with the short form video aspect too, where I feel [00:11:00] like TikTok is still the dominant player, but are there certain types of users that may be more likely to find success on YouTube shorts or Instagram reels? I don't know if that's necessarily true yet, just because and we can talk about this.

[00:11:13] I don't know if we see the same breakdowns there, but that's one thing that I was thinking about as well. Even if you are the main cultural place, are the other areas finding their own folks.

[00:11:23] Tatiana Cirisano: Totally. No, and I wanna, think about that question of what platforms benefit, which artists. But you also just reminded me of something else cuz of your comparison to MTV, which is that TikTok considers itself an entertainment platform, not a social platform. And that's so key to me.

[00:11:39] And so interesting, like you'll see even in, in news articles and interviews, people will call it social platform and you know, the CEO or whoever's being interviewed will say, no, no, no, no, no, back up because we are an entertainment platform. And that's really different. I think, you know, YouTube shorts is a bit similar because most people don't go to YouTube or social.

[00:11:58] They go there to again, like be [00:12:00] entertained. But that's something that pits it sort of, or puts it in a different playing field, I guess, than something like reels because people have usually gone to Instagram to see content from people that they know, to the point where when Instagram like introduced a, you know, a TikTok like feed, a lot of people are like, I don't want this.

[00:12:15] I wanna see what my friends are doing. and I think that's changed over time with like influencer culture like I definitely follow a lot of people that I don't know at all. But in general, you know, these other spaces that might try and launch short formm video like Instagram are social platforms that people use for social reasons, and TikTok kind of puts itself in a different playing field by labeling itself as an entertainment platform, which also kind of, I think one of the benefits to that for them is, you know, I think it's part of the reason that people spend so much time on TikTok like there are stats for the average amount of time people spend on the app is ridiculous. It's something like an hour, like nobody does that in one sitting on Instagram, and it's probably because you run out of content.

[00:12:57] If you're following a certain number of people, [00:13:00] I run out of, you know, stories to watch or people's content to view. There's only so much you can get out of a social platform like that. But with TikTok, if you're there for entertainment, you can scroll forever. I've done it . So, you know, I think that's a key distinction.

[00:13:13] Dan Runcie: Yeah, that's a great pro and I think we can talk a little bit more about that when we talk about like who wins out, whether it's, you know, platform versus artist versus company. But, cause I feel like there's a tie in with that too. But that's a great point. What do you think some of the cons are about TikTok?

[00:13:28] Tatiana Cirisano: Yeah. I mean, I think the kind of obvious one is the threat of it being banned. but I don't know that's an interesting one because I feel like it's not talked about that much. It's always kind of an aside, and a potential, but it's unclear whether that could actually happen. what might end up being a bigger inhibitor is just the attitudes that that inspires like if parents are like, oh, the government might is trying to ban TikTok, it must be bad, let me tell my kid they're not allowed to [00:14:00] use it like I think the perceptions that people have about the app and their safety on it, they might be influenced enough by the threat of a band to be scared of using it.

[00:14:08] Like I know some people that kind of feel freaked out by it. so I think that could be a real threat or it could be an imagined one, but it could have impact either way.

[00:14:17] Dan Runcie: I thought a lot about the threat piece. I think the most likely scenario would be that it's similar to the discussions that we saw three years ago, where is there a US company that would potentially take over TikTok us and could that be the outcome? I know that a lot of that had pretty much died down with the US presidency transfer of power, and those discussions stopped.

[00:14:40] But I do feel like if anything I could see that, likely happening as opposed to a full on ban. We'll see though. I mean, because I feel like that could address some of the concerns. Hopefully if that happens, we'll see how whatever company that runs it would go about managing it. But that's how I see that piece of it, particularly playing out.[00:15:00]

[00:15:00] The other con that I've thought a lot about is, it's something Lyor Cohen, who runs YouTube, or at least he runs YouTube music, has talked about, he did an interview in, music business worldwide a couple months back, and he has, and I quote, he says, "Short form video that doesn't lead anywhere is the most dangerous thing I've seen in the music business in a long time."

[00:15:23] A lot of people are very familiar because it was one of those quotes where he didn't say the company, but everyone knew he was talking about TikTok. And the thing is, many of us know that TikTok is avidly trying to build up has its distribution service, but it's trying to build up its own streaming service so that traffic can go somewhere and that it can do that.

[00:15:42] It already has RESO in other countries, but it's actively trying to do that in the us but it still hasn't been able to do that. We know it. These are very cost intensive things to be able to do and do, right? I think it's worth talking about whether or not we think that is as big of a threat as positioned, but I do know that [00:16:00] that is one of the conceptions out there that you have this top of funnel that doesn't directly lead anywhere.

[00:16:05] So if you are obviously, record labels and others are tracking the pipeline of TikTok data that then leads to streams and things like that. But is the fact that that is a non-connected platform, at least the way it lives today, is that a risk in your eyes or a con?

[00:16:24] Tatiana Cirisano: I think it is a risk. I mean, I think that issue is getting worse. I feel like I brought this up maybe on another podcast we did too, but the fact that the same things that made TikTok so powerful, like having this for you page and having such a good algorithm also means that it's a completely lean back experience.

[00:16:42] I don't have to follow anyone on the app. I don't have to take any actions at all. All I have to do is open it and keep scrolling. So there's very little motivation to follow anyone. So that goes for content creators, but it also goes for artists who are trying to, you know, actually build and retain long-term fans, rather [00:17:00] than just having a hit go viral on the platform, maybe it translates to a streaming bump and that's the end of it.

[00:17:05] so I think that that is a bit of a threat. there's something else I was gonna say about that too. oh, that I think another point in all of this is, these platforms are no longer just competing for users. They're competing for creators because that's who's actually supplying the content, especially if you're an entertainment platform.

[00:17:22] TikTok is kind of like, if Netflix was like, we're not gonna actually create any movies, we're just gonna have users upload their own, you know, like the users are supplying the content, the creators are who they need, and they need to appeal to them. So I think if enough creators get frustrated with feeling like they can't build a following on TikTok, musicians include, they might try migrating to a different service, and maybe if other services can do that better, they'll stay there.

[00:17:46] So I think for that reason, it is a risk yeah, it's clear. I think it is something that TikTok is thinking about.

[00:17:52] Dan Runcie: Yeah, It does need to be acknowledged. I think as I've thought about this a few ways, I think that the challenge that was presented by [00:18:00] Lyor would imply that there is a higher conversion rate from YouTube shorts to YouTube, and that they have the data to be able to prove that. Theoretically, I do think that that makes sense in terms of absolute numbers though, it would be very interesting to see how many streams absolute it actually leads to, just given how much more massive TikTok is relative to YouTube shorts in terms of just the amount of people actually watching videos on that platform on a regular basis.

[00:18:29] And I think the other cod with YouTube, just to underscore something you had said was that, if artists themselves, or whether it's more broadly creators do start to feel like they're being more marginalized on the entertainment platform, where their name gets smaller and smaller and it's less important about who they are, and it's more important that they are just someone that is providing content on this platform, then they may be more likely to go some.

[00:18:56] Like a YouTube, which we could transition into now, but go more sort like a [00:19:00] YouTube, which has tried a position itself as more friendly to its business partners as opposed to primarily itself.

[00:19:07] Tatiana Cirisano: Yeah. And I mean, TikTok is, presumably trying to prove right now that it doesn't need music as much, the music industry believes with the kind of experiment they're doing in Australia. So I think that, relationship aspect is really important to all of this.

[00:19:22] Dan Runcie: Yeah. And then one last thought on TikTok too that this just made me think of. I know a couple weeks ago, Snoop Dogg had re-released the Death Row Records catalog, at least the album he owns. Exclusively on TikTok. it was a window wink thing one week before he released it more broadly elsewhere.

[00:19:40] While I do think that's probably more likely to be a one-off thing, just because it's a unique scenario where he is an artist, non-major record label that owns his content exclusively, he can choose to do with it what he wants. I'd be interested to see if that changes things and if TikTok does get more involved with exclusivity, especially if it builds out its [00:20:00] own music streaming service.

[00:20:03] Tatiana Cirisano: Yeah, a hundred percent.

[00:20:04] Dan Runcie: So we'll see how that one goes. But let's transition over to YouTube now, and I think we talked a little bit about this, but I think some of the pros that it has is that it clearly is YouTube short specifically is clearly a top of the funnel for YouTube. And YouTube already has this algorithm and everything built in there that makes it very easy for creators to be able.

[00:20:28] Actually monetize and we've seen many artists be sustainable success stories with how they've tailored their music releases to working on YouTube and be a young boy is one artist that comes to mind there, there are several others and the fact that this can essentially be a way for them to just spread more awareness to others on the platform to then capture more eyeballs and at least of what we've seen, it feels like there is growth, at least of what YouTube has publicly shared.

[00:20:54] I believe I saw the most recent number was 30 billion views per day for videos that were being [00:21:00] posted there. So there are a few things that seem to be working in its favor on.

[00:21:05] Tatiana Cirisano: Yeah, and I think the sort of, what Lyor Cohen was talking about, like that ecosystem play that YouTube shorts has, is, it's a major pro for them whereas on TikTok, an artist is kind of posting an isolation on YouTube, maybe their shorts.

[00:21:21] It's all on the same platform, and shorts can lead to their music videos or their vlogs on YouTube. And that could, in turn, you know, lead to their music on YouTube music. And I think that ecosystem is really powerful and that's what TikTok would be going after if and when they do launch a Western streaming service.

[00:21:39] So for right now, I think that's probably YouTube Short's biggest advantage. And it's biggest sort of, way to like convince creators of its value, convince artists of its value and get them on board. and I think they're clearly trying to do that.

[00:21:53] Dan Runcie: Great point. Another one too that that made me think of is another of YouTube's strengths is [00:22:00] they clearly are as I mentioned before, they are artist friendly in that it is a place where you can grow, monetize, you have the people that you're trying to reach there. But I do think that the fact that they're just stronger relationships that they have with the industry overall.

[00:22:18] Does tend to play in, I mean, YouTube is very vocal about how much, or YouTube music specifically is very vocal about how much money it pays out to the music industry. It's made it a clear goal that it wants to surpass Spotify to be the platform that generates the most for that. And I think a lot of that transfers as well to on the artist side, whereas you mentioned a platform like TikTok, trying to be less reliant on music.

[00:22:40] YouTube is actually trying to double down more than that, and the fact that there's just more stability in general. Obviously TikTok is the opposite of this, where we're still not sure will there be a band, will there be another company owning it? But with YouTube, it's the rare platform that 18 years into its [00:23:00] existence, people are still discovered it, people are still finding ways to be able to tap in. It competes with so many other entertainment platforms in so many ways that whether it's for attention, for content, for revenue, at least from a revenue perspective, it's not too far behind Netflix, if not in the same category, and it's all free content and the international reach, there's a lot there, and I feel like that's stability and that longevity, there's something to be said there.

[00:23:29] Tatiana Cirisano: Yeah, that is something that I was gonna bring up too, is just how massive and far reaching YouTube's audiences. it's, you know, one of the most global platforms and one of the top like, the platforms that have the most penetration, I guess is how we put it in the data terms of, you know, weekly active users, globally.

[00:23:48] And a question that kind of comes out of that for me though is like, how much overlap there is, I guess between the YouTube audience and the YouTube shorts audience. and I don't really know the answer to that. I mean, you would think that [00:24:00] a lot of habitual YouTube users trickle down to using shorts, but I'm not sure.

[00:24:06] I think YouTube is, a lot of people use, YouTube on a desktop or on a smart tv, not necessarily on the app, on their phones, which is kind of the main place for using shorts. I think Shorts has, I know actually that Shorts has, a younger user base than YouTube as a whole, which also makes sense cuz YouTube just has more users in general.

[00:24:24] But that's like an open question that I have too is how much overlap there is there, because that would impact this ecosystem strategy that they have.

[00:24:31] Dan Runcie: Yeah, that's a good con to highlight and I feel like. ties into with just user behavior on the platform too. TikTok, there already is this mind thought of this is the place where I can just scroll and get lost for hours. And on YouTube, if you're using the app on the phone, it's a separate tab that you have to click into to get to shorts because they're all at the bottom, whether it's shorts or regular videos.

[00:24:55] You click into shorts and then you hope that it's a similar type of experience. The [00:25:00] difference though, is that YouTube's algorithm is very YouTube overall, that algorithm is very much based, a bit more on YouTube itself is now the second largest search engine we have, and at least from a YouTube itself standpoint, there's a bit more of a likelihood of it giving you repetitive content and repetitive information of, if you've seen one thing, you've probably seen all the things from this type of niche that you're interested in. Almost in the same way that Spotify can do that, because I know that's a very streaming thing to give you so much of what you already know to keep you sticky. But sure, from video it's different especially if you're trying to optimize from an entertainment perspective. You're trying to keep up with the new trends. You're trying to see what's there. This is your opportunity to just scroll and do that. So can YouTube shorts optimized for that as well, because optimizing for that type of algorithm is different than optimizing for the destination music streaming service, especially from a consumer [00:26:00] behavior perspective.

[00:26:01] Tatiana Cirisano: No, and, as you mentioned before with Vine, if you have a smaller user base, you also just don't have as much content to continue serving so that the user can scroll forever. You don't have as many niches to go into like, I think part of the reason TikTok works so well is because since it has.

[00:26:16] like what does it have? Like a billion users more. since it has so many users, every possible niche is on there. So whatever hyper-specific thing you're into, TikTok can serve you the content for that. But I don't know if that's something that these other platforms maybe reels more than shorts, but I don't know if these other platforms really have access to that level of niche.

[00:26:36] Dan Runcie: That's a good point. And on that note, let's talk about Facebook and Meta and everything that they're doing, both with reels on the Instagram side and reels on the Facebook side. I feel like one of the pros there that works out for them is that, it is so well monetized just from an overall business perspective, what they're able to do from ads and how they're able to generate that a bit more so on Facebook than [00:27:00] Instagram, but still they're able to monetize that quite well, and I think that that does work into their favor because at the end of the date, this is obviously less about the artist and the industry perspective, but more from the company perspective.

[00:27:14] Your ability to make that have a high ROI is strong. And at least from recent reports we've heard from Mark Zuckerberg, whether it's at earnings calls or some of the Meta town Hall meetings, it does seem like reels both on Facebook and Instagram are a growing source of eyeballs. And even though that is less money now relative to the more established streams that would only naturally grow over.

[00:27:37] Tatiana Cirisano: Yeah. you know, you're reminding me too that Facebook did roll out that ad revenue sharing program for creators. and for the music industry for rights holders, which I don't think that that's available on reels yet. I've seen some reports that it could be in the future, but, you know, that is what it seems like the music industry is trying to get TikTok to agree to.

[00:27:58] so, you know, I would imagine that's a better [00:28:00] deal, you know, from the music side of things, and that's definitely important to all of us.

[00:28:03] Dan Runcie: For sure. Any other pros from Instagram or Facebook?

[00:28:08] Tatiana Cirisano: Yeah, I think, they already have huge built-in user bases, which is, useful. They're kind of, they don't have to ask users to download a new app or like open a new tab the way, or I guess it's the same as YouTube shorts, but it feels a bit more built into what users already doing on the platform.

[00:28:28] But that kind of also leads me to another point that I've been thinking about with this is, it's so interesting how like TikTok is an app, but on these other platforms it's a feature. Like TikTok is a standalone app for short form video, but when you go on Instagram reels, it's just another feature in the toolbox.

[00:28:43] Kind of similar to how, you know, when Snapchat had stories, originally had stories, Instagram just added that as a feature and kind of stole the concept away. And it was, it worked because it was just another tool in the toolbox for its users. I don't know if that's a pro or a con, but it's an interesting [00:29:00] differentiator to me.

[00:29:00] they're positioning this as just another tool. I don't know.

[00:29:03] Dan Runcie: Yeah, I think you maybe think of two things there, so I think that new features like that do work best when there is a audience that is either searching for this answer or searching for this type of solution that's already tapped in with how they consume and how they naturally engage with the platform. And I think that's been one of the differentiating factors between the copycat attempts from Facebook that work and the ones that don't work.

[00:29:31] Like why I think that Instagram stories took off in a ways is because, In a way, even more so than it did for a Snapchat, is that you had this core group of people, influencers, who were already using Instagram, but there's just so much pressure to post these perfect photos on the main feed. So stories helped, co helped solve that, and it helped solve that in a way that.

[00:29:54] even more so for that target audience on Instagram, because Snapchat didn't really have as many [00:30:00] influencers, at least to the same extent. Instagram still had a much larger group. So it's like that group that our, the group stole the feature bin, that feature was even more relevant cuz they had more of the target audience than you ever did.

[00:30:11] That was already relevant to like, how they were going about it in a way where I feel like some of Facebook's other things like facebook dating for instance, that they've like started and I don't even know if it's still going on. But sure, you have all the active users that naturally would want to, like most of the people using Match or Tinder probably already have Facebook accounts, but that isn't like tapped into like how they naturally use the platform.

[00:30:34] And I bring that up in this case because I think that reels is a behavior that is more closely aligned to the Instagram experience than shorts is to the YouTube experience because there was already a mindless nature to some extent of how Instagram was being used. Sure, I know there's differences based on to the point you mentioned earlier of people saying, Hey, I wanna see [00:31:00] my friends.

[00:31:00] Not necessarily all this to other stuff, but there's still a mindlessness to seeing your friends or just scrolling through the

[00:31:07] feed and.

[00:31:08] Tatiana Cirisano: that's a really point.

[00:31:09] Dan Runcie: And YouTube didn't really have that scrolling through the feed dynamic. Sure, the algorithm could suggest things, but the algorithm suggested things in a way that was almost closer to Spotify's algorithm suggesting things than it was to Instagram.

[00:31:21] suggest you the next thing.

[00:31:23] Tatiana Cirisano: That's such a good point. And it reminds me about how I was saying before, like people on Instagram will run out of stuff from their friends to look at. So maybe reels is the solution, maybe it's like going back to what you're saying about like solving a user need. Maybe it's you run out of things from your friends.

[00:31:40] Here's reels where you can scroll mindlessly forever and see content from people you don't know. I don't know. That's a great point.

[00:31:48] Dan Runcie: Yeah, no, thank you. It's something I've thought about too, because I feel like, yeah, running outta content is clearly a thing, cuz I feel like we've all had those moments on Instagram where, we're taping this now, it's almost March. You'll see posts [00:32:00] from the end of December that come through on something and you're like, wait, what?

[00:32:03] Why am I getting this now? Like this isn't even timely anymore, but it's something that went viral then. And that obviously isn't something that happens on TikTok in that same way.

[00:32:11] Tatiana Cirisano: Yeah, you you don't get a thing on TikTok that says you're up to date. When I get that on Instagram, like , when I get that on Instagram, I'm like, that's how I know I've spent too much time on this app. It's the equivalent of Netflix going, are you still

[00:32:23] Dan Runcie: Right. You still there?

[00:32:25] Tatiana Cirisano: you don't get that on TikTok if you got that on TikTok, like I need, someone needs to help you.

[00:32:32] That's such a good point. That's such a good point. So yeah,

[00:32:35] Dan Runcie: Some of the cons, I will say just with reels, both from Facebook and with Instagram, though a lot of ads and a lot of ads, and this is part of the double-edged sword about how well it's monetized, right? But a lot of ads that I don't hear people complaining as much about ads on the other platforms.

[00:32:53] Tatiana Cirisano: Mm-hmm. , that's something, I hadn't even thought about here, and you're totally right. many more ads on those platforms for sure.[00:33:00]

[00:33:00] Dan Runcie: Yeah, and I think too, just given that point I mentioned about influencers being a core demographic for Instagram overall because that's been the core audience there. How does that translate necessarily as much to artists? And I know that there's some overlap there with some artists who very much position themselves as influencers.

[00:33:18] But if you're an artist who really isn't about influencing in that way, is ls going to be as effective, relatively speaking, compared to some of the other short form video platforms.

[00:33:29] Tatiana Cirisano: Yeah, and I think that also gets to the, cultures that are different on these platforms like I think similar to what you were saying about how Instagram influencers like stories because they could be more off the cuff. I think reels still has a feeling of being a bit more professional and less casual than TikTok.

[00:33:47] TikTok feels a bit more casual, off the cuff weird. You don't get as much weird content on Instagram reels. It's a lot more curated and, professionalized. and it's interesting because I actually had, as one of my [00:34:00] pros to talk about something that I've just, I don't know if this is still true, but something that I've heard from marketers, music marketers in the past is that, Instagram just has more trust with brands than TikTok and other platforms that are new because they've been using it for so long.

[00:34:12] they know what the deal is like. It just has, better relationships in that respect. but if that's also leading to more ads on the platform, then it's kind of a pro and a con.

[00:34:21] Dan Runcie: Yeah, definitely. That's a great point. The brand piece too, and I know that TikTok is clearly trying to do it with some of the reports they've put out some of the positioning trying to get itself to be seen as a home for brands to be able to tap in. But Instagram has owned that space for quite some time.

[00:34:37] Tatiana Cirisano: Exactly.

[00:34:38] Dan Runcie: Yeah, any other pros and cons on reels before we move?

[00:34:42] Tatiana Cirisano: Well, I guess one other thing I'll say, this kind of applies to everything, but you've made me think during this conversation. I would love to know what percentage of people on each of these platforms are lurking versus also posting content. cuz I think that would impact our idea of like how deep the trove of content can go and how that impacts the [00:35:00] algorithm and the niches you can get into likeI sort of have a theory that because TikTok is a bit more casual and off the cuff, it might have more of a, percentage of its users are posting content. Like I've never, I don't think I would ever make a reel. It feels very influencer to me, but I would post a TikTok cuz whatever, like, it just feels a little bit more casual.

[00:35:17] So I think that's an interesting question to me is what percentage are creators and what percentage are just like passive users?

[00:35:25] Dan Runcie: That is a really good question. Yeah, it would be good to see that, right? Because I feel like TikTok kind of has two things going forward one, it does seem less formal from a content release perspective of just being able to share it. But on the other hand too, anytime you get into the absolute numbers of over 1 billion, approaching 2 billion monthly active users specifically on this feature of the short form, you know, For You page, it does lend itself to likelihood.

[00:35:56] Each time you go outside of that like concentric circle, I feel like it's a higher [00:36:00] likelihood of attracting more lurkers than hardcore users. But it'll be great data to be able to see. That's a really good point.

[00:36:06] Tatiana Cirisano: Yeah. We'll have to put that in a survey.

[00:36:09] Dan Runcie: I know, I know. We'll have to get those answers somewhere, but so now that we've talked about each of these, TikTok is the company that is clearly in the lead, both from a reach perspective, how long it's been established with this particular platform itself, and outside of the potential government sanctions or anything there, is there anything that you could see that could change the likelihood of that continuing relative to these other two services?

[00:36:34] YouTube shorts and Instagram and Facebook reels.

[00:36:37] Tatiana Cirisano: Yeah, it's a good question. I mean, the thing that immediate. Comes to mind for me is it's licenses with music and its relationships with music knowing that those are negotiations that are happening as we speak. I think if TikTok were to suddenly, I guess this is the thing that they're kind of trying to test in Australia, but if TikTok were to suddenly lose a lot of popular music, what would that do to the platform?

[00:36:59] [00:37:00] so I think that's the first question that comes to mind for me, just from, you know, music industry stand

[00:37:06] Dan Runcie: Yeah, I hear that. I could see that I thought about this too, and I had a tough time thinking about something that could really shift things. I do wonder about, If monetization itself and revenue generation does become an issue for TikTok moving forward, how that can shape the nature of the experience of the platform, right? Because meta and Google being YouTube's parent company are both so much more established. They've been around for years generating revenue at a pretty steady clip. And while at least the way TikTok is right now, it does have the advantage of being under bite dance, which has several, you know, has a lot of money coming in as well.

[00:37:49] I do wonder how profitable that will be. And obviously we saw how meta adapted to try to make money, where we're complaining about how [00:38:00] many ads there would be on the platform, could any potential changes there from the need to get more money, change that user experience in a way that could decline the user experience for this core demographic.

[00:38:12] So that's definitely a risk for TikTok.

[00:38:14] Tatiana Cirisano: Yeah. And also kind of going off that, if any of these platforms were to provide a much better way somehow for the creators on the platform to earn money from it, and then the creators were to go to that platform, that's where the audiences would be. So I think that creators actually have a lot of leverage right now, with that, because I think you can tell that all of these platforms are kind of competing to be the most sort of creator friendly, TikTok is updating, its fund, its creator fund. after getting a lot of complaints about how it was working, YouTube shorts, I think announced an ad revenue share program. So I think that could shake things up is I, I don't know what it would be, but if one of these platforms had ways superior monetization tools for the [00:39:00] creators, I could see the creators migrating there and their audience is following.

[00:39:03] Dan Runcie: Right. Yep. Good point. They all have funds to some extent, but you clearly need more than money if everyone else has it too, right? Like how is it gonna be used in an effective way? So it'll be interesting to see how that plays out.

[00:39:16] Tatiana Cirisano: Yeah. But at the same time, it's like, even if another, say that another platform say that YouTube Shorts had way better monetization for creators, but it still has a smaller audience. Will creators migrate there and hope that their audiences follow them? Or do they feel like they, it's better to have the larger audience for, you know, leveraging brand deals and things that are outside of the app like.

[00:39:36] Dan Runcie: True. Yeah.

[00:39:37] Tatiana Cirisano: I don't know what would be the better deal.

[00:39:41] Dan Runcie: Yeah, no, that's a good point because I think as we saw in the Spotify era, it was very easy for artists that didn't care about streaming and Spotify to ignore it and be very proud about them ignoring streaming back

[00:39:52] Tatiana Cirisano: Exactly. Yeah.

[00:39:53] Dan Runcie: 16. But all those artists are now on Spotify because they were like, can't beat 'em join them pretty much.

[00:39:59] Tatiana Cirisano: [00:40:00] Right. Like will TikTok always be the place where you can't afford not to be?

[00:40:04] Dan Runcie: Yep, exactly.

[00:40:06] Tatiana Cirisano: I mean, not forever. that's the thing about social media. nothing stays. It's popular, I don't think forever, but you know, how long can it last? I don't know.

[00:40:14] Dan Runcie: Yeah. No, we'll see. We'll see. All right, so a few, quicker questions here as we're getting to the tail line butwanna break this down for which of these platform do you think is in the strongest position for each of these groups? Artists, record labels, and, the parent company, the company itself overall.

[00:40:30] So let's start with artists. Which of these companies do you think creates the most value for artists? And let me not just say companies be clear. Let me talk which short form video platform.

[00:40:41] Tatiana Cirisano: Yeah. Well, it depends how you define value, I guess. Because if you were saying for having a hit or influencing streaming numbers? I would say TikTok getting discovered, I would say TikTok, but if you're saying for developing a [00:41:00] sustaining long-term fan base, no matter what the size is, I might say YouTube shorts because of that ecosystem that it has.

[00:41:07] Dan Runcie: Yeah.

[00:41:09] Tatiana Cirisano: yeah.

[00:41:09] Dan Runcie: I think that's a good way to frame it cuz I TikTok down as well, just because of the absolute numbers part of the algorithm, how many people you could reach. But I think that your per user approach or even the ability to do conversion of actual fandom. YouTube probably has a bit more tight in there.

[00:41:27] It's kind of like a short term versus long term

[00:41:29] Yeah, definitely. And it's like, okay, do you want this absolute number or do you want who you're most actually able to have as a real super fan down the road?

[00:41:39] Yeah.What about record labels?

[00:41:40] Tatiana Cirisano: That's a good one. Because I mean, we know that by far, YouTube as a whole is generating more for the music industry for record labels than any of these platforms. But when it comes to shorts, I'm not so sure it might be TikTok

[00:41:56] Dan Runcie: Yeah,

[00:41:56] Tatiana Cirisano: in terms of the bottom,

[00:41:58] Dan Runcie: Yeah, it's tough. I was stuck [00:42:00] on that one too. I think my answer still leaned YouTube, but that's probably thinking about, A the overall tie in and the clear

[00:42:07] connection to have it feed into the broader video platform, but then also what it seems like Leo's goals to make that be a clear thing.

[00:42:16] So that was the thought there. And then most value it created for its parent company. Which one would I be saying.

[00:42:24] Tatiana Cirisano: okay, so we have TikTok bite Dance, YouTube, Google, Instagram, Facebook. that's a really good, that's a tough one.

[00:42:32] Dan Runcie: I went with meta for this one because I

[00:42:34] Tatiana Cirisano: That's where I was leaning. That's where I was

[00:42:36] Dan Runcie: it's. , I think it's the most well monetized, at least from what a social media user is able to do and what they're able to generate from a sole Facebook user on average is so much higher than any of these other platforms. And the fact that this could potentially be a funnel into that is strong.

[00:42:55] And I know a lot of people may roll their eyes, if you're a certain generation the thought of a [00:43:00] Facebook reel even as opposed to an Instagram reel. But there's an audience for it and there's a reason why it's there. And that may not line up with contemporary artists, but that may line up with some, you know, other established artists that are clearly trying to reach that base.

[00:43:12] So I feel like there's something there.

[00:43:14] Tatiana Cirisano: Yeah, I think that makes sense. That's where I was leaning to. These are good questions.

[00:43:18] Dan Runcie: And then I just to close things out, we talked a little bit about this earlier. Well, you touched on this a little bit earlier, but will there be a new form of consumption, content consumption that could take over as the place for music discovery and its top of funnel in the next five years?

[00:43:35] Tatiana Cirisano: Yeah, that's a great question. What did I touch on earlier that related to.

[00:43:39] Dan Runcie: You were mentioning that there's a new social media platform like every few years that like comes through. So even though TikTok is in like a

[00:43:46] Tatiana Cirisano: yeah.

[00:43:46] Dan Runcie: today, we don't know what it's gonna look like in the future.

[00:43:49] Tatiana Cirisano: So I have a couple answers to this. One thing that I've been really, it's so funny, every time we do this, I always have a timely report coming out on the topic. I don't know how you have like [00:44:00] this somehow, this telepathy to know this, but I was wor I'm working on this report right now that's very related, which is about how potentially the next step for all of this, for music and social media could be, not only are you opening TikTok and adding, you know, a Taylor Swift song to your post, but you're also remixing the song, or you're adding your own vocals or you're actually changing it. So going a step further in what I was saying about, users engaging, creating their own spin on the music that they're fans of, they would be actually changing the song as well.

[00:44:33] Dan Runcie: you wrote about this recently, right? About like

[00:44:35] Tatiana Cirisano: yeah.

[00:44:36] Dan Runcie: and like, and music having its Instagram moment.

[00:44:38] Tatiana Cirisano: Yes, exactly. So the same way that Instagram brought kind of mainstream photography tools to the average consumer, and TikTok did the same thing with videography. when will music be part of that? When will music making and recreation tools actually be part of these platforms? And when I've talked to people who know way more about this than I do, and said, you know, why hasn't [00:45:00] this happened?

[00:45:00] A lot of it is about how hard it is to simplify music making into a mobile screen, let alone like, put it on top of a social app. and that's why, you know, I had the AI tie into my blog post is because, there are companies that are using AI to simplify that process and make this possible. So like Snapchat is a company that is like semi-related to short form video that we haven't talked about, and they have an integration right now with a company called Mini Beats, where you can remix the song that you're putting on your post. so I think that's not necessarily like, it's not a new platform, but it's a new way of consuming like I think creation as a form of consumption is like probably the next step.

[00:45:44] Dan Runcie: And that ends up being the catalyst for how so many of these platforms grow. We talked about TikTok and just how it was able to attract this group of music in some way was the backbone for user generated content. And then it just attracted so much, and everyone's talked about what AI looks [00:46:00] like, I was watching some video the other day about some guy that looked and sounded nothing like Kendrick Lamar had this voice alteration thing that made him sound just like him.

[00:46:09] And while it's not quite AI, I think there's a lot of elements there. So whoever taps that and then that can then be the launchpad for the next thing. Something like that could easily overtake and become the next dominant social media player. But we'll see. It'll take a couple years to get to 1.5 billion

[00:46:26] Tatiana Cirisano: Probably more than five.

[00:46:28] Dan Runcie: probably five.

[00:46:29] Tatiana Cirisano: probably more than five just because of licensing really. But, I mean, I think the interesting thing to note there is this type of behavior is kind of already happening like I notice a lot of with sped up songs and how the music industry actually adopted that after sped up clips were going viral on TikTok, like users are already modifying the songs and then uploading those modified versions.

[00:46:49] So imagine if that capability was actually part of the platform itself.

[00:46:52] Dan Runcie: Right, right. It's like everyone saw DJ Screw make a, you know, huge influence with this for this chopped and screwed music. [00:47:00] So it's only about time that you make it easy to make that accessible for users.

[00:47:04] Tatiana Cirisano: Yeah. So we'll see.

[00:47:05] Dan Runcie: Yeah. So we'll see. But Tati, pleasure as always. Thanks for coming on and yeah, we'll definitely have to stay tapped in with what you have coming up next on this topic.

[00:47:14] So relevant to this discussion.

[00:47:15] Tatiana Cirisano: Yeah, thanks for having me again. Always a pleasure.

[00:47:18]

The artist-entrepreneur-investor Mr Eazi has no on-off switch. Who he is in the recording studio, on stage, and on the boardroom are the same. With business and music, Mr Eazi has found parallel industries that allow him to be the same person.

He’s founded both emPawa Africa and Zagadat Capital to feed his business appetite. The former invests into African artists and helps them scale. Meanwhile, Zagadat Capital invests into tech startups, most of which are inside the continent. 

Then there’s Mr Eazi, the Afrobeats artist. He’s collaborated with the likes of Beyonce and J Balvin, and also taken center stage at Coachella. After taking time away from music amid the pandemic, Mr Eazi is back in album mode now. Holed up in Cape Town currently, Mr Eazi has plans for two new albums this year.

I caught up with Mr Eazi to cover his never-ending pursuits in music and business. Here’s everything we chatted about:

[0:22] How Mr Eazi is balancing artistry and entrepreneurship

[1:40] Similarities between music and startups

[6:19] Taking equity stakes in artists and what an “exit” looks like

[10:50] How Eazi measures success for Empawa artists 

[13:00] Eazi’s investment thesis for startups

[18:10] Startup success trends in Africa 

[21:30] Lack of capital is biggest challenge to Africa’s startup scene 

[29:45] Raising awareness within the continent

[32:20] Biggest obstacle that African artists face 

[36:52] Uncleared sample on a Bad Bunny song

[40:45] Impact of Western companies investing into Africa

[47:35] Mr Eazi is in album mode

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Mr Eazi, @mreazi

This episode's sponsor is Symphony. Put your fanbase growth on autopilot with the first AI-powered platform that brings all your artist marketing workflows in one place. Learn more at symphony.to/trapital

Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital

Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.

TRANSCRIPT

[00:00:00] Mr. Eazi: part of me deciding to be an artist was reading the book, the Jay-Z book, Empire State of Mind. And that was when I saw it clearly and I was like, oh, wait a minute like this music is a business and the music gives you access, it gives you access to capital, access to the network it puts you, gives you a seat at the table

[00:00:20] Dan Runcie Intro: Hey, welcome to the Trapital Podcast. I'm your host and the founder of Trapital Dan Runcie, this podcast is your place to gain insights from the executives in music, media, entertainment, and more. Who are taking hip hop culture to the next level.

[00:00:48] Dan Runcie: All right. Today we have the one and only Mr. Eazi, the artist, entrepreneur. How you doing man? Welcome to the pod.

[00:00:56] Mr. Eazi: I'm good. I'm good. I'm chilling. What's, going on

[00:00:59] Dan Runcie: Me. I'm good, man. Trying to keep up with you. Trying to keep up with you, man.

[00:01:03] Mr. Eazi: I'm trying to keep up with me, bro.

[00:01:06] Dan Runcie: Well, let's talk about that because you are someone who sits at this intersection of artist, investor, entrepreneur, and you are doing all of those three jobs and more. And it's also happening at this moment where the entire continent of Africa is booming from an entrepreneurship perspective, booming from a music perspective.

[00:01:29] How does it feel right now? How are you operating being at the center of that?

[00:01:34] Mr. Eazi: To be honest, I just feel like it's a blessing to be born or to be existing in this time. where like you said, everything is just like taking shape and, you know, yeah, it's exciting and it is for me. It's like every day I'm seeing opportunity left and right and just figuring out what is fun and what is doable and just, you know, going from thinking, oh, I'm an entrepreneur, to oh, I make music. And, it's similar cause it's products at the end of the day, on the bottom line, it's like you're selling music or you're selling some other product. And I thought they were two different things, but you know, I'm seeing how it's one and the same.

[00:02:17] It's just exciting to realize that I don't need to be two different people like I still be the same me and operating both walls.

[00:02:27] Dan Runcie: So how are they similar for you approaching both music and startups?

[00:02:32] Mr. Eazi: So I feel like every artist is like a. because the artist has a brand, has a feel, it's like a service product, it's an emotional product, right? And every artist, you know, that IP, there's an IP with every artist, and the artist usually needs investment to scale. And like coming from, like when I went outta school straight into an incubator program called 440NG and I kind of, there I learned how, you know your idea and your business, you know, you have the idea, you put it together, you iterate as the business keeps on going. So what you thought was the business at the beginning, you know, your customers could give you feedback and then you realize it evolves, it accelerate and you are trying to be as lean as possible and grow to the point where you have that critical volume to sort of like ask, what's the word as, proof that this is a valid idea either via customers or via revenue. And then you try and get to, you know, you try and scale, and you figure out what's your, unique value proposition is, and that's like where the startup, what's your unique value proposition?

[00:03:46] Who are your customers? What's the idea? You take it to market, you test it, you go get investment. And it's the same thing with every artist so at the time where I decided to do music full-time, I was in an incubator program, and so I just started to see the similarities with the music. I'm like, okay, let me test it, put it out, people listen to it, you know, gimme the feedback, you know, and the point where I decided I was gonna take the music as a business was when like I got the first person reach out to me and say, Hey, I want to pay you for a verse. So that was the first signifier to let me know that, okay, maybe I'm onto something.

[00:04:22] Then I started to have my early fans then Lauryn Hill reached out and said she wanted me to come play at her show. And I thought it was a fluke until I found myself in America performing in Lauryn Hill, coming out to say, I love you, thank you so much for coming. And like all of that is like with a business, with a traditional startup, it could be different things, but for me, the revenue, the number of users, aka the fans, all of that were signifiers.

[00:04:51] And then I just needed, you know, the capital to take it to the next level, right? So I think those are the similarities, and I've tried it when I started emPawa it was at the beginning, it was to test if they were one and the same. So I was like, okay, Y Combinator send, you know, picks a few, start a couple of startups, you know, does incubator program put funding and whatnot to them?

[00:05:18] And then maybe 20% of them you know, end up working on, and I did that with 100 artists across 11 African countries, over 30,000 entries then picked 100, then gave them the same amount of money, created the emPawa YouTube channel to host their videos, service it the same way, and in the end, start to see the ones that organically started picking up.

[00:05:41] And we had success with that. So for me it was like, oh, wait a minute it's one and the same. I've proved this. And that's when emPawa then turn from, you know, the, program I was doing to actually full service music company, because I had proved that it was the same and in the same way you invest in a song.

[00:06:01] I remember the first Joeboy song, the visualizer cost me $500, and then the song ended up having like 30 million views in like a year. And you know, Joeboy just went boom, boom, boom, boom, boom. So, I start to say, okay, there is a process here and perhaps we could do it with other artists, you know? So to answer your question, that's how I see both as, you know, one and the same in a way.

[00:06:28] Dan Runcie: That makes sense. And I wanna talk about emPawa specifically because this is you bringing so many of those startup concepts to music like you said, you saw Y Combinator is doing. How could you apply that here? The difference though is that with Y Combinator, the promises of course, an exit, so they're hoping this companies get acquired.

[00:06:47] They're hoping that they go public in music though. What does that look like for you as someone that is taking equity stakes in the artist? What does your return look like? What does your exit look like?

[00:06:59] Mr. Eazi: So, I mean, first off, the return is like when you invest, you know, you invest to create the content, you put it out, put some marketing, and you start to see, you know, the streams coming, the revenue coming, the artist is now doing live shows, getting endorsement deals, you know, you could get four, 5x, 10x multiples, you know, and time.

[00:07:24] so that's, one. But secondly, like on a developmental standpoint, you could develop the artist and then a big label comes and says, oh, we wanna upstream. So upstreaming is like a sale. It's like an exit, and you could still have passive rights to get passive income, on the artist. So those are like the kind of like returns and the kind of like exits.

[00:07:48] Plus you could just invest in the IP, buy it up, and next thing somebody wants to sample it and then they have to write you a big check. And it could happen now, it could happen in like 10 years, in 15 years time, you know, you could have a record just lined. I'll give you an example, recently the Joeboy record that didn't make it to the Joeboy is one of my artists.

[00:08:09] The song didn't make it to his album, and so we then licensed the song to a guy called Lakizon, you know, he puts out the record, you know, there's not so much thought to that. I wake up one day, Bad Bunny has put out, an album and I'm just listening to the album cause I'm a fan and I hear a record there and I'm like, basically what I was trying to say is, so you have that record that didn't make it to the album, Right? And it's just there and we license it to this guy and the next thing the record appears on a Bad Bunny album.

[00:08:43] And that's like the biggest artist in the world last year by a lot of metrics. And so that's like an example, you know, an exit because you make this record and then boom, and the upsides are like, you know, so high. And right now on the market, even if you wanted, you are seeing, you know, my mentor, one of my mentors, Merck Mekadalas, you see how many multiples from 10 to 23, 24xlast year's revenue on, you know, buying rights for music. So I think there's multiple exits and even just the music and music IP as an asset class has been proven to be a valid asset class by Merck and the likes. For instance, I was, I was part of the deal, the KKR deal that bought, I don't know if you saw that some time ago, that bought a law of the rights, including the Weeknd et cetera.

[00:09:36] I was part of that deal, via one of the companies, and you could see how you could see what an exit looks like. So there's multiple exits for music, whether it's an upstreaming deal from the label or it's a straight up acquisition of the catalog, or it's just multiples of revenue, the artist is now beginning to earn or if your label, you could get your entire label could become upstreams or you could go into a JV type situation.

[00:10:06] Dan Runcie: So that speaks more to the flexibility that's offered with being able to invest in music. It isn't just this one time event that you're hoping for as a startup investor.

[00:10:17] Mr. Eazi: Yeah. 100 percent.

[00:10:19] Dan Runcie: Yeah. Yeah And with that too, you mentioned that you have a hundred artists that at least came through the first cohort, over 30,000 had applied and when you are measuring your success for them, I'm sure that each of the things you mentioned are the things that you hope for, but along the way, what are some of those key performance indicators or what are some of those things that you're looking for to hope that traction can be gained to hopefully get to the point where you do have, positive financial event that comes.

[00:10:51] Mr. Eazi: I mean, it starts with like hyper local recognition. So, you know, I give example, there was this like I think she was 18 or 17 at the time, Nik, her name is Nikita and she's from Kenya. She had joined the program, she didn't make it to the top 10, but we put out the video and you know, that song started to gain local traction in Kenya even though she didn't make it to the Final 10.

[00:11:17] And by local traction, I mean like number of downloads, it made it to radio, you know, it made it to press picking it up. And even though she wasn't part of the software and I didn't give her full on funding, she got signed to Universal. So for me that's a testament of like the success and those are like KPIs like, okay, does it get to radio in your local country?

[00:11:40] Does it get, you know, that local, you know, appreciation from the fans in your country? And then when does it start to transcend, and there's nothing wrong with you having a popular song in Kenya or in Tanzania, but by the time it starts to go from Tanzania, you know, to rest of East Africa and then comes to the west, you know, those are the things you look out for and, you know, next level is by the time you start getting booked for shows based on the 1, 2, 3 singles you put out,

[00:12:11] Dan Runcie: That makes sense. That makes sense. Let's shift gears a bit to startups, because I know that's the other space that you're actively in. What is your thesis for investing in startups?

[00:12:22] Mr. Eazi: Right now, what I do is like, you know, I can bring some form of value to. So when I look at like the idea, or like when my team, you know, sends me some deal flow and we kind of walk through it, it's like, okay, aside the money, what else can we bring to this business? You know? And if I'm able to spot some extra form of value I can bring to help the business kill.

[00:12:53] Then I want to invest, you know, it could be marketing. Can I add some marketing? Can I add some of my experience here? Can I leverage on my network in this other side? Aside the money, and most of the investments I've been making haven't been personal. They've been via my collectives, Zagadat Capital, and Zagadat Capital is basically, for now, it's 12 people like myself, young, successful African boys or girls who usually, you know, find it boring to speak to the financial guys and you know, have some form of liquidity. And so when we get the deal flow, and I just look at who's in the collective and who can add value, then we bring it to, the collective and then we invest.

[00:13:45] So it's majorly been, it's like 90% being Africa focused because I feel like there's so much opportunity, on the continent and also on the sentimental level. The amount of impact the investment does when it's, on the continent makes, is something that's bigger than just the money.

[00:14:07] And the money is great like, you know, we've seen a lot of African companies hit and cross a billion dollar evaluations to become unicorns. so you know that, can happen. But at the same time, the impact, and it's always fun when I go to an office that I'm an investor in of the like employees, they're excited that Mr. Eazi is in our office and Mr. Eazi is a shareholder like, you can't buy that. And I think that's what I always wanted because like part of me deciding to be an artist was reading the book, the Jay-Z book, Empire State of Mind. And that was when I saw it clearly and I was like, oh, wait a minute like this music is a business and the music gives you access, it gives you access to capital, access to the network it puts you, gives you a seat at the table and you know your merch, merchandising could be like the three cap that chance the rapper does, or it could be Uber or it could be, you know, Power Pay, which I've invested in that, you know, is the number one mobile money focused payments aggregate on Africa doing over 1 million transactions a day, you know, and so it's, different things and I know how I can bring value beyond my, cash it and just watch it grow. And it's exciting

[00:15:28] Dan Runcie: That makes sense. So that collective, that operates a lot like a syndicate. You all are sharing deal soon where you can add value. What stage do you normally invest in and how much money are you normally putting into startups?

[00:15:41] Mr. Eazi: You know, it's different like we've done like some seed stage. we did a company that was looking at listing last year on the LSE. We've done growth stage as well, so it really depends, it depends on where it comes to us, and it could be as low as, you know, 25K check, which just gets maybe if it's a 25 K check, I might just take 50% of it and just say, Hey guys, do the rest, and I just put it on the platform we use and boom, boom, boom, everybody just clicks and it's, done. Once it's done, it's done like I just invested in a platform called Ruka Hair, and it is a startup that, you know, provides hair for, people of African descent based out of London.

[00:16:30] And that was a small check for, and it is growth stage, you know, so it really varies. and there's no rule. Yeah.

[00:16:41] Dan Runcie: That makes sense. Yeah, keeping it flexible and gives you the opportunity to see everything that's coming through. What are some common trends that you're seeing? What are some things that you're seeing from the founders or from the startups that are coming through, especially the ones that are getting markups and getting closer to exits?

[00:16:59] Mr. Eazi: I'm seeing like, you know, companies that solve fundamental, problems. You know, and I know there's so much bars on FinTech, it's like everybody just gets a hardon for African FinTech. But like, for instance is, if this products are solving specific, like there's a company called Eden Life, which I invested in.

[00:17:26] And what this company does is like, you know, there are a lot of people like myself who, we don't in town enough, like enough for us to like have a chef and all of that. And we have very busy schedules, so we want like meal preps delivered to us and we want like our laundry picked up, you know, that's a very middle class, sort of like early into the job market, like pre family kind of types. And so that kind of product is a product that's like valid because like you're solving a particular need, you know, or PISA for instance, that are invested in. So PISA gives remittance based lending.

[00:18:13] to, people in Mexico. So you know, the love Mexicans in the US sending money back to, Mexico to their family and their loved ones. And PISA uses that data of how much you get your current every month like my mom and dad, I put them on allowance. Like I pay them an allowance every month, Right? So we use like, by the way, for clarity they don't need it like they're good, but it's just something I do. And the other people in cultures like African culture, like in Africa, it's a pride for you, even if your dad is a billionaire, like being able to do something for your dad is like, it's like a pride.

[00:18:53] It's like you've achieved, right? So you have people sending money back home, you know, either to Mexico or to different parts of Africa to either family that need it or to do stuff with it, like build a house back home or to help the family school fees or whatever, or just out of sentiment, like, it's like paying your tithes.

[00:19:15] I don't know if you're Christian, it's like when you pay 10% of your income to the church. It's something like that. and then there's all that data, all that data because it's like salary, right? it comes every month, usually on a certain day. So PISA uses that information to provide loans to people.

[00:19:34] And that's like a need, that's a specific need. So that's what we are seeing, Yeah.

[00:19:40] Dan Runcie: What are some of the bigger challenges right now for startups in Africa?

[00:19:45] Mr. Eazi: I think one of the biggest challenges is, you know, getting funding and you see a lot of, like African startups, YC has been doing a great job, but there are, you know, and like, future Africa, which I'm part of and I'm an advisor, you know, investing in these projects. But raising fund is like so hard.

[00:20:07] There's still a hesitance when it comes to African startup raising funds, especially at seed stage. And usually this is not a lot of money. It's like from 20K checks to like even hundred is a lot of money, you know, but that 50 k to, get you into flight mode. So I think that's the biggest issue is not lack of ideas, it's, you know, getting funding, especially local funding that's not a lot of local funding sources. There's few options like the YC's and it's hard to get in generating that local funding is still a problem as a lot of the, you know, organizations and a lot of investors are still trying to understand this whole tech investment and valuation.

[00:20:55] I have my uncles ask me, you said this company is, is what, $20 million? Do they have 20 million cash in their account or do they have, buildings? Where's the building? Where's the physical asset, you know, it's that culture going from brick and mortar to technology and understanding evaluation and all of that.

[00:21:15] And, then you have sectors that are now like so hot that valuations are going crazy you know, And you have, like, depending on what sector you are, a lot of the countries are just catching up to technology. And in some places there are no laws written for the kind of products you are creating.

[00:21:38] So if you're not in sync with the regulators, the regulators might pass a law that is detrimental to your business and all of a sudden you wake up one morning and your successful business is now killed just like the motorbike railing company. I forgotten the name in Lagos. That was really growing and then with one day regulations like no motorbike, transportation in Lagos, boom, dead.

[00:22:04] So, I think it's not just in Africa-peculiar problem. It's like, for instance, with crypto and, you know, a lot of, you know, countries trying to understand what is going on. So you're having innovation outpacing regulation and you know, if there's no proper interaction you are having like regulations could just like be the end of use.

[00:22:28] So I think access to capital, and in some sectors, depending on your sector, regulation as well could be a major setback.

[00:22:38] Dan Runcie: The access to capital piece, I could see that, especially since the friends and family round is such a key piece, or having the angels outta there, such a key piece to help make that happen. But if the people that have the financial means are fewer and far between, you know, whether it's folks like you or others that are in your syndicate or maybe some of the other co-investors you have, that means that the deal flow that you all get is heightened even more so because there's just so fewer other places, which makes you all needing to be even more selective, I can imagine, than you maybe otherwise prefer to be. I mean, how do you feel in that perspective as someone that wants to see the space grow, but you know that you can't back everybody even though you know, I'm sure inherently you wish you would, but you still have your own rubrics. You still have your way that you evaluate things, and that likely has to be even heightened given the number of deals that you're seeing.

[00:23:32] Mr. Eazi: Yeah, I mean like, well one of the things I pray, I have some days, fuck you money. Do you understand? To just like, because like 1.2 billion people in Africa on the continent. And it's like, if you think of the amount of money that comes back to Africa from the African Diaspora, it's like, I think it's like over a trillion dollars a year.

[00:23:54] So there's so much opportunity. And, but like you said, what this does is it makes things a little bit harder for people, you know, entrepreneurs who need the money and the proof is in the pudding. Like I always say, like although it takes time and things are changing, don't get me wrong, things are changing.

[00:24:15] They are more local, VCs, funding, but like I probably know like five people with networks over a hundred million, right? But now, for me to get to the point where, and these are people who've, amass all this wealth with brick and mortar businesses. So now you know, there's a job to do to sort of like show proof, show validity that, hey, I invested at this point, it's not for Gen Z it's not a pyramid scheme.

[00:24:50] And like show people and then you get more people, coming in. And I have seen like some of my friends who are like billionaires now start to set up separate funds to say, okay, you know what? I don't really know what this tech thing is about for, but you know, put the money in future Africa or put it in some other fund and try to learn.

[00:25:11] So it's more sort of like publicity and sometimes the drop, the setbacks are when there's a big startup out of the continent that then runs into all sorts of scandals and then, you know, it causes five steps backward. And that's not peculiar to Africa like, I mean, you seen what happened to ftx, right? So that happens everywhere.

[00:25:35] The only differences, you know, because it's still kind of new. It causes more negative effects, you know, so I think there needs to be more education, more pr to the successes of these companies. Every success is a success and should be, you know, communicated and things would get better because there is capital on the continent.

[00:26:00] There is like lose capital on, the continent looking for where to invest, you know? So I mean, things are changing like Future Africa. I always keep mentioning Future Africa, like they've been able to show that, you know, they know what they're doing. There is a method to the madness. They could deliver results in terms of like revenue, you know, they invested in Move, which is a company that provides, you know, the cars for Uber drivers and it's, you know, I think it's now a unicorn and that's like a very particular need because, you know, drivers need cars, but they don't have the capital to purchase the cars, right? And going through the banking routes, you are gonna have to bring collateral, your mom's name, your grandmother's house, plus the high interest, you know, so they've identified, and this has been a problem, it's still a problem to today that they've been able to solve.

[00:26:54] So I think the more people know about this, the more education, the more things will open up.

[00:27:01] Dan Runcie: The PR piece you mentioned is interesting because from my side, living in the states, I'll see the articles about a company like Carry1st, which I do think has had a fair amount of PR, I feel like one of their announcements got an got an article in the Hollywood Reporter, so I remember seeing things like that, but I feel like it does become fewer and farther between, at least from what you are seeing, from the awareness of some of these

[00:27:27] Mr. Eazi: Yeah, you're correct and it's not so much I understand why like there's a lot of PR outside looking PR like you said, you know, New York Times, you know, LA blah, blah, blah, because that's where the money's coming from, right? But like, I'm talking more intra-Africa PR like for the money on the continent, you know, because that's like easily, like it's right there in your face, you know, there's enough money in Lagos for them not to be any need to raise capital from outside . You get what I'm saying? There's so much capital in Lagos, like from Lagos, you feel me? Or from Rwanda, you know, and, Rwanda is trying to position itself as startup, you know, pro-startup investing, you know, so there's money on the continent and it's like

[00:28:22] that's what I mean by PR and publicity and awareness. if I wasn't friends with, like, I met in, was co-founder of, Flutterwave with and then Andela, you know, and then Move. So three unicorns, right? And, you know, we've been friends and we've been investing together. if there was not that proximity to him or to Shola the founder of Paystack that got bought by Stripe, I wouldn't know that this was going on.

[00:28:50] You feel me? Maybe, you know, I wouldn't have known. So that's what I mean, you know, because like every A-list, Afro-B artist can be you know, can be invested, you know, so that's exactly what I mean.

[00:29:08] Dan Runcie: It is interesting you bring up the music piece because I'd be curious to hear how you feel some of these challenges that African startups may face. How do the African artists themselves fare in that regard? Do you think that they have similar challenges with funding or with regulations in that way?

[00:29:26] Mr. Eazi: There's regulation issues, like for instance, collecting, publishing revenue on the continent. It's a joke, right?

[00:29:34] Dan Runcie: Why is that?

[00:29:34] Mr. Eazi: Or collecting streaming revenue because like for you to be able to collect publishing revenue, you need the government to enforce the laws for the radio stations to pay you, you know, publishing royalties on the music they place for the bars to be able to pay for what they play, like for the use of your music. So you need strong in a lot of African countries, these laws are there, but there's no enforcement because I would say it's worse for creatives because people still look at the creative sector as a joke.

[00:30:08] The orange economy is like, ah, that's not really business like that's just young people with dreadlocks, just singing and dancing and jumping across the world. Yes, they hear the music everywhere. Yes, now things are getting better because they're seeing teams at the Grammys, they're seeing Burna Boy, you know, and whiskey doing Madison Square Garden, but there's not a lot of education for them to really understand the business of music or creativity.

[00:30:36] So even, I remember like two years ago I spoke to almost all the bank MDs, or three years ago, almost all the bank MDs in Nigeria trying to convince them on why music is a business is a valid business, but I couldn't get funding. And that's me being a successful African artist showing the revenue, showing all of that, like I once got on a panel with, you know, a financial institution that was meant that. they have a fund, they have like a 500 million dollar fund for investing in creatives. And I was on a panel with somebody there and the person said, oh, it is impossible to protect music IP, it is difficult to protect music IP, and I was like, whoa, whoa, whoa, whoa, whoa, What? And like, are you kidding me? Like, there's Shazam technology, there's like, every song has an ISRC code and like if you upload the song in Kenya or in in Afghanistan, like on YouTube, like it will pick it up instantly. So when you have a situation where you have an institution that has up to a billion to invest in creatives. But you are having the key stakeholders who decide who gets what telling you or speaking out confidently and saying is hard to protect the IP, you know, then that just shows you where it sucks. So there's still a lot, but I feel like that's why there needs to be more education, you know, just like for startups to music, to let people realize that this is a business, like there's revenue to be earned. Not just live revenue, like streaming revenue, publishing revenue, especially now that the world is looking to Africa. Like you're seeing early starters jumping on Afro Beats records, like, what's that song?

[00:32:31] Essence, Essence was a hit song before Justin Bieber jumped on it. It was already a global smash. Peru was a, global smash before, Ed Sheeran jumped on it. So you are having like pure Afro Beats records in our local language produced locally in some hotel room in Lagos, you know, going on to be big songs globally without any major support from without necessarily, you know, I know A and R like support, like his producers locally. And you're seeing this, so you do know that this is the time, or you know, like the example I gave, you know, Bad Bunny, you know, sampling a Joeboy record and putting it on his album, putting an Afro Beats record on his album, you know, that's an ex example.

[00:33:18] Dan Runcie: And by the way, that was declared properly and like I'm about to go, you know, go crazy with the lawyers to make sure I get my bread. And more importantly, the writers and the producers get, their due credit and revenue and, you know, Did Bad Bunny's team reach out before this?

[00:33:39] Mr. Eazi: No, no, no, I literally just listened to Bad Bunny's album and I just heard Joe Boy's voice at the end of the record, and I was like, I've heard this record before. And then I realized is a record, I didn't make it to his album. And I'm like, wait a minute. And then my team start speaking to them since May of, last year.

[00:33:55] And it's just back and forth to the point where I'm like, okay, you know what, you guys have had fun with this. Like, I'm just going brazen on this, let's get lawyers. Let's make it like a proper lawsuit. But what I'm trying to, or you have, you know, Beyonce, you know, doing the Lion King, the gift and having created from all of Africa put it so like, you know, you are having Drake, you know, with Whiskey on one dance you're having Ed Sheeran, Justin Bieber jump on multiple Afro Beats records that are Afro Beats records. You're having people more and more people sampling Afro Beats records, you know, and maybe not giving proper credit or do, or you are having, like I once produce. and was on co-produced and wrote and featured on a record involving Bad Bunny on the Joint album and Afro Beats record.

[00:34:45] So you're seeing is becoming more global and global. So we need to be able to tell these stories to the funding sources back home to establish that this is indeed a business. So it's education the same way education for the startups, but even more for music because music was never, and creatives, you know, was never looked at as a valid business.

[00:35:09] It was looked at as things, people who don't graduate from school or people who just wanna be jokers do. But right now people are sitting, wait a minute, wow, that artist bought car that artist's bought a house. that artist did this, did that or Grammys or this, that, that. So, but there still needs to be more information back home to the business side of the music to know that behind that sold out.

[00:35:36] MSG is a check, and behind that billboard is a check, you know, and even the TikTokers, like I was speaking to someone at the bank and explaining to my bank MD friend that, you know, I showed him a lot of payments, like TikTokers in Nigeria are getting paid as much as $10,000 to put up a post on their TikTok.

[00:35:59] 17 year old, 18 year old, you know, and I had to show this and he was like, what? Are you serious? And then he went back to ask his kids. And find out that, oh wow, this is a thing, you know? So it's that education, I mean, because there is the capital on the continent, it's just like, how do you get it?

[00:36:17] And it is a lot of work to do to basically explain and explain and explain. And one needs to have the patience. And it's hard to do that while still running my label, doing everything I'm doing, putting out music for myself, you know, so, you know, but thankfully I'm not the only one doing it, Don Jazzy is doing it.

[00:36:39] Olamide is doing it. They're more examples. So one way or the other people are saying it.

[00:36:44] Dan Runcie: How do you feel about the investment in African music that has come from the West? So thinking about Universal Music group opening up record label in Africa and some of the other majors having different concentration in Nigeria or elsewhere, how has that been and what type of impact has that had, if any, on your end?

[00:37:07] Mr. Eazi: I mean, I think it's good. It's a good signifier because all these labels were in Africa from the years before Fella, right? You had all these labels in Nigeria before, you know, the nationalization where, you know, the government had passed that all the companies should be nationalized and the labels got sold to local owners.

[00:37:26] So you are just having, you have Majek Fashek that was on the late, late show, the late night show in 1991, bro. So when people say, oh, African music is then becoming popular. It's been popular. And it's coming back again with technology and everything. So I think it's good. I think the more, you know, major labels coming to Africa, but not just as, or let's test to see what happens.

[00:37:52] But the more investment that comes, the more structure there will be for the business and the more signifiers, you know, to show people who wanna invest, you know, so yeah, I welcome it. And I think there should be more funding and there should be more, like the local companies should be autonomous, you know, I think that's been the only drawback with the majors, pardon of me, I might be wrong. Don't quote me where you are seeing the local, you know, Universal Nigeria or Sony or whatever, you know, that lookout team not having a lot of, autonomy in the checks they're writing to the artists or taking those risks they have to get approval from maybe South Africa or, you know, London or LA.

[00:38:43] Meanwhile, everything is happening on the ground in Lagos, so you are having distributors. So I think a lot of the most recent successes have been by more distributors than record label in breaking artists. So more like Empire or ONErpm or the Orchid or emPawa or, you know, Believe, because these distributors are more flexible and have been able to give a lot more autonomy to the local guys who are running, these local companies to write those checks because like, what is somebody in London like with all due respect, like I always say this as a joke. There's no songwriter in the world that would've written, I don't care how many Grammys you've, gotten, you cannot write Soco, Soco, Soco, Soco, Soco, baby.

[00:39:42] You. That's the Wizkid song, you can't write that song or, one of my favorite artists Wande Coal, there's a part of his song where he just spits jibberish, like he don't mean anything, like it's a vibe. So like without due respect to your A and R ears, you don't know the music like even me, I'm from Nigeria, but I always have to be updated.

[00:40:09] So there needs to be more investment and more autonomy. But I love it like the more labels come in and the more distribution companies come in and there's this competition, the more money is invest invested. And when you invest money, then you start to structure it then you start to say, Hey, why are we not making as much money locally?

[00:40:29] Okay, let's invest in touring, you know, in Nigeria, in on the continent. let's go lobby for enforcement of collection of royalties. So, yeah.

[00:40:40] Dan Runcie: Have you seen any success stories from the major record label side in Africa yet?

[00:40:48] Mr. Eazi: There's none that comes to mind in terms of breaking an artist. So you have Wizkid signed, you have Diplo signed, you have Burna Boy signed. you know, and this is like A-list, A-list, right? But if you look at all the artists that have broken Buju for instance, initially signed to Burna Boy and then Empire, broke him, you know, that's Buju, Fire Boy via Empire and Olamide's YBNteams, you know, independently broke with, her record. I think she's been upstreamed now. So in terms of sort of like carrying that conversation, you know, outside to the rest of the world, yes, I'm sure there's been a lot of success like the Wizkid record, you know, Burna Boy, entire Renaissance.

[00:41:44] And you could go on and on, but in terms of actually finding an artist and breaking the artist, there's not a lot of successes. And I think that's down to autonomy because, you know, you have some executives moves from the label to the distributors and do well, you know, we just understanding you know, how to a and r and how to put our music, on the continent, and you can't just bring like somebody who's of Nigerian descent and just expect that they don't understand. Like, I am Nigerian, but every time I go back to Lagos, I'm like, whoa, the sound has changed, you know? So that underground on the ground, you know, and there's a lot of work.

[00:42:31] Dan Runcie: Definitely, and yeah, I know that there's so much interest, but like you said, if they don't have the control or the ability to really make decisions on their own, I can easily see why an Empire or some of the other distributors have been able to have success there. But Mr. Eazi, man, this was great. I feel like you gave us a snapshot of where everything is right now on music and investing side.

[00:42:53] But before we let you go, for you, what's big on the road for you still beginning of the year? What's big on the deck for you? What do you got coming up?

[00:43:02] Mr. Eazi: I mean, I kind of like needed a break from putting out music and touring and when COVID happened I was like, oh, thank God, like because I was battling with, oh, if I should, I pause, like it was just routine doing the same thing and it was like too much for me. So I was able to have that pause, and put some of the attention towards like growing emPawa with my co-founder.

[00:43:27] And then leaving it to him to sort of like, you know, and come back to iterate, iterate change the model, blah, blah, blah, build the team. And I just went off and started doing like investment and putting more time in the startups I was investing in. And now, I'm in Cape Town recording. I'm putting out two albums this year, one in September and one in, I think April or May.

[00:43:55] So I'm just recording that now and I feel like, and now I want to go back on the road, but not first as my usual live band touring, but first as sort of like a curator, where I bring like, you know, the way Major Lazer tour where they have the sound system with Walshy and Diplo and Ape Drums. But instead of Diplo and Ape Drums, I select like the DJs, maybe one playing Afro Pop, one playing Ama one playing something else.

[00:44:27] And I am the Walshy Fire, sort of like putting it together, hype man MC. So that's what I want to tour. The first part of the year once I put out the Chop Life album, so that's called Chop Life. To chop life means to enjoy life. So I'm making an sort of Afro dance album that I'll put out first and then I will talk as Chop Life sound system with doing these parties.

[00:44:53] you know, of majorly Afro Beat parties, sound system across the world. And then I dropped the album, the second album, and I taught as, okay, this is my album tour. So that's the plan. Hopefully I'm able to complete the first album. The second album is done, it is just in mixing a mastering, that's the September one.

[00:45:13] It's done just in mix. And my string phase and then this first one, I'm recording. That's what I'm recording right now. Recording downstairs.

[00:45:21] Dan Runcie: Nice. Nice. Well, looking forward to all of that, man, and thank you. No, this has been a pleasure. And yeah, so people that wanna follow along and keep up with all that, where should they go to follow you?

[00:45:30] Mr. Eazi: Follow me everywhere on social media @mreazi, M R E A Z I, Mr. Eazi. Yeah, everywhere, everywhere on social media.

[00:45:44] And I wanna see you at one of my shows. You have to come maybe when I do the parties, where are you right now?

[00:45:49] Dan Runcie: Me, I'm in San Francisco

[00:45:51] Mr. Eazi: Cool. I'm, sure I'll be coming around LA, San Fran, at some point

[00:45:55] Dan Runcie: Yeah, come through.

[00:45:57] Mr. Eazi: I'd send you an invite,

[00:45:58] Dan Runcie: Definitely, definitely. All right, man. We'll talk soon.

[00:46:01] Mr. Eazi: All right. Have a good one. Thank you.

[00:46:03] Dan Runcie Outro: If you enjoyed this podcast, go ahead and share it with a friend. Copy the link, text it to a friend, post it in your group chat. Post it in your Slack groups. Wherever you and your people talk, spread the word. That's how capital continues to grow and continues to reach the right people. And while you're at it, if you use Apple Podcast, go ahead.

[00:46:24] Rate the podcast, give it a high rating, and leave a review. Tell people why you like the podcast. That helps more people. Discover the show. Thank you in advance. Talk to you next week. 

The gaming industry is larger than music and film combined. We’ve seen big music collabs in Fortnite, Roblox, and more, but there’s room to leverage music even more.

That’s been a big focus for Vickie Nauman, who works at the intersection of music and gaming. She consults for major record labels, game developers, and more through her company, CrossBorderWorks. She’s also worked on big virtual concerts, like David Guerra and Saweetie in Roblox, and VR games like Beat Saber. 

But there are plenty of friction points between music and gaming. As Vickie said, the music industry likes to get money upfront, whereas gaming is fine getting it on the back-end. Then there’s the long process of clearing music from rights holders to even use in games. It makes it tough to move quickly

It’s even more challenging because of how fast technology is changing. New virtual experiences are being created daily, which adds pressure on the music industry to sort this out.

Vickie and I covered all this and more. Here’s everything we discussed:

[1:40] What attracted Vickie to gaming

[2:40] The gaming moment that finally struck a chord with the music industry

[4:33] Similarities and differences between gaming and music industries

[10:09] Why Travis Scott’s Fortnite concert clicked but others haven’t

[9:53] Can gaming have its Kate Bush - Stranger Things moment 

[15:47] Why the music industry plays catch up to technology

[21:33] Clearing 143 writer’s share for David Guetta’s Roblox concert

[28:45] Dot-com bubble era of web3

[30:45] Music will evolve differently in web3 experiences

[36:17] What’s slowing down virtual reality adoption?

[41:26] AI is coming at the music industry like a freight train

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Vickie Nauman, @vnvnvnvn

This episode was brought to you by trac. Learn more about how artists can bring web2 and web3 together for their fans at trac.co

Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital

Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.

TRANSCRIPT

[00:00:00] Vickie Nauman: There are not an enormous number of opportunities for music and games. It's gaming is similar to the music industry where there are a handful of huge, huge, huge gaming studios, and then there's an inordinate long tail of small to mid-size gaming companies and, you know, very, very similar to music.

[00:00:19] So the few big studios, a lot of them are doing, you know, licensing and they get music in. But it's been much more common over the years to gaming studios just hire a composer and they just create a song that is right for the mood and the moment in the game, the gaming studio owns it and they're just done.

[00:00:40] You know, they don't have to worry about licensing or business models to incorporate music into the games. But I think for the most part, the music industry always likes to get their money up front, and the gaming industry likes to get all the money on the back end

[00:00:55] Dan Runcie Intro: Hey, welcome to the Trapital Podcast. I'm your host and the founder of Trapital, Dan Runcie. This podcast is your place to gain insights from the executives in music, media, entertainment, and more. Who are taking hip hop culture to the next level.

[00:01:22] Dan Runcie: This episode is all about the future of gaming, and today we'll be breaking it down with someone who understands this space in and out. Vickie Nauman. She is the founder and CEO of CrossBorderWorks, which is her consulting and advisory firm, which works with some of the biggest major record labels, streaming services, and more on the intersections of word music meets technology, gaming, and several other emerging tech platforms.

[00:01:47] We talk about what music and gaming's challenges and opportunities are in the future, how games are monetized versus music, some of the opportunities there. We also talk about the music industry itself and why the music industry often sometimes plays catch up with regards to emerging technology, how that impacts her work.

[00:02:07] And what it can look like for gaming, to have that huge sync moment that Kate Bush running up that hill moment like we saw on Stranger Things. What could that look like for music in a video game? I think we've seen several successful examples over the past couple of decades, but we'll continue to see more as gaming in the Metaverse, Web three, and AI continue to intersect and influence this space.

[00:02:29] Really great episode. It was great to have her share her insights here, and I hope you enjoy it. Here's our chat.

[00:02:36] All right. Today we're here to talk about gaming music and so many of the intersections it has, and wanted to talk with someone who understands this space better than almost anyone that I could reach out to Vickie Nauman, who has consulted and worked with many of these companies in music and gaming.

[00:02:53] Vickie, welcome to the pod.

[00:02:54] Vickie Nauman: I am so happy to be here. I'm a huge admirer of your writing and your work and it's an honor.

[00:02:59] Dan Runcie: Thank you. Appreciate that. So what is it for you that attracted you to this space? It's been an emerging space for some time, and it feels like the music industry is now starting to put more emphasis in, but you had been focusing even before the current wave has been there. What attracted you to it?

[00:03:16] Vickie Nauman: Well, I've always looked at gaming and I'm one of these people who for years was telling the industry. Gaming is bigger than music and film combined, you know, it is a massive, massive industry and they're, you know, and almost all the monetization is built on low friction, high engagement in-app purchasing.

[00:03:37] And so companies are releasing games that are free and they're making billions of dollars. There's, you know, there's lessons for the music industry. I feel like it all fell on deaf ears. People are like, yeah, yeah, yeah, you know, companies come to us and. We wanna license them our whole catalog, and they don't want it.

[00:03:53] And so there's nothing for us to do. And then, Marshmello did a set in Fortnite and got 10 million people to listen to his music, and that struck a chord in the, you know, in the industry. you know, and importantly, it didn't necessarily resonate with the digital business people who were always, you know, under an onslaught of new companies coming to try to get rights.

[00:04:19] But it was in marketing and a and. and then there was like, it was a moment where I think everyone started to realize the power of gaming and the hundreds of millions and billions of people who are playing games as a new platform in a new way for artists to reach, fans and to break artists.

[00:04:37] And it was interesting too because at that time I was working with Beat Saber. and they were this was in 2019 that all of this happened. And, Beat Saber was still an independent studio out of Prague, brand new game. And we were trying to get some of first songs in to that game.

[00:04:55] Vickie Nauman: We had worked with Monstercat before and we had these original soundtracks in there, but we didn't have any, huge major label acts and we were trying to license Imagine Dragons. And so I heard firsthand from labels and publishers all throughout that process of like, wow, you know, we really want to do more with gaming.

[00:05:16] And I credit a lot of that to Marshmello.

[00:05:20] Dan Runcie: And you talked a little bit about how gaming is just so much bigger than music, and part of it is because they're not necessarily selling the content itself. They are selling what you can do on top of it from things you can buy or other things that are less friction. The frictionless, as you mentioned.

[00:05:38] Had any of that come up, especially after the marshmallow event? Did any of that come up in any discussions about like, Hey, could this be an opportunity to rethink monetization a bit more broadly? Or maybe think about the bigger picture? What have some of those discussions been like?

[00:05:54] Vickie Nauman: Yeah, it's been really interesting actually because they're really in aggregate. There are not an enormous number of opportunities for music and games. It's gaming is similar to the music industry where there are a handful of huge, huge, huge gaming studios, and then there's an inordinate long tail of small to mid-size gaming companies and, you know, very, very similar to music.

[00:06:18] So the few big studios, a lot of them are doing, you know, licensing and they get music in. But it's been much more common over the years to gaming studios just hire a composer and they just create a song that is right for the mood and the moment in the game, the gaming studio owns it and they're just done.

[00:06:39] You know, they don't have to worry about licensing or business models to incorporate music into the games. But I think for the most part, the music industry always likes to get their money up front, and the gaming industry likes to get all the money on the back end. And so you know, there are these friction points that, you know, marrying a business model into a game is kind of an art because if you've already got an existing model and it's free, or there's, you know, in-game purchases, then how do, you know, do you try to incorporate music into that? Do you just pay the rights holders and get a deal for a certain period of time, or can you create a revenue share and some way to participate in the upside and, a lot of gaming companies are even huge companies are still new to this. And so they're kind of what I would call, like dipping their toes into the pool, you know, testing the waters and trying some small things. And then trying to figure out does this work for us?

[00:07:44] Do we need to, you know, do we need to create a big stack of technology to manage the rights? Most of them do not have an appetite to do. They certainly have the skills, which is part of what's so fun working with gaming companies is they have amazing engineers and really great minds about problem solving and coming up with these ways to engage users.

[00:08:06] But nobody really wants to dedicate engineers to building a rights management system. And so I think everyone is, you know, all the companies that I work with, they're trying to kind of simplify things with music, try it out, find out what their users want, what their gamers want, because that's another big thing is, you know, you have to ask, you know, gaming is such a culture and such a subculture and each game has kind of a different community in it and a different vibe, and so you really wanna make sure you're getting that. Your assumptions of what kind of music is going to work are in line with your user's expectations.

[00:08:45] There was one company that I worked with that was like, had a lot of underground, you know, all, their users thought of themselves as very underground and they did a music thing that their users thought was too commercial, the gamers rebelled . So, so, the best thing is to ask the people who are gaming, ,you know, and your products.

[00:09:02] Ask them what they want.

[00:09:04] Dan Runcie: Yeah, that customer base, especially with gaming, I think is huge cuz it makes me think a lot back to that Travis Scott Fortnite integration, which was almost three years ago at this point, but it was the perfect combination of so many things. At the beginning of quarantines with the pandemic, but also there's such alignment between the type of person that's on Fortnite with the Travis Scott fan as well, which is why I think that one worked much better than some of the other A-list artist superstar artists collaborating in a digital gaming environment.

[00:09:37] Vickie Nauman: Yeah, I think that's a great, I think that's a really great point, and you know, because of the dynamic of gaming and the kinds of things that we're seeing, you know, it's not like a service that has, it's just music and it's going to put out hundreds of thousands or millions and millions of songs and just saying, You know, something for everyone, you know, let the end users find the music that resonates with them with, when you're picking and choosing a couple of artists or a couple of songs, you know, you kind of have one shot. And it reminds me of, you know, I used to work in radio before I started doing all of this, and. there was so much science to the choices that we made in radio because we knew that you know, we had one signal and we had to choose artists.

[00:10:24] You know, if we said our demographic is, you know, 18th to 34, urban men and women who are professional and make a hundred thousand dollars a year and above, if that's your demographic, then you have to say, what kind of music and what kind of programming and what kind of announcers and events. Gotta get it.

[00:10:45] And that's very similar to the way things are when you're doing things in the metaverse or gaming where you're like, well, we're just doing, we're picking a few things and we really wanna light them up, but we need to get them right. We need to get the user experience, we need to get the right artist to fit with the right user base.

[00:11:04] And then how we present it, how we monetize it has to also be something that fits within the gaming community.

[00:11:14] Dan Runcie: That makes sense. And I feel like that lines up with something else you had said in recent interviews talking about gaming syncs and the potential there and how there may not be as much because a lot of the game developers are doing in-house music now, but it can grow in the future. And I'm thinking about, especially this past year, we saw the Stranger Things moment with Kate Bush running up that hill and I assume like it's only gonna be a matter of time until we see a gaming moment that is at that level or something like that, or maybe there already has been ones that have been at that level.

[00:11:45] Vickie Nauman: No, I think it is a really good point there as well that, that I think with the Kate Bush moment or Fleetwood Mac with the skateboarder and the, you know, cranberry juice that we've had these cultural moments in social that have, Absolutely lit up music for a new generation, which I love.

[00:12:05] I mean like kids bought tickets to see Fleetwood Mac in concert after listening to 20 seconds of one song. And that's so exciting and I think, it will get there with gaming. and I think when you think about the limited number of opportunities and then then the limited number of artists or songs that can be integrated into every game, I think that we are really, really at the early end of the early part of that spectrum.

[00:12:34] I don't think we've even begun to really let the music industry and the gaming industry come up you know, with that Kate Bush moment or the Fleetwood Mac moment. and I think that, what I love about gaming as well as you know, other kinds of audio visual is that when you hear it, you know, you hear the music differently when you're gaming and you know, like Beat Saber, I've worked with them for many years.

[00:12:58] Vickie Nauman: I also work with Niantic on, they have a new NBA game and you know, with Ubisoft and some early stage gaming companies but with Beat Saber there are certain songs. that I've always loved. Like there's a, you know, a bunch of Green Day songs that are some of my favorites that I've listened to for 20 years, but now I've, played them in Beat Saber, and now whenever I hear the songs, I hear them differently because of the experience of having this immersive gaming and this gaming experience.

[00:13:30] So I think there's, I think there's just so much potential that we haven't yet been able to tap into. Some of it is also because there's been so much friction around licensing, and for the most part, I think sync licensing is the best way to do things in gaming because you want something specific and then you know, the artist and their team want to know how their music is being used and you know, you, take something to rights holders and if they're like, you know, we need more money or we don't like that rev share, or that artist has a conflict. And then you're like, okay, well, you know, we'll move on to something else. And then you know, ideally you get an artist and a label and a publisher and a writer and those teams that all say, wow, this is great. I would love to have my music in this game.

[00:14:21] And that's really where I think that, you know, if we can get those, all of those things right. that's the start of it.

[00:14:28] Dan Runcie: Yeah, and this conversation too is making me reflect on a few things. Cause I feel like music and gaming have gone through ebbs and waves like for instance, I know that there's always been music in games like Madden or like the NBA 2K series, for instance. But I think back to like Grand Theft Auto.

[00:14:43] I know one of the things there, they always had music. So they had this Vice City game that came out 20 years ago and that was all eighties. So I feel like for a lot of people of a certain generation, that was like their thing to go to. And then a couple years later, Guitar Hero and Rock Band, huge. Right?

[00:14:58] And then I think even those songs reintroduce, especially some of those classic rock song rock songs there. And you also had some of those Def Jam vendetta. video games as well. So now I think what's different of course is that these are more so, okay, how do we integrate them into these digital environments, the metaverse and things like that.

[00:15:15] So I'm excited to see, I still think that there is huge potential to see one of those moments happen, and who knows? I mean, I feel like the Kate Bush moment was largely, I don't wanna say unplanned, cuz obviously people expected it, but no one would've anticipated that it would've taken off that way.

[00:15:32] But that's how these things.

[00:15:34] Vickie Nauman: Exactly. I know, I know. I love it. like a lightning in the bottle, you know, where you're just like, wow, you know, we didn't, we really couldn't quite anticipate that things would resonate like that and, and especially reaching a gen, a new generation that probably otherwise would've never heard of Kate Bush.

[00:15:50] but I also think that with. you know, with music and gaming, what's, what's also so fun for me personally, is I've been doing music licensing and write based things for like 20 years now, you know? So I feel like an old lady when I say that, but I'm always the one chasing everyone, you know, I'm chasing labels and publishers and trying to put things in front of them, you know, what do you think of this? What about that? Have you thought about it? Is this approved? Is it not approved? Can we move forward? No, we can't. gotta start over. And this is the first time in my entire professional life where I. artists, publishers, labels, and songwriters coming to me now and saying, I wanna get my music in games, you know, and I wanna get my music in the metaverse.

[00:16:36] Vickie Nauman: how can we get band in the Metaverse? And I love that because, you know, for me, like self selection in the industry is huge. It's really frustrating when you have to drag people kicking and screaming into the future and into experiences. So I love it when people contact me and let me know which of their artists on their roster are really interested or even better, which, artists are gamers themselves and then they are already part of the community but then they want to take it a step further with their music.

[00:17:08] Dan Runcie: That's good to hear because I often feel like the music industry is playing catch up when it comes to emerging a new technology. In so many ways, dating back 20 plus years at this point. So the fact that people are coming to you now is good. Do you feel like that is true overall? Do you feel like the industry is at the moment, like right in step with where things are going?

[00:17:29] Or do you still feel like there's a bit of catch up?

[00:17:32] Vickie Nauman: I think there's always a bit of catch up, just simply because, you know, technology moves at such a pace. None of us can really quite keep pace with it. And then there's always these very similar dynamics where there will be some new technology that comes around, whether it's, you know, on demand streaming or live streaming or gaming or virtual reality, and now metaverse and NFTs and fractionalizing rights and all of those things in web three, and there's a very common pattern where these technologists, they look at music and they say, oh my gosh, this would be fantastic for my platform, you know, it will help me with adoption and relevance and get in, get some artists and some music in there, and fans will come and it'll all be great. And then they start talking to the industry and they learn about how music writes work, and that you usually can't just go to an artist and get what you need. They're usually signed or they have some management and they publishing is probably administered by someone and they all have their ways of doing business. And there's a moment where everybody then, you know, they have to decide, do we have an appetite to do this? Or should we just move on to something that isn't as complicated? Because music is great when you get it right, but not all companies really wanna do things right.,You know, and so, you know, we kind of go through this every time when there's new, you know, new user experiences that are emerging.

[00:19:06] And I think that the music industry is always, you know, takes all these things in. and then they start thinking, number one, is this a fad or is this something that's going to last? Is it worth us spending time and cycles to really engage with the companies on this particular kind of experience? And then how can we extract value?

[00:19:30] How can we make money? How are they making money? Is our deal going to outlive the the survival time of any given platform or company? There's a lot of people, I mean, it's very frustrating sometimes to do licensing, but I have empathy with all of the, with all of the rights holders, because I'm in the same boat where companies come to me and I have to just like, oh gosh, you know, it's a great idea, but you guys have never done anything before and, you know, can you build this? Can you execute you? Can you take it from a PowerPoint or a demo into a fully functioning product? And it's hard. And so I think that, you know, the labels and publishers they have assets to protect and they're, you know, and now increasingly artist management companies are also in the mix because a lot of things require artist name, image, and likeness rights.

[00:20:26] And sometimes that can come from the label, but sometimes it. So they're all in a mode where they have something to protect, they want to exploit and, you know, make money, but they have a lot to lose if they do things wrong. And so there's this inherent mismatch between how quickly things move in technology and how slow and methodical the music industry is about deciding.

[00:20:52] Whether they wanna move forward. And then there's the other issue, which we're faced with right now, which is all of these emerging use cases and people being kind of afraid of agreeing to the wrong terms and setting a precedent that they're later going to regret. And so, . when technologists complain about the music industry and they're like, they're so slow, they're so backwards, they don't understand our vision.

[00:21:20] It's like, well, they have a lot to lose. You don't have a lot to lose cuz you're a startup and you have a big idea. But these guys have, you know, they've been, you know, 20 years of companies just like you that have come before. And so I always try to encourage, I always try to encourage people not to just, you know, get so frustrated with music that you know that they abandon it because a lot of great Id great ideas die on the vine because of these mismatches. But to be patient and to also, you know, maybe you think you need Jay-Z. But I would challenge most early stage companies, you're probably not ready for Jay-Z.

[00:22:00] You know, like let's, you know, maybe find some earlier stage artists that might be more appropriate to your size and budget and a little bit more forgiving. And then you get product market fit and then start expanding and, you know, might end up with Jay-Z, but maybe you might find you don't need, you know, you don't need that to resonate with users.

[00:22:24] Dan Runcie: Right. The break thing things fast mentality of startups just doesn't always line up. And that's a good point too. You get approached by so many companies, you don't know who's gonna be there. And obviously that probably requires some level of evaluating these startups to see what makes sense. That's just one side of it.

[00:22:42] The other side of it is the patience to be able to see these things through. And I know you've seen this yourself with David Guetta and making sure his music can be cleared. Can you talk a little bit about that process?

[00:22:54] Vickie Nauman: Yeah, it was really crazy. I mean this was a project I did with Warner Music Group and I love what they're doing cause they're really trying to create a pipeline to get their artists into metaverse and new web three based experiences. And so, this was a year ago, David Guetta was doing a DJ set as an avatar in Roblox, and he originally had chosen 26 songs and then we narrowed it down to 20 songs.

[00:23:23] but you know, what I found was that those 20 songs represented 143 shares on the publishing Plus, almost all of them had shared masters. And what many people don't realize is when you're listening to music and you see, you know, here's a song featuring, you know, Shakira or somebody else, that featuring usually means that artist is probably on a different label.

[00:23:50] Vickie Nauman: And so even the sound recording can end up having multiple owners. and there was a certain point in the process where I start looking at these songs and I quickly saw like, wow, there are, you know, 10 of the songs that had, you know, all these writers who are not on a PRO, so they're non society, they don't have a publishing administrator.

[00:24:18] They may own one or 2%, which if you're in streaming and on-demand audio streaming, it doesn't really matter, the services can still use the music, even if you can't find the person who has one or 2% but if you're doing sync licensing, you need to have a hundred percent of the publishing at a hundred percent of the master recordings or the sound recordings cleared in advance.

[00:24:42] So I chased down. All of these people, these writers and people who had small shares, you know, they weren't registered anywhere. I found them on social media and got everything, got everything in there and approved. But for me, it was kind of an exercise in how well prepared or how poorly prepared are we for the world that's coming, which is all of these metaverse, web three-immersive platforms that are building creator tools directly into the platform, assuming that artists can just be nimble. And then you look at this, it's like David chose these songs, he wanted to mix these songs. And that's so unsustainable to think of, you know, being able to harness innovation.

[00:25:38] When you have 143 different rights owners that all have to be harmonized around the same deal, and then a third of them are people who are not even, you know, technically in the ecosystem of music, but they still have shares. And that's true for hip hop and electronic music. Pop music also has an enormous number of writers, but they tend to mostly be with pros and have publishing administrators. But in hip hop and electronic music, there's just a ton of people who are contributing to big songs, but they're completely outside of our ecosystem.

[00:26:16] Dan Runcie: That point reminds me of the news that had came out when Beyonce released her album, The Alien Superstar song had 24 songwriters on, and people were like, oh, well how does this happen? And I think for some people it became a bit of an eye-opening. Well, this is how a lot of this music gets created, and these are the people that either had a hand or they helped sample.

[00:26:35] There's so many things. And then if someone goes and samples, they only have superstar in the song that's gonna have all those same 24 writers, plus whoever helped them with that new song.

[00:26:44] Vickie Nauman: Exactly. I know, and like when you watch the Grammys and they go through the , the awards for composers, you know, and there's a paragraph, all these names that have contributed to each of these songs. and I think about it a lot though, like, you know, we've kind of, if you go back in history to the olden days, you know, fifties, sixties, seventies, you know, like in the fifties and sixties, most artists, it was very common to have a songwriting group and then an artist, someone performed someone else's songs.

[00:27:20] And then when the rock music came around, we had bands that it was like a big deal. Like we write our own songs. And so in that era, like if you're licensing rock music from the seventies, eighties, or nineties, it's great because there's like one or two writers on every song and it's usually the band and they've written every single thing.

[00:27:43] So you, you know, you wanna license one Green Day song, you're pretty much going to have the same mix across all of their music. And then you fast forward to the way people create now, and we have this incredible fragmentation where we have on average seven writers per song, but it's outsized in electronic music and hip hop.

[00:28:05] And so we have 10, 15, 20 writers on every song with these tiny shares and that just a trend of how people collaborate and how they create and samples and you know, people in the studio and people all, you know, collaborating all over the world. But I think a lot about where the industry is going. And Metaverse and NFTs and Web three and, you know, where you know, again, all of these platforms are assuming that you as an artist can come in and bring all the rights you need to be able to do something interesting with your fans and whether or not this is going to drive a different kind of creation because, it will definitely the artists who have just a one writer or a couple of writers.

[00:28:55] And who really have tight control over everything are at a much bigger advantage to be able to be nimble in the, in this next iteration of music experiences than writers, than artists who have 20 writers. And some of them they don't even know. And so, you know, I'm going to watch this because like, there's a producer, Poo Bear, you know, contributed to a lot of big songs, but he's doing an NFT project and he's just made a decision. I'm gonna write, perform, do everything on these songs that I'm doing in the NFTs. Cause I don't want to, you know, have to pull in an entire army of people to get them to approve.

[00:29:36] So I feel like, you know, thinking creatively about how you can take advantage of things without having all of this, administrative burden. It might drive and change some of how we see music being created.

[00:29:50] Dan Runcie: That's a really interesting point because I think broadly, everyone's been trying to figure out specifically with Web three and what's ahead, how do we best make this work? How do we make this into a real business vertical that can drive real revenue. It isn't just a fad. And I know you've spoken about this in the past, how felt like we were at this .com bubble era of Web three and where things are now more proof of concept, but not actual businesses, like more features, not necessarily companies, but where do you feel like we are now and if any of the things that have been good examples, does anything stick out to you to be like, okay, like that's generally how this could be done and how we could approach Web three.

[00:30:33] Vickie Nauman: Yeah, This does really remind me of the early two thousands, because. There are so many things that, like in back then, we would do things like order a pint of ice cream to be delivered by someone and no markup. And it's like, that's ridiculous. That's not a real business. But it was a proof of concept that you put your name in, put a credit card in, you order something and they promise to deliver it and it, comes to you.

[00:31:02] And so, I feel like, you know, and then out of the ashes of all the companies that burn through venture capital, you know, inflamed out or had some great idea, but there was no business model to it. And somebody else then saw it and said, if we do what they did, but we do it this way, you know, we're in the midst of that process.

[00:31:25] And back then out of the ashes of everything grew, companies like Amazon you know, and there were certainly lots of casualties, but I think we're kind of in that phase right now with Web three, and I'm still really bullish about it, but I think that we've, I think that we have now because of crypto and what people saw with FTX, you know, their eyes have been open a bit.

[00:31:51] and a lot of the companies that have been doing things with music and NFTs and, you know, some of them have been really lucrative and successful, others haven't, but it's all part of the process. but I think that some of the things that I see I think that music is going to evolve slightly differently in all of these web three experiences than maybe, non-musical, activities.

[00:32:14] Like, especially in NFTs. I think the dynamic of, you know, of buying and collecting. Visual art is going to have its own trajectory. But I think, music in token based communities, I mean, I think there will be a point where we'll probably look back and be like, damn, remember when we talked about NFTs, non fungible tokens?

[00:32:35] Sounds this ridiculous name. But I think that what we will see is these artist communities that are artist centric, that are token based, and it's like fan clubs 2.0, you know, interactive fan clubs with different ways to, you know, limit membership. Maybe you can co-create with the artist. Maybe you are getting a access to ticketing or the artist in some way.

[00:33:04] that there's benefits and ways to pull a small community of people around an artist together. And then We've had a lot of these artists direct to fan initiatives for many, many years that most have failed because they required the artists to do too much. The artists are artists, you know, they wanna be artists.

[00:33:23] They don't want to spend all their time, you know, on 20 different platforms. But I think these are different because I think there's something inherent about, you know, artists and fans that is the most golden connection that you can possibly have in music. And we currently have artists and fans and then, all the different platforms and labels and publishers and, algorithms and transaction engines and, you know, followers and all of these things that are keeping many, many, levels separate of separation.

[00:33:58] And now I think we can bring them much closer together. So I think that's one experience that I think is going to have an enormous and outsized, positive effect for music. And I think some of these will have music in them and some of them won't. And, some of them will be more about the artist's brand and their likeness and you know, their personality, their identity.And then I think another, use case in web three is, this fractionalizing rights and allowing users to invest in music. because this requires, you know, SEC, you know, this is like full investment, you know, you have to really, really get that right. I think there will be very few companies that end up in that space.

[00:34:44] I think it's 

[00:34:45] Vickie Nauman: just you know, the lift is too much for the average, but I think there will be a really viable marketplace. And I've talked to writers and performers who are also even signed, cuz if you're signed to a label or a publisher, you know, you're not gonna fractionize their share.

[00:35:01] Dan Runcie: Right.

[00:35:02] Vickie Nauman: And that's also something I always have to tell the companies that want to do this.

[00:35:05] Like I'm going to now tell you some really disappointing news. but they're interested in doing some fractionalization of maybe just their writer's share or their performers share. And that's super interesting. And so, you know, how can we make that another income stream.

[00:35:22] And then I think the third area that I'm really bullish about is the experiential side of, you know, we, we've seen during the pandemic, you know, and starting with starting with these things in Roblox and you know, Fortnite and you know, having these kind of pop-up experiences. Again, that's a proof of concept that if you put an artist in as an avatar and create some sort of activation, that people will come and they will buy virtual goods and they will have a great time.

[00:35:56] So I think you know, that's, again, we're just barely scratching the surface of where these more experiential things will go with AR VR. Just, you know, web-based and mobile-based and, you know, avatars, you know, live streams I think fit in there as well. And I also think that the way the internet and even websites, the way that they work now, where you are, kind of view, go to a menu and you click on things and you get a flat page that tells you this is, you know, who the people are, this is what the products are, you know, like even the most basic things about how we engage online I think are going to change. And so I think there's going to be much more, you know, immersion and interactivity and real, you know, real time engagement. And to me that's just feels like that's just so perfect for. You know, small artist, activations where you don't need 20 million songs.

[00:36:52] You just need a couple of artists who really want to do it. And I think that we will have just a really, really wide range of ways for people to enact more meaningfully with artists performing online.

[00:37:03] Dan Runcie: Yeah, I think the collectible piece was a key point, and I also think that artists just being able to have communities around this too. I think we probably overestimated the investing piece just because I don't think that the average fan is going to be as interested in that piece, and I think that was a big selling point.

[00:37:21] It's almost in the same way that like we all may have Apple devices, but how many of us are owning stock in Apple as a result of us wanting to see the thing right. But I do think that the collectible piece is huge. Obviously you see it in people wanting to have physical media, whether it's cassettes or vinyls going up.

[00:37:37] So there's an aspect there that I think will continue to be tapped into, but it'll be fascinating to see how that plays outthe other emerging technology space that I know you've done some work into is VR itself. And I know that one of the companies that you worked with extensively was acquired by Meta and although you know, from my purview, they seem to be one of the more successful companies in a landscape that I think has been a bit slower to have that mainstream adoption than a lot of people thought with VR more broadly. So where do you see with that space right now?

[00:38:10] Vickie Nauman: Yeah, it, you know, VR at the beginning, you know, it had so much promise of, you know, being, you know, being transported to, other worlds and having, you know, having this 3D environment around you. But I always felt like it's going to be gaming, that would be the catalyst to this because I think there's also, you know, there's also something like how much time does anyone want to sit in a headset?

[00:38:39] And you know, you generally, it's kind of like, you know, remember when 3D TVs, we're huge, and everyone's like, no, we're not gonna sit around our house with these funny glasses on for hours at a time. It's just not going to happen. But I think that gaming has really been an enormous entry point in, and, you know, Beat Saber is the VR game that was acquired by Meta and continues to do extremely well with this customized gaming rhythm But I think that, you know, part of it is we need the headsets and things to shrink and we need them to be, a little bit more, you know, a little bit more comfortable. We need to be able to spend more time in them, and we need to have more experiences than we have right now.

[00:39:28] And I think that there are things, you know, there are lots of companies that are starting to build even like, you know, meetings and,you know, are we going to have meetings with people in the metaverse and in virtual reality? There are companies that are doing enterprise-based training for employees that are using VR you know, and using these technologies in ways that I think is not gimmicky, but it will actually lend, it will actually lend to human emotion and feeling close.

[00:40:00] but I think with everything with web three, we're going to have a blend of, these things, you know, AR is generally considered to be more accessible than VR because you know, you don't need as much equipment. But I think as, all of these things grow and we start to get more platforms and you know, more variety of use cases that we'll probably see a blurring between AR and VR and lighter weight.

[00:40:28] hardware and more cost effective hardware, and that will just help to grow. That'll help to grow the market.

[00:40:36] Dan Runcie: Yeah, I think for a while VR kind of had a bit of that sharper image vibe, I would say where, Yeah, you know, you go in the store, there's these cool forward technology things, but not necessarily something that I would wanna have in my house, right? And I think over time, to your point, the headsets get smaller, gets a bit more accessible.

[00:40:54] We'll eventually get there. It's just a matter of the use case said, Yeah, to your point, I think gamers, if anyone, you think about the people that are gonna be wearing a headset while they are playing Call of Duty or whatever it is, they're probably the audience that's more likely to have another device over their head as they are interacting with game.

[00:41:13] Vickie Nauman: Exactly. Exactly. And I think, you know, fitness is another area that, with VR originally was like, oh yes, you know, are there ways to simulate, you know, downhill skiing and hiking and cycling and, you know, being in this expansive different world than being in your house. but you know, you don't really wanna just be sweating, you know, sweating in your, headset either. And so I think the only, like, there probably needs to be some evolution, if that's a big enough market to support specific hardware of fitness, you know, then there probably are people who really want to do that. but you know, we're still kind of trying to figure out what this entire next iteration of the internet is going to be, and I can't imagine that VR won't be a part of it.

[00:42:05] Dan Runcie: And I think the other emerging platform that'll likely or emerging medium, that might likely be a part of it somehow is AI and that's the one thing we haven't talked about deeply yet today, but where are you at right now with AI and let's fast forward five years from now, 2028. What role does AI have with music, and specifically with what the major record labels and their artists are doing?

[00:42:28] Vickie Nauman: I know. I mean, it's just like, I feel like web three is, we kind of have some time because I feel like you know, companies are building infrastructure, there's lack of, you know, horizontal integration and interoperability. We have time to kind of keep experimenting and figuring it out. AI is coming at us like a freight train right now, and I think maybe five or six years ago when.

[00:42:54] AI and music first came on, the first came on the horizon. A lot of people were freaked out by it. Then they listened to the music and said, that's pretty bad, you know, now, we're not worried anymore. But now music's getting way better. and I think that, I kind of look at it in a couple of different, you know, avenues because I feel like the first thing that I see is artists. And artists are always the first to embrace any kinds of creator tools. You know, they're not afraid of technology, they're not afraid of tools, you know, you think back to drum machines, you know, my God, the drum machine's gonna eliminate drummers, you know, we don't need drummers anymore. Well, we didn't, you know, we still need drummers.

[00:43:41] But it did serve a purpose. Practicing and, you know, don't need to have you know, a drummer there to practice your songs. Don't need to always take a drummer on tour if you're doing some sort of small, intimate shows, but we still need great drumm. so I think that artists are probably going to be the first ones to embrace and use technologies that are like, think of plugins to DaaS and, you know, and that you've got a writer's block and you want to have something kind of help pull some things out of your head and break through that.

[00:44:13] So I think like that is going to be a really, really robust market. And those are still very much human creations. They're just tools that are now a little bit more advanced.

[00:44:25] you know, the opposite end of it is text to music, 

[00:44:29] and that's where I think like, we have no idea how that is going to play out and who owns it either.

[00:44:37] I think that electronic music is kind of the first use case because it's easiest to replicate and come up with, you know, a new electronic mix that's AI generated as opposed to something that is, you know, got, you know, 12 instruments in it. But, I still feel like there's a line there around what are the areas where it's, music is still kind of human created and you can never get it away.

[00:45:03] Vickie Nauman: And live music for sure, you know, there's nothing that replaces being in a room and you're waiting for your favorite band to come on stage. And we're all human and we're all there in this shared experience. and I also think that there are things about human creativity and music that surprise you and that, you know, kind of, you know, a human can take you down an emotional path or a musical path that you never, ever would've anticipated.

[00:45:32] And that's something that, that seems inherently human. But I think there's a lot of things, like a lot of background music. A lot of music that's kind of music for sleeping, music for concentration, you know, non-descript, you know, unknown artists production. I think that area is probably ripe for disruption by AI.

[00:45:57] , you know, but it just still doesn't answer some of these fundamental questions about the copyrights of, if you fed an AI engine, millions of songs and it can now reproduce music based on a text command, you know, who owns that? You shouldn't t he music that was fed into the AI participate in that.

[00:46:20] Dan Runcie: right. Because right now there's nothing that's necessarily pulling them, that they're pulling these from whatever, lyrics, websites that are there, but the lyrics, websites aren't, you know, pulling from those. So a lot of issues to sort through.

[00:46:32] Vickie Nauman: Yeah. what do you think about?

[00:46:34] Dan Runcie: I mean, I'm excited for the potential because I do think that if the industry is able to get it right in some way, if there's a way to fairly compensate people, like let's say that whether it's open AI or one of these companies has some way that they have a licensing agreement, no different than the record labels have licensing agreements with the streaming services or the dsbs. If you have something there that attributes some level of, okay, how much was pulled from here, and even if it ends up being some fractional aspect or whatever it is, obviously it would most likely all be some fraction, some way to attribute that back, especially if that becomes the next viral TikTok hit.

[00:47:14] If that then spawns the journey for the next person to release the next big song, and you think about, whether it's the next Billy Eilish or whoever is creating music in their bedroom that's gonna release the biggest album of the year, like that's likely where this is gonna come from. I do think that's some of the things that we discussed in this conversation about how.

[00:47:32] because the industry is more likely to not be in this break things fast mentality, to make sure that things are right. It's more likely to play catch up on some of those things, which I think, you know, could be frustrating to see it play out, but it's completely understandable just given how these things play out.

[00:47:49] So maybe we'll see some more, of this happen from independent artists or those that are doing more things where they own everything themselves, kind of to your point with whether it's Poo Bear or other people like that, experimenting. Okay, what could that look like? So I think we'll probably see some type of innovation there.

[00:48:06] Or maybe there's even a solution where some company has more rights to more of the royalty free or independent artist owned music where that can then be used as something derivative from where the OpenAI or chatGPT three or some of these companies can pull from. But I think we're a little ways away from that.

[00:48:27] Vickie Nauman: But there's clearly no stopping it.

[00:48:29] Dan Runcie: Yeah, no, this is a train that is gonna continue to go on for sure. But Vicki, this is great. I feel like we covered a bunch of stuff, especially with gaming and so many of its intersections. And if people wanna follow along with you and the work that you're doing, where's the best place that they should follow Thank you so much.

[00:48:47] Dan Runcie Outro: If you enjoyed this podcast, go ahead and share it with a friend. Copy the link, text it to a friend, post it in your group chat, post it in your Slack groups. Wherever you and your people talk, spread the word. That's how Trapital continues to grow and continues to reach the right people. And while you're at it, if you use Apple Podcast, go ahead, rate the podcast, give it a high rating, and leave a review. Tell people why you like the podcast, that helps more people discover the show. Thank you in advance. Talk to you next week.

Burna Boy will be the first African artist to headline a UK stadium show when he performs at the 60,000-capacity London Stadium this summer. It’s the latest sign of Burna’s starpower and Afrobeats exploding popularity.

The Nigeria-born artist is one of the genre’s biggest stars. Burna has reached this level because of consistency (six albums in nine years), savvy performing strategies, and a headliner mentality. 

To break down Burna’s rise, I talked to Denisha Kuhlor, founder of Stan, which helps artists identify and grow their fanbase. Stan has used Burna show giveaways to develop insight into his wide-spreading fanbase. Here’s what we discussed:

[3:05] What sets Burna Boy apart from other African artists

[6:26] Burna’s show at London Stadium

[7:26] The Burna fanbase

[7:52] Streaming era impact on African music

[11:56] Returning to Coachella after 2019 drama

[17:05] How Ye incidentally helped Burna break out

[19:16] How fame is perceived in Africa vs US

[20:45] Fans of Africa’s “Big Three” artists battling each other

[21:50] Burna’s “contested” Madison Square Garden sellout

[24:11] Possible missteps in Burna’s career

[27:54] Projecting Burna’s future shows

[32:20] His best career move

[38:03] Building record label infrastructure in Africa

[44:06] Five-year prediction for Burna’s career

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Denisha Kuhlor, @denishakuhlor

This episode was brought to you by trac. Learn more about how artists can bring web2 and web3 together for their fans at trac.co

Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital

Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.

TRANSCRIPT

[00:00:00] Denisha Kuhlor: I think it was interesting, him being so vocal in the approach he took, I think a lot of, Ayra Starr did a documentary for Spotify and she's quite big, especially within West Africa. And she talked about touring in the United States for the first time, and she basically said that she viewed it as an opportunity to make someone her fan, right?

[00:00:19] Like, just by someone attending her show, her goal was to convert them into a fan. Whereas, Burna definitely takes the approach of, "you should either already be one or recognize my fan base for what they are." I think in his case he's lucky cuz he's been able to back it up. especially when you look at Coachella to now.

[00:00:40] but definitely a, an approach that's consistent with his brand. 

[00:01:11] Dan Runcie Guest Intro: Today's episode is a case study style breakdown on the one and only Burna Boy. I was joined by someone who is a near expert when it comes to the world of Burna Boy, and that is Denisha Kuhlor, who has been on the pod several times, and she is the founder of Stan, where not only does she focus on how artists can engage their fan bases, she's actually been involved with ticket giveaways for Burna Boy's upcoming stadium show in London. So she has insights into what these fans are like, what are some of their preferences? And we talked about all that and more. We broke down, Burna Boy's rise. What are some of the key things to his success? What are some of the challenges? Talked about some of the other moments that he's had that we wanted to talk about.

[00:01:57] Where does that stand with him? What is his standout moment and where things could really go for him from here on out? Really great conversation. If you enjoyed the one we did on Cash Money a couple weeks ago. This is something similar, but about an artist who is really having this moment right now, and we broke it all down.

[00:02:12] Here's our breakdown on Burna Boy.

[00:02:14] Dan Runcie: All right, today we have our case study style breakdown on the one and only Burna Boy, and who else is gonna join me then? Someone that understands him and the work that he's done in and out over the past few years. Denisha Kuhlor Welcome back to the pod.

[00:02:29] Denisha Kuhlor: Thanks so much for having me. 

[00:02:30] Dan Runcie: Yeah, and I wanted to talk to you because you wrote that piece in Trapital several months ago, talking about how artists who have relied on music festivals, maybe there's something that they may regret down the road in terms of actually getting in there and building the true fanboy fan base. And you used Burna Boy as an example of someone that went through this and obviously he's blowing up. He's had a huge year and we've now seen so much growth, especially in the past few years of just how so many African artists have been able to rise and grow platform.

[00:03:05] But Burna Boy has clearly been able to hit levels that many others haven't. What do you think it is that has set him apart?

[00:03:13] Denisha Kuhlor: Yeah, I think one, just Bruno boy is very compelling, as an artist. I've seen him perform, last year twice. his Madison Square Garden show. Then I got to see him at, Afrochella now, Afro Future, in Ghana. And one, he is a live band, as crazy as that sounds, I feel like that's rare and rarer these days. as consumers, it kind of feels like we've gotten used to maybe a DJ or kind of that accompany accompaniment. So the live band aspect is a huge one for me, and I think he's very compelling on stage and has great, charisma. and then lastly, I kind of feel like he was everywhere this year.

[00:03:53] You couldn't really. Escape him, whether it was last, last, as a hit or, him touring so much of the United States. I feel like if you didn't know about Burna boy, maybe a year or two ago, last year was definitely just a true breakout year for him on the global stage. 

[00:04:09] Dan Runcie: Yeah, I think that makes sense. I think there was a couple other things that stuck out to me too. So he has been able to position himself as a leading man. I am the person that's headlining. I'm not just gonna be the person opening for the artist. gonna be the person that is doing the guest first.

[00:04:27] And I do think that's some of the other artists who rose up from Africa, they have done a bit more of the, "okay, let me jump on the Drake verse. And then that becomes Drake's or things like that." although I know that Burna has done several guest appearances and feature shares, it hasn't been in that same way.

[00:04:45] And I think he's still just been so focused on himself in that way. And of course it could take a little bit longer to develop, but it's almost like how in Hollywood you may see someone that is always positioning themselves as supporting acting roles. If that's where you're taken to blow up, it could be hard for the industry to see you.

[00:05:04] The lead actor, but if you're willing to do the lead actor roles for the smaller things and you get the right thing, then you become seen as the lead actor on the big I feel like that's 

[00:05:14] been his experience. 

[00:05:15] Denisha Kuhlor: I'm totally aligned with you when, just based off you talking about that makes me think about some of his features on the continent. And he's largely broken those artists, right? You look at Bnxn,formerly known as Buju, right? 

[00:05:27] And the Lenu remix who was signed a Burna. I first heard about Amapiano,because Burna Boy got on the Spoon, No No remix, and one of the biggest breakout stars of the continent, Asake, the Zumba remix, this year. So I agree, I think he's positioned his features as more as like, let me lend a helping hand and let me get your distribution and your visibility. But if I was. In African artists or emerging artists from the continent vying for a feature in some ways, I'd probably wanna Burna feature over potentially a big artist from the west. 

[00:06:04] Dan Runcie: Yeah. And I think a lot of that is with his. And his persona, and we can get into that in a minute, but I that played into a lot of this. And as you said, he's been every run the past year and we're setting stage for an even bigger 2023 where he will do his stadium tour at London Stadium, the first African artist, a headline and do that.

[00:06:26] What does that mean for his career?

[00:06:28] Denisha Kuhlor: Yeah. One, I think it's just huge and a testament to how far music from the continent has grown. I think, you know, you look at the story or how people paint the narrative of how music from the continent has grown. And so often it's kind of like, oh, there's a population of people here or there's little, you know, subsets of people that are interested in the music.

[00:06:51] Whereas now, it's makes it very clear that this is world music, right? This is pop music in a lot of ways in that people have embraced this music in the same way you look at, Latin music, right? And people are singing whether they know Spanish or not. I think it's really a testament to the ability to do that. So it's very exciting. 

[00:07:13] Dan Runcie: Yeah. I think you've also had a front row seat to this as well, because with your work at Stan, you've been doing ticket giveaways and things like that to really tap into who the Burna Boy super fans are.

[00:07:26] Denisha Kuhlor: Yeah, so we've found two things working with Burna Boy fans or Burna Boy fan pages. Is that, or maybe even three. I find that one you have the fan that maybe, it reminds them of home. So typically a fan with roots or ties back to West Africa or Africa more broadly, who's now living abroad or first generation, but there's a sense of nostalgia or home as a result.

[00:07:52] I think you also have fans that are like learning or being introduced to, Africa. Through his music, which has been really fascinating and really cool to see us talking to a fan, based in France, right? That like taught herself pidgin and like wants to visit Nigeria because she's such a big Burna boy fan.

[00:08:11] and that's also really, really cool to see. And then third, I think you just have like hometown pride, right? Like you look at people in Lagos or even other African cities and people are just really, really proud of what he's been able to do. So it's interesting seeing all the subsets of fans together.

[00:08:29] Denisha Kuhlor: But as someone who's attended his shows, I think it's exhilarating when you watch it all come together. 

[00:08:36] Dan Runcie: And just for some context for the listeners, what does your giveaway entail and what does that process look like?

[00:08:43] Denisha Kuhlor: Yeah. So, we run live interactive trivia games that allow us to test a fan's knowledge and how much they actually know about the artists. So everything from lyrics to questions that fans would only know if they watch music videos to general information about Burna boy that you probably would only get if you read his interviews 

[00:09:04] or you just deeply know about him. Every time we're crafting these games, I actually learn so much more about, these artists that we work with. And so I say that to say, I'm continuously surprised not only by his fans' knowledge of his music and his lyrics, but also how intentional they've been about truly learning about him and what they feel he represents. And so I feel like he's done a really good job of being consistent in that narrative.

[00:09:32] Dan Runcie: I think too, one of the other things that really works in his favor is that in the rise of the streaming era, we're seeing the rise of local repertoire and local language artists being able to rise and not just have to rely on Western cultures. And I think that the music industry has shifted a bit, or at least from a mentality perspective, and you could see this on the Spotify daily charts.

[00:09:56] You can see there's so many places where there were so many artists who were used to being able to have that global footprint of essentially exporting their music elsewhere than making so much money they're now seeing less and they're seeing less because a lot of these artists are being able to do it themselves, and it's not just.

[00:10:16] Burna Boy's being able to do this in West Africa, but he's being able to do this in France, which has, you know, a large West African population and some of these other corners of the world that do, and I'm curious to see how that will continue to develop, because you know how the diaspora and certain regions that.

[00:10:34] You see more fans of West African artists than just West Africans in general, and how that will align with where someone like Burna Boy continues to tour and where some of the bigger concentrations of his fandom end up being.

[00:10:49] Denisha Kuhlor: Yeah. I think, you know, interestingly enough, like he also probably benefited from the rise of like macro things that maybe couldn't plan, but like one black panther, right? Black Panther, like reignited people's curiosity about Africa and maybe in a way in which, they hadn't thought of before you look at things like the year of return in Ghana in 2019 and this bridge or this desire to have a bridge between black Americans in the United States and you know, people in Ghana.

[00:11:18] And I think all those like, factors made people, got people excited and got excited in a way that his music just set the stage. If you came to Ghana in 2019, you were gonna hear br boy and people were gonna take it back, right? 

[00:11:33] Denisha Kuhlor: Davido said it best. He said, you know, Afrobeats will succeed because in America, everybody has one African friendand whether you realize it or not, like, you are exposed in some way, and I think as people's proximity changed and curiosity about each other and where people are from grew, especially as it relates to Africa, he really benefited from that. 

[00:11:56] Dan Runcie: That makes sense. That makes sense. And I think the other thing too, that I think about for him this year, he of course has the huge stadium show in London, but he's also coming back to Coachella and very famously back to Coachella after being quite upset in 2019 about the size of his name on that Coachella poster. And this day, this year, this time around, his name is much bigger. Still not a but I'd be curious know what you think, like how he must have felt about that process. Was there some level of buy-in? Because I could see at his level him thinking that, okay, I'm a superstar. I should be a headliner. But if they're now putting him on that second line right under the headliner, then how that may affect him. Obviously it's still great placement, but. Yeah.

[00:12:45] Denisha Kuhlor: Yeah. You know, it's interesting and I remember when that happened and in some ways I think it probably helped his brand and really showed like it was a testament to the type of artist that he desired to be. I do, you know, think it's interesting because you do see within Africa stars that are huge, right?

[00:13:04] And maybe they're numbers, quantitatively don't show up on the Spotify charts, they're on YouTube or they're on other platforms. there's still quite of downloading, that exists within just Africa as a whole. So sometimes we don't necessarily see an artist as set the way we would, maybe with an artist in the States or with a huge listenership in the States, from a charts perspective or immediately.

[00:13:27] But I will say is I think it was interesting, him being so vocal in the approach he took, I think a lot of, Ayra Starr did a documentary for Spotify and she's quite big, especially within West Africa. And she talked about touring in the United States for the first time, and she basically said that she viewed it as an opportunity to make someone her fan, right?

[00:13:48] Like, just by someone attending her show, her goal was to convert them into a fan. Whereas, Burna definitely takes the approach of, "you should either already be one or recognize my fan base for what they are." I think in his case he's lucky cuz he's been able to back it up. especially when you look at Coachella to now.

[00:14:09] but definitely a, an approach that's consistent with his brand. 

[00:14:14] Dan Runcie: Right? Because I think that part of it too is there's clearly a western skew for a festival like Coachella. I know that when Burna had complained back in 2019 about where he was, people had shown where Kendrick Lamar was, I think it was 2012, and how small his name was compared to him being a headliner several years later.

[00:14:35] Denisha Kuhlor: The difference there though is that Kendrick Lamar is from Compton, which is which is driving distance to Indio, California where Coachella is, versus Burna boy may have numbers, may have the base, it's is that base, if they're not a strong contention of them in the in Southern California, are they going to be able to get there?

[00:14:58] And I do think that the fact that he is, you know, second because this year you're headliners, unless someone pulls out, you never know what happens. But, right now your headliners are Frank Ocean, Bad Bunny, and Black Pink. So he's, you know, just under there. So you never know what could happen. Things shift all the time, but I assume if based on his placement, it must be a pretty decent size bag as well.

[00:15:21] At least I know for the headliners, the last I checked a few years ago, they were getting paid 4 million per weekend, which totaled 8 million total. so that's what I would assume the payday would be for, Bunny, Black Pink and Frank Ocean, but then that next row down probably isn't too far below that.

[00:15:40] I mean, I'm sure it is less money, but I don't know how much less.

[00:15:43] Sure. Yeah. Yeah. And when you look at like negotiating from just a hard tickets perspective, in terms of what he's been able to drive from last year alone, he definitely had some strong leverage from a negotiating standpoint.

[00:15:57] Dan Runcie: definitely. And with someone like him too. I know that we've talked a lot about artists and how they're able to develop true fandom, and I think true fandom is the people that are showing up at your. Concerts and they know the words of everything and not just singing the TikTok part that goes viral that we've seen from whether it's many artists that have experienced that, that have had TikTok hits that have blown up.

[00:16:24] How do you think that impacts someone like Burna boy, I don't necessarily feel like he is making music, quote unquote for TikTok. I know a lot of the stuff that blows up their artists don't have any control over, but how do you think that skews, like how do you think that soc or short form video has played a factor, if at all, in his career and his rise?

[00:16:44] Denisha Kuhlor: Yeah, I think a few ways, one, touring, right? I think people want to go to a Bea boy show even if they haven't seen him before or only know a few songs. So I think it's definitely been really, really helpful there. I don't know how many, people know, like the story behind Ye, one of his breakout hits, but like SEO just like really helped him.

[00:17:05] So he had the song, Ye. It was already uploaded to streaming platforms, and then Kanye came out with his album. . And so a lot of folks search for Kanye's album, but his, was still like ranking pretty high on Spotify. They actually released a video that that day or around that time thinking, thinking Kanye, for, for the album name.

[00:17:25] So I do think in, this is what's so interesting. He's very true to himself in the sense that he's definitely not an artist that like hopped on those trends, right? Like TikTok is not really potentially his thing. he's not gonna be doing any TikTok dances, so he's still been authentic to himself. While I think galvanizing his fans or letting his fans know, he appreciates their effort and I believe his fans look at it more so it as like, let's spread this message, regardless of his participation.

[00:17:58] That's something I always get from his fans specifically, it seems like you have different artists, with fan bases. Like the Barbz need Nicki to participate, they want Nicki to participate, right? 

[00:18:09] Whereas Burna fans, I feel like they do their own thing. They know the temperament of the artists and what he likes to do, and so they don't, they're not really like rushing for him to, adopt maybe some of those technique. 

[00:18:23] Dan Runcie: And that's an interesting breakdown. Do you think that any of that is compared to where the artist is from or just the nature of their fans? Thinking specifically about the Barbz versus Burna Boy's fans.

[00:18:37] Denisha Kuhlor: Mm. that is interesting. You know, I can't say with certainty, but what I will say and as I've spent more time in Ghana is that there's a level of familiarity. I find, past, maybe, I don't know what it is, but past like, experiences that maybe invoke a certain socioeconomic status. There's a level of familiarity, that you'll find these artists like I've definitely maybe seen, or you can be in spaces with so many of these artists just casually like going to a restaurant or, you know, like you living your.

[00:19:16] And, I do think that invokes a certain sense of familiarity in which fame is perceived differently here. like in Ghana specifically, you see a lot of, a lot of artists here with very little to know security. just like really doing regular things. it's very different, whereas the fame is more sensationalized it feels, in the states, like you can be in the club with Burna, he's walking up and there's not gonna be the, oh my god, Burna, like that kind of thing. It's very different in that way. So maybe that wouldn't really add much, at least to his core or his home base fans, because that familiarity is there. 

[00:19:56] Dan Runcie: Yeah, it feels a bit the closest thing that I would. You have in the US is Atlanta, where you would have the artists that are at the mall or you see them walking around and stuff. And it isn't necessarily the same level of frenzy, although that may be a little bit different now, but in like, you know, the nineties, two thousands, you would see them a bit more.

[00:20:17] And I think there was a bit more of that vibe that felt a bit more natural like, you know, you go to Magic City or something like that and you would see someone. I think the other thing that is distinctive too with the US fans versus maybe some of the fans, others, is that online, I think you do see a bit more of that hive behavior, specifically from a group like the Barbz, where I think there's almost a falsification to them.

[00:20:45] Denisha Kuhlor: And in that, I mean the reactiveness to the other side and what they're saying, and there's almost the galvanization of that and how the barbs can galvanize in Cardi B take down, or a snide comment of someone trying to come at Nicki in a way, but they that bit of catalyst to feel galvanized.You know what's interesting? I do find it that I do think that Burna fans and maybe the big three, so for folks listening, within Africa, the big threes typically referred to as DeVito, Burna boy and Whiz Kids. So they all have their, various fan bases. And the only time I really feel like that's activated.

[00:21:27] Seeing how their artists are doing in the West and comparing. Right. So, you know, obviously with Burna winning the Grammy, but and I talked to you about this, like his, Madison Square garden numbers were quite contested. Like if you actually look at the Twitter account that shares,ticketing information. That one was like retweeted so many times because it was the fan bases going back and forth.

[00:21:50] Like he actually did sell out MSG versus didn't he? So it's very interesting because while, you know, in some ways like his hyper localized approach in terms of the themes of his music is what's propelling him on the world stage. I do think these fan bases are very curious to see just how well they're doing and they use that as the point of comparison, as it relates to other African artist. 

[00:22:13] Dan Runcie: Wait, what was the contention that the fans had about the MSG sellout?

[00:22:18] Denisha Kuhlor: Yeah, so there were a few things. One, they felt like there weren't enough seats available. 

[00:22:23] Dan Runcie: Oh, you did tell me about this. 

[00:22:25] Denisha Kuhlor: True . Yeah. Like it was a true sellout. And, at first folks didn't believe that he had sold it out. So, it's also interesting with fan bases because you're now seeing like novice or people, fans knew to wanting to understand how the industry works and also wanting to dig into what that means. But that, I think gave the confirmation that he did sell it out,and led to other fan base battles over the discrepancies. 

[00:22:56] Dan Runcie: Right? Yeah. Cuz you and I talked about this. It isn't like if someone just books like a music hall or a House of blues, purpose of that is for music venue. So the capacity's listed as the capacity, but for some of these sports venues, it could be very different because artists have such different set pieces and stage and production and you don't wanna perform with your back to people like yyou're gonna be different places. So 

[00:23:18] Denisha Kuhlor: Exactly. 

[00:23:18] Dan Runcie: You can't compare the sellout for a Knick's playoff game capacity and be like, oh, well that had more people than Burna Boy's selling out MSG. It's like, it 

[00:23:27] Denisha Kuhlor: Exactly. And that was a lot of, the conversation, which I thought was so interesting. But I also think it it came about because of how he branded it, right? One Night in Space was the name of that. It wasn't part of a tour, anything, it was just one night in space. And so there were gonna be a lot of eyes on that event, regardless.

[00:23:48] Dan Runcie: Yeah, and you know, people always try to poke holes when they see something that surprises them that they probably wouldn't have, you know, seen otherwise.

[00:23:57] So we've talked a lot about the things that Burna Boy's done well, how he's got to this point. Do you think there's any missed opportunities so far at this point in his career or anything that you've looked back on and be like, huh, I wonder if he did that differently, or even things that he may be doing after?

[00:24:11] Denisha Kuhlor: Yeah, so, I obviously have a company around fan engagement, so some of the fan engagement has been interesting. I will say, one thing that's been, very pleasant for me has been some of his intentionality around connecting deeper with his fans this last album he did host quite a few meet and greets, and had people bring their albums or you know, even bring their kids and like that kind of thing.

[00:24:37] I felt like he was really like seeing and touching people, which is something that in the past it didn't really seem like maybe he was open to or necessarily had the appetite for. So that was nice to see. It sounds like, or at least for me, the professionalism when it came to One Night in Space was also great. 

[00:24:56] the show started on time, ended on time. Can't necessarily say the same for some of his shows within Africa. And that can be due to a host of reasons, but it definitely does lead to, maybe folks will get different experiences. And that's what's so tricky in some ways about artists, in supporting artists.

[00:25:16] He's also headlined Afro Nation, Afro Nation, Puerto Rico. They've pulled out the day before and he was replaced with Rick Ross, which upset a lot of fans. So, I say all that to say, I think. It's a Burna Boy production or Burna Boy affair. it seems like everything is phenomenal. and just A- plus end to end when there are other stakeholders.

[00:25:41] The process doesn't always seem as smooth, at least for the end user experience, for the fan. so I, I think it sometimes becomes a question of like are we going to continue to pursue some of these opportunities with other stakeholders, whether that's festivals or, just some of these other events, right?

[00:26:00] Denisha Kuhlor: Or are we going to take the bulk of our production or the bulk of our events or how a fan can interact with me from a live performance standpoint in-house, and control the end-to-end experience that way.

[00:26:13] Dan Runcie: Yeah. And I do think that this strength weakness here lines up with the things that we're saying before, right? If he's someone that wants to be the lead, you wanna be the focus. You're gonna put more energy into the Burna Boy Productions and you may take a slight at things that are not that right. And I think it's unfortunate if some of that distribution skews between the things you do outside of Africa are the things you do in the Western world that do buttoned up, but then when you're back home it has less energy, less focus because yeah, your day one fans of your stans are gonna feel like, okay, well now that he's stadium status, what do we get?

[00:26:52] Denisha Kuhlor: Yeah. and in fairness, you know, some of that is probably, you know, thanks to the regulation, like there is no coming on at 2:00 AM at MSG. Like they will set everyone home. You'll not be allowed to perform. they will charge you a fine. so there's also I think just some of the like, again, the standards upheld within these ecosystems.

[00:27:12] But it breeds a dynamic that it's unfortunate and I think is happening just overall where consumers are privy to this at this experience. As a fan that goes to see a show, I don't really wanna hear the promoter and technical issues and like production. I paid my money, I took my money to see this artist.

[00:27:35] So, now the fact that fans are being so exposed in a lot of ways to all the elements behind these things, not only are making them more sophisticated consumers, in deciding whether to patronize you again, but it's taking away some of the magic that was entertainment and like show business. 

[00:27:54] Dan Runcie: Yeah. I do think that for someone like him specifically, it is important to work on how could this product be the best that it can be? Whether you are doing it at home, whether you're doing it elsewhere, and obviously knowing where you're doing it elsewhere, you're involved with other productions, there's things that are gonna be outta your control.

[00:28:13] And I know it's asking someone that is naturally more focused on putting more into the things they have more control into to still bring that same energy elsewhere. But hopefully, I'm sure that he wants to be eventually a headliner at a Coachella or a Glastonbury. I'm to do other stadium shows as well. That'll actually go to the next thing that I'll ask you, I think that if that's the goal, then some of that energy has to con continue there. So, two questions here, this is a two-parter. So the first one, obviously London is the first. Well, I don't wanna say the first, but at least it's the one of the biggest stages that he has had himself.

[00:28:51] I think, you know, we'll see how many tickets end up being sold. I assume it'll probably be at least like 60,000 or so, just given the size of that place. But where do you think, if you could project where the next stadium shows would be based on his fan base, based on what you know, where do you think those would I would say Texas , somewhere in, Texas. I mean, Dallas and Houston have some of the biggest African populations, within the United States. And so when I think about that, not only do they have African, you know, or they're first gen or immigrant populations, but a lot of people have also been exposed just by proximity.

[00:29:31] So I think, yeah, I think it would be either Houston or Dallas. Definitely somewhere in the States, I do think he could do somewhere else in Europe, but if looking at the data really does concentrate, at least in London and with the disposable income, I think that would allow for a show like that, for a show like that to be successful. Another thing about Burna that's interesting is, he's been touring. So a lot of these fans, you hadn't seen him two years ago. You definitely have had your opportunity to see him now. even when I think about, by the time I saw him at Madison Square Garden, I could have seen him at Afropunk right in New York as well.

[00:30:14] He did summer or he was supposed to do Summer Jam. So there were like multiple opportunities, even just within New York to see him. So I wonder though, before he does that. There will be a bit of a, break, or at least new music so that the consumer feels like they're seeing something. 

[00:30:31] Dan Runcie: What about Paris?

[00:30:32] Denisha Kuhlor: Yeah. So Paris is a really interesting market. He has a ton of fans in Paris and I talk to them quite often. I don't know though. I, I don't know if a stadium show can work there just yet. And part of the reason is because I do think that the market rewards in some ways, , those who try.

[00:30:53] And while he's done a ton of podcasts, a ton of interviews, a ton of things, I can't say how much he's actually interacted with, you know, some of the French press andsome of the opportunities there. He did do something really cool, recently or, yeah, not too recently. where he did a like deep cuts performance for 300 fans and he just announced it on Twitter and folks got to go.

[00:31:19] So I think he can work up to it just quantitatively. It might take longer than other markets.

[00:31:27] Dan Runcie: Yeah, Paris was one that had in mind I think, those things you mentioned make sense. New York was another one too. Just given that MSG show and you have the MetLife stadium, I feel like like that could eventually happen.

[00:31:39] Denisha Kuhlor: Yeah. Yeah. I think New York makes a lot of sense. It's pretty close to, obviously, you know, DC and Virginia, which also have big African populations. New Yorkers have seen him and know, someone who attended the MSG show. I really felt like there was like a sense of pride, like folks were really excited to be there, and to see this. And it definitely makes you feel like in events. And one that you could partake in multiple times for sure.

[00:32:07] Dan Runcie: Right. And two, with this, we talked about his missed opportunities, but what do you think about the best opportunity or the best move that he has made so far in his career?

[00:32:20] Denisha Kuhlor: Yeah, I think one consistency. He's been pretty consistent about releasing new music, whether it came to the album that he released during COVID, as well as his latest album now. There's definitely a strategy, I think, of always being focused or always looking ahead or being able to see what's next.

[00:32:40] And so he's been able to use consistency through his own music, but also relevancy by jumping onto trends that are new, whether it's or not new. I feel like the Ima piano folks are gonna come at me for that. But,whether it's Amapiano, right? or Asake who really brought a new sound for folks.

[00:32:59] So I think he's been able to do that really well. I think it was really intentional of his team. We've gotten to see, and not to compare Burna Boy to Ice Spice, but as consumers, I think so often, we see folks, do really well as a result of a breakout hit and have these expectations of them that don't necessarily correlate.

[00:33:23] And it's actually been really great to watch an artist like Ice Spice or even a Little Nas X kind of come into their own when it comes to their performance and stage play overall. Whereas with him, I think he really got to build that methodically and, and over time, get comfortable on stage, see what works, what doesn't work, figure out the kinks of working with the band.

[00:33:44] And so he's really, really been able to perfect and invest in his live show, which we're seeing dividends on now, while also maintaining just the consistency of new music and relevancy, which is quite d 

[00:33:57] Dan Runcie: Yeah, I think the Ice Spice is interesting because I was talking to someone about this a couple days ago and she had just put out her project, and I think it may be sold around like 15,000 units. And that of course sparked some discussion. And the thing is, it's hard to even frame something like that as a negative because six months ago, most of you didn't even know who this was, if we're 

[00:34:23] So we have the nature of the internet being able to help someone skyrocket into a different level. Almost overnight, and then just realizing that her team, everyone else has to catch up. It's a very different situation, like where Burna Boy is showing you that, yeah, it takes time to get to this point.

[00:34:42] I mean, if he starts really releasing music, you know, early 2010s. By 2017, still doing small venues in New York. And then it really until, you know, a couple years later where you're being able to hit that. If you even get to that point, it's so hard. And I do think that live performances in the honest you command is one of the few things that can't quote unquote blow up overnight and it's, if anything is the more humbling thing that we see. I think streams can be somewhat humbling to some extent, as you've seen, but even that can be misleading. So it does at least ring true, and I think for me, I'd spoke about this earlier, but the thing about his career that I think is the best move for him was just continuing to position himself as the lead and not necessarily, you know, following the latest trend just to hop on it. Although I think he was smart about things, but not just trying to attach himself. I think he still had the brand there and it took longer than some may have, you know, wanted, or maybe even he saw himself, especially, I can only imagine, you know, it's 2015, you're doing this for a few years, things still bubbling.

[00:35:53] So I do think that worked to his advantage cuz now it's really only a handful of artists globally that can say they're in that position. And then really his whole continent, you know, of the big three is at least the one that has the most exposure and platform in base right now.

[00:36:09] Denisha Kuhlor: What did you think of? I feel his choice to embrace Artis from the west like his last two or three really, his last maybe three albums, you see like a really conscientious approach, whether he's had everyone from YG to Keilani, had Diddy executive produce an album, and that felt really intentional to reach, listenership or an audience from the westlike you said, it's probably tricky like if that went wrong, it could have really went wrong but in his case it seemed to go right, but I'm curious what you thought that. 

[00:36:43] Dan Runcie: Yeah. I think part of the reason why it worked is like, I feel like he picked artists that felt somewhat aligned with like what he was doing too like I, at least from what I read, I think the YG track may have potentially would've involved Nipsey, but you know, Nipsey had passed, so like that didn't work.

[00:36:58] It's not as if he was just hopping on, you know, who is the hot single that like needs someone or like, you know, the Drake or whoever else. And not that I think with Drake is an issue, but because obviously is done and then Bad Bunny's continue to grow. But I feel like because he's like picking certain artists and maybe not every pick I necessarily, you know, thought was like his best music, but there seemed to be a ality with people that like lined up with him where it's like, okay, I've listened to enough why G'S music over the years?

[00:37:28] I could see why someone like Burna Boy would want to do music with him, right? So I feel like for me, that piece of it did line up and I know that if you're trying to grow there, there's some inevitable push of who can I align myself with that isn't just trying to do the generic pop thing. Like I don't think I would ever hear him beyond a Maroon Five song, which I do feel kind of becomes like a bit of a rite of passage for a lot of, Western hop artists.

[00:37:57] But I'd be very surprised if I ever saw Burna Boy.

[00:38:01] Denisha Kuhlor: Yeah. No, that makes sense. That makes sense. 

[00:38:03] Dan Runcie: Yeah. the other thing that I think this conversation taps into is just the broader growth and the broader expansion of record labels and infrastructure in Africa from what the music industry to do and how Burna Boy's been able to help. In many ways, not just, I don't wanna say necessarily lead that because I think he's did a lot of this without the infrastructure.

[00:38:26] If anything, the infrastructure has kind of started to come as a result of what he's done. But I've also heard a few rumblings from different folks that some of the investments of certain record labels, some of the majors having offices there, there's been questions about how they're seeing what's viable, what makes sense now because some of the artists that blew up, they don't have those artists on those labels, so now they're trying to find the next person and they're realizing that really hard to do that.

[00:38:55] Denisha Kuhlor: Yeah. You know what's interesting, and I thought a lot about this is I feel like most artists on the continent don't necessarily need help on the continent. So much to our point of thinking about like Coachella, that was so surprising to Burna Boy because he was a huge star within Africa.

[00:39:11] and when you look at the labels, he's engaged, for like a more global expansion. The thing I think he's been very clear of and his mother and the rest of his team is that like they've got Africa covered. And so I do think that could be part of the reason why maybe some of these labels are struggling because in a way it probably makes sense or the hunches to put more money or investment into what's already working, which is within Africa. When in reality I think it, it forces you to start to iterate and experiment on what's gonna resonate in terms of an artist, fans, an artist who has fans abroad, or them starting to build their broad audience.

[00:39:53] And while an African audience it probably validates a lot of things, right? Maybe stage, presence, charisma, ability to connect, that the music is global or can reach people like it, that change or that shift. now being in the states or being in Europe is also quite different as well.

[00:40:11] Denisha Kuhlor: And I think it forces labels to take a true A and R approach, whether it comes to everything from media training, Interacting, there's cultural differences. And so, I think it's going to lead way to maybe a new type of executive. it's something I thought a lot about music programs like the Music Business Academy,in Africa.

[00:40:33] That's done really, really amazing work. I continue to be really, really impressed with the folks at Maven. And what their talent is doing, I think, for the African music ecosystem. But, with that being said, I think that the ecosystem is still getting to the point. where it's maturing, but also maturing in a way where folks can capitalize not only on the talent from the ecosystem, within Africa, but there being true connections, going both ways, because that's ultimately where the label will be able to recognize their power.

[00:41:05] But for an artist that is already successful in some ways already getting Booked for shows. You look at, you know, where Tua Savage was by the time she got signed, or a DeVito by the time, he got signed abroad, they're already huge stars, which in some ways is different than what labels are used to signing in the States.

[00:41:27] They, you know, would either find an artist and before invest the development in them or find an artist who's had maybe success digitally, but are working with them, on some of their more physical initiatives. So, I think it's interesting, but I also think it's a bit of a, different framework or thinking that some of these labels need to do in terms of the true maturity of the talent at the time they're being signed in some cases.

[00:41:52] Dan Runcie: Yeah. When I heard rumblings that some of these record label offices that had recently started in Nigeria or elsewhere in Africa, that they were starting to question some of the future and the growth and things, I honestly wasn't that surprised because if you look at the way the record labels work in the US and at least currently they're working cause.

[00:42:16] you have the Drake's and you have the Taylor's and the Adele's and Beyonces, and you've given them more favorable deals. But knowing that even if they more favorable deal, whatever share you get of that is still gonna make up for more than everything else. And that's gonna help your strategy in so many other ways.

[00:42:33] Versus you're starting from scratch in a landscape where it's already harder to like develop someone from the ground up. And you're starting that without the Burna Boy without DeVito or without them, and now you're trying to find that person and you're trying to, you know, still do the investment. It's tough to get there because it took these folks so many years to get to that point.

[00:42:55] So if you didn't start like a 10 year time horizon and you're have a bit of that, you know, more of a standard, okay, what has this person done for me lately? Do we keep this artist? Do we drop them? It isn't going to work in the same way. And we saw some of those same challenges, not even to this level happen.

[00:43:12] 20 years ago when there were so many artists from Jamaica that were starting to blow up when reggae and reggae Fusion was really starting to be the wave when Sean Paul was doing his thing, and we didn't even get to that point where they were even trying to start the record label. There were issues with visas Yeah. Yes, and all. 

[00:43:31] Denisha Kuhlor: It doesn't just transfer. That's, you know, that's such a great point. Like I think in some ways people expect the success in the continent to like transfer almost smoothly when in reality a new type of work is just beginning. And that's the type of work that, you know, when you think about the office, the big office is looking for, right?

[00:43:51] Because that's gonna produce quantitatively what they wanna see. and so in a way it can feel discouraging because you're like, wow, I have this artist, they've done this, this, and this. They're getting booked for shows here. Now we're going to Europe and we can't do a 500 person venue, but we just did a 5,001.

[00:44:06] Dan Runcie: Yeah, it's gonna be fascinating to see how this develops, but before we close things out though, let's say five years from now, 2028, where's Burna Boy in his career, right? At that point, what is he doing?

[00:44:18] Denisha Kuhlor: Yeah, I really, you know, I call it like a bit of the Jay-Z effect, but in some ways I see that for him, one clearly has an ear, not only for like developing talent, but also emerging talent, from, you know, a feature to Bnxn who assigned onto his label, but ended up not staying ended to, ask to leave the label, which I think is very interesting.

[00:44:40] So I kind of wanna see if he focuses or hones more on also like developing talent innately his sister's also the creative director for his brand. I think too, we'll also will also see him play a role where he does a lot of fun things around fan engagements. he talked about in an interview that he's performed at so many venues and gotten to travel the world. And so he wants to take a really exciting approach in like performing on a train or kind of doing all these other like, cool fan experiences. So hopefully will he'll start to experiment with that as well.

[00:45:20] Denisha Kuhlor: And it'd be interesting, but I think he might have the potential to be a really high touring artist for a long time. We see some artists that are just like, they can go on tour. It feels whenever they want, regardless of whether they have new music or not. And to some extent, I think that he just might be an artist that can command that.

[00:45:42] and this has, you know, everybody's talking about, everybody's talking about catalogs nowadays, but as you think about how digitally Native Africa is, how young the population is. I'll be curious to see if he gets an offer he can't refuse. on the catalog side, there's more and more, places invest in content within Africa.

[00:46:02] Denisha Kuhlor: It's only gonna increase, syncs the power of nostalgia as well. . Well, my hunch would be that he wouldn't sell, it wouldn't surprise me if we also saw him really structuring his business or his brand in, a way, that commands a high catalog price as well. 

[00:46:19] Dan Runcie: Yeah, when you're one of the biggest ones in this like wave and you're really reaching the height that others haven't reached before, you do have a bit of that advantage, right? Are able to this rise in a number of ways. So it's gonna be fascinating. I'm excited feel like at a minimum, what headline in Glastonbury feels like an inevitable thing, just given with things.

[00:46:39] So yeah, I am eager to see how this all plays out. And who knows, maybe he'll be at Coachella again, and maybe he'll have the headline spot and at that point there's nowhere else to, you know, complain. Maybe we'll just have Burna Boy hyphen the African Giant and that'll be what's on the poster,

[00:46:56] Denisha Kuhlor: Yes, I can literally see like just the African giants. I think that would be just such a moment, in the funniest way, like very reminiscent of Jay-Z, Jay-Z at Glastonbury, no. Yeah, it would be cool to see that all come full circle.

[00:47:10] Dan Runcie: Definitely. Well, Denisha, this was awesome. Thanks again for making the time and making this happen

[00:47:16] Denisha Kuhlor: Thanks so much for having me.

[00:47:17] Dan Runcie: If you enjoyed this podcast, go ahead and share it with a friend. Copy the link, text it to a friend, post it in your group chat. Post it in your Slack groups. Wherever you and your people talk, spread the word. That's how capital continues to grow and continues to reach the right people. And while you're at it, if you use Apple Podcast, go ahead.

[00:47:38] Rate the podcast, give it a high rating, and leave a review. Tell people why you like the podcast. That helps more people. Discover the show. Thank you in advance. Talk to you next week.

In music, web3 hype may have cooled over the last year but there are still builders in the space making moves, like trac’s founder, Cardin Campbell. Trac is one of our sponsors for Trapital, and it was great to have Cardin on to discuss how music tech startups see the big picture and are approaching this. trac is a music distribution service, but it wants to bridge web2 and web3 together in a way most distribution services aren’t.

Cardin sees an opportunity to digitize how royalty payments are made without disrupting the Web2 experiences on Apple Music and Spotify. That can remain, while blockchain technology adds a layer to bring an artist’s superfans around for the journey.

In this episode, we discussed web3 music — what was overhyped, what has lasting value, and where things go from here. Here’s what you can expect: 

[2:57] Finding a wedge in web3 music 

[5:17] What people get wrong about web3 and ownership

[9:25] SEC challenges with NFT royalties  

[12:04] Most music fans don’t want to invest in artists

[15:31] Where web3 and web2 meet in music

[19:13] Building trac’s platform 

[21:37] Benefit of artists “windowing” music releases

[25:59] How trac sets itself apart

[32:15] Artists “moving on” after reaching success 

[34:54] What’s most exciting in web3 right now

[36:22] Biggest friction points to web3

[41:05] Projecting trac’s revenue mix between web2 and web3

[44:38] How to follow trac’s process

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Cardin Campbell, @iamcardin

Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital

Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.

TRANSCRIPT

[00:00:00] Cardin Campbell: Success means, you know, you as an artist can make a living doing your art, and whatever the national average is in terms of salary per year, we want every artist on track at that level to get to that level of freedom and beyond.

[00:00:17] yeah, we're building for that success story. and then some that's like the bare minimum for us. But yeah, we hope to create, you know, the next superstar. Not create, but we hope to help support the next superstar by giving them the tools to make the business side and, you know, management side of their catalog super easy.

[00:00:35] Dan Runcie Intro: Hey, welcome to the Trapital Podcast. I'm your host and the founder of Trapital, Dan Runcie. This podcast is your place to gain insights from the executives in music, media, entertainment, and more. Who are taking hip hop culture to the next level. 

[00:01:03] Dan Runcie Guest Intro: Today's episode is all about where Web two and Web three meet each other in the music industry. It has been a rollercoaster past couple of years in terms of NFTs Web three Crypto and how all of it makes sense for artists, musicians, record labels, and more to help make sense of where we are and where things are going.

[00:01:21] I sat down with Cardin Campbell, who is the founder of Trac is on a mission to empower artists to reach their fans more closely than ever, whether that's by distributing their music directly to the digital streaming providers or through NFTs so that their most passionate fans can get early access and a small ownership stake in their music moving forward.

[00:01:42] Trac is also one of sponsors, so it was great to be able to talk with them about their solutions more deeply and how they're serving artists. In this conversation. We also talked about some of the other challenges that happened with music distribution, such as when you have those superstar artists, how do you keep them on board?

[00:02:02] We also talked about broader trends in web three, where things are going, what some companies are getting right, wrong, and more really great conversation. I like the way Cardin sees things. I hope you enjoy it as much as I did. Here's my chat with Cardin Campbell.

[00:02:17] Dan Runcie: 

[00:02:17] All right. Today we got a full conversation on deck. We're gonna talk about where Web two, when Web three, meet each other with someone that is living and breathing this every day, Cardin Campbell, founder of Trac. Welcome.

[00:02:29] Cardin Campbell: Thank you, thank you, thank you. Good to 

[00:02:30] be here.

[00:02:31] Dan Runcie: Yeah, definitely. I feel like you and I have had a few conversations about this, and the industry's been in such a fascinating place right now. You look at the past year and a half with Web three, crypto NFTs. It's been a rollercoaster in terms of where the industry is, where people stand, where companies stand, and where they're focusing on.

[00:02:51] How do you feel like we are right now? What's your macro take on where the industry is right now with regards to web three?

[00:02:57] Cardin Campbell: I think the industry's in an interesting place. I think we're still trying to find that wedge of where web three or this concept of Web three, you know, aids music in any way. You know, I think a lot of people, are trying to think of it like this separate space and you know, this place where you can sell more of stuff and generate more revenue for the industry.

[00:03:19] And I think that can happen, but I don't think it's going to happen in a way that we've been approaching it to date, you know, but yeah, I think we're still trying to find out which ultimately is where we currently are.

[00:03:30] Dan Runcie: Yeah, I think one of the challenges was that there were so many cool and nifty ideas that people had about what something could look like, but at the end of the day, you needed to have a real functional aspect that would add value in a way that you are either making something easier for the consumer or you are making it more unique in a way.

[00:03:49] And I feel like a lot of the things that are being pushed, were more focused on, oh, here's this cool, almost wonky idea of what something could look like as opposed to, boom, here's a fundamental shift change into how things were and how things could be moving forward.

[00:04:04] Cardin Campbell: Yeah. 

[00:04:05] Yeah. It's really like, you know, the classic case of entrepreneurship and startup, right? It's like you try to find a problem to solve and then solve that problem, whereas with web three, there's so many cool things you could do. And people were just like building cool things and then trying to find a problem, you know, later.

[00:04:24] Right. So I think that's why we're still trying to find our wedge in the whole space, but because it's just been a case of, "Oh, we can do this and do that and like, wouldn't this be nice?" You know, but not really centralizing, you know, the focus on problems to solve, right? And then solving them.

[00:04:39] Yeah.

[00:04:40] Dan Runcie: And as you look back on it yourself, as someone that's been following the industry to to a deep extent yourself, do you feel like there are parts where you yourself are like, huh, maybe I had overstated where I thought this was gonna go? Because I think that each of us probably bought into some of the height and potential to at least some extent.

[00:04:57] Cardin Campbell: Yeah, 

[00:04:57] so I still feel like we have, we've got it right to a degree, and I'll explain, right, so a lot of people approach Web three music in this like way of thinking of it like it's another medium, you know, for people to consume music, to buy it, like it's a collectible and I think that's the wrong approach.

[00:05:17] That's just my personal feeling. I've always thought that, and probably will always think that until I'm convinced otherwise, right? Because you can't really treat it like a new medium. When Spotify and Apple, you know, has the fan experience, you know, being the best it's ever been, like I feel like discovery has been solved, do you know what I mean? Like the algorithms and all the things that they provide to help you discover new music and just have access to all the songs, right? There is the best it's ever been. So companies that's been approaching it where they're thinking, oh, web three, we can generate NFTs out of songs and sell them.

[00:05:56] I don't know that that's it. like, I hope I'm wrong cause it feels like an opportunity, right? To generate more revenue for the industry but I don't think that that's it because we've seen iTunes come and go, right? they were selling a digital file that was the MP3 for a dollar and that was cool for its time.

[00:06:12] But then we shipped to streaming, they bought beats and turned into Apple Music and, right? Like it shifted. So I don't think that that's it. And I think that's where a lot, you know, the focus has been, and I think that's where people are getting it wrong. Because it's not, another, you know, medium, so to speak.

[00:06:29] Dan Runcie: That's a good point because I do think that part of the reason that streaming took off, and a lot of this was in conflict of what Steve Jobs himself thought. He of course, is one of the big proponents of iTunes, and I think for its time, iTunes especially, when did it launch 2003? I believe that was the answer at the time.

[00:06:48] You could buy your favorite song for 99 cents or a $1.29, whatever it was at the time. But after a while, consumers really didn't wanna do that. And I feel like one of the reasons why Spotify worked, granted, I know that the company has had its own ups and downs over the years, but one of the reasons why I think Spotify works is because it met consumers where they were at. People wanted to have access that at the time mattered more than ownership. So some of these things that are going back more to ownership, like whether it's companies or models that you're referencing, it brings us back to that. And it's not that people don't wanna own things.

[00:07:22] They clearly do. You see the boom of vinyls and other things. It's just not ownership in the way that we may have thought, or that some of these companies may have.

[00:07:31] Cardin Campbell: Yeah. And when you think about it from an ownership standpoint, like you don't technically own the MP3 when you bought it from iTunes, and when you're selling a .wav file or an MP3 as an NFT, which is the same thing, you don't technically own it, you're own like access to it. Like

[00:07:47] Dan Runcie: Your copy of it.

[00:07:48] Cardin Campbell: Yeah. Your copy of it. Exactly. Exactly. So, you know, I just don't think that's the right approach. Now, I think the mistake people are making in Web three in particular is trying to mirror what we've seen happen with PFP NFTs, right? Like they, you know, collect them and it has this, you know, extreme high value from the doodles, you know, crypto punks and bored apes and all that, they're trying to mirror that. But fine art or the representation of art as NFTs in web three is a different thing than collecting music, right? Like you can't collect the mp3 like you, I mean, I guess you can, like we did with CDs and vinyl, but I think that's dead.

[00:08:30] and I think that's where we're trying to like force something to be what It's not, right? Music is valuable when millions of people listen to it and love it, whereas fine art, it's like a one of one thing and that's where the value comes from, you know, I think the more apples to apples comparison with music and fine art is the actual royalty now that's the product of music and then we have two of them.

[00:08:53] So music is just way more nuanced and more dynamic than fine art is. And I think, you know, those companies that are approaching it from the, let's collect the mp3 or the .wav file or sell it as this thing, you know, to consume it like another medium. I think that's all wrong. And like I said, I hope I'm wrong because I support anybody in the space trying to build a better tomorrow for music creators and the artists right, to make more money.

[00:09:18] but I just don't think that's necessary. I do think the royalty side is it, but the SEC makes it complicated.

[00:09:25] Dan Runcie: Let's talk more about this because when I think of the whole one of one thing, of course the physical example, you think about that Wutang album, the Once Upon a Time in Shaolin, that was essentially a one of one, and I know that that's traded hands a few different times more recently as last year, but I guess if we're thinking about it from your lens, you're saying that that isn't necessarily the product since obviously it can be copied and replicated in the same way that you and I could have a replica of the Mona Lisa, in our house, the real value is the actual recording itself, so you feel like the royalty, or at least that piece is the piece to focus on.

[00:10:02] Cardin Campbell: Yeah. That's where the value is. Like when we see all these companies buying catalog, you know, they're buying the royalties, right? Whether the publishing side or the masters, right? Like that's where the money is, that's where the value is, that's the asset, right? sure you can replicate that thing in the, you know, the Wutang example, and I think Nipsey Hussle mighta did something too at one point in time, selling his album for a thousand bucks.

[00:10:25] But that to me is a, a marketing thing. That's like a part of an album rollout. And if you have the cache like Wutang had and Nipsey had, you can do those things, right? But when you think about doing this at scale. Where every artist can, you know, benefit and, embrace this new model or approach, that's when it starts to break down.

[00:10:45] And that's when you know, it's like, that's not it, that's not the answer.

[00:10:48] Dan Runcie: You mentioned SEC part of it before. And I think we've seen a few different challenges from some companies that have tried to do creative things where fans could either buy a NFT or that could get them some fractional ownership of the music moving forward. And that what that actually looks like.

[00:11:05] There are companies such as SongVest and others that have gone through the securitization process. How do you view that aspect and how do you feel like that aspect of the ownership or what you may see on royalty exchange or one of those types of platforms. 

[00:11:20] Cardin Campbell: So, I think of it, in two ways. So I love it because fractionalizing, the actual asset is a beautiful thing, right? the SEC though, I think, I could be wrong, but I think from what I've been hearing and reading, the SEC thinks of it as a security. The minute it's fractionalized and then you have to go through the whole regulatory process and it just kills the flexibility you can have, it kills the scalability you can have with it If it's on the blockchain and it doesn't have to go to this regulatory, you can like BS. So that's one side, on the other side, you know, we now have a different audience that we're like selling these things too, because, the casual fan is not the audience as much as we think it is.

[00:12:04] Like there's a Venn diagram that exists, right? That says, yep, we have some fans that are investors, but truly who we're targeting our, we're talking about investors of music, people who value catalog and wants to own it. And yeah, that's just a different beast.

[00:12:18] And that's why we haven't seen it like really take off. Like we would think, in my opinion, because we haven't like really targeted the fans just yet. And find something that they would value just as much as the consumption of the music,

[00:12:32] Dan Runcie: So two questions for you on that. Let's start with the actual fans themselves and some of the misreading that I think people had on whether or not the average fan would wanna invest in or own a piece of a stake in the fan, the artist's music. Why do you think that there was an overstate or an over assumption of how much the fan would be interested in there?

[00:12:56] Cuz that was a pretty popular point for sometime

[00:12:59] Cardin Campbell: right. 

[00:13:00] I don't know. I think, you know, it sounds cool. It sounds like, oh wow. Like if you know, we have billions of people in the world that love music. I think the last time I checked, I think six plus billion people listen to music every day. So when you think about like the total accessible market, you're like, oh shit, that's a huge market.

[00:13:18] Cardin Campbell: And if we can fractionize this one asset and sell it to a bunch of people, And then they can sell it to amongst themselves. Your head explodes right at the the potential scale of this thing. but with the regulatory, you know, stuff and then the fact that fans aren't really investors, it's kind of like "womp womp", right?

[00:13:36] It's like that's when you realize it's like not as sexy as it sounds, in theory, on paper.

[00:13:41] Yeah, the analogy that I've always used with it is, I think if you look at the popularity of something like, Apple and the iPhone and all their products. So many people have the Apple phones themselves, but that doesn't mean that all those people necessarily have Apple stock in that way. There's a person that's gonna be the retail investor in Apple stock than the person that is still going to buy a MacBook, a iPhone, an iPad, and everything else that they have, AirPods, you name I think there was an overestimation there. And then I think additionally just with the psychology of how a fan thinks it interacts with music. I think sometimes this is part of the challenge with confusing things with sports because I think that people looked at the popularity of fantasy football and just gambling and how gambling has exploded.

[00:14:28] The monetization in sports in general, and I know that several music executives have asked me like, what could this look like? And I know that there's startups that have tried to do more of the fantasy sports for music, but. It's a different fan base and it's a different type of experience and product. And what a lot of these fans are into, at least from if they wanna have something beyond just the $9.99 per month that they pay for Spotify, they don't wanna collect a vinyl, they wanna have some piece of merch, they wanna go to a concert.

[00:14:58] They want things that don't necessarily always lead to actual like cash value that they could trade in, in the long term, but they want something that means something to them.

[00:15:09] Yeah, they want something that shows how much of a fan they are of that particular band or artist. And yeah, like, you know, in a nutshell, fans aren't investors, and investors and fans aren't gamers. Like, in the fantasy football example, like three different customer base right there, three different audience, three different personas. T here's a Venn diagram, like I said, but by and large, they're three different people.

[00:15:31] Dan Runcie: Definitely. And I think one of the other things too that you touched on earlier was just where web two and where web three meet each other because I think that a lot of the early web three excitement was around. People pointing out some of the challenges that exist for the digital streaming providers and the payouts that they give to artists, and seeing Web three as a solution to that to put more inherent value on music.

[00:15:54] Cardin Campbell: And I think a lot of those things sound good. But I do think that the more actual reality, as you've said both here and even in past conversations you've had is where the two of these meet each other. And from your perspective, what do you think the best approach is, or some of the best things you've seen look like where you do see Web two and Web three meet each other in music to actually provide value for fans?

[00:16:18] Right. So I guess let's define what Web three means by starting with Web one, right? So, the definition that I've used, you know, with people is web, one is read, web two is read, write, web three is read, write and own, right? And what I encourage people to do is not think of them as three separate spaces.

[00:16:40] They're actually a stack, a capability stack, let's call it, right? That, you know, you had one capability in web one. We can read things like a magazine, which is why it's called a webpage, cuz it's like a page of a magazine we read, right? As you know, the error we're in now where you can post things on social and leave comments and write all kinds of things on the web.

[00:17:02] and web three is read, write, own. I think it's just another capability that we now have, and I think stacking it in that way is where the value is. You still want to give people the experience and the, you know, the UX of web two, but the invisible, immutable experience that the blockchain also has and provides.

[00:17:24] Cardin Campbell: So I think when you think about web three music, the way we're approaching it is, yeah, let's give them user experience in web two, but let's also write their royalties and their ownership on the blockchain. So it's immutable, it's saved forever. No one, can take it away from them, which solves a problem that exists in the industry today. Because a lot of the industry still on pen and paper, it's not very digitized just yet. So I think Web Three gives us an opportunity to digitize the music industry in ways that we've never been able to do it before beyond just a PDF or whatever, right? It's like, yes, these are real assets. We can put them on the blockchain and keep them there.

[00:17:59] And I think, you know, if we think about it from that perspective, the blockchain and Web three music is more of a B2B play between the creators and the rights holders themselves. And it makes it really scalable to send, exchange and trade these royalties, in a space that is immutable and no one can change it.

[00:18:19] No one can, take it away. Cause we've heard Snoop say, you know, man, the first couple of albums at death row, I wrote, what's the publishing check? I never saw a publishing. I wrote 70% of the Chronic and I wrote, that would never happen in this new era with the way we're approaching web three music, it's like, hey, let's publish your work and write itinto the blockchain. You own it, it's in your wallet. No one can take it away, Right? And if, we can streamline that and make that a standard, I think we would solve a lot of problems. and then once everybody has their stuff in their wallet. Yeah, there can be a space where we, in web two, give them the ability to trade it with each other, sell it amongst each other, sell it to a hypnosis or whomever.

[00:19:04] But it's all immutable. that's my thoughts.

[00:19:07] Dan Runcie: And then with that, where are you right now at Trac with making that a reality for artists?

[00:19:13] Cardin Campbell: So, it's a reality already for us. Like we built the tech, right? It's now about getting the artists that have valuable assets to use it in a way that's meaningful, right? And the challenge is at what point do you make that right to the block chain? Is it in the studio at the creation process?

[00:19:34] I don't think so. Is it at the point of distribution, which is why we launched distribution, right? Because I believe that's where the cutoff is from the creative process to the business of music. So we're betting on that being the right space and right place for it. So yeah, we built the Tech Stack, we built the product.

[00:19:51] We're now going after the artist that can, you know, evangelize the solutions and, make it meaningful, basical.

[00:19:57] Dan Runcie: And then are there any artists that you can share or any examples from, oh yeah, this is an artist that's doing what we're envision 

[00:20:03] Cardin Campbell: Yeah, we have some, you know, up and coming artists that's like really, really growing. Like one artist on our platform, his name is MRG, he is like killing it. He started with us from the very beginning with barely no, you know, monthly Spotify listeners to now he has over 400 thousands. And we're, you know, we're in talks with, you know, major label artists that, that are no longer on major label deals that we want to use the platform and, you know, like, make this thing a reality. So it's really about like putting it together. Bringing it together, in a meaningful way. It would be nice if we can like, make this thing scale to all distributors, Right? 

[00:20:40] But the problem is, you know, it's also attached to payments, right? So we have to like really showcase this and make it, you know, big first. I think before we can like, yeah, like scale it to everybody else, but ultimately we would love to do that and be the central solution for it all.

[00:20:58] Dan Runcie: Yeah, I feel like with these things, especially in a space like distribution, one or two success stories with those normally help get the eyeballs and they see, oh, okay, this person did it. No different than any the headlines we see, you see what, whether it's the Chainsmokers or you see what BL or some of these other artists have done, and then that generates the attention there.

[00:21:17] Cardin Campbell: for sure. For sure.

[00:21:18] Dan Runcie: Yeah. And then thinking about that specifically, I know something else that you've touched on with this is just the idea of how artists can use windowing, specifically astatic, to be able to use both web two and web three, and being able to meet and serve their audience where they're at. How do you see that factoring in.

[00:21:37] Cardin Campbell: Yeah, so the reason why we thought of like doing it this way is, another problem to solve in the industry besides, you know, getting assets written to the blockchain so that they're immutable and people own their stuff and no one can take it from them. That's one thing.

[00:21:51] Another problem in the industry is that artists typically don't know who their fans are. they just don't, They're consumed so much by all the DSPs and even social platforms, but they don't really know who their fans are. and, and we've seen, you know, platforms like community and, you know, come, come up and, try to give, you know, artists, that ownership of their fan base.

[00:22:12] But so I think the way we're approaching it is if we can give an artist the opportunity to, give away an NFT to their fan base, like it's an early listen to an album or a single, so long as they pre-shave the song on Spotify and that pre save will unlock the NFT and give them access to listen to it early.

[00:22:33] That then gives us an opportunity to share that fan to the artist and build a community for them. And what I also do another benefit. It trains the Spotify algorithm to say, oh, we have a bunch of pre-safe, that means this song must be good, or this album must be good. It automatically gets added to the algorithm, the algorithmic playlist on Spotify.

[00:22:54] So it's like this nice, you know, recursive flywheel effect if we can, you know, apply that using NFTs. Right. you know, and you technically can do it without NFTs, but we feel like the NFT can then now have another lifebeyond that, so if the artist is doing a show somewhere and that person who did the precinct just show happened to be there and bought a ticket in that entity could be a backstage pass or something.

[00:23:18] So it just unlocks the opportunity, multiple different opportunities. the way we think about it, way we're gonna approach it. But yeah, windowing, is I think a necessary thing. we've seen the platforms try it without success. I think the success can be realized at the aggregator level because we're not dependent on any of them.

[00:23:37] Right? And the artists can, you know, own the fan and give them an experience that none of the individual DSPs can, you know? So that's kinda how we're thinking about, and.

[00:23:48] Dan Runcie: Speaking of windowing, you may have just saw the news that Snoop Dogg is re-releasing Death Row Records, but he's giving TikTok a one week exclusivity through their sound on service before putting it on streaming. And that was interesting because at least to my knowledge, I had yet to see an artist or at least you know, a former major label artist do anything like that.

[00:24:08] So 

[00:24:09] Cardin Campbell: Yeah, we've seen, you know, the Carters do it right with title, but I don't think it's been successful. Just, windowing at the platform level that is. but yeah, I've I haven't heard that, but that's interesting to see him do it.

[00:24:20] Dan Runcie: So with this, you're saying that, of course, this isn't at the platform level, but they're saying whatever digital student provider that you used, you can pre-shave this song. You get exclusive access to listen to it on the provider of your choice, whichever one that you're already subscribed to.

[00:24:35] Cardin Campbell: We're gonna give them a space to listen to it. At the artist level on Trac, on our platform. Like we spin up a page for them to listen outside of the platforms early. That's what the NFT gives you. It's like a token into that listening experience. And then once the release date hits, you get that notification from your stream platform of choice that, Hey, the release is here and you can go listen, you know, as much as you want.

[00:24:59] Dan Runcie: Got it. And as you all were thinking through it, even just, channeling back to the earlier part of this conversation when you were thinking through, okay, a lot of the NFT things didn't exactly work out in the same way. There seems to be some type of consumer disconnect in terms of what they may have valued and what they didn't.

[00:25:15] What was the value add for this one, this idea that was like, "yeah, you know what? I think a consumer would be interested in this particular type of NFT that we'd be offering here.

[00:25:25] Cardin Campbell: Yeah, the benefit is you know, for both the artists and the fan for the family, get to listen to the song or the album early and for the artist, they get that pre say, which trains the algorithm to, you know, add it to playlists in the future. so that's the benefit for both personas in this case.

[00:25:43] Dan Runcie: Got it. That makes sense. And then for you all specifically, I know I mentioned sound on earlier, there's a number of music distribution services out there, and you talked to different artists and I think a lot of them can sometimes feel like they can be a bit commoditized in terms of the roles that they have.

[00:25:59] Cardin Campbell: But how do you feel like Trac stands out in that regard? And what are some of the things you've done to help Trac stand out so it isn't seen as just another.

[00:26:07] Another. Yeah. So when we thought about the space music tech, we thought web three first, but we're like, we want to be in a position to help artists maximize their earning potential, so monetizationwas the central thing for us. And with that in mind, we thought another problem in the industry is, you know, the, payments and speed of payments.

[00:26:30] So when we launched the platform, we lost distribution. We said, why wait two, three months to get your money? We're gonna pay you out weekly. We saw it went viral for us. It was like, holy shit. Who would've thought that this would happen. But you know, when you think about entrepreneurship, like I said, when you're solving a problem, you know, it tends to go viral.

[00:26:49] So that's our differentiator. we want to be known as the platform that gets you your money fast. And with distribution, we unlock a bunch of other value around like, to where it feels like. we don't wanna be known as just a distributor, necessarily. So even though that's where we started, but yeah, we get you your money fast and we unlock value at the point of distribution is what we say.

[00:27:13] So the minute you, you know, release your music, we also take your cover art and put it on merch. We get you syncs, like it just unlocks value around without you having to do anything else. It's literally one action. Value creation

[00:27:27] is our value prop.

[00:27:29] Dan Runcie: and this is the value prop you're pushing to artists, artist managers specifically. He's definitely the target that you're trying to reach there. And how would you say that's been on the customer acquisition side? What does that look like for you and what are the most effective ways that Trac

 is used to be able to get artists and their managers on board?

[00:27:47] Cardin Campbell: So product-led growth is interesting, right? Because it's like it scales and you don't need a bunch of people to acquire people, just do some digital ads. People come the products, you know, converts them. Oh, happy day. While that's great. You don't typically, you know, at a high clip that is, find your target audience and you definitely have to then shift to more of a sales led approach to acquire that target audience. So we are building out, you know, a team of Biz dev folks there are as to go after our target audience with, you know, the value propositions we just talked about earlier to bring on, you know, folks we feel like is our core managers and artists at a certain caliber.

[00:28:32] Dan Runcie: Okay. And what is that caliber? How would you define that?

[00:28:35] Cardin Campbell: We define it as an artist with 250,000 monthly Spotify listeners. That's our core.

[00:28:40] Dan Runcie: Okay, nice. And then with that, is it also, I guess a vision in the artist's mind of, okay, if I'm at 250K now this is where I wanna get to, or this is where I can get to, like with Trac’s help.

[00:28:54] Cardin Campbell: Yeah. that's how we want to, you know, position the brand. It's like, Hey, when you're at this point, we want to get you to that next level, that next level being success for us. Well, firstly, I guess I gotta define what success means for us. Success means, you know, you as an artist can make a living doing your art, and whatever the national average is in terms of salary per year, we want every artist on Trac at that level to get to that level of freedom and beyond.

[00:29:25] yeah, we're building for that success story. and then some that's like the bare minimum for us. But yeah, we hope to create, you know, the next superstar. Not create, but we hope to help support the next superstar by giving them the tools to make the business side and, you know, management side of their catalog super easy.

[00:29:43] Dan Runcie: Yeah, and one of the benefits that I think I often see with distribution services that stand out is that there's so much discussion right now about independence, ownership, and artists wanting to have more rights that they can stay the course, and they can do that with the service that can grow with them.

[00:29:57] And I do think that after a while, The power laws do tend to take over to some extent where, of course I understand the goal is to make sure that everyone can reach at least some minimum viable level. But inevitably there will be a handful of stars that do end up having the outsize returns, hopefully, on a lot of these platforms.

[00:30:17] But then it also becomes the flip side of that challenge, which is keeping those people happy because they start getting offers from elsewhere about other things. How has that piece fit?

[00:30:27] Cardin Campbell: Yeah. So on one side, you know, people say, don't worry about it. Right? Like, there's nothing wrong with helping an artist, grow and then graduate, let's say, right? I don't want to think of that as like the standard or the norm. because I think, yeah, like, that feels like failure to me, right?

[00:30:49] Like if you support an artist and they get to a certain level and they go take a big check that feels like we didn't do our job well, of educating them on. why that may not be the best move. Right. like getting a big check doesn't really mean it's a success, right. So yeah.

[00:31:07] We're, we're, we're trying to find the right medium. is really me, like trying to find acceptance in, saying, yeah, you know what, it's okay if they move on to a label or, or, or somewhere else and take a big check. Yeah, I don't wanna accept that right now.

[00:31:20] I feel like we need to get them to a certain level and, and make sure that they are educated enough to stay there, you know, and that, that's not only education, but maybe helping them build a team that can support them, you know, as much as they need, you know, as they grow.

[00:31:35] Because that's really where I think the drop off is, it's like they feel like, oh, the label will do everything for me, but they don't realize your team outside the label is just as important, if not more important than the label themselves. You know? Cause we've seen a time and time again where you're forgotten, you know, even though you're a signed artist, like Frank Ocean is a perfect example, Right? So yeah, I think the market share is also shifting. So much so that, the role of the label will eventually change. That's my prediction and we're betting that we can establish a relationship with the labels that is different from the one that exists today.

[00:32:13] At least that's what I'm imagining will happen.

[00:32:15] Dan Runcie: Yeah, this is an interesting topic because I feel that on one hand, there is something to be said for, as you mentioned it yourself, artists moving on from one thing to the other. People are always switching things or sometimes people are trying things differently. They may go to something else like we've seen that a few with how artists may do deals with empire or label like that they do on album and then they choose to do something else on their own.

[00:32:39] And it's interesting because I do think that on a lot of the music distribution services, you do technically have the ability to earn as much as you want and continue to maintain ownership and move forward with all the things which is great. The other side, some of the checks that artists do get, and I'm not even saying I advocate for this, some of those checks, it's different when there's $50 million in front of you and that's what the label's giving you. It changes the conversation. 

[00:33:07] Cardin Campbell: sure, for sure. Yeah, yeah, yeah, for sure. being, you know, a web three company like, and that that's possible in web three. We're hoping to do some things in defi that can challenge that, like, challenge that like greatly, you So yeah, like can't really talk about too much because it's not baked yet.

[00:33:24] But yeah, like we're planning to, you know, combat that somehow, you Um, yeah, I, cause I don't feel like graduating them to a, you know, a state or a place where the problem exists is, is the right thing, even though the check is, you know, is lovely, right? It's like, is, is it really lovely?

[00:33:42] You know? Yeah. I don't 

[00:33:44] Dan Runcie: And I guess with this, and of course I think we're talking qualitatively, but on a quantitative side, how does this impact churn or any of the more specific benchmarks that you may be evaluating things.

[00:33:56] Cardin Campbell: we, yeah, we, we we're not there in our maturity yet to really. Factor that Um, but it's an interesting question. Interesting mental model to, to, to play with for yeah, I mean it's, it's, it could be a good acquisition strategy to say, Hey, look, Trac got all these artists signed to all these major label labels.

[00:34:17] So we have like a big funnel of people coming in, but then a smaller funnel of people going out like, yeah, I don't know if that's, that's not the definition of success. . So I, I try not to like, embrace it too much, you know? Yeah. I, I, I, I really hope to solve the problems in the, in the music in, in, in, in every way.

[00:34:40] It's a, it's a tough, tall order, but I'm an entrepreneur. I can't help it.

[00:34:46] Dan Runcie: What excites you most about this space right now? I know we've talked about a number of things, but what excites you most? Right.

[00:34:54] Cardin Campbell: what excites me most is the digitization of the, the business of Um, the immutability of the, the, the assets and making payments,um, work at scale, right? Like, I think waiting two, three months is BS to me. Like it doesn't need to um, that long. I think with the blockchain and with money now being uh, on the.

[00:35:20] And trust being like almost solved on the internet with, with web three. I think there's so many opportunities there. So that's where my heart is and that's where we're trying to build, but it's just tough with regulations and tough with user adoption and, you know, all these complicated technologies and whatnot.

[00:35:39] So that's why we, you know, we think of the capability stack as I, as I talked about it. It's, it's, it's just another layer. We shouldn't be inundating. artists and fans and people with wallets and all these weird and wonderful things, like it should just be seamless. So yeah, that's where my heart is. That's what keeps me up at night.

[00:35:57] That's what, you know, brings me joy in thinking um, yeah, I, I, I can't wait for five years to roll off and we're like, oh shit. Cardin was right. Like, look at, look at what we built. You know, like, yeah. That's, that's what excites me.

[00:36:10] Dan Runcie: you talked about wallets and maybe some of the confusion that fans may have with things, and from that I can pull out some of the friction that has existed with. Web three experiences more broadly. 

[00:36:22] Can you speak about that piece of it? Cuz we haven't touched on that, but I do feel like that's been part of the barrier for some of the web three adoption as well in that the people that are web three enthusiasts, that was no barrier for them.

[00:36:33] They were already native, but some of that Venn diagram of who is a hardcore fan versus who is a web three enthusiast. Those things didn't necessarily always interact in the same way. If they did, then great, that's your demo. But I think that at least historically up until this point, a lot of the companies and a lot of the things they've been launching attracted more of the enthusiasts than they did some of the super fans.

[00:36:57] And I think the friction of the wallets and meta masks and some of those things that you needed to be able to fully tap in. Played a factor.

[00:37:07] Cardin Campbell: big, it's a big barrier of entry for the masses. Um, and I think, you know, over time the more investments that go into the infrastructure side of web three to make it more seamless. and, and like I said, a part of the, the value stack the, capability we're seamlessly, I think that's where the beauty is, which is why we built all of our web three stuff on Um, not only were they an investor, we, we believe in how they wanna approach it because it's the same, you know? I, I, I think about it in, in the same way. Yeah. Like, no one wants to have to go get this other tool just to interact with the internet, right? We've already invented the browser.

[00:37:47] That's it, right? Like, that should be the standard thing and it should just be Um, So yeah, that's how, that's how we think about it.

[00:37:54] Dan Runcie: It's interesting because I agree with you. I think it should be seamless. I've also heard this ongoing debate from a few other folks within the Web three community about, they feel like there's pushback on this notion of things that are in web three need to seem like they're less crypto or seem like they're less web three.

[00:38:11] And then that's how you get people bought in because of some of that stigma, and I don't think that the stigma necessarily was as much about the actual function as much as it was people, you know, kind of pointing and laughing at a hype. It's almost brings me back to the.com bubble in a lot of ways because yeah, people, some people may have laughed at the internet at the time and there were laughable things that people were trying to do like, you know, delivering ice cream cones to people and pets.com and stuff like that. But what we are now in is this world where everything relies on it. And I think that is the most bullish perspective on web three more broadly. And I do think that still exists and will exist. I think that we just had to get past a lot of that.

[00:38:56] And if anything, this post pandemic wave of things coming back to reality and the 97% drop in NFT volume that you'd seen from that Bloomberg report. That's all a sign that, okay, there's no more million dollar pet rocks. That was the wave, and we are now unto hopefully bringing the real businesses to come to fruition.

[00:39:18] Cardin Campbell: Yeah, we, gotta solve problems. that's the bottom line. We gotta solve problems. It's technology at the end of the day that we can use to do that, solve a problem,and you know, just as we don't think of companies as not being a web company like, you know, I think that's just what we gotta think of it as.

[00:39:38] Like, you're a web company, whether it's web one, two, or three, doesn't matter, like you're just, you are a company that embraces the internet, whether that's web three or web two. Like, I think that the technicals shouldn't matter. Like no one, you know, says, oh, you know, I went to amazon.com and ordered something and, you know, it was written to a no SQL DB and like no one cares. Like what's underneath is like irrelevant, you know? So that's how seamless it has to be, to really like break through, solve problems and give people immutability and, and trust and native currencies on the internet to make it like truly, truly seamless. We'll get there, you know, we just need to get through, like you said, this Pet Rocks movement and soft start solving some problems, which is what we're doing and what we're working on. it's a marathon, not a race, you know, not a sprint. So, yeah.

[00:40:29] Dan Runcie: Agree. I think we'll get there too. And would you think maybe more than the short term, let's look at in the next year from now, if things with what you're building with Trac play out the way that you think it will. If you look at the business model you have, where on the distribution side you do take a cut of any of the revenue that comes in from the songs that you distribute.

[00:40:46] And then I assume on the web three side of things, you would also take a small percentage of any of the transactions that come through on that side. Where do you project that your revenue mix will most likely come from when you compare the web two side of things, when you compare the web three side of things.

[00:41:05] Cardin Campbell: Yeah. Music has always been a transactional business, right? it's always been , you know, we add value here and, you know, we take a percentage of whatever revenue is generated from that relationship, you know, experience. So I think that's gonna always be the case. Even like when you look at companies like Shopify, on the surface, you might think, oh, there, there's a subscription, you know, business model.

[00:41:31] Yes it is, but 70% of their revenue is transaction, less than 30% actually is subscription. So I think that's gonna be the typical mix with any company in our space. Whether there's a subscription at, you know, attached to, you know, an artist's plan or whatever. and if we take a percentage, we just approach it differently than most where we take a percentage where we add-value.

[00:41:54] So, you know, back to what I was saying earlier, when we launched with Speedy payouts and get your money, you know, week after the stream happened versus two months, that's when we take a percentage versus some companies say, we're gonna take 20% just to deliver your song to Spotify. That's bullshit to me.

[00:42:09] You know? So, yeah, it's gonna be a mix of, you know, different, you know, streams of revenue, some subscription, because you need a pay wall just to make sure you're, dealing with serious people. That's the subscription side, but I think the majority of it's gonna be from the revenues generated from that relationship being established, and if we can add, you know, a little bit more service to our mix, to help an artist even grow even more, that's another example of adding value to why aren't you taking a percentage?

[00:42:38] But yeah, I think the transactional revenue's gonna be the lion share of where the revenue comes from.

[00:42:42] That's what I was 

[00:42:43] Dan Runcie: gonna ask about next because I know that if we take that Shopify example further, they have their white club or their white glove enterprise offering for the clients that they hope that they can keep, that don't go create their own website or create their own stack, right? And tie back to what we said earlier, that would be.

[00:43:00] I assume how you all would try to make sure you keep those superstar potential artists on Trac opposed to doing their thing.

[00:43:08] Yeah. Yeah. we we're building out a concierge team as we speak. we just hired a sales guide that, that can help those clients, those artists and artists teams, you know, achieve goals that they might have and really have a more intimate relationship with them. So one might say, oh, that's a label.

[00:43:25] Like we think of it like any other business that, you know, sells a software license that gives you an account manager. that's how we think of it. So it's like Salesforce, you pay them a million dollars for software, guess what? They're gonna make sure you have a success manager to make sure that you achieve your goals, that you can renew every year, every year.

[00:43:45] So that's kind of how we're approaching the business for that top tier in hopes that they don't go graduate as they say to some label. But if money is the carrot that pulls them away, like I said, we're hoping to solve some of that problem, with some defi Web three shit too, you know?

[00:44:00] And I think if that's what things come to, then those are good problems to have, as I always say.

[00:44:05] Yeah, absolutely. Good problems to have. Yeah. Definitely. Well Cardin, this is great. Appreciate the breakdown on everything related to Trac where things are moving forward, and just good to hear where you see things moving with the industry.

[00:44:17] I think a lot of companies are trying to see where things sit and what you're building as a reminder that you don't have to pick between one, find a way to integrate it into your business model and potentially do both of them. So before we let you go, what's the best way for whether it's an artist, manager, or for anyone else that's listening that's in the space to follow along with what Trac is doing?

[00:44:38] Cardin Campbell: They can go to Trac.co or go to our social, Trac.co I think everywhere. and follow along, you know, all the things we're talking about. You know, we're, gonna be doing a lot more on the content side as well to just to educate the artist and, you know, talk about the problems that exist and how we are the wedge or the solution for those problems.

[00:44:55] So yeah, I think our website and our socials. Would be a great place to start. and then yeah, we can take it from there.

[00:45:02] Dan Runcie: Good stuff. Cardin, thanks again, and it's always great to have a fellow Jamaican on too, so appreciate you

[00:45:13] Dan Runcie Outro: If you enjoyed this podcast, go ahead and share it with a friend. Copy the link, text it to a friend, post it in your group chat. Post it in your Slack groups. Wherever you and your people talk, spread the word. That's how Trapital continues to grow and continues to reach the right people. And while you're at it, if you use Apple Podcast, go ahead.

[00:45:34] Rate the podcast, give it a high rating, and leave a review. Tell people why you like the podcast. That helps more people. Discover the show. Thank you in advance. Talk to you next week. 

The Techstars Music accelerator just announced its 7th cohort. As the program’s Managing Director Bob Moczydlowsky told me on this episode, they don’t invest in music companies. They invest in companies solving problems for the global music business. 

There are 10 companies that involve music in some way, including — education, web3, and even wedding celebrations. 

Each startup gets a $120,000 check from Techstars and hands-on development for 90 days. Past portfolio companies include Community, Endel, and Splash among many others. According to Bob, the program has returned a 3X multiple on invested capital since starting in 2017. Companies that went through the accelerator have gone on to raise an additional $250 million in capital after the accelerator.

Here’s what we hit on:

[0:00] How the accelerator has evolved 

[7:56] Investment areas that have underperformed 

[9:02] Is there a ceiling on music innovation? 

[12:38] Minor-league scouting, major-league swinging

[17:07] Repeating motif of investments

[18:11] 2023 accelerator cohort is “weirdest class ever”

[28:49] The case for remote teams

[31:44] The surge in capital from outside music industry

[37:46] Music is less sensitive to macroeconomic conditions

[40:39] Return on music accelerator vs. other Techstars programs 

[43:32] Techstars LP’s becoming more experimental 

[48:01] Hip-hop business mentors wanted

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Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Bob Moczydlowsky, @bobmoz

This episode is brought to you by Amuse. Learn more about how its new program Music Insights can help your artist career: https://www.amuse.io/en/insights

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TRANSCRIPT

[00:00:00] Bob Moczydlowsky: We have to invest in something that isn't fashionable but looks like it's before it's time, might even look a little crazy. And that's the where we can add a ton of value. And then it's our job to help to look back three years later and go, oh yeah, there it is but of course we saw that all along.

[00:00:13] Like, same thing with generative media. We've been making generative media in investments since the very first year of the program and about half of them are really interesting, valuable companies now. And it took a long time for the red, the market to sort of catch up to that. and then, you know, ironically, my problem is as a small check investor just at the moment where I know that space really well and I can be really helpful and we have a good portfolio there and a community of people to connect new founders too. Now that the category is hot, we can’t afford it anymore.

[00:01:07] Dan Runcie's Guest Intro: Today's guest is the one and only Bob Moczydlowsky, but if you're in the space in the industry, you probably know him as Bob Moz. He is the managing director of the Techstars Music Accelerator, and he recently announced the seventh cohort that they have for the accelerator, which includes a few companies here, let me just read the names here.

[00:01:26] Baton Media, Beeper, Confetti, 5ive Mics, Haven, Highly Liquid, Homeroom, Obey Me, Royalty, and Seed. So Bob and I talked about what went into these companies, what are some common themes that went into this cohort and how this cohort has changed over time. This is now the seventh year that Bob has been running this accelerator.

[00:01:48] So he's gone through the bull market of startup investing. The growth of streaming and how each of those things have impacted. So what are some of the trends that have been the most lucrative for him? How he's evaluated on his returns, how his LP mix has been shaped and shifted over time, and some general trends and some common misconceptions that people hear and think about when it comes to investing in music companies and companies that are trying to solve problems in music.

[00:02:16] Great episode, especially for the founders, investors and builders out there. Hope you.

[00:02:22] Dan Runcie:

[00:02:22] All right. Today we have Bob Moz, who is the managing director for Techstars Music Accelerator. Bob, first time on the podcast.

[00:02:31] Bob Moczydlowsky: Thank you very much for having me. I am a, longtime listener. I'm kind of thrilled to be a guest. It's very cool.

[00:02:37] Dan Runcie: Yeah, and I think it's great to talk to you right now because you have the new cohort for Techstars Music Accelerator now, but you've actually been doing this now since 2017, and I think that. It's been interesting to just to see how much has changed in your role, but more broadly with music. You had this bull run, you had streamings rapid growth, and I'm sure with that, there's been so many different evolutions of how this cohort and how the companies have shaped over time.

[00:03:06] What's been your read on that? How has the accelerator evolved over time?

[00:03:11] Bob Moczydlowsky: Oh man, that is a gigantic question right out of the gate. so when we started the program in 2017, part of the thesis was. and it is still sort of the dirty secret of Techstars music. Like, we're not really here to invest in music companies or music tech startups. We're here to invest in startups that solve problems for the global music business.

[00:03:31] So we wanted to be five to seven years ahead of, where new revenue streams would be. New audience interactions would be. we wanted to be really, really out there on ways kids could express themselves and, and or make new music or how rights holders would monetize that music and I would say that heading into our seventh class, like any, you know, venture fund, we made a bunch of mistakes.

[00:03:54] we are happy to have some really valuable companies in the portfolio that are changing the way the music business works, like Splash and Endel, and community. And so the winds have come from the places we didn't expect, with maybe the exception of generative media. We can talk about that a a little more.

[00:04:11] Bob Moczydlowsky: We were into that from the beginning and we've, remained into it though I can no longer afford any of those deals because that's kind of a popular category. So I think I'm kind of out of those deals now. But in general, like the wins came from places we didn't expect and the defeats came in places we thought were gonna be great spots, right?

[00:04:28] So what we have learned is that you really have to focus on the quality of the team. You really have to focus on the opportunity and how that company can capture value in the market. And then you have to be patient, and just, and remember that one email, you know, with a yes on it. One phone call with a yes changes the fortunes of companies.

[00:04:48] Pre-seed, seed stage, you know, one feature, one good, dev sprint, where you actually really, you know, solve a problem for your users, changes the trajectory of the whole company. So, I would say that we have, put ourselves in a position now where we ha like our thesis is defensible, our portfolio value is real, and we have an incredible list of people who have come through the program and touched it in some way that.

[00:05:12] make a lot of really important decisions in the music business. So mostly it's just, I feel old when you say that, and I just feel super grateful that we get to do.

[00:05:20] Dan Runcie: Well, you said a few things there that I wanna dive into about the wins and the losses being opposite from what you may have expected on either side, and I think that's a thing I've heard from other investors and VCs, but specifically with this accelerator, are there certain trends that stuck out for things that you thought would've been a big bet but didn't end up turning out?

[00:05:43] Bob Moczydlowsky: Well, know, we were really excited about adaptive music and it's changing and matching your biometrics and pairing that with fitness that hasn't really come to fruition yet. . I'm optimistic it still might, but it hasn't so far. we were super optimistic that the using DSP streams to make mixes would allow, DJs to create and express themselves and create new content and repurpose music, and that wouldn't be considered a derivative work.

[00:06:08] And you could give full credit stream back to the rights owner, and that would be a way to deepen engagement and maybe add a couple of bucks to the monthly subscription fee of a larger DSP. That hasn't happened really, you know what I mean? or come to fruition. it has taken longer, than we've expected for someone to make a hit song using generative media and AI, though, you know, it sort of perpetually feels like it's right around the corner.

[00:06:33] but I think in that category, you know, I think we were just wrong people were gonna use generative media and AI to make songs. and instead they were going to use it to become artists and play games. and so we've learned a lot there where, what the thing we actually learned, and I say "we", but what I really mean is the splash team.

[00:06:50] Bob Moczydlowsky: And Steven and Angus, I'm a passenger in that, right? So I say "we" a lot, but those guys do all the work. you know, what they realized was that kids don't wanna make songs. Like no kid is going out there looking for an AI to make a song. they're looking for an AI to help them do

[00:07:05] several of the things that it require that are required to be an artist and grow a following and have people pay attention to you and express yourself. And they went and built a whole game around, okay, well then here's all the parts you need to DJ set. Here's the ability to perform in front of people.

[00:07:20] Here's a framework under which those performances are judged. And that became a wildly popular game. And so it turns out that like in the gaming world, you might use an AI to control both sides of the copyright, to give the player the freedom to do whatever they want with the music. but you also need a venue and you need an avatar, and you need a crowd.

[00:07:38] And there's a bunch of pieces where it's the song or the music is just one part of that. so that's been a massive, massive learning. and then the last one I would say, is that we continue to make investments around this and we will continue to do it, but the pace at. royalty flow and auto software automation for routing payments from consumption of music.

[00:07:56] The rate at which that has changed and adapted to be automated and look, I'm not naive. I know there's a bunch of competing interests and reasons, you know a bunch of players who benefit from it being slow and manual. but I think that's an inevitable area that has to get automated over time, and it hasn't happened as fast as I would expect it to.

[00:08:14] we we're kind of bumping up against the ceiling of growth for revenue from recorded music until we start automating those payouts and have better database ownership and better understanding of who owns what on a track. And the idea of like, you know, one publisher opting out or, securing their payment information to sort of give them leverage.

[00:08:33] Bob Moczydlowsky: Like, yes, that optimizes price for any one license or copyright, but it doesn't, grow the, it doesn't swell the tide. And so I think we're hitting this point where if we really want astronomical growth, we're gonna have to start automating that process too.

[00:08:47] Dan Runcie: Yeah.

[00:08:48] Bob Moczydlowsky: I remain optimistic. I'll keep trying on that one, but I haven't yet, mined any gold there,

[00:08:52] Dan Runcie: touching on something that I've heard other investors talk about too, where it does feel like there is this ceiling of how much innovation, how much growth can truly happen, and you hear that mostly about music tech specifically, just because some investors feel that. The incumbents just have so much power and control over the wake.

[00:09:12] Things currently are done with the systems that, whether it's tams or astronomical growth can be somewhat limited compared to what you may see in other industries.

[00:09:21] Bob Moczydlowsky: That's right. that's part of why I say we invest in companies solving problems for music and not music companies, is that it is a really complicated process to license music and use that. and so you think about the, act of primary listening or primary consumption, you know, some of the big platform companies use that as a loss leader.

[00:09:37] You know, Spotify's a pure play streamer, but they had diversified into audio and it took them enormous scale to make that those economics work. those are great businesses. It's cool, you know, think of me as a minor league talent scout. I'm not, you know, my checks are small. I go to work to help make those companies valuable.

[00:09:53] That's a level of the game that, I can't play, I don't have the kind of capital to make investments replace current big competing companies to Spotify. I'm better off make investing in companies that have an opportunity because of the way Spotify changes the landscape or the way Amazon changes the landscape.

[00:10:09] Now all of a sudden there's a new opportunity because people's consumption habits are different. That's where I'm gonna invest. I'm not gonna invest in the primary piece. And then the secondary part of that is like a lot of the way music copyright works, and we could talk about this as you dig into web three stuff if you want to.

[00:10:25] but a lot of that stuff is coded in the law and it's coded in the law across multiple territories around the world. You can't just disrupt the way payments work for music. That's not how it works. . Like there are rules and laws that make that stuff be what it is. and so in some cases the, those laws are holding back growth for the rights holders and in some cases they're protecting value for them.

[00:10:45] and startups that pretend that, that's not true, like they're kind of lying to themselves, you know, and they're, there's a couple of those every year. I wish someone would write a really definitive blog post about how to stay out of that. it is what it is. like that's not our domain.

[00:10:59] Dan Runcie: Yeah. I think too, just thinking about, you mentioned something as well, just in terms of you being in the minor league position, that's not your job necessarily to make the swings for the majors, but I also have to imagine too that whether it's you or even some of your LPs, would love to be able to double down and invest some of the prorata that you may have in some of these follow on rounds.

[00:11:20] Bob Moczydlowsky: Oh yeah, don't get me wrong, my job is to swing for the majors, right? but my job is to find a company that could be a billion dollar company where, you know, a couple a hundred grand and the support of the program and mentorship can put it on a path to succeed. Like if a company needs 10 million dollars to start, I just don't have that kind of capital.

[00:11:40] I'm not the right profile of investor for that company. So it's not that I'm not trying to get gigantic companies, right? Like when we wrote the first check in to Endel people thought we were crazy. They were like, what are you doing? How is the personalized soundscape for helping you focus, relax, or go to sleep?

[00:11:55] How is that gonna be a billion dollar company? And now you're in a situation where there's, you know, millions of dollars in annual revenue, hundreds of thousands of subscribers, interesting revenue coming out of the DSPs. Incredible partnerships with artists. No one at this point now in music, would argue that functional music is going to be eight to 10, maybe 12% of total consumption of music.

[00:12:20] And that Endel isn't the premium brand and the most valuable company in that space, that's sort of a foregone conclusion. That wasn't the case when we wrote that check. That's what I mean about sort of minor league, right? It's like, it's not that the companies aren't major league companies, of course they are.

[00:12:37] It's just that we have to invest in something that isn't fashionable but looks like it's before it's time, might even look a little crazy. And that's the where we can add a ton of value. And then it's our job to help to look back three years later and go, oh yeah, there it is but of course we saw that all along.

[00:12:52] Like, same thing with generative media. We've been making generative media in investments since the very first year of the program and about half of them are really interesting, valuable companies now. And it took a long time for the red, the market to sort of catch up to that. and then, you know, ironically, my problem is as a small check investor just at the moment where I know that space really well and I can be really helpful and we have a good portfolio there and a community of people to connect new founders too.

[00:13:19] Now that category is hot and we can't afford those deals anymore.

[00:13:23] Dan Runcie: And I'm sure.

[00:13:24] Bob Moczydlowsky: so that's what I mean, like it's not that we're trying to have small companies, we're trying to have

[00:13:27] Dan Runcie: Right. No, that makes sense. And I would imagine too, Whether it's your investors or others, they would love for you to be able to, oh, could you still get in these deals? Or could you still be able to do the follow on investments in whether it's an end or, or some of the generative companies?

[00:13:42] Bob Moczydlowsky: That's right. so the companies that have come through our program in total have gone out and raised another additional 250 million dollars after taking our initial capital, Right? so the capital we've deployed through the program is now, let me see, 7.4 million dollars after this current class.

[00:13:58] It'll be 7.4 million of, checks all sort of at that 120K, you know, Techstars, accelerator deal. You know, like they're all the same. All of our deployments are Post program now 250 million plus, it's like 254 million, something like that. And change has come into those companies after the program, of which about 16 million of it has come from the member companies.

[00:14:20] So that's Sony Warner's, Peloton, Hyde, Concord Monarch, Quality Control, Right hand, Bill Silva. All of those companies sort of collectively have put another 16 million dollars in post program, into those companies. So they're, active strategic investors and angel investors into those companies. the number I don't have that I should to tell you, is like also the individual, the number, the numbers, right?

[00:14:44] So executives from those companies as angels, or, executives or mentors who are not from the members, but are just independent and come and visit and help in the program. They also write, you know, 25K, 50K, 100K angel checks into companies. That number's a little harder for us to capture. cuz it's sort of personal money and not, corporate money, but, everybody around the program is definitely taking prorata and in, participating in those rounds as the companies grow grow for sure

[00:15:07] Dan Runcie: That makes sense. And I feel like those examples hit at the flip side of that earlier question of, at the time people probably didn't think that those were the areas that may have lined up with the initial thesis on paper, but they ended up being some of the most successful ones you had.

[00:15:23] Bob Moczydlowsky: it is a continuing, like delightful and hilarious, like repeating, you know, motif through the whole program. Right. no one liked Splash when it came in. It was called Pop Gun at the time. No one liked that, right? That's a 70 million dollar company now and the number one music related Roblox game.

[00:15:40] The company shimmer came in and was sort of like stuck mid-C ground, had a huge pivot and became community, right? That was, who could have predicted that? Endel, everybody hated, didn't believe it was real. Hey, these crazy Russian guys. This isn't science back. this doesn't work.

[00:15:55] This is the placebo effect. you , know, that's a 75 million dollar company. even just recently, like last year as recently as last year, having all of this history in the program, we get all the members together to screen new companies coming in and decide who we're gonna invest in.

[00:16:07] last December, the lowest ranked company in that screening was Circle Labs. Run by Anushk Mittal makes sentient NPCs sort of, and chat bot, right? A year ahead of chatGPT a year ahead of, in world, right? In those companies trying to like personalities into video game characters. you know, and during the program he went from sort of like two or 3000 users to 25,000 users.

[00:16:31] Bob Moczydlowsky: By the end of the summer he had 40,000 users. They're making these creators, you know, they're making these characters independent creators are, they're in multiple Discord servers. They're chatting with people all day. They have Twitter accounts, that becomes a competitive round, that light speed leads last fall, no one thought that was a company.

[00:16:48] Everybody thought that was crazy, not gonna be a thing. Now that's a, you know, $20 million plus company just you know, less than a year later, right? So it just is a thing that like can keeps repeating and repeating over time. and the reminder to us as investors and, especially at this pre-seed stage is it's okay if it's wild, right?

[00:17:08] There are gonna be things that are wild that are gonna fail, but only the wild different ones have a chance to actually move into that open space in that green field and be a huge company from seemingly nowhere, right? And that's our job. Our job is to experiment with that stuff and bring the whole music business around, in an ecosystem to participate and argue about it and be wrong together and disagree.

[00:17:29] And, you know, it's sort of my job to provide that safe space for those conversations to.

[00:17:34] Dan Runcie: Right, and I feel like you've talked about this a little bit, and even in past conversations about how the definition of a Techstars Accelerator company, or Techstars Music Company is part of that. It continues to evolve as you've seen different cohorts, but at least for this current cohort right now, you have a few, three companies in here.

[00:17:56] You have a few music companies, even one involved with wedding celebrations as well.

[00:18:01] Bob Moczydlowsky: Yeah, we do. It's the weirdest class ever, in the best way. Like I'm actually really curious. So you've seen it almost before anybody else has. and you know, it'll be public by the time people are hearing this podcast, but it's not public right now. Like, where do you wanna start?

[00:18:15] Like, it's an interesting list. there's probably a couple companies on there you've heard of before and seen, , I'm actually like, I'm happy to talk about any of them and I'm just as fascinated and curious to hear where you wanna start and what you, saw when

[00:18:27] Dan Runcie: Yeah. So we gotta start with Confetti. We gotta start with the wedding planning there and looking at the website, this wasn't a company that was on my radar before, but that's why I love stuff like this. You know, you're able to have unique access to things and it points out, and for me it stuck out.

[00:18:43] There's an experiential aspect. We all know how many people would love to be able to see and attend and experienced weddings and can't normally do so, but they're integrating brands. They're integrating music and culture in different ways and I think that's a unique thing. And yes, of course you could always throw a Zoom link.

[00:19:02] I've attended Zoom weddings before, especially during the pandemic, but I think there's something different here. And that one, let's start there. That one stuck out to me.

[00:19:10] Bob Moczydlowsky: Yeah. It's the most polarizing company, within our sort of internal community coming into the program. Andrew, the CEO knows this, like you've mentioned all the things like people wanna attend remotely. People might watch and buy a ticket to an influencer wedding. As weird as that sounds like it's totally believable thing that could happen.

[00:19:26] but I also think like there are, ways to organize media and everybody's at these events with a phone in their hand the entire time. like, you know, you're dressed up, you're in your suit, you're in your cocktail dress, whatever it. The only thing you need besides yourself and a fancy outfit at a wedding is your phone.

[00:19:42] Bob Moczydlowsky: You're taking pictures, you're making video, you're sharing things. So the concept of can we provide and experience people who are not there, can we generate and organize content with people who are there? Can we do virtual gifting and tipping or challenges and organize some of that stuff, especially as that pertains to the big moments in a wedding, which also, let's be honest, revolve around music in a lot of ways.

[00:20:04] I mean, it's very few weddings you've been to that don't involve music in as a core key ingredient in different places. this is a thing where there's enormous number of these events that happen over time. There's enormous potential in organizing this already existing behavior. and this is a good, it's a good hack as a venture investor if the behavior already exists and the company is gonna capture value by organizing it.

[00:20:27] that's a good opportunity as opposed to like, oh, we have to create some behavior and convince people to do this action. We have to change the user behavior before the company works. Those are companies that just have a much steeper hill to climb. And so this company comes to us with some traction.

[00:20:43] They've done some influencer weddings, they've got kind of a cool philosophy around it. We're gonna run a bunch of experiments and see if we can turn this into a

[00:20:50] Dan Runcie: So what does the business model look like

[00:20:52] Bob Moczydlowsky: for them?

[00:20:52] Come along for the ride, like, if right now it is a share of ticketing for the influencer stuff, right?

[00:20:57] and that's kind of marketing if you think about it. Like how do I get people comfortable with, how do I participate in a wedding remotely? but we actually think the much larger opportunity is just in people moving cash around during the wedding, gifting, buying things for each other, participating or having the account to organize the media.

[00:21:14] So there's several different revenue streams inside of that, and we're gonna experiment with like, what makes people happiest and they'll do sort of at volume. but right now the virtual gifting thing is a real thing. And it's easy

[00:21:24] Bob Moczydlowsky: for a bunch of

[00:21:25] people. Like, you don't have to bring the gift with you.

[00:21:27] you know, you're not just sending, like, who wants to just buy something off an Amazon registry link that's boring. Like, let's instead, you know, put a bunch of money on at the moment and, you know, run up a cool tab for people to go have a good honeymoon with during the reception itself. Totally believable.

[00:21:41] Dan Runcie:

No, I think there's something there, especially even with brand opportunities too. Just think about the number of brands that want exposure. Think about anytime you see a wedding and even just a way to like share that information in a way that's more clear. I know friends get weddings, literally, they'll reshare the Instagram story of every friend that was at the wedding, and it's like, all right, you know, happy for your nuptials and everything, but I'm not gonna sit here and tap through a hundred Instagram stories. Like, no, I'm not gonna do it. But if there's some type of interesting thing that's somewhat in between some, you know, $10,000 videographer, you know, montage that they put together and something that could be done here, I think there's something cool to be able to potentially tap into there.

[00:22:21] So excited for that one. The other one, come meet them.

[00:22:25] Dan Runcie: I know. Yeah. The other one that stuck out to me is Five Mics. So Ace Patterson, "Call Me Ace". He's been a guest on this podcast before. Him and I are friends, and I remember him telling me about this startup that he is playing as a while, and I think that he has, interesting landscape into the industry from both his work in consulting, working in big tech, working at YouTube.

[00:22:49] So he understands how that piece of it works, but then he's an artist himself, so just tapping into the collectibles opportunity, and I feel like so many people have been talking about that hip hop gaming collectible intersection, so I feel like there's something there.

[00:23:03] Bob Moczydlowsky: Yeah, I mean, well, so we should tell people what it is, so anybody listening, the picture is very simple. Imagine a card game like Magic: The Gathering or horror stone that is started around hip hop. And so instead of playing my or versus your Wizard, I'm playing Snoop versus, you know, Chief Keith, I don't know, like I don't know if it requires name and likeness.

[00:23:21] I don't know. Like the whole thing could happen. It could be Snoop Lion versus Murder Was The Case, Snoop, right? There's a bunch of different ways you could think about the organization of the characters. They could even be. Made up characters just in a fantasy hip hop world, if you don't, you know, need name and likeness, right?

[00:23:36] but the concept of those cards as digital collectibles, not physical printed things, you can store them, right? You can tokenize them, you can play them back and forth. if that game is fun and can entertain you, that's a real opportunity in a very cool and interesting way. And so I think, you know, I think Ace and Adam, are really talented guys who needed a shot, they needed shelter to actually like get this idea off the whiteboard and into practical reality.

[00:24:01] Bob Moczydlowsky: And part of the reason our program exists is to take really talented people who need that and need a little capital and need a little shelter to really like, feel like they gave that thing the full effort it deserves. and that's an idea that deserves real effort. Like that's a great concept. And if done correctly, I think we all could believe that could be played by millions of kids around the world.

[00:24:21] No problem.

[00:24:21] Dan Runcie: The other companies that stuck out to me from the list, there was a large focus I felt on community. There were a number of the startups that are either tapping into it, in some way, trying to bring music fans together, bring collaboration with other folks together.

[00:24:32] Bob Moczydlowsky: A hundred percent a theme for this year's process. Yep. Like very intentional. we talked a lot about what's happening around our own behavior, and the way we are all kind of interacting with each other. And it's like, I don't know if I need to have millions of followers.

[00:24:46] Like that's not a community. I need to have, you know, hundreds of people or thousands of people that are really like-minded that really teach me things and move me together. And, and so, the future being a massive niches is a thing we've all been talking about for a very long time.

[00:24:59] And there's a lot of evidence happening right now that these things are starting to become really lucrative, really valuable to people, and are becoming places rather than just online destinations. so we got a couple of companies that, touch this sphere, One called Homeroom, founder named RJ Ruggles.

[00:25:15] the Lazy investor way to describe this company is it's Google Analytics for your online communities. it's the, console you use to monitor Discord, Slack, other community-based environments where your community manager has to report metrics back to the business. Are we getting people out of the community into the transactional purchase funnel?

[00:25:33] Bob Moczydlowsky: Do we have people leaving the community because the commentary is toxic they're getting harassed? How do we monitor and what are the standard metrics by which we operate as community managers, like that's pretty loosely defined these days. and we think we can build a piece of software that defines that for people and then also helps them do better at it.

[00:25:51] and then in that same world, there's a company called Highly Liquid, run by Izzy Howell. If you imagine if you build a new fashion brand, and the buzzword of the day is a fi digital brand, right? Where you have digital and physical products.

[00:26:03] Bob Moczydlowsky: You have physical experiences, online community. So if you took a company like Supreme and we're gonna start at today, not everything would be skate decks and t-shirts. but you'd have collaborations. You would have some products in person and in her mind, Highly Liquid is targeted at women who care about online and tech communities, her first, product drop is actually a pair of panties. It's like a lingerie product. The second product will be in a totally different sort of category. but the idea that there's sort of a, what's the company, mischief.

[00:26:32] She references a lot that does like crazy online campaigns with artists and gets, like, creates trouble online and gets people to follow. If you combine that with sort of an ongoing community that was about female empowerment, about being active online in a, cool community, had a little bit of your favorite R-rated sex comedy jokes and attitude about it, that's a really interesting brand.

[00:26:51] That could exist in lots of different channels. and so we're excited about that and you could see how a company like that would need a company like Homeroom, as part of its core, you know, control center for running the, business. Right. on the other side of that is this company, Seed,the founders come out of a small town in Puerto Rico.

[00:27:07] They're living in Florida now. They've built an online music community slash school for learning about the music business. Entirely in Spanish and targeted exclusively to Spanish speaking markets. So they're not trying to like have multiple languages and everything's in English, like very specifically Spanish language, Spanish language contracts, dynamics and explaining the way the business works from the perspective of someone who sees Bad Bunny or sees Shakira and aspires to be in that world.

[00:27:37] and that company is doing gangbusters business already. and could be, I think the definitive brand for how music business expands in Spanish speaking, territories, right? Again, driven by a combination of school and curriculum, but also community and professional development, and a place where you can go and talk to people and develop your career and make like sort of lifelong contacts.

[00:28:00] Bob Moczydlowsky: As opposed to something like LinkedIn where it's like, oh, everybody's on LinkedIn. So there's not really any real community there, right? yes, you need that because you need the publicly available place where you're, you could be found professionally, but in your industry, in your category, in your specific vertical, you need much more interaction.

[00:28:16] So, we're headed that way with sort of, with some of those companies. So I'm glad you noticed like this. It's not an accident that all that stuff's

[00:28:22] Dan Runcie: Yeah, and I'm sure too with this cohort, this is a hybrid cohort. With that, we're talking a little bit before we record it, but you're gonna have a week in la, you'll have a week in Atlanta. There'll be a lot of remote time, and I think that reflects a lot of the trends we've seen over. The past few years, and even how Techstars has run, because you started out where the teams were all in LA, at least for the duration, working outta the office during the pandemic.

[00:28:49] Everything's remote. Now it's hybrid, which I think does reflect a lot of this that we've seen. and I know that the focus of teams and the people that are building these is so important, especially in early stage startups. How is your evaluation of teams? And that piece of it evolved with knowing that even the startups themselves may not be directly working in the same place.

[00:29:11] Like the founders themselves may not be directly in the same location.

[00:29:14] Bob Moczydlowsky: Yeah, I think the idea that you have to run your startup in a specific room with everybody all together, or you have to be in a specific geography like, the trend was that that wasn't true pre covid, but Covid just wiped it off the, board. You know, like we, we've had companies in the past, like investor, like go to see investors and the investors is like, oh, like everything about this deal except that your company's located in Europe or your company's located in Australia or whatever, so we're gonna pass because of your location.

[00:29:44] I haven't heard that in years, you know what I mean? Like we're in a new world now where people can be multiple places at once in a really weird but true way. Like, one of the teams coming in, Baton is working on organizing all of the pre-release, like work in progress music.

[00:29:59] And their teams are all over the place. They've got guys in, they have a guy in Dubai, they've got a team in Italy, they've got Americans, they have people in New York, they're gonna be with us here in LA. We have a team, working on online virtual nightclubs, specifically targeting African teens.

[00:30:15] They're based in South Africa and London. They're gonna be with us in LA and New York and probably raise capital in the US and build a product targeted towards, you know, teens in Africa. So the idea that these things are geographically focused, or your thesis could be geographically focused, I think is actually a detriment if you're operating that way.

[00:30:32] and so we've resort of rearranged the way the program works to try to add a maximum amount of value for Serendipity. Be together in the office, talk about hard things, have accountability, do an all hands, meet each other, share contacts, and then break apart and go back remote and focus on shipping product.

[00:30:50] Bob Moczydlowsky: And you can do really great mentor meetings in, you know, 20, 30 minute sessions via Zoom and get access to amazing people because they don't have to come to the office to have that meeting. and so if as long as you're balancing the hard conversations and the development and the team organization in those in-person weeks.

[00:31:08] And then you're breaking apart to go actually focus and accomplish stuff. I think you end up with the best of both worlds. So we've always had an international program by thesis design. Half our investments are outside of the United States because we think that's where most of the future revenue opportunities are and growth is gonna be.

[00:31:25] So the hybrid model just makes this whole thing, you know, easier for us and allows us to actually, you know, have European portfolio companies that are just as important to us and accessible to us as Americans.

[00:31:36] Dan Runcie: Definitely, especially in this industry, with any company that's trying to improve problems for music, it's most likely gonna come from places outside of the us so that makes a lot of sense. The other shift that I've seen over the past couple years, especially in music, is the increasing amount of non-music or non-music people that have a big checks or they're trying to get involved in some way, usually at later stage rounds.

[00:32:03] And in your case, those could be the folks that are marking up some of your companies that you've already made investments in, do you feel like that has shifted what the success likelihood or the type of companies that may get follow on investing in that, that you're then looking at your end of obviously trying to fund those companies out to be most likely to exit and how that may have shifted the portfolio companies or just the likelihood of success one way or another for companies solving problems in.

[00:32:32] Bob Moczydlowsky: Hmm. Yeah, I would say it's like, so it kind of depends like, the companies that are related to music, there are a lot of people coming into music who have bought catalog or who have, who have bought music related assets, who now wanna help further that ecosystem. and we have a company in this year coming into this year's class called Royalty that's working on, like, the analogy I would use for that company is, a company that was very boring, that wasn't very sexy, called Athena Health that automated the medical billing process.

[00:32:58] Like it was too hard for doctor's offices and clinics to submit their procedures to the insurance company. Insurance company reject it cuz it didn't have some special code on it. They have to go refile it and try to get paid to qualify. Right. That model looks a lot like, royalty registration and making sure you're collecting money from copyright assets around the world.

[00:33:16] And so you see people funding companies like that and like entertainment intelligence, although I guess entertainment intelligence in the program a couple years ago. We sort of co-own that as a program with Concord and secretly Canadian, and it's used by Monarch and secretly, and Hopeless Records and a bunch of other folks, to do data warehousing and trend analysis, right? It's the ability to watch what's happening to your streaming data and then react to tiny signals in that data. So, for example, you have a catalog track that you haven't done primary marketing on or 15 years starts to get a little traction on TikTok. You now need to call your rep the DSP and get that thing onto a playlist or you need to call your music supervisors and get that in somewhere, right? And so investment and capital and growth is happening for those companies. and they're so like that's the kind of company that the person who's coming to music because they bought some assets or they've had extra cash and they're developing, those are the kind of companies that we're seeing that kind of investment going to.

[00:34:15] and like I'm really excited about royalty this year because of that opportunity, right? There are people now who have gone and purchased these assets, who now need the way the music business operates to become more efficient and more streamlined so that they can get growth that justifies the multiple they paid for that catalog.

[00:34:30] Bob Moczydlowsky: If you bought a catalog at 20 x annual revenue, you need to make sure you're collecting every penny that's due to you, and you need to work on streamlining the way the business works to get more money in the future, right? So you get a faster payoff and better ROI on your deals. The companies that are most valuable for us, however, I still have to cajole, convince, arm twist network with, you know, grade A venture investors and show them those deals.

[00:34:56] And I almost have to leave out the fact that we operate in and around music on those deals, right? Like when Splash goes to COSLA or Endell goes to, true or, gogogo comics goes to BitCraft or Circle Labs goes to light speed music isn't part of the conversation at all in those cases. And we still have a stigma of music as a category is a smaller, not as interesting place to play for those investors and instead of convincing them that they're wrong and they should look, I have found that the way to be effective is just to show them the opportunity uniquely to that one company and let them judge that and forget how it relates to music altogether.

[00:35:38] Dan Runcie: That first point you mentioned I think is really interesting because if you're a company that has purchased a catalog, it would also be in your interest to make sure that those payments are being processed as efficiently as they should, or any other type of financial activity that could benefit your asset that you just spent 50, 60, a hundred million on could be even more beneficial.

[00:35:59] So that piece, it made sense. And I think too, even the comparison to like Athena Health, right? How can you make a comp to some other industry where this thing did this and helped push things moving forward. I could definitely see that. I would like to imagine that the music conversation, maybe it would eventually shift at some point.

[00:36:17] I know that we often hear the comparison to gaming and how gaming's revenue continues to increase and I know a very different business model different in a lot of ways. So I still think that the big tams are out there, and I think because given. There's been so much investment activity, even from the major record labels or some of the indies.

[00:36:36] I know some of them are investors in your accelerator, or they have made big investments themselves or big bets like they want to be able to increase the overall pie. Just think that there's so much that is inherent with the complexity of the business and just some of the. Information that can be held tight, that can make some of it be a bit challenging.

[00:36:56] But if you do have that combination of someone that knows the space, someone that's willing to find efficiencies where it can be, I still think that there is big opportunity.

[00:37:06] Bob Moczydlowsky: I agree. Like If anything, there are more deals that I would like to do that I can't do. You know what I mean? Like, it's not like I'm like, oh, I didn't have enough deals to do. I think the next couple of years, there will be less cash. There will be less capital in the market.

[00:37:19] which will be good because there was sort of too much and prices were too high and there was too many and it was hard to sift through which founders are real and which ones weren't. but in these next couple of years, there is unbelievable opportunity based on sort of like the inertia of where the business is headed and whatever impact we get of macroeconomic downturn is gonna hit music less than it's gonna hit a bunch of other categories.

[00:37:42] And so the concept of music driving culture and culture driving everything else, and things starting in around music, and music, being willing to find these other revenue streams. music was at the forefront of the direct-to-consumer online shopping revolution. Music was at the beginning of the, how do I become, an entity that can have multiple brands and collaborations and have new consumer products driven by fandom.

[00:38:03] Music has been at the forefront of these movements over and over and over again, and the company doesn't have to position itself as a music company to benefit from working in and around music, right? Like that's the way we think about it. And I just think that's gonna be more and more true over the next several years.

[00:38:18] It's just gonna be, and the things that people wanna do in and around music, like go to events and go have experiences with their friends outside. are going to become even stronger. That demand is really high now, and we have a bunch of tools and platforms that allow people to do that at scale.

[00:38:37] That was never possible before, right? Like this company coming into this year's class, I think it's the last one maybe we haven't talked about. Haven, they have multiple brands, one called Floating and one called Ambient Church. Where they put on events that don't have artists on the top. They have sort of experience like, we're gonna go to the park and there's gonna be a sound bath, and we're going to like 40 people, no alcohol Sunday afternoon out in nature.

[00:39:00] Connect with each other, talk to each other, be mindful and relax and like de-stress from our overly technical scheduled lives. That company, you know, sold tens of thousands of tickets last year across their two brands. And they're connecting everybody with, you know, SMS community and membership belonging to a community that furthers those brands and those events.

[00:39:22] But the event itself is like unplugged, disconnected, like that's the level we're at now where the tools allow you to have sort of music style experiences that don't necessarily involve the legacy music business at all. There's no promoter there. There's no primary ticketer, you know, there's no tour merch, there's no back production company.

[00:39:43] There's not a huge rig and a negotiation like there's none of that stuff. It's just humans agreeing to go do something and enjoy some music and sound out in nature. But everything around it makes like you can have the entire rest of the company that looks like a really awesome modern promoter company because you can scale it horizontally into multiple cities.

[00:40:03] Through community, right? So these are the things where everybody says there's no more green space in and around music. It's a low limited category, there aren't big, huge opportunities for these companies to have a hundred, 200 million in annual revenue, a billion dollars in annual revenue.

[00:40:18] I just kind of chuckle cuz it's like the perfect, you know, like it's the perfect great garden bed to plant these seeds in. Like yes, they grow up to be trees in other forests, but they start there.

[00:40:28] Dan Runcie: And when you hear that pushback, do you have like stats that you can show or anything that like I'd be curious to hear what does the Techstar Music Accelerator returns or success look like compared to maybe other Techstar non-music accelerators like we.

[00:40:43] Bob Moczydlowsky: Yeah, so some of that's pretty proprietary. couple of the stats I'll give you just because I'd like you and I'll probably get in trouble, but it'll be okay. So our multiple on invested capital from the accelerator is a little over three. And, you know, we've deployed, like I said, that 7.4, you can do the math on that about what our positions are worth in those companies.

[00:41:02] The reason that is true is because, you know, the way an accelerator works is you, you know, there's gonna be a power law, right? You're gonna put 10 companies in, you're gonna work on them together. They're not all gonna end up being equal, but the things you learn from the ones that fail are gonna help you make better decisions on the next batch.

[00:41:19] Bob Moczydlowsky: And, so, you know, the last couple of years the market has been so, frothy, right? There's been so much cash looking for assets to the price of assets just went way up, right? Interest rates were effectively zero. If you had cash, you had to do something with it to get a return. You couldn't just put it away and get 3, 4, 5, 6% on it.

[00:41:37] There was no interest to be had. So that drives up asset prices, it drove up the stock market, it drove up private company valuations, drove up the prices of seed rounds and pre-seed rounds and everything, right? That is deflating quite a bit at the moment. So, in those two years where our deals stayed the same and we make the same sort of fixed term investments and there was, it got even more competitive for us to try to get into companies and invest in them.

[00:42:00] And great companies had their pick of investors, we decided to go the other way and go even earlier and even crazier because instead of competing for those really high, overly marked up deals, we're gonna help start some things. And yes, we're gonna have a high mortality rate, but if you grab a couple that work, the markups are so gigantic that you end up with a pretty good performance on your fund, right?

[00:42:22] So if you invest in a company, you know, at a 3 or 4 million dollar valuation, and the next round to capital for that company is in the twenties like, now you look like you know what you're doing and it's okay that a couple other ones like that seemed crazy, turned out to be crazy and went to zero, like the magic of venture capital is you can only lose your principle.

[00:42:42] Dan Runcie: Right. Yeah. Asymmetric upside for sure. Especially with,

[00:42:47] Bob Moczydlowsky: That's for sure. And so if you're thinking about deploying capital in the category, you kind of need to be promiscuous, right? You need to have a long-term horizon on it, and you need to be willing to think about it that way. And I think the way to do that is at the very earliest stages. Now to do that, you have to know how music works and you have to be able to get people on the phone, and you have to be able to argue about stuff, and you have to have the stomach for the crazy one, you know, going belly up six months after you wrote the check. but if you're willing to do those things, the amount of information you learn by doing that is sort of creates a, little flywheel around you making this better and better and better

[00:43:21] Dan Runcie: decisions.

[00:43:22] Right. And I think for you, at the end of the day, it's being able to get that buy-in from the LP base. And I'd be curious to hear from you, how has your LP base shifted over time? Are there any trends you've seen there? And does that say anything about what types of companies have been more or less interested in investing in the future of solving problems for music in the past five, six years

[00:43:44] Bob Moczydlowsky: Yeah. they've definitely gotten less conservative over time. More experimental, more willing to like try stuff. Like to the point even where like if you look at Warner from Warner's comments in, I think they maybe were in Music Ally or MBW a couple days ago, like late January, I think she even said publicly like, the era of conservatism is coming to an end.

[00:44:06] We need to start experimenting with the way our content is used to build these businesses. I can back her up, she's awesome by the way. Very thoughtful looks at it at a really good high level. I can back her up and then I've actually felt and seen people's behavior change against that rhetoric.

[00:44:22] when we first started the program, it was a lot of question about what are returns gonna look like? When are these companies gonna be valuable to us? When are we gonna get something out of this that's we can have, you know, financial ROI on and as the companies have evolved, as Endell became Endel and Splash became Splash and Community did its thing, and Gimme Radio is moving, you know, hundreds of thousands of dollars for catalog divisions, you know, in specific genres.

[00:44:47] Bob Moczydlowsky: When AI became, you know, the source of data warehousing and is helping people understand TikTok and Concord is the secretly Canadian are like, oh, we need to actually own a piece of that company, you know, when those things start to happen. Everybody looks at it and goes, oh, all right, like, we just need to water the garden.

[00:45:03] We don't necessarily need to be beating any one deal up on its ROI as long as the garden has flowers in it, right? L et's look at the whole thing. And so we have a very real feeling of, collegiality and team inside of the accelerator. you know, it's not like Warners and Sony don't compete. It's not like Concord and Sony don't compete, right? But when it comes to a company that is providing the service that could help them be more efficient. They are more likely to collaborate and share information with each other, because everybody benefits. And that posture now, you know, in 2023 where, you know, compared to 2017 radically different.

[00:45:39] Like when we were first putting the program together in 2017, I had major label business affairs lawyers, like giving me checklists around making sure we didn't have like, you know, anti-monopolist or collusion issues or antitrust issues with the way we shared information in the program. Now we have a screening committee where we look at sort of the top 25 companies each year, and everybody's in the room together sharing ideas and like trading deal flow, and like, oh, I think we really like this one.

[00:46:07] Do you guys like this? If we wrote a check, would you write a check? Like the conversation is so radically different and collaborative compared to where we started. That I can just say like the music business knows that to get growth, it needs to be more experimental, and it's not like it was doing the wrong thing from 2005 to 2012 or 2013 when your annual revenues are declining,

[00:46:33] like anybody, you lose your job, you have less revenue. You're gonna be more conservative with how you spend your cash and what you do it, and you're gonna be more protective about the revenue you do have, right? Like when you are making more money and you made your bonus and you got extra money you didn't plan for, you experiment and you try new things and like that.

[00:46:50] So the good news is I think we're in an era that's gonna stay, you know, pretty steady for a while and that experimentation and growth is gonna occur, and it's a delight to see, you know, public rhetoric from the heads of major labels, like backing up the behavior they're already exhibiting in the accelerator, right?

[00:47:07] Like, I think it's time for huge

[00:47:09] Dan Runcie: optimism.

[00:47:09] Well said. I think that they we're in this transition moment, so hopefully we'll see more of this. But Bob, this has been great. Before we let you go though, for folks that wanna stay in touch with what's happening with this cohort, with the accelerator, where should they go?

[00:47:23] Bob Moczydlowsky: Okay, so we actually are recruiting some new mentors for this year's program. we have some specific issues and people that we're interested in and we want them to come, particularly from, hip hop, right? We are constantly trying to build a deeper bench of mentors and angel investors from the hiphop community all the time.

[00:47:42] And so what I would tell people, if that's you and you're listening or you are active in that area, just email me. I'm Bob Moz, bobmoz@techstars.com. I'll send you a thing to submit on mentorship, and not everybody will make it through. Some people will have to say no to. But we'll read 'em and look at all of them, but there are specific things where we wanna e expand and deepen our community, that that's one of them.

[00:48:03] the other thing, would be is that if you are an investor thinking about deal flow here, you're looking at a company we're in, or you're looking at a company that we're not in, and we can be helpful to you to like, here's what we've seen, here's the comps companies, here's the competing company or Oh, you know, we made an investment like that.

[00:48:18] Bob Moczydlowsky: Here's all the places that fell apart. Be careful of these places. Also just, email me you know, I'm constantly talking to investors about their portfolio, not mine, and trying to like just be useful to them. because ultimately I want there to be more capital in the category, right? I want people to raise funds. I want them to invest in deals.

[00:48:36] there's not one thing I can think of where I would've a competitive posture about any of that stuff. and I would tell people who wanna be involved, like, drop your competitive pieces off out of your own actions and your own behavior. Just be a hundred percent collaborative.

[00:48:51] There's only a couple hundred people who are really serious and really active in this community worldwide. There's nothing to fight over. Like there's enough for everybody. and, you know, deals that I can't afford. That's okay, I'll still tell people I think they're cool deals and if you wanna be involved and see some of that stuff, like just email me and we have ways to plug people into our, community. It's hundreds of people. So, it's not like we're off in a closet running the accelerator with, 10 folks. It's a lot of people.

[00:49:16] Dan Runcie: That's awesome. That's awesome. Love to see it. Well, thanks Bob. This has been fun. Appreciate you.

The biggest stage in music is still the Super Bowl Halftime Show. In 2023, that stage belongs to Rihanna. This is a noteworthy show for multiple reasons.

Rihanna hasn’t released an album since 2016’s ANTI, which was a TIDAL exclusive! Seven years is a long time. She has since built two billion-dollar brands with Fenty Beauty and Savage X Fenty, and recently became a mother. Could this be the start of a music comeback for RiRi?

A few years ago, Rihanna famously turned down this opportunity citing her support of Colin Kaepernick. But that was before Jay Z’s Roc Nation entered into an agreement with the NFL to produce the show in 2019. That relationship — Jay signed Rihanna to her first record deal at 16 — likely patched things up.

This performance is also noteworthy since it's Apple Music’s first year as sponsor, taking over from Pepsi’s decade long-run.

To unpack it all, I brought on Louie Mandelbaum aka DJ Louie XIV. He’s a pop music connoisseur and breaks down the genre on his Pop Pantheon podcast. Here’s what we covered on the episode: 

[1:38] How Rihanna has stayed relevant without releasing music

[4:49] Factors behind Rihanna’s cool factor

[13:18] Where will Rihanna’s performance rank among Super Bowl halftime performances?

[18:03] Evaluating Roc Nation as halftime show producers

[26:47] “Chaotic” MTV-era producing halftime shows 

[28:59] Apple Music’s impact as first-time show sponsor

[32:52] Is performing at the Super Bowl still the biggest stage?

[37:15] Is Rihanna finally returning to music?

[45:32] Predicting future Super Bowl performers

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Louie Mandelbaum, @DJLouieXIV

This episode was brought to you by trac. Learn more about how artists can bring web2 and web3 together for their fans at trac.co

Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital

Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.

TRANSCRIPTION

[00:00:00] Louie Mandelbaum: I would say there's three moments that really stand out to me, maybe four. the first is I do believe from the jump, she always had the coolest records from Pon de Replay on like Rihanna, Pon de Replay, SOS, Unfaithful. These were like very state of the art cutting edge, well-made. Cool pop songs. She always had that going for her.

[00:00:23] I think from the jump, but I don't know if that necessarily translated into her celebrity persona. I think that began to emerge around her third record, which is 2007s Good Girl, Gone Bad. I think Umbrella kind of to me stands as like the moment where Rihanna went from sort of upstart to like true.

[00:00:39] Kind of a-list Pop Star, that record is obviously widely considered to be one of the best pop songs of the 21st Century For Good Reason. 

[00:01:15] Dan Runcie Guest Intro: Today's episode is a Super Bowl special. This is all about Rihanna, the halftime show, and how this show has evolved over the past few years. I was joined by DJ Louis the 14th, who is the host of the Pop Pantheon podcast, and him and I talked all about what do we expect from Rihanna? This is the first big music thing that she's done in quite a few years.

[00:01:35] What do we think? Where this show will sit in terms of other performances that have been historic in the Super Bowl, this is now gonna be the fourth Super Bowl that Rock Nation has done. What do we think about the job that they've done? This is the first year for Apple Music. How have they been doing and what do we think we'll expect from them moving forward?

[00:01:53] And also, We all know about the Super Bowl bounce, what artists do the year after the show. So what do we expect from Rihanna for the next couple of years after the show? What do we expect to see from the show moving forward? And we make some predictions at the end on who we think would be some dope Super Bowl performances that we could likely end up seeing in the next couple of years.

[00:02:14] Here's the episode. Hope you enjoy it.

[00:02:16] Dan Runcie: All right. Today we have the pop culture expert himself, DJ Louie the 14th here with us. Today he's hosted the Pop Pantheon podcast, and he was the best person that I had that I wanted to talk about this upcoming Super Bowl halftime show with the one and only Rihanna. So Louie, we're talking a little bit before we recorded just about her and how, I know she's someone that you can riff on for a while, but it would be good to start with where this fits with Rihanna's career right now, because she's someone that, I think it's almost gonna be seven years since Anti came out at this point, that at least the Super Bowl halftime show would've happened. I know she had the Black Panther song, but it's been so long since she's released new music, but she's still stayed so current.

[00:03:04] What do you think it is about her that just keeps that.

[00:03:08] Louie Mandelbaum: Dan. Thank you so much for having me on the show. So glad to be speaking with you. What I think is Rihanna's number one currency as a pop star, you know, like lots of pop stars have sort of a thing that. Is the engine behind their stardom, you know, for someone like Taylor Swift for instance, I would say it's her songwriting chops.

[00:03:28] That's like the thing that everybody turns to about her. For Beyonce, it's kind of her epic performance abilities. Like, not to say they don't have other attributes that, you know are working towards their success, but they're sort of like a main thing with all of them. I tend to think, and to me Rihanna's has always been her cool factor, like Rihanna is the coolest pop star of her generation, and she's never been the most traditionally talented at any of like the musical aspects of all of it. Like she's not like a generational songwriter. She's not a particularly like gifted dancer, you know, she's a very distinctive, but not traditionally powerful vocalist necessarily.

[00:04:13] So Rihanna's thing has always been that she is genuinely cool, like in a way that isn't put on or try hard in any sort of way. And I think that allows her to have a certain amount of interest in everything that she does, even when she's not making music. And of course, she's done a really fantastic job of building out her brand identity outside of just being a pop star through the success of her various fashion lines, Fenty Beauty, Savage, all of that stuff.

[00:04:47] Has allowed her cool factor to like disseminate through culture without her necessarily releasing music. But I think the most important part when it comes to her returning to music is that unlike other pop stars of her generation, say like a Katie Perry, who definitely does not run on Cool factor, I think that Rihanna is appealing to pop's core fan base, which has shifted out of her specific generation. So like since Rihanna's released new music, like there's an entire new generation of pop fans that are now like the kind of core center of pop music that were very, very young last time that she released music. But I think Rihanna's cool factor.

[00:05:28] I guess my hypothesis is that Rihanna's cool factor can allow for her to potentially be someone that they'd be interested in engaging with on new music in a way that they wouldn't, for somebody like Katie Perry or even someone like Lady Gaga, or even someone maybe even like Beyonce, I think that her cool factor creates the circumstances where perhaps people will still be engaged and interested in her releasing new music, despite the fact that it's been such a long time.

[00:05:56] Dan Runcie: When do you feel like that cool factor emerged? Because I agree with you. I think there is something intrinsic about her that just pulls people in and thinking about her career, it's almost been 20 years now. She came on the scene as a teenager and, of course, I think that in the early years we do start to see a bit more of the record label created person, and you don't see as much of the personality, but over time you start to see that.

[00:06:20] When do you think that shifted? Whoever's like, oh, here is the Rihanna that is showing us why she's the shit and other people aren't quite at that level.

[00:06:30] Louie Mandelbaum: I would say there's three moments that really stand out to me, maybe four. the first is I do believe from the jump, she always had the coolest records from Pon de Replay on like Rihanna, Pon de Replay, SOS, Unfaithful. These were like very state of the art cutting edge, well-made. Cool pop songs. She always had that going for her.

[00:06:53] I think from the jump, but I don't know if that necessarily translated into her celebrity persona. I think that began to emerge around her third record, which is 2007s Good Girl, Gone Bad. I think Umbrella kind of to me stands as like the moment where Rihanna went from sort of upstart to like true.

[00:07:09] Kind of a-list Pop Star, that record is obviously widely considered to be one of the best pop songs of the 21st Century For Good Reason. It's an incredible song and something that really allowed her specific kind of reading nasally voice to like shine through and like she gave that song a Life that I think even other vocalists couldn't necessarily.

[00:07:30] That was a song that famously like got passed around to Britney and Mary j Blige and acon and a lot of other artists. So it's really her plus this song that sort of came together and it was like her cool factor and her specific brand of Rihannaness that really made that song what it was. But I also think in a sort of, weirdly, maybe this is like a sticky and difficult or chewy idea. But I do think in the wake of what happened between her and Chris Brown, which was obviously like a horrific public experience, and you know, a very difficult thing for her to parse through. And for the public who, you know, were experiencing her at like one of many zeniths of her career, her experiencing this huge public, you.

[00:08:16] Incident with her boyfriend. I think the way that she emerged out of that as this kind of like titanium, no fucks given sort of, brand of like pop heroin or anti heroin in some ways. I think that was the moment in which like the Rihanna persona really crystallized like somewhere between rated R and loud and the kind of caval kid of albums and songs that came after.

[00:08:41] She emerged as this very specific brand of turn of the 2010s pop star who was kind of like middle finger in the air, like kind of gave off the air of like, I'm not even trying that hard, but like everything I do is amazing. Like that was another thing about her that I think really like codified her pop star.

[00:09:00] Every pop star is working really hard. It's a very hard job. So I don't wanna make it sound like she's not doing that, but there was a way in which she made it feel. She wasn't even kind of trying and like everything she did was a smash, even though she was kind of like casual about it, she never gave off the air of someone that was just like gritting her teeth and working really hard in the way that like a lot of pop stars can seem.

[00:09:22] So I think it was those combination of factors around that time, oh 9, 10, 11, that like the full embodiment of the Rihanna, like pop heroin slash anti heroin. I don't know exactly how to frame that, came into full, like being at that point.

[00:09:40] Dan Runcie: Yeah. I think another thing that happened right around that same timeframe was the accountant that she had and how she had almost went bankrupt from trusting someone that was very shady with her money too. And that's where I think a lot of that zero fucks given as well. You combine that, the Chris Brown, you know, domestic violence and abusing her and then.

[00:10:02] That combination. Yeah. I do feel like by loud sonically we also started to hear a little bit, it almost felt like there was a bit more of like a tone in a oomph in some of the music there, which has been cool to see ever since. And I think like over time, she's just leaned more and more into that. And she also was someone who I think for every year, for up to at least the middle part of her career, she was releasing an album pretty much every year.

[00:10:27] But then I feel like by the time that Anti comes around, Slowing down. She's starting to put more into her. And we kind of saw similar transitions with how Beyonce, maybe it started to do, releases that word bit more, you know, less of the general, here is what you're getting. But no, let me be a bit more myself and tap into something like what we saw with formation and the self-titled.

[00:10:50] I think you started to see that a bit more with Rihanna and I feel like this. lines up with it as well. And I think another piece that I think about with her too is social media and just how we saw another side of that personality was just a bit how cutting and how, you know, direct she could be with people, whether it was her online, back and forth with Sierra, or even, I think there was one of the Kardashians, or maybe it was like Kendall Jenner had said something about, oh, That I hear this song played at the Rihanna concert, and then she's just like, then don't come if you don't want to hear that song.

[00:11:23] And little things like that. It's just like, okay, all right, here we go. You know, throwing a little spice everywhere and slowly making people realize that this is who she is.

[00:11:33] Louie Mandelbaum: Yeah, the social media thing is like definitely critical. I'm glad you brought that up because she kind of was like the peak celebrity of Peak Instagram, Twitter, years. Like she was the one that made it all like really enticing. I mean, her Instagram persona in the early 2010s was like the reason to be on Instagram.

[00:11:52] And of course all of those clap backs. Our legendary and still cited it to this day. Another one of my favorites is like when some tabloid like tweeted something about, you know, something derogatory about her and she said something like, your pussy's too dry to be riding my dick like this, or something like that.

[00:12:09] It was just, you know, we. I think that that was, first of all, she's very clever and smart and good at that stuff, so you can't fake that. But I do think the era of the social media celebrity has been all about creating an accessible persona or something that feels relatable as opposed to like the idea of pop stardom being something that's sort of like cordoned off or celestial or like, you know, something that is untouchable.

[00:12:33] You know, the transition that pop has gone through in the 2010s has been toward stars that at least give the patina of relatability or accessibility. And I think her persona on social media and in tandem with the fact that she, I think the fact that she isn't a virtuoso in the way that Beyonce is so defined by her virtuosity created or helped kind of pave the way for the way that Pop stardom has evolved over the 2010s into something that's more about a brand of personality that feels accessible somewhat.

[00:13:09] Like relatable, that they could be one of your friends that you know stuff about them, that they don't have to be perfect and manicured necessarily, even though that imperfection can be perfectly manicured in and of itself. But yes, no question about it. Those were all things that she played an integral role in creating that have only become bigger and more prominent aspects of pop stardom in the latter part of the 2010s as she's been kind of pulled back from pop music.

[00:13:35] Dan Runcie: and it was interesting to hear you talk as well about the things that set her apart in thinking about the Super Bowl performance coming up. Because this is a stage where so many of the best performances lean into people that are the best performers or have that musical ability that transcends in a lot of ways and for her, even though that cool factor is something

[00:13:57] Louie Mandelbaum: Remember Maroon five.

[00:13:59] Dan Runcie: Oh man. It's funny, before listening to this, I was listening to where you had ranked a lot of them and I was like, I wonder where he has the maroon five one. And then eventually I was like, oh yeah, like, I'm sure it's closer to that one. I mean, we could talk about that one for a while. I do think that this rietta performance should be, better arrangement and spectacle than that one.

[00:14:22] I am curious though, because of course, from a range of, let's say that, "The Who" or the Tom Petty. I mean, I wasn't as much of a fan of those, and I know you weren't either, but of course, Princeton, Beyonce are more of the highly regarded ones based on what you know about Rihanna and where you think she'll fit, where do you feel like this performance would likely end up in terms of where the, where she ranks compared to other halftime perform?

[00:14:50] Louie Mandelbaum: Well, I'm awfully curious, Dan, because we haven't seen her do much in a long time, so it's definitely going to fill in some blanks and some curiosities that I think a lot of fans are wondering about where Rihanna is as a pop star and performer. Prior to kind of hanging up her pop star crown, let's say in like, you know, after the Anti tour, let's say in like 2017 or 2018.

[00:15:12] She had made great strides as a live performer. I think early in her career she was sort of a weaker performer. Her vocals weren't that great live. She was kind of a listless dancer. Again, she pulled out a lot just based on her swag, but like she had made really huge strides in her performance ability and her vocal ability.

[00:15:31] I mean, she was singing so well towards the, you know, end of the promo cycle for auntie when she was in her like Love on the Brain live performance era. I mean, she was shutting it down in a way that I never had imagined she would. She sounded amazing. So I'll be curious to know where her voice is. The thing is that Rihanna's going to do this in the Rihanna way, I would imagine, like, I just don't think, again, prince and Beyonce are two artists that are defined by virtuosity.

[00:16:02] They are artists that you know are going to get on stage and be the Absolut. Apex of musicianship of performance ability. They're two of the greatest examples of those things in the most untouchable way possible. Rihanna's like a very different type of pop star. She kind of just gets on stage and grabs her dick, you know?

[00:16:21] And like everyone's like, yeah. You know, so that's like what she does. So and I also want to pinpoint that again, and I've said this before, the things that she makes easy look easy or tossed off, or casual or not, like, don't be fooled like a lot of effort and thought and work goes into all of that with her.

[00:16:40] So I would imagine we're gonna get some version of "the Rihanna thing" in a Super Bowl performance, which of course, every Super Bowl performance in the modern era is gonna be highly choreographed. It's gonna have massive production values, but I can't imagine her turning in something, again, even akin to like Jennifer Lopez and Shakira's, which is another one that I think is fantastic, but two other performers that are just like impeccable dancers, like super tight performers.

[00:17:06] I have a feeling we're gonna get some version of like something that actually maybe relates a little bit more to a rock stars version of the Super Bowl. Not that she's gonna turn in like a Tom Petty-esque performance, but Rihanna can actually just stand there and sort of swag in a way that like, you know, your Beyonce's never gonna really do so. The question is, Is it gonna be up to snuff? I don't think anybody knows that. I think that's part of the fun of waiting for this thing is that we haven't seen her do anything in so long. She's had a baby. It'll be interesting to see like where she's at as a performer. I wish I knew more about it, but I'm just as curious as everybody else's.

[00:17:47] But I would bank on the fact that someone of her pedigree and experience is going to turn in something epic and God knows like she's got the production budget and all of the help that she needs to like make that happen. So Rihanna can do a lot just by being Rihanna. So I would say that, I'm sure it's gonna be epic.

[00:18:08] My guess is it will probably be epic, I guess.

[00:18:11] Dan Runcie: Yeah, I do think that putting her in the top half of performances is a pretty safe bet, I think you could say. I think that comparing to the Prince or the Beyonce, to your point, I think there was so much that you expected from them based on what they're known for before going into it, that you already had that heightened expectation there.

[00:18:31] With Rihanna, there's a lot more unknowns. Before this, I was going back and looking at, okay, what are the signature Rihanna performances that are out there. I was looking back at past VMA performances, past Grammy performances, and again, it's so long since you've seen some of those, so it's tough to compare.

[00:18:48] And even some of those songs, I mean, she's doing some of the songs that she had done with Calvin Harris, which I'm sure we'll hear at the Super Bowl. But she's also done stuff from Anti that we just hadn't seen in that, you know, grand of a estate, at least in some of those, settings before. It'll be interesting to see.

[00:19:06] I'm definitely expecting at least on the top half, but I've thought a lot about just the Super Bowl at all because you brought up the J Lo and Shakira one, which I do think was great on the performance perspective, just given where they are, and that was actually the first. Super Bowl that Rock Nation has done since they had took over as the lead to help the NFL with entertainment for the halftime show.

[00:19:30] So that was the first one they had. Then they had the one with the weekend, and then you had last year the West Coast hip hop ensemble with Mary J. Blige and Eminem, Dr. Dre, Snoop, Kendrick and 50 cent was one of the guest acts there. And then you have this one with Rihanna. How do you feel like the Rock Nation era of the Super Bowl halftime show has been?

[00:19:51] Louie Mandelbaum: Well, it's definitely been putting a focus on artists of color and artists that are, many artists that are adjacent to r and b and hip hop in a way that the previous iterations like touched on but weren't so focused on. So that's been really good and I think that's been needed and an important pivot. So that's been good. I think the J Lo and Shakira Super Bowl halftime show is one of my all-time top favorites. I think it was absolutely spectacular. They were both incredible and they both managed to make their like two six minute sets that they had to split up, like feel com comprehensive in this way that I was just like floored by.

[00:20:26] It was just every moment of that was thrilling. So I love that one. I did not care very much for the weekend's performance. I thought I've never found him to be an incredibly compelling live performer, and I felt the same way about his Super Bowl performance. it just didn't do that much for me.

[00:20:41] But I think he was a, a good choice. I mean, he's a massive superstar. He certainly deserved the slot and it made sense. And I thought last year's was great. I mean, I grew up in that era of hip hop, so seeing Dre, Mary J. Blige, Eminem, and Snoop Dogg. I'm never gonna be unhappy about that. And I thought they did a really nice job of threading those all together in a way that made sense.

[00:21:05] And it felt like, you know, if you grew up on that music, like how are you not gonna love that? I don't know. It was hard to deny. But that was a very unconventional Super Bowl performance because in the last, let's say 10 to 15 years especially, they've become very codified as this. Artist Showcase for One superstar, they become this kind of like elite performance showcase for these upper echelon pop stars.

[00:21:31] if you get that slot, it sort of says something about how culture sees you as, as we would say on my podcast, as like a top tier, pop star. So the last year one was definitelylike an anomalous one in the sense that it I guess it was a celebration of Dr. Dre's, you know, production work on some level, but it wasn't necessarily like the traditional pop star extravaganza that we were used to.

[00:21:55] So they've tried things, which is nice, and I think it is nice to shake it up, but I am excited for it to be back to this like one artist sort career capstone thing because I think that that's been a really fun and fruitful mode for the Super Bowl halftime show. So I'd say they've done a good job and I think that I am, you know, I mean they landed Rihanna, which is like interesting considering that she had sworn off doing this because of Colin Kaepernick, which I know was another topic you wanna talk about, but clearly there's something that Rock Nation's involvement with this has. Changed in her mind about her willingness to participate with the NFL on this after she had pretty publicly said that she wouldn't.

[00:22:39] Dan Runcie: Yeah, there's been a few things that Rock Nation has done here that I think have been good. I think that they were able to create themes around the event and try to tie in the location in some way, right? They had the Super Bowl in Miami, so they went deep on K. How can we get more music involved with Latin culture even though JLo herself is not from Miami?

[00:23:01] That was the tie in there with her and Shakira, and I know that after watching J Lo's Netflix documentary, she was upset about the fact that she had

[00:23:10] Louie Mandelbaum: yeah. 

[00:23:11] Dan Runcie: to share the stage, not against Shakira, but just Kind of like you said the past decade before that, was this is a capstone on a singular pop star, and then here you have J Lo, and now she has to share the stage with someone else.

[00:23:23] I know she was upset about that,

[00:23:24] Louie Mandelbaum: Which she very easily could have done. She very easily could have done that. I just wanna put that out there. Like J Lo definitely could have held down a 13 minute halftime show by herself.

[00:23:34] Dan Runcie: I think so too. I mean, we've just seen her perform at all these different settings and in so many hits in. people can have issues with her as a vocalist or things like that, but in terms of the performance, it was top notch.

[00:23:45] So I'm with you on that one. And then with the weekend one, I do think that's the weakest of the ones. And there was less of a tie in, I forget the location of that Super Bowl specifically, but I know that, he had a huge years, the middle of the pandemic and the only person that was really like, you know, elevating as a superstar in the pandemic to a new level was him.

[00:24:05] So I understood that. And then, yeah, the West Coast ensemble, that Super Bowl was in LA definitely didn't see it coming just from what we expected, but it was cool, and I do think that a lot of this speaks to the relationship piece and this taps into maybe a bit of that factor about why. They were able to get Rihanna in a way that they may not have been able to get her in 2016, 2017.

[00:24:28] I think of course, when they had done that, this was right after Colin Kaepernick was kneeling and the league had a lot of heightened f a lot of people were heightenedly frustrated with the league because of not only its stance on police brutality, but this was also a moment where the league's relationship with domestic violence was getting more underlied.

[00:24:49] It was only a couple of years after the Ray Rice incident. The concussion discussions were more and more, the NFL, at least from a public perception place, was probably in its lowest point that I could remember, at least in my lifetime, in that mid 2010s era. So to ask Rihanna then was rough. And I think another thing too that stuck out to me with how Rock Nation went about things, Jay-Z had said this in one of the press conferences that the NFL would ask three of these artists at the same time if they wanted to do the show. So then if someone comes back and then someone says yes before then now you have to go rescind the offer to the other person that said yes, which is a very. Bad way to go about this, especially if you tarnish relationships with things like that.

[00:25:33] So I've always kept that in my mind, like if there's certain artists that haven't done it yet and you're like, oh, why hasn't this artist done it? Part of me wonder, is it because they like asked three people to do it and then two of them said yes, and then now they need to go, you know, renege on a deal with someone.

[00:25:48] So I knew that Jay-Z was very deliberate about, we ask one person at a time, and then if that person says yes, then great. But if that person says no, then you move on to the next person. It sounds so obvious, but that's how they did it. And at least I had heard close to, some sources that told me that Rihanna was the first choice that they had for this year.

[00:26:07] And then she said yes. So that was cool to see. And yeah, I mean, I think it speaks to it as well. Jay-Z obviously had signed, Rihanna's, her first record deal with, Def Jam. She was with Rock Nation. After that, they've always been in business together. So it was cool to see

[00:26:24] Louie Mandelbaum: Well, I think part of the problem too is that there's like, we're running out of these superstars who are deserving of this capstone performance. Like there really only is like a handful of those super, super top tier pop stars that haven't done it at this point. It's like Rihanna was an obvious one.

[00:26:40] Taylor is obviously one that's sitting out there, I'm sure. Ariana could probably do one at this point. There's like a handful of them left in the mix. But like Drake, drake, absolutely. But there's not that many and you know, there's a whole, you know, extra conversation we could be having right now about the state of pop stardom and how we aren't minting superstars in the same way that we used to do it.

[00:27:04] But I think that was another reason why perhaps they felt the need to shake up the format a little bit, including with last year. And maybe even with the Shakira and JLo one and find ways to like do other versions of this because there really aren't, like we've burned through the like a-list pop stars, really, like a lot of them have already done this, so it'll be interesting to see if they continue to kind of like mix it up or like, you know,

[00:27:32] hopefully like Billy Eilish and Little Nas X and Olivia Rodrigo, like just really turn it out over the next four or five years so that they're ready, like, you know, in the mid to late 2010s, 2020s to take over for the Super Bowl. halftime show life. I don't know. We'll see. But maybe we are gonna get like more of these.

[00:27:49] different themed ones or mis mix and mashups. I mean, that's how they used to be like in the early 2010, early two thousands when MTV was doing them prior to Janet's situation. they were doing these kind of like huge ones, like people don't remember, but like Janet's Super Bowl performance was not like the ones that we get now from superstars, even though obviously she could certainly have done. She did two or three songs, really you got Nelly and Kid Rock and I mean, Justin Timberlake, like a panoply of other artists were involved in those shows. So they used to be more of like a smorgasboard, or at least sometimes they would be kind of like these conglomerations of sometimes very loosely connected stars.

[00:28:33] Louie Mandelbaum: There was 

[00:28:33] Dan Runcie: Did you like those MTV halftime shows? 

[00:28:35] Louie Mandelbaum: And No Doubt. I mean, they were incredibly chaotic. Like I just think that they were so random. But yeah, I mean, they had their own charms. Like there was the one year that was like Aerosmith and Britney and Nsync, and Nelly and . I mean, they were fucking weird, but like they had their own charms, I guess.

[00:28:52] But just a different kind of show, I guess.

[00:28:54] Dan Runcie: Yeah, going back and watching some of those, the fact that Nelly did two Super Bowls is

[00:29:00] Louie Mandelbaum: I know it's so weird.

[00:29:01] Dan Runcie: thinking about that moment, right? But. 

[00:29:04] Louie Mandelbaum: the two Super Bowl clubs is like Justin Timberlake, Beyonce, and Nelly.

[00:29:12] Dan Runcie: I know, right. And maybe Tony Bennett did like one or two from the older ones if I remember correctly. But yeah,

[00:29:18] Louie Mandelbaum: No, 90s ones are fucking psychotic. The nineties ones are like out of their minds. Truly like, Chaka Khan, I think like doing like Indiana Jones and Indiana, it was like psychedelic fever dreams. Or maybe it was Patti LaBelle, not Chaka, Patti LaBelle doing Indiana Jones, like themed Super Bowl Halftime performance is one of the weirdest things I've ever seen in my life.

[00:29:44] Dan Runcie: Man, and it just makes you think about how far this show has come along and I think to that, even if we see these ensembles, I like the fact that there will be a bit of a theme to them moving forward. And I think there are so many creative things you can do. And I'm also curious to see how the show will continue to shape with the sponsor that's leading it because I feel like that's another element to this. This is Apple Music's first year. As the primary sponsor for the show after Pepsi had had it for the past decade, and we knew that Pepsi chose not to renew. They wanted to put more money into digital, and Apple was willing to pay more for the show. And I know that a lot of these streaming services are trying to get into the livestream business.

[00:30:30] Apple was one of the more public companies I was trying to get NFL Sunday tickets. So there's always this association, both with music and entertainment that they've wanted to do to try to essentially sell more AirPods, sell more iPhones or whatever the exposure ends up getting them.

[00:30:46] But I am curious to see, is there gonna be any type of integration or any other type of thing that we'll see that is a shift because I feel like this Pepsi era gave us so many of these singular pop star capstone shows. I feel like I think about Beyonce when I think about the Pepsi era of Super Bowl halftime shows.

[00:31:02] What will this Apple Music one look like? I'm not sure, but what do you think? Is there anything that you expect to see moving forward now that it's kind of new chapter, new sponsor,

[00:31:12] Louie Mandelbaum: Like Rihanna just like comes out wearing a pair of AirPods or like, I don't know, like she she sits down at like a MacBook Air and like in the middle of the stage. yeah, I don't know. That's a good question. I think, well, what's interesting maybe that you were making me think about earlier is that clearly having an artist like Jay-Z involved and Rock Nation involved is gonna be like a more artist friendly way to program these things that's gonna like value, cuz Jay-Z is a music artist, so he's gonna have some form of respect for the people he's booking. I think part of the issue sometimes here is that this is such a huge opportunity. This is the biggest stage in media for any star to get a chance to do this. Is such a huge moment in their career that I can understand why, like prior to Jay-Z. The NFL or whoever was programming these things in the past, like felt like they had all the power . Cause really there's very few opportunities in media. Where like someone like Beyonce feels like, oh, I should do this.

[00:32:12] I mean, Beyonce barely does anything at this point. Like there's very few things that would feel like she didn't have the power in every situation. I was just reading an article the other day about how like the Grammys are so desperate to have her perform, but of course like why would she, I don't know what would be like, what would be the benefit of that to her at this point?

[00:32:27] So the Super Bowl was really one of the last remaining things that feels like. Oh, like this is exposure that like you get once in a lifetime and it's so humongous. So I can see how that power dynamic works in terms of like what Apple's gonna do versus Pepsi. I don't know if I have any clearer thoughts on like how it's gonna be different except to say that like, again, perhaps Apple is like more of like, in the music industry, like is like more part of the music industry in some way.

[00:32:54] They obviously like have been an integral part of like music consumption for the last 10 or 15 years. Whereas like Pepsi, like, you know, aside from like their iconic ads, like really, anyway, Pepsi's not exactly like, you know, music driven necessarily in the same way, so maybe that's gonna have an effect. Do you have any thoughts on that? I'm not totally sure.

[00:33:13] Dan Runcie: Yeah, I'm not a hundred percent sure either, I do feel like apple's Dream would probably be to be able to have some type of live stream where you could watch it directly through Apple Music if you're on your computer or if you're on your phone or something like that. I know that the networks that broadcasters show are probably holding onto those rights and want them exclusively, whether it's Fox NBC, CBS, so I don't know if that would actually happen, but I'm sure it's something that they want just thinking about where things go. but beyond that, it'll be interesting to see. It's something I'm definitely gonna be looking out for, but I think it's still a little early to put any predictions on that. One thing you did say though, that was, that touched on something that I was thinking about earlier was just where the Super Bowl sits within pop culture within media and its importance because I do think that for a long time. We always thought of this as, yes, this is the biggest stage in entertainment, and I still do think, especially for a US artist, I think this is still the biggest stage that you could have, but thinking about someone like Beyonce, I think most people would probably look at the past 10 years and say, okay, Beyonce did perform the Super Bowl twice, and what's her signature performance of the past 10 years?

[00:34:27] it was her Coachella performance and that's probably not something that we could have said about a artist 10 years before that, cuz I know Coachella has just grew and grew and definitely became an even bigger thing the past decade plus. And I'm now thinking, okay, in this next decade with where things are going, even just now where the Super Bowl sits, how are things shifting?

[00:34:49] Is the Premier Music Festival and doing a great performance there, especially since they're now all being live streamed. Could that ever rival or get even close? Are there other types of opportunities that are engine closer? I feel like the Super Bowl probably will always still have that stranglehold just because of how many eyeballs you get, but that's something I've been thinking about, just how these things are shifting and what that may look like.

[00:35:13] Louie Mandelbaum: Well, there's no comparing giving somebody a two hour concert to like do the most in the way that Beyonce obviously like now, has defined the most that you could possibly do with that. And of course that is her most well regarded performance ever. And like probably the. Most well regarded live performance of all time question mark.

[00:35:33] So no question about that compared to like getting 15 minutes, but. There's the amount of people that are watching the Super Bowl is unmatched. Like no matter how many people are watching that Coachella live stream, like for instance, my parents, my parents still haven't seen Homecoming like they're not big Beyonce people, but my parents see every single Super Bowl halftime performance like, so I still think it's one of the rare instances where monoculture like still exists.

[00:36:00] It's like one of the only things I mean I watched the Super Bowl and I could care less about sports. I have zero interest in football. I've never watched another game the entire year, but like I'm there like, you know, with it on mute until , until the halftime show happens. So it is one of the rare instances where monoculture still exists and people still tune in and you're still getting in front of people.

[00:36:24] like for better or worse, the people that are watching Coachella are people that are already having some sort of interest in the artists that are performing there. This show puts you in front of a large group of people that like may not give a shit about you and wouldn't like choose to watch you perform even on the Grammys or anything like that, but there you are, so I think it is a level of exposure and a reminder to people and I think the way that these songs burn up streaming charts and Apple,you know, iTune store charts immediately following this, like, the artist that performs at these shows, like tends to like, have humongous streaming and, you know, download boosts following the show bears out that like you're getting in front of people that like just wouldn't seek you out in other instances.

[00:37:06] And we have so few examples at this point of like actual monoculturelike functioning in this way, but I do think the Super Bowl is one of the rare moments where that still does happen.

[00:37:16] Dan Runcie: Yeah, no, you're right. And I think too, just thinking about how media has changed, especially since the pandemic, if anything, all the other stuff from a broadcast perspective, people are watching less and less, and that's becoming more niche in the N FL even compared to other sports is still the dominant thing.

[00:37:36] So I think the Super Bowl, if anything, is probably just having more and more importance from that perspective. So I think it'll always be number one there. You brought up the thing about the bounce and the impact.

[00:37:45] Louie Mandelbaum: And prestige. I mean, I think the other thing is just the prestige of the, of getting chosen for it is also something really important. Like yes, getting a Coachella headlining spot is like a big deal, but like people who wouldn't get. Super Bowl head. Letting spots yet like a Billy Eilish last year are still gonna get that Coachella slot like getting that Super Bowl slot is a badge of like honor and confirmation of your like superstar, A-list legendary hall of fame status as a pop figure in a way that like very few other things can coordinate in this day and age, I don't think.

[00:38:21] Dan Runcie: Yeah, no, that's a good point. And I think the other point you mentioned too, about the impact that this show has, of course, the week after the Super Bowl or the day after the Super Bowl, we'll see the streaming numbers or the downloads or even the record sales. But I think the thing that I've paid more attention to is some of the ways that these artists are making even more money from their tours or other things like that looking at someone like the Weeknd, he goes from performing in arenas to performing in stadiums and having one of the biggest tours of the year and even last year's West Coast hip hop ensemble. I think Mary J. Blige had the biggest tour that she had had. Dr. Dre, I know he didn't go on tour, but he just sold some of his music and maybe some of the high end interests there could have helped.

[00:39:04] And even Snoop Dogg sold a bunch of NFTs afterward and launched his record label that was aligned with this. And if we could think about Rihanna who hasn't released music in seven years, what do we think this next year post Super Bowl will look like? Do you think we'll get a tour? You think there'll be a collaboration?

[00:39:22] Do you think we'll finally get that album?

[00:39:25] Louie Mandelbaum: I hope so. I mean, I tend to wonder like why she would be doing this if it wasn't to set something up because it doesn't seem like she has interest in just sort of like maintaining like she hasn't done anything in so long that I don't know why she would just do this, like randomly. So one has to imagine that this is the kickoff to an era of some sort. God knows she could launch a humongous tour without having a new album, and I think it would be massively successful like I wonder if Rihanna could play stadiums at this point. Just doing kind of what seems to be the new trend with all the girlies right now, which is doing their greatest hits. That's like Taylor's doing that.

[00:40:04] Madonna just announced that she's doing that. I mean, Rihanna could certainly be like, Hey, you know, let me perform my greatest hits, which also constitute like the 25 best singles of the last, you know, 23 years or whatever. So like I have to imagine that it's setting something up. I don't know what to say about the album.

[00:40:25] I mean, like I feel like I'd be getting in front of myself to say that she's gonna release something because she's really been adverse to releasing new music, and I wonder if there's anxiety about reentering a streaming marketplace that has changed quite a bit even since 2016. As I mentioned earlier, as much as I do think she has the capacity to appeal to the current pop fan base, cross section. She is certainly, you know, eight years has gone by, like, you know, things have really changed. I wonder if there's like trepidation about like how to work this system. I mean, you look at some of these seasoned pop acts, like even Beyonce. Like Beyonce did well with Renaissance. I mean, she did nothing to promote it, which is like a whole other conversation we could have about that.

[00:41:14] But like, you know, the record sold well but isn't doing numbers like Taylor's doing and you know, isn't the sort of like jugg, you know, A-list, A-list, A-list juggernaut that like Bad Bunny is, or that, you know, some of like the new Vanguard of pop stars are. So I wonder if there's a feeling on Rihanna's part in terms of like someone who's had a career that's churn so much on.

[00:41:38] A cavalcade of number one hit singles over and over and over and again. Album after album, after album, after album. About like how she's supposed to work that. Exactly. Cuz things have just changed so much and the guard has changed. And so that's a long-winded way to say I don't. No, if you had a gun to my head, I would say tour an album or forthcoming as a result of this, or like on the back of this.

[00:42:05] I can't imagine that there isn't. But I will remind people that in 2013 when Beyonce did the Super Bowl, she didn't announce any, like there was nothing new happening. Later that year in December, almost a full year later, she dropped the self-titled album Out of the Sky, but, It felt like that performance just sort of existed in a vacuum when it happened, so it's not as if that doesn't happen.

[00:42:28] So it's a little bit hard to say, but if she was smart, I would say given the amount of years that have gone by and how much like she could use of refocusing on the music and that the Super Bowl's gonna give that to her, I would hope that she's using this as some sort of direct launchpad.

[00:42:44] Dan Runcie: Yeah, my prediction is Tour. Yes. Album maybe. And the album point is in large part for some of the reasons that you mentioned too, because the last album, I believe there was a botched release with Anti, I think it leaked

[00:43:00] early on title cuz I think it was a early release or something like that. It was messy and I know that she was pissed about that and I'm sure that many fans were too And.

[00:43:10] People can't escape leaks. I mean, Renaissance leaked early. these things are still happening. And to your point, yeah, there's a whole new system on how these things are being done. And SZA, she's someone who I think kind of perfected this system, but she's with a record label that has. Literally adapted its strategy to be able to understand how to perfect this thing.

[00:43:31] And she had this whole waterfall release thing and you need singles leading up to it to kind of make that happen and Rihanna hasn't released music recently, so there's so many things that would need to happen before anyone would really expect, okay, boom, day after the Super Bowl, here's an album.

[00:43:46] Like I do not think that's gonna 

[00:43:48] Louie Mandelbaum: Two things. One is that, I don't know though, cause here, two thoughts I'm having. One is you are right about the anti rollout and it wasn't just the leaks that were the problem. There was a series of underperforming lead singles that led that record off until they landed on work. It was, you know, Bitch Better Had My Money, didn't crack the top 10. There was. You know, the, kind of weird Lucy with Kanye and Paul McCartney. I mean, there was like, you know, a series of singles that like, didn't quite do the job that like usually Rihanna lead singles were doing at that moment where every single one you could to a number basically were like generation defining smash hits.

[00:44:25] So that's one element of it, but I kind of think the the SZA thing is an interesting comparison to me because yes, SZA released singles before the record came out, but like Shirt didn't catch fire in the same way that Kill Bill has since the album came out. And there's a big thing now with records that come out where.

[00:44:44] Fans pick the hit, you know, you dump the record and fans, I mean, it's the same thing that's happened with Cuff It on some level. Like yes, you know, Break My Soul, hit number one, but Cuff, it's actually been a bigger hit than Break My Soul. If you go look at Spotify numbers, it's got more streams. It's a bigger song.

[00:44:58] It's got it got the organic TikTok element that came into play. If she had done literally anything to promo it, if she had performed it or made a music video, I'm sure that song could have hit number one easily. But of course, that's a whole other thing about why Beyonce is doing nothing to promo any of this, but I think Rihanna might benefit from removing herself in the same way that Beyonce did with her self-titled Record and Lemonade.

[00:45:24] To some degree, I guess, formation notwithstanding from the sort of like trying to find a lead single prior to dropping an album. I think Rihanna's in a phase, especially with Anti, which is her most critically well regarded work, an album that I think like expanded the possibilities for Rihanna being like a sophisticated and intriguing albums artist to come forth with a full record and sort of like see what catches fire from there might actually be a better strategy for her than trying to locate. In a boardroom, like a single that's gonna function like an umbrella or only girl in the world or whatever. Cuz this marketplace is just way more fickle and difficult to figure that out in than it was during her peak era.

[00:46:06] So I actually think her dropping an album like literally after the Super Bowl with no notice, like, could be actually like a pretty effective strategy. But again, I don't know that she's gonna do that, but I'm just pontificating on like what I think could work for her. I actually think that might be a better strategy than like doing some more traditional rollout.

[00:46:24] Dan Runcie: Yeah, it'll be fascinating to see. I mean, there's so many unknowns to the same way where I think even before Beyonce reformed, we kind of had an idea of what to expect. we don't know what to expect in a lot of ways, so I'm excited for that. But, Louie, before we let you go, let's make a prediction.

[00:46:39] So we talked a little bit about maybe some future ensembles that we could see, or some artists that we could see perform. who do you think would perform, I don't wanna just say next year, because that might be a bit too. Keeping it contained, but what is a artist or a mix of artists that you could see doing the halftime show in the next couple of years?

[00:46:58] Louie Mandelbaum: I think the obvious answer is like Taylor is obviously going to do this at some point. It's actually like somewhat surprising to me that she wasn't doing it this year. She's having a massive year. This record is gigantic. She has her biggest hit in a long time. This album is a juggernaut in a mainstream way for the first time in like, you know, a series of interesting kind of career diversions that were all huge.

[00:47:20] But like, this is definitely like, feels like a big, big moment for her. And she is such a classic Super Bowl artist, not in maybe the Rock Nation era, but she is white country, you know, blonde, critical darling, rock bonafides, like whatever, like, so it's truly surprising that she hasn't done it yet again, Ariana seems like another obvious one.

[00:47:41] At some point, I'm assuming Ariana's gonna come forth with a new record. She's due. It's been, I think, Two and a half years or something since her last album. So one has to imagine she's due for a new era soon. She feels like she's of the caliber and of the stature at this point to do one of these by herself.

[00:47:57] So those seem like two obvious superstars. And Drake, I think Drake is on the other one. You brought him up. He's obviously seems like a slam dunk. You know, generational superstar. Literally, I don't know how he'd pick the hits, which is another thing with Rihanna, like how's she gonna pick what she performs in terms of like groupings of artists?

[00:48:15] I think that's really interesting. I mean, I wonder like what a version of like the MTV format would like look like in the modern era like how could you like bring a group of artists together? Again, the Dre thing was really an interesting sort of like roll of the dice on that idea, but I'm wondering like how you might do that. In other contexts, like, I'm trying to think of like other rap crews, like obviously the other ones that comes to mind like, ha, why hasn't Jay himself done it yet? I mean that's an interesting one to me too. I know Jay famously said, you know, I don't need the Super Bowl, but now he is intrically involved in the Super Bowl.

[00:48:53] He feels like another obvious artist and obviously someone that could like kind of corral and very interesting stable of guests. So. it's like Jay-Z and Friends seems like it could be an interesting one. Unfortunately, we've lost another obvious either co headliner or headliner himself in Kanye who was now radioactive and would never get the slot anymore.

[00:49:12] I don't think so. He's someone that certainly deserves it on a musical front, but like I think is just, you know, persona non grata in most spaces at this point. And. I don't know. I'm trying to think of like good groupings. Do you have any ideas of like, what could be like a thematic grouping?

[00:49:28] Dan Runcie: Yeah, I mean, it's funny, I was just looking here at some of the upcoming locations to see if that could give us any clues. But before I get there, you brought up a few things that I was thinking about the Taylor thing. I agree with you. I think that will happen. I think she's waiting until all of the re-recording come out.

[00:49:45] So I don't think 1989

[00:49:47] Taylor's version came out. I don't think that Reputation Taylor's version came out. So I think once those come out and she's like, yes, you can play all my non-Scooter Braun owned music wherever you want after that, then I think

[00:49:59] she'll do it. so I think she's kind of waiting there. 

[00:50:02] Louie Mandelbaum: Yeah. I think 

[00:50:03] Dan Runcie: do it. I don't think that I mean, there's no Super Bowl team in Canada, so there's no tie in there, but I wanna see him do it. I mean, I've been a fan of his for a while, but some upcoming locations. So you have this one in Arizona. The next one is in, Las Vegas, and then the one after that is in New Orleans.

[00:50:19] New Orleans could be interesting. I feel like, you know, a whole bunch of, you know, culture with vibe there. I don't know. what artists necessarily, I know you have a lot of, hip hop

[00:50:27] Louie Mandelbaum: Big Freedia Super Bowl halftime show when?

[00:50:30] Dan Runcie: Big Freedia would be something, oh man, I feel like they'll do something with that. Assume that, you know, rock Nation is still involved. I feel like we'll get something cultural there. But, the one person that I do wanna say, and I think you mentioned this on a podcast as well, I think I love Bruno Mars as a performer. It was too early though, and I think you're right about that like he performed before Uptown Funk, before 24K magic.

[00:50:54] And I think that he may have done like a snippet of those songs at the Coldplay one that he guested it on with Beyonce. But no,

[00:51:01] we have a 

[00:51:01] Louie Mandelbaum: whole next. 

[00:51:02] Yeah. He did Uptown Funk. I.

[00:51:03] Dan Runcie: Yeah, we have a whole next set of those to do. And maybe if it's too bland to do him again, maybe you mix him with someone else or something like that, you know, him and Cardi B have done a few songs, like something like that could be kind of cool.

[00:51:16] Louie Mandelbaum: Yeah. What about Nicki and Cardi? I mean, like we haven't had a female rapper headline on her own.

[00:51:22] Dan Runcie: I mean, can you get those two in a room though?

[00:51:25] Louie Mandelbaum: No, not together. Not together. Not together. I mean like what about one or the other? I mean, Cardi, maybe not, but Nicki certainly is a generation defining pop artist who like certainly deserves her own show. I think that'd be an interesting choice. I think the New Orleans one is really interesting because you're like, all right, you could have like Wayne as like one of the primary headliners of that, you know, and then you could like mix in.

[00:51:50] I don't know, like other famous, you know, there's so many famous New Orleans artists. You could do like a Cash Money, Drake, Wayne, Nicki, 

[00:52:01] Dan Runcie: That would be special. That would be special.

[00:52:04] Louie Mandelbaum: Mm-hmm.

[00:52:05] Dan Runcie: All right. Well, we're calling that now. That's our prediction. We'll have to check back, but that's our prediction for when is this? February 2025. So two years from now, Drake, Nicki, and

[00:52:14] Wayne. The Cash 

[00:52:15] Louie Mandelbaum: Right on. We'll have to check in about. That seems like an obvious good one. I mean, honestly, great show I That would be amazing.

[00:52:22] Dan Runcie: Yeah. No, that would be something that would be good. But no, Louie, this was so much fun. Thank you again for coming on and for the folks that are listening and want to hear more about how you break down pop artists, where should they go?

[00:52:35] Louie Mandelbaum: They should subscribe to Pop Pantheon wherever you get your podcasts. It's really a taxonomy of pop stardom. We take them all one by one. We have really in-depth discussions about their careers and disc photographies, and then we rank them in a series of tears called the Pop Pantheon. So if you are interested in pop music, I think it's both informative and fun and smart and stupid at the same time. So if you like to talk about pop music and to overanalyze it as we do, follow us at wherever you get your podcast, Pop Pantheon, and also we're on Instagram and Twitter at Pop Pantheon pod. And I'm @DJLOUIEXIV on Instagram and Twitter.

[00:53:18] Dan Runcie: Awesome. Great stuff. Thank you. Appreciate it. 

The playbook for artists to go viral on TikTok has changed a lot since 2019. Sean Taylor aka “BrandMan Sean” has written and executed that playbook for his clients since the early days of TikTok. He’s the co-founder of the ContraBrand Agency, which specializes in TikTok marketing for music talent. The agency has helped artists like Macy Gray, 24kGoldn, and Trap Beckham, among others.

Sean and his team just released a global report on How Artists are Going Viral on TikTok. The report is packed with insights on artist virality on the platform. According to the report, artist-generated content (AGC) is the key to going viral today. It’s more impactful than not user-generated content (UGC) from fans and other users. AGC not only works, but it’s also a cost-effective way for independent artists to break through.

However, Sean points out that virality isn’t as easy as before. TikTok has matured, and overnight success is harder to achieve. Still, with the right strategy, Sean believes TikTok is still a second-to-none top-of-funnel marketing play. 

We broke down this tested TikTok system in our discussion. Here’s everything we covered about the platform:

[1:51] TikTok entering its maturation stage

[5:39] Second wave TikTok music artists vs. first wave

[9:10] Biggest shift on TikTok for artists

[17:13] No, artists don’t have to post dance content

[24:00] YouTube shorts lack of culture

[26:29] YouTube’s advantage over TikTok

[31:31] The problem with IG Reels

[33:32] TikTok pushing Google for search dominance

[38:55] TikTok as a marketing funnel

[42:21] The rise of TikTok live

[46:10] Predicting where TikTok will be in three years

How Artists are Going Viral on TikTok in 2022 report:

https://www.contrabrand.agency/tiktokglobalreport2022

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Sean Taylor, @brandmansean

Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital

Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.

TRANSCRIPTION

Trapital #Sean Taylor

[00:00:00] Sean Taylor: One of the problems that people were having were them blowing up right? Without being able to connect to an actual face, right? So it solves so many of the problems that come with that, and even helps the problem of TikTok’s algorithm where people just hop on and start running things up with ads and you haven't really even understood what your content looks like, that creates some algorithmic problems, which probably aren't worth getting into, here, or maybe they are, but yeah. Man, artists generate content. It's gonna be a love hate relationship for sure with artists, the labels, all of us, right? But, if anything, it'll force collaboration and synergy between teams, in ways that it hasn't before.

[00:00:42] Dan Runcie Intro: Hey, welcome to the Trapital Podcast. I'm your host and the founder of Trapital, Dan Runcie. This podcast is your place to gain insights from the executives in music, media, entertainment, and more. Who are taking hip hop culture to the next level.

[00:00:42] Dan Runcie: All right, today we are joined by my guy, Brandman Sean, Sean Taylor, who is back on the podcast for a second time now, and I wanted to have him on because there's so much that's happening with TikTok, with short form video and how artists are using it. And his company, the contraband agency just put out a report that dives deep into this, and he talks about this often on his platform, the Brandman Network. So Sean, let's level for a little bit, and I feel like TikTok is in such an interesting place right now, 2023. It's not some of that same rapid growth that it may have had a couple years ago, but it's still so essential for artists. How do you feel about where the platform is right now?

[00:01:51] Sean Taylor: I think it's in a really good space actually. It's in a maturation space. The problem with that is people aren't seeing hits come as easy on the platform. and they're actually using that to downplay the platform and say, TikTok isn't that impactful, or it's not that big of a deal. It's hard to get a hit on TikTok. The difference is it's now a normal marketing infrastructure within your whole overall marketing stack. So yeah, there was this hot period where you were getting like gains that you probably didn't even deserve. Right. Every shock, swish, nothing but net. Now you have to do what you're supposed to do in every other space. So I think a lot of the pain that people are feeling isn't necessarily TikTok not being effective. It's TikTok not being unreasonably effective, unbelievably effective. The thing that made me get on TikTok, back in 2019. It's in an interesting space, but I think it's in a good space actually. And I can go deeper into that specific argument and why I see it that way. Cuz there's some numbers and milestones that I kind of think of it and approach it from, but yeah, that's where I think TikTok is right now. It's new, it's a viable marketing channel, but it's not the marketing channel that everybody is going to be as excited about as they were.

[00:03:24] Dan Runcie: I'm glad you said this because there's been a bunch of reports about how TikTok has slowed down about how artists are starting to complain, and I've heard many A-list artists, even privately and publicly complain that things are popping the way they used to. But this isn't 2019 anymore. It may take some actual marketing expertise since some clever thinking about how to find things in. I remember one of the reports I said was talking about how you can't just give some post or some link to Addison Rae and then hope that someone like that goes and blows the whole thing up for you and makes you a superstar. You have to find your niches and build from there. And in reading that, it's like, well that sounds like what it's like to grow any type of career, and that's probably how it should be, right?

[00:04:11] Sean Taylor: Exactly. Should it be that you pay one person and everything just blows up. Not really. I would love it to be that way for me, you know? But look, that's just the reality of how marketing works. So you can still get that number to grow and get millions of streams, but that millions might come a little bit slower. And now when it hits that 2 million mark, 3 million mark, probably even before that, it's gonna take a lot more heavy lifting to get it over the hump where, That thing could just keep going like a rocket ship straight to 2030 and not stop, right? So it's a great space to get things off the ground and create the spark, but going beyond that spark is more difficult.

[00:04:59] Dan Runcie: In past years, we saw record labels signing a bunch of artists that came from TikTok, and I would assume that because of this rocket ship success, people didn't have the infrastructure behind them. A lot of those stories probably didn't end up panning out the way that they thought they would, maybe even at a lower rate than the average hit rate for. Otherwise artists at a record label are assigned. But I would think now that things have matured a bit, the artists that are actually coming to the forefront are likely gonna have more behind them. And because of that, B, the potential to actually maybe have a more sustainable career than that first wave of artists who just benefited from a very aggressive area.

[00:05:39] Sean Taylor: Yeah. I mean, I think the thing is people hadn't really seen anything like that before, right? Like yeah, there had been one hit wonder. That has happened and someone who's seasoning the game probably understands what needs to take place. But to constantly have day after day someone popping out of nowhere like a breakneck speed level and trying to figure out how to bring infrastructure up, up under all these artists at the same time is a completely different story. Cuz it's also a different story when you have these artists housed under you, and then things take off really fast. You're taking them, you're trying to create a deal and figure out how to sign them, and then create infrastructure. By the time some of these deals take place, a lot of that moment is already missed, right? So, it was a really weird space, and I'm sure there's labels that have more of an infrastructure that's prepared for that situation. It's like, oh, if we bring somebody in from that particular climate, then there's a specific path that we can take 'em. Whether we expedite some things or we start here versus there, I'm sure that's there. But TikTok was really weird watching in the beginning because you had all these people blowing up and many didn't even wanna blow up, right? Like you had kids just using the platform and blowing up, they were an artist or just a regular influence or whatever you call 'em. They were just doing what kids normally do on apps and became stars overnight, which is very different from the artist who wants to be an artist. And then they take off. These are kids who are in their experimentational experimentation phase, kind of just having fun playing with things. And then it might be a hit song, right in a bed without even them trying to pursue it. So it created this really interesting space on TikTok and unfortunately, where I saw early on there were so many artists I don't wanna say artists, actually, less artists, more general content, creators falling prey to opportunist managers and companies because artists fortunately, have had a lot of education in these pages. I'm not saying artists don't ever have bad deals and situations, but there's a very common knowledge almost at this point that's been put out for artists getting in bad deals, avoiding bad deals, what you should do, in the culture, that education is out there as a regular content creator. That information isn't out there. Right. But it's very similar. So I actually saw like a lot of kids being signed by managers who had nothing to do with the industry at all. They're just like, "Hey, I'm just about to sign 51 situation I'm literally thinking about and he's telling me, yeah man, I just signed 50 content creators right to a management deal." And then thinking of it only from the standpoint of if I leverage these 50, then I'm gonna be able to get me a bigger deal, hopefully. But he doesn't have any relationships in place. There's no individual incentive to make any of the individual influencers blow up. It's more just, Hey, let me get stable so I can leverage the stable and, most of those deals fell apart, down the road. Or hopefully the parents kind of figured it out. But I know some who got burned really bad, but things were moving so fast. Like it was crazy. So a lot of parents were. Okay, this guy knows two or three people in the industry and you know, but everybody in the industry knows two or three people. So, but for people who don't have a child in the entertainment industry, and they never had any plans and they have no idea what to do, that sounds good. So TikTok was very crazy at the beginning. It was the wild, wild west. Now we're in this period where I think everybody has figured it out. Not everybody, but many people have figured out how to create more infrastructure. The problem is now the game is harder and that's how life works, right? It's like, dang, the moment I figured this shit out. Right? Things change a little bit. but you referenced my report earlier. I think the thing that was the biggest shift was the artist has to do more work. And that's what people feel more than anything. We could do everything and the artists were doing nothing and we were blowing songs. and now it's like, dang, I gotta get my artist to participate. And we all know how hard it can be to get the artist to participate in some things, especially content, right? but you know, that's created a space for those artists who truly do have a knack for content and that drive and honestly stamina to play that content. They've been able to make a lot happen, get a lot of organic streams, which makes it so much easier on the team cuz you still gotta do your job and make it, blow from there. But I know several artists that we work with who are getting their songs to 500,000 streams, 1 million streams, 10 million streams. Right. Any other form of marketing, just their content. So that's a huge benefit, and that's what I think the silver lining needs to be. The fact that we have that is still something we did not have in 2018 for music specifically, so that we need to appreciate and have gratitude for our blessings.

[00:11:00] Dan Runcie: Let's dive into this a little bit because I think this point about artist generated content versus user-generated content is key. And I know it is a big part of your report as well, because I think for years now, we've heard so many people, even TikTok Head of Music just said this at the Nylon conference a couple days ago, was talking about how it's so key to be able to get the fans, to make the videos and get involved and things like that. And while that's still important, you're saying what actually can move the needle even more is getting the artist, even if they're reluctant to do it, getting the artist to do it themselves and having the two of them together and even more so the artist piece of it can really help push things forward.

[00:11:42] Sean Taylor: Right. 100%. See, we realized this in 2020, in the trenches, you see this guy post a video, right? And we construct this concept. and you get a hundred thousand streams and just off of your video. Right? And that was amazing at that time to really see that he got a hundred thousand streams. And oh, by the way, there weren't really any replications to his video or sound. It had nothing to do with the dance. It hadn't had anything to do with influencers at all. He had the right creative concept, right? Hundred thousand streams. And for the artist that he was, you know, you're talking about pretty much no listeners, that's a massive number, especially just from one post and even better a post from him. Right. With not much of a following at all. He probably only had like 20,000 followers on Instagram at the time. Right? So we saw that and then I devised this campaign with the artist. Ironically, I just got off a call with this artist. We did like a little Google chat named Fash and Kid in Australia, right? He has some followers, probably a hundred thousand, 200,000 at this time. literally never dropped the song a day in his life at this moment, right? And he's like, “Yo, Sean, I've watched some of your videos and stuff on YouTube, and like, I wanna figure out how to release this song. I'm releasing it next week. What should I do? First of all, "Hey, don't release it next week", you know what I mean? Like, let's talk. Right? So, we made it a month from there, we created this entire narrative driven campaign. And just from him posting it was all based on his post, right? I actually took the marketing method that I blew up my music festival with, before I was doing, like working with artists, and it was all organic posts, right? So I had a structure that I used, and that was literally just him posting on his page. He got 1 million streams on his very first song, right? So, It wasn't one single post that made everything take off, but it was a system of post, and those were all pre, well, primarily pre-release. And then there were some things that were done, but this is 2020, so we're like, man, just posting all right on your page can take you far. The problem, I won't even say the problem was, but the thing is, paying influencers were still working like crazy at that time, right? So we didn't have an incentive to like to lean in it as heavy for artists that, you know, we would, were a little bit harder to get onto the platform and make work. Now, it's one of those things where, okay, look, we really want you to start here because the way things are set up today. If you don't do this and create this foundation, a lot of that other stuff won't bring anywhere near as big of a gain as it did. But yeah, back then we saw success with, or artist generated content, influencers. There were things that we called TikTok creators. We saw all these different types of games, but literally paying influencers was working so great at that time it was like, ah, why do anything else But yeah, artist generated content. Man, it's the way, man, it is the foundation of how I believe. things should be ran today. But of course, the caveat with every artist still has a different path, right? So your artist generated content might look different or artist generated content. There are outliers where that just won't be prevalent for you, but as a general way in a business approach. I love the fact that, one, you're creating fans in visibility for no money, right? You know, however much it costs to create your content, but generally speaking, no money. Two, you're testing. Songs before you actually put money behind them. Right? Three, if something blows, you already have a presence on the platform to connect people to. Because one of the problems that people were having was, were them blowing up right? Without being able to connect to an actual face, right? So it solves so many of the problems that come with that, and even helps the problem of TikTok’s algorithm where people just hop on and start running things up with ads and you haven't really even understood what your content looks like, that creates some algorithmic problems, which probably aren't worth getting into, here, or maybe they are, but yeah. Man, artists generate content. It's gonna be a love hate relationship for sure with artists, the labels, all of us, right? But, if anything, it'll force collaboration and synergy between teams, in ways that it hasn't before.

[00:16:16] Dan Runcie: Yeah, I got the impression that from the TikTok head of music, making the comments about user-generated content, of course there's plenty to back that up, but I also saw it as a bit of a positioning to not take the stance that I think some of the labels have taken, where I think that the labels have come a bit of the public enemy of the artists who don't wanna be active on TikTok. We all saw the viral post that happened last towards the end of 2022. It was Florence, Florence of the machine and Halsey and others saying like, Hey, the label's making me do this. But I feel like there's so many ways to go about making short form videos and making content. How involved do you get with that piece of it? Cuz I think some of that is because people still think that artists need to be doing one of these like, you know, vertical TikTok dances that fit in something like they're Jason Derulo or something like that, but you don't necessarily have to do.

[00:17:13] Sean Taylor: No, you do not. So again, this is one of those things that I was telling people back in 2020, but the problem was, again, dancers were working so hard and so well, no one's gonna believe you. Right? But we were only seeing the commercial level, right? And everything has levels to it, just like the industry, right? You have pop music and there's some genres that. For less far reaching than pop, but they're successful. Right. So that's what I attribute seeing Dances in 2020 work on TikTok. However, there were other things that were working right? like people thought you had to be a super upbeat hip hop song, cash pages song that blew, was nothing of the sort. Right? But so I think that for one, people have to understand that it just goes back to being creative. At the end of the day, and unfortunately many artists stop thinking creatively once they leave the studio, right? And I don't think it's all the artists now. I used to just blame it on the artist where it's like, bro, you're supposed to be an artist. You wanna be creative, right? Artist means more than a musician. Musician is just music, but artist creativity, that's what we're looking at you for. You have to show creativity and how you present yourself in this content. But I think what happened was there was so much working in terms of these trends, and they saw so many. Finding success so fast, it kind of demoralized them into thinking I have to follow these specific formats to find success myself. Right? So when I hear TikTok, I hear TikTok in a specific way, not just another platform that I can distribute my video on. You know what I mean? It would be like, oh yeah, you could create a movie, but it has to be a romcom. That's kind of what they're hearing, right?. That's not the truth though, right?

[00:19:08] Dan Runcie: It reminds me too, of what you used to hear of MTV back in the day as well. Right. A lot of artists, especially late eighties, early nineties, a lot of artists that went on to be huge music video artists resisted it and they would always have a bit of a you know, high brow about it. Like, oh, I'm not trying to be like the Sir Mix-a-lot baby who got back a music video, like dancing on, you know, butts and booty shaking and stuff like that. But they found their own way to make the platform unique years down the road when it became the main thing.

[00:19:38] Sean Taylor: That's it, because it's you. At the end of the day, you can create the content and the platform is just how you distribute it. Now, I think there's something to be said for using the unique qualities of a platform, right? Just like albums. what people created, just like CDs impacted what people created. Just like the internet and internet culture has impacted, oh, shorter songs cause shorter intention, span longer songs. Cuz now we have more space to create. Like all those things were like, music has always been impacted by the mediums and the culture around it. Right. And I think for some reason we constantly fall into this trap of, you know, oh, SoundCloud music, TikTok music. You know, at one point in time there was I mean, well, people complain about, I've seen people complain about tape cassettes. You know, like when you look up enough, you're gonna find everybody complaining about everything, right? And then the Grammy's, what's the Grammy's formula? Everything has its success, but truthfully, I'm in their own formula for success. But truthfully, you know, especially in this independent business, you know, you don't have to play every single game. I think sometimes we find ourselves wanting things that cause us to play a game we don't want to, which is like that weird love hate thing. It's like, oh, you know, black people shouldn't pay attention and value the Grammys yet. We still want Grammys. Right. You know what I mean? It is that love and hate relationship. I think everybody's doing that with different platforms in, in, in some form of fashion. and you asked earlier, Deep and involved that we get in people's content creation. It's varying, right? we don't do it with every project, every person. It depends on the vision and also their willingness and the need that's there. But, you know, we've gone as deep as recording things ourselves. I remember one campaign. This wasn't artist generated content, it was an influencer, but we bought something off of Amazon to send her for her to wear in it because it connected with the idea. And she had like 5,000 followers at the time. And the video ended up doing like 2 million. Right. So we were like really A and R ing, cuz sometimes it's, you know, TikTok is about narrative and with the presentation, so just hold, let me go to how many followers. Cuz the beauty of TikTok is you can not have a lot of followers and still get a lot of views.

But if so, if you find the right person and can contrast it in the right way. Right. You can make it move. Right. I don't want to get into that campaign cause it might be semi uncontroversial in a way. I gotta explain

[00:22:23] Dan Runcie: We'll save that one for offline then,

[00:22:25] Sean Taylor: yeah. We'll say that one for, offline. For sure. For sure. But yeah, man, I mean, I think what I've seen is, if people can just open their mind and not start what's moving on a platform and just think literally in Word out, "Hey, what do I want to communicate now? How do I communicate that on this platform?" It'll save a lot of stress, particularly for the artists, because artists wanna do music videos. This is nothing but another video, right? So why can't I in 60 seconds? Be creative. Use that box. That box is a framework that will inspire creativity. How can I communicate and make something really dope in 60 seconds? We've had an artist last August blow up, his profile from like 20K to 400K and did 2 million streams in about a month with very, very high quality videos. And everybody thinks you gotta be really low. To find success on TikTok and record it from your phone and have the bubbles. These were very, very high quality shots and editing, and it's darker and it worked. Right. So it's really just about dope content at the end of the day.

[00:23:35] Dan Runcie: Yeah, for sure. Let's switch gears a bit. I want to talk. Talk's, competitors that are also in this space wanna talk YouTube and Instagram. But let's start with YouTube first, because you had recently put out a video where you were talking about YouTube shorts, their efforts there, and you said you're not concerned about YouTube shorts' impact because it just doesn't have the culture that exists on TikTok. Can you talk more about that?

[00:24:00] Sean Taylor: yeah. So the thing that made TikTok so unique, early on was it developed a culture, like once it hit that network effect, I knew it wasn't gonna go away overnight cuz there's too much money involved outside of the government stuff. But that's a different story. Right? And then culture, like people, have a different presentation and expectation on how you act on TikTok. It's looser than Instagram. That was the beauty of it, right? So that created a culture. YouTube has an established culture and relationship that they have. their audience. YouTube isn't as interactive. It's a little closer to tv. You know what I mean? And Instagram's a little bit more of a resume. Most people are putting on their best, their Sunday best, if you will. TikTok, we're involved in this together. People feel like they have the power to blow a song up on TikTok. the users feel like they're giving heavy feedback. You should drop this song. When is this gonna come out, right? It's a completely different culture that you can't just copy overnight. That's where competitive advantages get created, right? Culture. Cause it's very, very hard to mimic that. I think it's gonna be successful, but it's just not going to be a threat to TikTok in that specific way where, you know, it's like a TikTok killer or something. It's like the Jordan Stoppers. Oh yeah. You know, Jordan only scored 39 instead of 35. Cool. You might see.

[00:25:26] Dan Runcie: So if it's thinking about the Kobe stopper thing, so if TikTok is Kobe Bryant then is YouTube shorts, Ruben Patterson.

[00:25:37] Sean Taylor: You too might wanna take offense to that, but in this analogy, yes.

[00:25:42] Dan Runcie: Yeah, but I've been thinking a lot about the YouTube piece, and I will give them credit. I think the trajectory of YouTube is greater than Ruben Patterson. No disrespect, but I do think that Lyor Cohen had said something interesting. Of course, he's the head of YouTube and one of his big things is that the fact that YouTube shorts has the connection directly to the platform 

[00:26:04] Sean Taylor: Yeah.

[00:26:04] Dan Runcie: on-demand listening happens, he feels like that conversion rate and that connection is stronger. And he didn't name TikTok specifically, but he was essentially talking about the fact that TikTok doesn't have that same type of win. I know they have Rezo, but it's just not the same. What do you think about that? Cuz I think the underlying aspect of that is conversion and just being able to transport an audience from one to the other. What have you seen from that perspective.

[00:26:29] Sean Taylor: I think Lyor Cohen is extremely smart and savvy, and reading that statement. It was hilarious cuz you know the elephants in the room that he's addressing and it was like this competitive moment happening. It was like, come on man. Say their name. Say their name. But you're like, I'm not gonna give them any clout that was really, funny to read. But I think that they do have an advantage that TikTok doesn't. Right in that way, the long form content and that mentality, I think it's gonna be a lot harder for TikTok to get people to consume shorts on their platform than it is for No. It's gonna be a lot harder for TikTok to consume long form content on their flat platform than it is gonna be for YouTube people to consume short form. Does that make sense?

[00:27:19] Dan Runcie: Yeah, that makes sense. And I feel like part of it too is the conversion rate is one thing. I don't doubt that there's likely could be a higher conversion rate, but I think that absolute number is still what makes the difference at the end of the day. And I just don't know if the overall absolute number of people that are converting from. Hearing a song on TikTok and then going to stream that artist and then becoming a follower and an avid fan of that artist is necessarily going to be a number that's ever smaller than what we may see otherwise from YouTube. I think YouTube has still had great strides in that area, but I just don't see it coming to that level.

[00:27:56] Sean Taylor: no. Cause again, it's about that culture, right? So two things, I'll get to the YouTube TikTok second. But when we first got on TikTok and started working with some people on TikTok, it was ridiculous to see the conversion of people who left TikTok and went to Spotify. Instagram, these other places, but specifically, let's talk about Spotify. Why was it so ridiculous? Because at that time, TikTok did not acknowledge the music on the platform at all, right? You had people hearing the song and then googling the lyrics to find the song name and then going to stream it, and it was happening in droves. That much friction told us, holy shit, when they get rid of this friction, it's gonna go. And of course TikTok got rid of that friction. But pa the fact that people were doing that, like I remember telling some artists, yo man, you got like a dollar sign and this version of the song, and then it's like no dollar sign. Like, and so people were having difficulty finding it. It's like, bro, you're ruining people's ability to stream your song. Like that was a thing. And then people started to rename their songs or added lyrics in the parentheses, right? Because of the culture. And that was happening and they wanted to make sure people could find the song right. Now we see less of that. It goes back to like the mediums and how things are influencing. Now we see less of that cuz you can figure out what it is within TikTok and people know how to name it. So that transferability from TikTok to other platforms has just been there for so long and people almost expected it. It's almost like TikTok is the megaphone, the amplifier. But then you don't even really expect to go super deep on TikTok, right? YouTube, you kind of do expect to go deep, but when we. Look at the platforms that TikTok converted to, and this is where I say the competitive advantage of YouTube goes. YouTube was one of the greatest conversions from TikTok that we would see. Like so many people left TikTok to go to Spotify and YouTube. Instagram was last particularly for artists. Right? So now, yes, being on YouTube already, Is a great competitive advantage. I think there's some fluidity issues that they need to solve. Like right now, from the phone, from your phone, I could take this video that we're creating right now and say, yeah, I want 10 seconds to 20 seconds, and take that into a short and it'll automatically be connected. But I can't make a cool edited short that's specific to the short format, and then say it's from this video. Right. And that'll make things even smoother because it's hard to take a snippet from the long form content just from timestamps and that would be a good piece of short form content. So people have to be able to edit and then connect it back for that to really come into place. And also they would have to make it a little bit more obvious that you can do that because the culture is not yet to go from long. I'm in short form to long form within YouTube. I know it happens, but people aren't naturally having that expectation. Oh shoot. This is probably from a larger video that's on this platform. What people are seeing more on YouTube is actually, mm, it's the opposite of what allowed TikTok to become what it became, and I don't know how it's gonna play out, so I'll tell you what I'm saying.

[00:31:23] Dan Runcie: What are your thoughts on Instagram reels? I think you talked a little bit about it, how it's a bit of a resume but where do they stand?

[00:31:31] Sean Taylor: I don't like reels, in terms of the value add yet, it's very inaccurate. So you'll get higher numbers, less engagement, where it's pretty clear it's not going out to the right people. The best people you know, they're, padding the numbers, so to speak. Right. It's cool that it got more reach, but if it wasn't accurate and I didn't get that much following, what does it really mean? That's where reels are at large. Now, can reels work and has it still helped some songs? Yes. It's just not it's not at the proportion that TikTok has been, and I think YouTube shorts are going. definitely, beat reels.

[00:32:11] Dan Runcie: Yeah. I think the clear desire from Instagram to try to turn your entire feed into a for you page is forcing this content to not necessarily hit the right people, which is why. Yes, it could be good from a viral discovery thing where, okay, if you have a post that's doing better than 80 or 90% of your other posts, then yeah, it may reach a larger than initially intended audience, but I don't know if it could be necessarily relied on in the same type of way.

[00:32:41] Sean Taylor: Yep. I agree with you there. We'll see if they figure it out maybe they should focus less on the Metaverse.

[00:32:52] Dan Runcie: Another thing that you had brought up a little bit earlier was about search in general and just how powerful that's become on TikTok. I think it's clear that they want to, well, I think TikTok is trying to do anything and everything. I know this is something for folks that follow Trapital been writing about this recently, all the things they're getting involved with. But I do think search is one of those interesting things because they are trying to take on a Google Head on, and people have seen how, especially Gen Z, they may be more likely to look up something through TikTok than looking it up through Google. What do you see as the potential of that moving forward, and do you think that would be a credible threat to Google at some point?

[00:33:32] Sean Taylor: yes. You know why tutorial culture, that's what TikTok cut into. And Instagram never did that. It was never really a place that you went to look up tutorials, right? So it's less about music and entertainment and that side of things. It's the fact that people are looking at recipes, right? How to fix things. And then once you have that, that's what creates the. For looking things up in the, at the seo, right? it's not that it can't be created in other ways, but that's like a hack. If I know I can go find this and, oh man, I can find it done in 60 seconds versus three minutes or 10 minutes because on YouTube the video's not as valuable and might not go as far if I don't do an intro and all this leads in, right? Oh, these videos won't go straight to it. So they have a lot of ground to make on YouTube. But I think they're going to succeed, I'm not into the speculation of which one's gonna be number one. There might be days where it beats YouTube or whatever, but it's going to be, a legitimate search engine. You know, Yahoo, Google at least.

[00:34:43] Dan Runcie: I do think that the tutorial piece is key, and I'm even thinking about times I've used it in the past. We bought a mattress recently, and of course you could Google search, what does this mattress like? But sometimes it's easier to just put it in TikTok and have someone show me some unboxing video to show me what that's like and compare a few. I liked it for that. I think more broadly in terms of all of the search pieces of it. I think that what Google has done in this space and even thinking about, you know, decades back about how they beat Legos and Alta Vistas, some of those others, I think it will be hard to ever replace that for everything that's possible, that people would wanna search. But I do think that the video tutorial piece of it, which is a subsection of it, but I do think that that's a unique place where they can, if you get core to the market there, you can figure things out. I also think that either misinformation or wasted just credibly have or understanding for users to know, okay, "What is legitimate?, What is not legitimate? Is a concern, and I think it's maybe harder to do in a way where I think text, you can have some of those clear things come up where I think the nature of a viral platform wants to show things that you know, may be sensationalized to some extent through video. That may take time, but I think that's one thing that will need to develop, especially on the TikTok side of things for sure.

[00:36:02] Sean Taylor: See what you're explaining is the different personalities of seo. Just like we talk about the different personalities of TikTok, Instagram and YouTube. So Google dominates damn near Monopoly. You couldn't just be a Yahoo or actually, truly become a threat, but what you could. Was be Amazon and eventually have so much shit on there that people just think, "Oh, if I want a table, I'm gonna go Amazon, look for a table, I'm not gonna go to Google", right? Or you could be a YouTube, right? And have so many videos. If I want a video tutorial, I'm just gonna go to YouTube, right? So you enter the search engine market from the side versus, you know, the [inaudible] so I think TikTok has successfully gotten there. and even that personality being short form is something that attributes to that and the personality that Google will probably hold on to,in the long term for sure is probably gonna be the more scholarly approach, right? The more credible approach because of those other platforms. that's almost in conflict with what makes things move and the way people use them, and incentives that are in place.

[00:37:15] Dan Runcie: Right. That makes sense. That makes sense. The other thing too, that it'd be good to get your thoughts on with TikTok is I think a lot of this conversation and a lot of how people have been measuring the success for TikTok is that conversion from TikTok and broader social engagement to streams, what are you seeing though from the next level down? From how looking at TikTok itself can eventually translate to concert ticket sales, or whether it's V I P clubs or other high end opportunities that fans are engaging it with an artist.

[00:37:50] Sean Taylor: It's there. We've already had artists do that. The difficulty is the geography of it all. So you can do that, but you aren't completely sure that the video is going to go viral enough within your own audience, right? Because still, especially like most of last year, you still can drop a TikTok and it's mostly gonna be seen by new people, especially for people earlier on, right? So if all of your followers aren't necessarily going to see your posts, it's gonna be new. then that creates this issue with going deep with your audience, right? It's great for going viral and gaining and blowing up fast. That's why it happened, right? That built TikTok in a sort of way to show it to more new people than people who are following you. But then at some point it becomes, well, what are my followers really worth? right on TikTok. And I think some people are starting to figure that out. Like, man, I don't know if this really matters all that much. It really only matters what the individual video itself does, right. So the problem with that, if I'm doing a show and I don't know if my followers will see it, or I have no idea if it's good, or enough of video because it's outside of my normal format to get enough people to see it in general. Then, man, that's not predictable enough. It could be my strategy, but it's not predictable enough. Now, the advertising might come into play, which is a different conversation, but there's that, and then again, also, who's gonna see it geographically in the world? We have no, you know, way of controlling that. Again, outside of ads so far. It's definitely something that's useful for selling things like merch, for creating awareness for your shows, but the best way we've seen it with shows for the most part, is almost to talk about your tour as a whole, right?. So you bring awareness that multiple are going to happen, and then if your artist is down for it and it kind of works within your format, you can also vlog in a way, or like let people know, oh yeah, I'm gonna be in Atlanta tonight. Right? So they see and get reminded that you are on tour, right? So it's trying to create this awareness of all the spaces and places that they will be going. And then also reminding them that you're in process of this to remind them, oh yeah, when he's gonna, when is he gonna beat in my city? That's kind of like the best middle ground we've found. But it's hard to be like, Hey, I'm gonna be in Atlanta next week and all my Atlanta people and expect all the Atlanta people to actually see that and convert.

[00:40:27] Dan Runcie: Right. it's a funnel at the end of the day, right? And TikTok sits at the top of it, even higher than some other social media platforms, right? And then from there, it's always going to be hardened, honestly foolish to an extent. If your main message on the top of the funnel awareness platform is, "Hey, Join my V I P club or join my Patreon or buy tickets to my concert, right?" You need to introduce people, let them know who you are, and maybe at that next level of engagement, then you can start to push more of those things. Then you can start to have more of these things come through, because there's just gonna be less friction there and you're doing the job that should be done at each level of the.

[00:41:08] Sean Taylor: I agree man. I think, like you said, at the end of the day, it always goes back to the fundamentals of it and there might be aberrations. Give us more for moments of time, but things are always gonna default back to that basic infrastructure and use the thing with the right expectations versus expecting everything from it.

[00:41:30] Dan Runcie: right. The other thing that I've thought a lot about for this conversation is, and even for reading the report and rolling into the show notes, so others can take a look at it as well, but thinking about how artists generate content and having artists push is what the wave is. At least at this particular moment. And I think there's a lot of reasons to think that yes, this is what makes sense now moving forward, but we also know how quick these things change and how things have evolved. Do you see another element, like I know eventually gaining steam eventually, I know that we talked about ads, we talked about influencer campaigns and just UTC and how a lot of these things were stronger and now relatively weaker to artists generated campaigns. Is there another thing that you think is going to play a role or that we may see another shift in this.

[00:42:21] Sean Taylor: The dark horse is TikTok lives. Everybody's actually. Investing more in a live culture in general when you look at YouTube, as well. but TikTok lives the way they use that for you. Page is ridiculous, man. On Instagram, you're gonna see the lives of people that you're following. Again, on TikTok, you can go live and people will discover, right? It'll pop up on the people's For You page, and that's a different paradigm, right? I've seen it live when my partner was live where all of a sudden, like thousands of people came in, right? Because TikTok was feeding him to so many people. and then he would see it also trickle off. Whereas like experimenting, they wanna find a live that's engaging in a way that content isn't, moves up the algorithmic letter, right? So they're, look, that's how they display lives. So the fact that you can blow up doing lives, it's a completely different paradigm because it's like having a show but the people who do it well, they're getting money in these lives. A lot of money. I've seen people make a lot of money in their lives, but it's also a great format to build a relationship far deeper than you can through individual content and lead people over to buy tickets. We've used lives to like getting emails and, I mean, I did one campaign even back in 2020. , that artist Fash we probably got 10,000 emails more so from him going live, not more so, only from him going live. Actually, he even use a little bit of IG live. So the fact that you can do that is going to create this other performance skill that artists will have.

[00:44:06] Sean Taylor: Almost like being a salesman, right? But doing it in a way where you give the presentation and the ask isn't so blatant. it's, we're going into this climate that's going to breed so many different types of artists like that have these, you know how you could be an artist that plays an instrument or you could be an artist that sings, maybe you could do multiple, where there's now these soft skills that we'll see artists, oh man, this dude is, he's just a salesman and he knows how to entertain people on live. And that's how he plays his game. This person still is just a pure musician, or this person creates a really dope content in the box of the regular feed. There's gonna be things like that. And the thing is, these other platforms are, you know, homogenous in many ways. They keep copying each other. So that culture that starts on TikTok, it's not just a TikTok thing. I always communicated it as a new language to learn because the new generation would be used to hearing and seeing things and consuming things in this format. So they'll wanna see it on other platforms. And inevitably, right, like we have an hour podcast, two hour podcasts, and people were like, Hey man, can you make this in 60 seconds? Like they expect to be able to learn something really valuable that's gonna change their. You know, in literally 60 seconds. I mean, we literally have had those conversations and seen those comments, but everything's not, you know, how you bake a cake? People like you can't rip at everything and change your artist's career in 60 seconds. But that's what we're seeing, like live is truly a dark horse, and I think it is gonna become more prevalent in TikTok and YouTube as well, to be honest.

[00:45:45] Dan Runcie: No, I can see that happening definitely just with the way things are going. But, last question before we let you go here though. So let's fast forward three years. 2026. Is TikTok still in the dominant position that it is right now? And if it isn't, is it because of geopolitical concerns or is it because of another competitor that now has the next big thing?

[00:46:10] Sean Taylor: If it isn't geopolitical, I think it's gonna be pretty dominant from what I've seen. in terms of their vertical integration and investment, particularly in music. It's just nothing like any other platform like you've seen, I mean Sound On, right. Rezo. Right. It's just different in what they're trying to do. They have deals that they've offered artists. Right. Which is really nice. Right. And unique because, oh, you're on, sound on and you. You have a song that blows up using their distribution platform. They have all the data. So now we can offer you a deal and you don't have to pay it back cuz it's gonna be paid back through the royalties. We're probably using the algorithm to calculate how much we should give you anyway. Right? This is already happening. Right. So the way they invest in it, I think it's just gonna be hard to get a pool away from it in three years. again, it's going to. More of a norm, less hot in its way, but I think they're gonna be pretty dominant in three, three years down the road. Yeah. I'll, I'll leave that at that.

[00:47:10] Dan Runcie: Yeah, I'm with you on that. I think three years, because even though I do think that TikTok has been the fastest to grow to a billion users, at least what we've seen from a social app, I do think that the next app will probably be even shorter just thinking about how much faster adoption is, but. It still took TikTok several years to get to this point, so I think maybe five, six years would be a different conversation. But no, I agree with you. Three years. If it ends up being shut down, it'll be for some geopolitical concerns, but we'll see between now and then. We'll have to check in again at some point if any of that ends up going in that direction. But Sean, it's been a pleasure man. Thank you for coming on and for people that wanna learn more about your insights on TikTok and the stuff you're doing at Contraband Agency, where should we reach out?

[00:47:56] Sean Taylor: Brandman Network on YouTube is a nice place to start. You know, you watch the podcast or you just go to no labels necessary on, Spotify, but no labels necessary is our podcast. So type in no labels necessary on YouTube or, or Spotify. At the moment, I think the podcast is probably the best place to go. But if you're immediately interested in services and want to speak with our team, that would be contraband.agency. There's no.com, www.contrabrand.agency

[00:48:28] Dan Runcie: Good stuff. All right. Thanks again, Sean. Appreciate you.

[00:48:31] Sean Taylor: Always good speaking with you man.

[00:48:33] Dan Runcie Outro: If you enjoyed this podcast, go ahead and share it with a friend. Copy the link, text it to a friend, post it in your group chat. Post it in your Slack groups. Wherever you and your people talk, spread the word. That's how Trapital continues to grow and continues to reach the right people. And while you're at it, if you use Apple Podcast, go ahead. Rate the podcast, give it a high rating, and leave a review. Tell people why you like the podcast. That helps more people. Discover the show. Thank you in advance. Talk to you next week.

Everybody’s got something to say about Cash Money Records and the brothers who co-founded the label —Bryan “Birdman” Williams and Ronald “Slim” Williams. To paint the full Cash Money full picture, good and bad, I brought on Zack O’Malley Greenberg who has interviewed the brothers at-length while working at Forbes.

Cash Money has one of the deepest catalogs in the game with several classics. And unlike some other upstart hip-hop labels, Birdman and Slim maintained control as they rose up. Their 1998 distribution deal with Universal is hip-hop’s Louisiana Purchase.

But we can’t ignore Cash Money’s lows either. There is a long, long list of artists who claim they were not compensated fairly by Birdman and Slim.

Zack and I go through 30 years of Cash Money as a business, its competitive advantage, and what comes next now that Drake and Wayne are gone from the label. 

[1:44] Is Cash Money the greatest hip-hop record label of all time?

[7:34] What people sleep on about Cash Money

[11:01] Cash Money’s history of not paying artists 

[16:52] Did Cash Money succeed because of Birdman and Slim or despite them? 

[19:29] Biggest signing? 

[20:29] The 1998 Universal-Cash Money deal 

[25:31] Lil’ Wayne’s mixtape run

[29:03] The benefit of partnering with Republic Records

[31:49] Bidding wars for Lil Wayne, Drake, and Nicki Minaj

[33:21] Connection with New Jack City 

[40:56] Cash Money catalog valuation ?

[43:00] Lil Wayne’s beef with Birdman 

[45:48] Can Cash Money strike platinum again? 

[50:44] Birdman’s love for music 

[56:08] Hopes for a Cash Money reunion tour and biopic 

[58:24] Who “won” the most in Cash Money’s history?

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Zack O’Malley Greenburg, @zogblog

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Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.

Transcription

[00:00:00] Zack: You know, some of the subsequent deals that they worked out with Universal, you know, maybe some of the deals where they were able to get universal to, to tackle some of the back office stuff. I mean, it's very unsexy, but you know, that's clearly an area where they needed to improve. So, let's say,to give some cash in terms of like higher distribution fee in order to have Universal, you know, cover some of this stuff. It's kinda like a boring, dark horse candidate, but you know, I mean, you could say that, that's probably useful in terms of buttoning things up.

[00:00:37] Dan Intro: Hey, welcome to the Trapital Podcast. I'm your host and the founder of Trapital, Dan Runcie. This podcast is your place to gain insights from the executives in music, media, entertainment, and more who are taking hip hop culture to the next level.

[00:00:57] Dan: All right. Today's episode is all about the one, the only cash money records. I got the one and only Zack Greenberg here who has reported on this company many times before we ran to this company and the business moves they did in our Top 10 Revolutionary list last year. So Zack, welcome back. I'm excited for this one.

[00:01:18] Zack: Always good to be here with you, Dan. 

[00:01:19] Dan: Yeah. So for the folks listening, we are gonna do this in a few ways. We got a bunch of categories here that we're gonna run through, just evaluating Cash Money as a business, some of the highs, some of the lows, and just where they stand overall. But I think it'll be great to kick it off with the question that we often hear from folks is Cash Money, the greatest hip hop record label of all time? What's your point? What's your take?

[00:01:44] Zack: How, man, you know, I mean, I think it's sort of like, any of these greatest ever are you talking about, overall body of work or sort of like, you know, The label at its peak. But you know, I think you gotta take it in an overall body of work, you know, type of thing. You know, it's hard to top Def Jam, I think, you know, if you were gonna go with an overall body of work, hip hop, legacy. But, you know, I don't know other than that, I mean, it's hard to say that there's anybody who you'd put above cash money, I'd say. Especially something that is, you know, really artist founded in that same way. I mean, you could talk about Bad Boy, you could talk about Rockefeller. But I think that, you know, Cash Money has staying power. You know, through Drake and Nikki and Lil Wayne and so forth, you know, in a way that, you know, I would argue that a lot of these other labels haven't, and, you know, who else can say that they've had Drake for that long? And I guess he's not there anymore. But man, that was pretty recent development and it's been a pretty great run. So, you know, to go all the way from the early nineties, you know, through basically now being relevant, stacking up all that catalog, you know, it's certainly, if not number one, it's, you know, gotta be top three, if not top two.

[00:03:00] Dan: Yeah. So my answer is Def Jam as well, and we'll get to Def Jam in a minute. But, the case for Cash Money is this, and I know a few people have said it. Irv Gotti recently said it. Russell Simmons himself said that Cash Money was the greatest hip hop company that has come through. But the case for cash money, you mentioned it earlier, the fact that they did it while owning the core asset and the music and still doing that moving forward says a lot. Not something that can be said about Def Jam, many of the others that would be even in the conversation. I think even with a newer label at Quality Control, they've still done it while owning it. Well, at least up to this point from some rumors that are happening. But I think that's one case for Def Jam. But then I think of the continued run of success from everything that happened in the nineties from I guess we could start with like juvenile drop in HA in 98 and then pretty much everything from Drake's last Cash Money album, which I believe was Scorpion. So if you're looking just at like that run from everything there, that is such a strong hit rate. And I think that's the thing too that I would give them over Def Jam is the hit rate of who were the artists we signed and what was their likelihood of success and they were just able to do it. Even with the imprints, I mean, I think major record labels. So wrong with so many imprints. I just never worked out and for them to have, whether it's Young Money or even the smaller moments with the best music or with Rich Gain, there was always something there. And even though there was some conflict, and we'll get to that, I think that's the Cash Money case. The Def Jam case though, I think this is where I think of course Def Jam did end up becoming a major record label, so it's a little bit nuanced there, but I do think you have that eighties run Beasties LL Public Enemy. You got the nineties run with all those artists too. Especially looking at what Red Band met the man DMX. I feel like they had New York on Locke and then two thousands, the Rockefeller partner. Murder Inc. The video games, I mean, it's, I know the last decade hasn't been there, but it would be tough to not put Def Jam up top, but I understand if some people would consider Def Jam a major as opposed to, you know, an independent. So, I get the nuance there. 

[00:05:10] Zack: right, right. And, and being, you know, fully owned by a major as opposed to Cash Money, which really has distribution agreement. You know, and you could look at, you know, I guess Def Jam was sold in chunks, but the total amount that sold for, you'd have to adjust for inflation and stuff. But I wonder how that would stack up against the current value of cash money today, which, you know, it's incredibly driven by the copyrights that they still control and, you know, definitely hundreds of millions of dollars. You know, if you look at, Lil Wayne kind of quietly sold his The Young Money, Cash Money Partnership for a hundred million bucks a couple years ago, that was before the catalog boom, got really crazy and then kind of died down again. So, you know that that's valuing what Birdman and Slim Own, you know, just on the Young Money, Cash Money side of the business, you know, at nine figures. So there's, you know, there's a lot more to the company than that, although that's, you know, that's kind of the gold line. But still, you gotta think that, you know, this is still, you know, sent a million dollar business and, you know, I'd be curious to see what a proper valuation, you know, what it would look like against the total value that Def Jam got, you know, in terms of dollars over the years. But, you know, when you think about who was hottest and what record label was hottest at any particular point, Yeah, I think probably the peak was there was that year that Def Jam was, you know, getting sold or the second half of it was getting sold. And, Lyor basically said to Jay and D M X, like, let's have two albums this year. And, you know, because the valuation is gonna be based on revenues, not earnings. And like, the more you can sell, the more we get. And so, you know, that moment at D M X at his peak, and you know, Jay, I think, I'd say at least at his commercial, you know, record Sales Peak, you know, as an individual artist, you know, that was about as hot as, as it could ever get for, for any record label, I think. 

[00:07:08] Dan: That's a good point. So I guess if we were to compare Def Jams 98 and 99, like that run to Yeah. Cash Money, and I know there's a few runs you could put in there, but from an overall commercial perspective, it would have to be 0 8, 0 9 20 10, I would probably assume, because you get. Carter three, and then you get, you know, Drake's debut, Nikki's debut. I feel like it would probably be somewhere in there. 

[00:07:34] Zack: Yeah, that's probably pretty close. I mean, that was a lot, you know, that was a lot of concentration within a couple year period as well. You know, and I think the other thing about Cash Money, that maybe people sleep on to some extent is, you know, just like the efficiency of the label, especially in the early days. And, you know, of course we can get into some of the issues with paying producers and so forth, but, you know, they really had a system and you know, it was going and finding artists that were bubbling up, you know, first in the New Orleans area. I mean, this is in the nineties, and, you know, and then kind of just plugging them into the machine. Right. You know, put them with stable producers in-house, get Manny Fresh on there and, you know, it was not like a, you know, high expense kinda situation. Like maybe you would've seen with Def Jam or, you know, some of the New York, LA labels, it was just like, you know, you know, probably low, low cost, high output. You know, like there's a high margin business, low overhead, you know, it's lean and mean. So I think from, in that regard, Cash Money, you know, it might have been, it might have been the best business, you know, out of any record label. Right. In terms of sort of like efficiency and profitability and stuff like that.

[00:08:47] Dan: That's a great point because if you look at that vibe, I think that was the vibe for the South overall. We saw that with no Limit as well, just with in-house production sheep, that production does almost everything and the music videos aren't flashy and the fact that I think they stuck with what they do and what they work with well, and eventually I think collaborations came, but that was something that they were hesitant about as well. Just thinking about juvenile dropping 400 degrees, and I'm going back to that just because that's the first album that comes after that 1998 Universal deal, which we'll talk about soon, but, that album, I'm pretty sure the entire production value for those music videos probably costs less than one of the suits that Puffy and Mace wore in the music videos. or, yeah, Jay-Z's Sunshine Music video, which I know has been talked about for years on end, but that's what the vibe was. There were no Hype Williams music videos coming through Cash Money. Right. At least at that point. I know they came later when Wayne blew up further, but that's what they did. They stuck to what they did and it worked. It worked so well. 

[00:09:55] Zack: Warren Buffet would love Cash Money. 

[00:09:59] Dan: Oh yeah. He loves little cost.

[00:09:59] Zack: Cash Value. Value, cash value investor. Right. Early cash money would be the Warren Buffet play.

[00:10:06] Dan: Yeah, absolutely. Definitely. And the thing is too, you talked about it earlier, just some of this things leading up to the big deal that they had, but even back in those early days, even before the Universal deal, Birdman and Slim, the co-founders of Cash Money Records had a history of legal issues with artists and not paying artists on time. And I actually have a list here, and it's probably an incomplete list, but artists that have had some type of dispute or issue with Cash Money records when it comes to payments. So I have Lil Wayne, Pharrell, Clipse, David Banner, Bangladesh, the producer, at least five or six artists before 1998, Wendy Day, who's not an artist, but one of the attorneys and people that helped make this deal happen. Behi Turk and Shal and Jazz Prince, of course himself. Tiger, Manny Fresh, and I'm sure I'm missing people from that list. 

[00:11:01] Zack: Yeah, absolutely. I mean, it's a long and storied list of people to have disputes with and, you know, it really is something that goes, you know, hand in hand with success.You can't ignore that history. So, you know, I think it is important to remember some of the context. You know, these guys were coming out of a completely different world. You know, and they were hustlers. They were legit hustlers in New Orleans. And, you know, in doing some reporting, you know, I verified it. I mean, you know, they were the real deal. They moved things over. They went legit. They became record moguls and Bird Man's Case became a rapper himself. And, you know, they were not people who had dealt with, you know, sets of books, right? There was not really necessarily like bookkeeping apparatus in their form of business. So, you know, I think there was an adjustment period that, you know, let's say perhaps went on for too long in terms of, you know, getting things papered up and straightened out. But, you know, I wrote a big story on them in 2019 for Forbes, where I went down to Miami and spent some time with Birdman and Slim. I talked to their lawyers a lot. I talked to Wendy Day. Spend some time in the studio with them and you know, I mean, everybody of course has, if you ask people in the Cash Money camp, they're gonna have their side of the story. If you ask whoever they're having the dispute with, you know, they're gonna have their side of the story too. And you know, obviously when there's smoke, there's fire, there's a hell of a lot of smoke when it comes to not getting paid on time. But… 

[00:12:29] Dan: What would you say is the Cash Money side of the story, though? The Cash Money is this it?

[00:12:33] Zack: They, you know, started out as people who had not had formal training in business, doing business with a lot of other people who had not had formal training in business, who were represented by people who had not had formal training in business. And so when you go back to some of these early documents, it was not properly papered over on either side. And so there's a lot of question over, you know, who owns what, you know, I don't know that anybody who was involved in some of those early deals really, you know, had a full grasp of sort of, you know, music copyright and publishing and, and master recordings and all that. I mean, you know, it's not like an intuitive business, you know, it's like, wait, what? There's two writes to every song. They've like, there's a publishing and a recorded music. It's separate. How does that work? So I think a lot of that was, you know, kind of like if you go back the nineties and early nineties, especially when they're getting started, you know, before the Universal deal there was just really like, you know, I would imagine a lot of handshake deals, a lot of just, you know, kind of like, let's see how, how it goes sort of stuff. A lot of, you know, here we're gonna give you a bag of cash and you do you give us this beat or you give us a verse or whatever. So, you know, it makes sense to me that it might not be papered up properly. But, you know, the fact that that's continued, you know, so far into the future, you know, that's another story. So, you know, what they did say was that, you know, after, and we can talk more about this Universal deal, but after the Universal deal started and then, you know, as it continued to evolve, you know, to where Universal got an even bigger cut of, you know, distribution fee or like an even bigger distribution fee than it had signed up for in the beginning. Universal took on more and more of sort of the back office function. And so, you know, some of the more recent stuff is, you know, a little bit more papered up properly. So that's the Cash Money side. But, you know, it's funny, I mean, when I did this story and I reached out to all these folks, you know, what I got was like a no comment, which says to me that, you know, things have been settled up and they kind of don't want to get into it anymore. Right. Or maybe there was an NDA involved. But yeah, a lot, a lot of smoke. A lot of smoke in that area, for sure. 

[00:14:42] Dan: Yeah, the NDAs are key. I remember there was one of the people that I had mentioned earlier that I was going to have on the podcast of Trapital, the interview timing didn't work out, but that was one of the first things they said. If you have any questions for us about Birdman and his relationship with this artist or anything like that. No, we're not answering it. And I was just like, all right, noted. Like, and I feel like that's kind of RANE with a lot of this, but I think they and Birdman and Slim specifically in an odd way. It wasn't even just to them alone. I feel like there was this ethos of, you could almost put Suge Knight into this same category as well, but these people that were cut throat with business folks that they were doing major deals with, whether it was Suge Knight with the folks at Interscope or Birdman with Universal, I'm like, Hey, I'm gonna take what's mine. And rightfully so. They kept ownership over what worked for them and they did that, but they kept that same energy with a lot of the people that like worked with them on the other side too. And that's the piece of it that while it was frustrating to see there are actually some other sides of this too, because even the fact that I think we can get into it in a little bit, but just some of the artists, they were able to sign how they went about that. As frustrating as it was about them not paying artists, like there not every aspect of the business was and is predatory. So that's one thing that you know started to come up more and more as once you get past the salacious parts of the details and stuff, you're like, okay, no and no different than why you went down there to report them. Right. There is nuance and there are a number of things to dive into. For sure, for sure. So shifting here, one of the other things that I've thought about, we talked a little bit about what set Cash Money apart. We talked a bunch about the backstory and the bad rep, but the next thing up here is about Cash Money itself and whether or not you think that it succeeded cause of Birdman and Slim or it succeeded despite them. So thinking about this hypothetical world, if it even is possible, other folks that would've had this label in their hands and what things would've looked like, what's your take there? If we're really isolating them as business leaders.

[00:16:52] Zack: I absolutely think it succeeded because of them. I mean, did they get in their own way some of the time? Absolutely. But I think, you know, anybody who can run a business that goes from like the early nineties in an informal economy, you know, in like the Louisiana area to being this global thing, to this day that is still, you know, very much at the forefront of an industry. I mean, you know, like they gotta be doing something right. You know, 30 plus years on the staying relevant and, you know, from like the early days Hot Boys to like the late nineties and, you know, remember Big Timers and Oh yeah. Still flying, all that, you know, heyday as we were alluding to, and sort of like the late s apparently, you know, 2010s, you know, of Cash Money, Young Money with Nikki and Drake and Wayne. Even coming through to, you know, to you to say Scorp. I mean, that's a really long run of relevance and you know, have that, I mean, yeah, like I said, they gotta be doing something 

[00:17:53] Dan: Right. Yeah. I think it's because of them too. I will. Because as much as there are issues, and we've talked about a lot of them here, There's so much of this that would've succeeded with folks, other folks in charge, because there are a lot of record labels from the South that tried to do what Cash Money did as well. And a lot of them came and then most of them went. And the fact that we're having this conversation and not having it about them is part of it. And a lot of those record labels had talented people as well, but things just didn't carry over. They may have taken, you know, a bigger deal to get more money upfront, but then the hypothetical is, let's say it was in the hands of someone else that wouldn't have been able to push it forward, then it becomes part of the Island Def Jam conglomerate and then just kind of gets mixed and mixed. And then it becomes one of the many labels that you hear about where it's like, oh yeah, whatever happened to this one or that one. And I think it took what could have been easily, because there would've been enough meat on the bone if we just talked about Cash Money from the early nineties up until, let's say the mid two thousands. Right. And I think that's, inflection point that we can talk about in a little bit. Even that itself was a great run itself. And then you look at the second half of the career from like the mid two thousands on, that's a whole other historic record label. They have two of those under the same house. I think it's because of them and as much as it can be frustrating to hear and see and, you know, unlikely there's some critical things. But let's jump into that now though, because I think one of the questions we have here is the biggest signing that this record label has had. What do you think is the biggest signing for Cash Money?

[00:19:29] Zack: Oh man. You know, I think probably easy answer is Drake, but you know, I would actually say Lil Wayne because if you don't have Wayne, I don't think the Drake thing happens, you know, and really Lil Wayne from such a young age going all the way back to the hot boys and, and you know, coming through. All those Carter albums, you know, like he's the backbone of this whole operation, you know, musically, sonically. And I think without him you don't get everything else that comes along. What do you think?

[00:19:58] Dan: Yeah, it's Wayne too. That's who I have. I know that Drake is the highest commercial artist. If you were to look at all of the numbers and I think without him, the past decade would've looked very different. But we would still be having this conversation in some form. Likely if it wasn't for the past decade of Drake, it may be a bit more truncated. But we may not be having this conversation at all if it wasn't for Wayne. So I think it has to be Wayne there. What do you think is the best business move for Cash Money?

[00:20:29] Zack: You know, I'm gonna go back to that first deal that they struck with Universal. I was in the early nineties at Wendy Day, who he mentioned earlier. It was sort of like a go be who helped, you know, really get them, you know, kind of set up properly with this deal. But you know, they negotiated it and they wouldn't take anything less than something that they felt was an incredible deal. And, I remember the story that Slim told me as they went in, they sat down some mid-level executive at Universal and low-balled them to straight up buy half the company. And so he and Birdman just got up to leave. Then Doug Morris walks in and he was the head of Universal at the time. Comes in with another colleague, Mel Lo winter and Slim members, you know, Doug saying, Hey, if I were you, I wouldn't sell my company. He comes in and offers him 30 million advance just for the privilege of doing business. And, what does Universal get a 7% distribution fee, which is not a lot. So kind of almost doesn't make sense from Universal's perspective unless you think about it in terms of market share. Market share is so important when you're the biggest record label because there are all these great things that happen when you have the most market share. There are all kinds of rights that are assigned based on market share. Like anytime there's, you know, a mislabeled song that gets played or gets spun,and this happens a lot, the metadata in music is a disaster. So if, you know, there are these huge pops of sort of like unresolved money and you know, what they eventually do is they get resolved down by market sharing. So if you're Universal, you know, you get the land share of that and there's a lot of other things, a lot of other places where calculations are done based on market share. You can also brag and say that you're the biggest stuff like that. So, you know, certainly it was worth it for Universal to come in and especially, you know, you think about at the time, You know, hip hop was still at a nascent stage and particularly hip hop in the South was like, not even really on the map for Universal to be able to come in and have this connection was really great for them. But, yeah, I mean, what a great deal. 30 million bucks. You don't have to give up anything. You just give, you know, just give a distribution fee and frankly, you would want your stuff to be distributed by this, you know, enormous record label anyway, so that you could expand and get bigger and better. So I think hands down, that's it. You know, that didn't stop, that there were rumors, you know, that they were even bootlegging their own music, like out the back or wherever, so that they didn't have to pay the 7%. But I, you know, I don't know. I mean, that's that talk about, you know, efficient business. But, you know, I think you go back to that deal that kind of laid the groundwork. Cause if they had given up half of their company way back then, I mean, you see what happened, Jay-Z he up, you know, a huge chunk of Rockefeller early on and. And I think was never really that incentivized, you know, to make that his main thing anymore because, you know, he'd given up such a big chunk early on.

[00:23:29] Dan: Yeah, it's one of the best deals we've seen in music and one of the best deals we've seen in hip hop over the past 30 years without question. And the fact that they were able to get everything you mentioned, plus 2 million advance for three years. They kept ownership of the Masters too. And that's the thing that, as we talked about, Birdman and Slim are still collecting on that year after year. So it's up there. It's incredible. And I know that there were other labels that tried to do the same, but just couldn't. I think part of the reason is that this goes back to them focusing odd, what works for them. They had a unique sound. Universal saw this as their entryway to the south in an authentic way because back then, you know, the south was still vying for dominance. And I know that, you know, things were happening at LaFace, but this was different. The New Orleans sound was different from what was happening in Atlanta at the moment. And this gave you an entry path into that. So it was big time. 

[00:24:27] Zack: Yeah, yeah, yeah. And, I think, you know, also 30 million back then, I mean, probably more like 50, 60 million when you talk about inflation. But you know, I would, to our earlier point, you know, did Cash Money succeed? You know, or despite Slim and Birdman, you know, that's situation where, you know, obviously I wasn't there and there wasn't a video of it, but, you know, when you sit down with Slim and Birdman, like you can get the sense that it would be tough to negotiate with that.You know? I mean, Slim's sitting there, he's like 10 feet tall. He doesn't really talk very much, you know, and Birdman, he can get pretty loquacious, but like, uh, he, you know, when he wants to, you know, be kind of stone based, you know, I mean, he can, he can have a great poker face. So I think, you know, if you're some executive, you're going in and you're trying to get them to sell, and they have really no incentive to sell, and they're sitting. Just like, Nope, we're good. You know? I think that that leads you to offer them some crazy deal, like the one that Universal offered and so I really would chocolate up to some very good negotiating, on their part as well. 

[00:25:31] Dan: Yeah. You need to be able to negotiate to pull off hip hop's Louisiana purchase. Got to at least one half. Absolutely. At least one half of it. Yeah. So, yeah. The other thing that I did have was a dark horse move and a move that doesn't get talked about as much, and as much as that move does get focused on the one dark horse that I did have is the, well, I guess too, but let me focus on this one. I would say that the mixtape strategy that they had with Lil Wayne in the mid to late two thousands, even though cash money had ownership of the music, even though this, I think that worked so well. One of the questions that we have is just how well did this company record label transition from different stages of music, whether it was from the CD era, ringtones or ringtones, to streaming it, Cash Money knocked it out of the park. With each of their albums sold, especially when they did this deal at the height of the CD era, when the music industry was struggling in the mid two thousands and they were trying to get people to buy CDs. They were just like, Hey, let's give away the music for free. And Wayne was rapping over other beats. He was in his bag more than anyone, and from dedications to Drought, all of those, just so many classics in there that I think real Hip Hop fans and folks that were following Wayne were following even more so than the next album. So all of that speaks. Lil Wayne being able to sell over a million albums in the first week when the Carter three drops in 2008, which is still a very tough time for CD sales to even happen. So that whole run and just the thought to do that. And granted, I think some of this may have been a bit more on Lil Wayne's push himself, especially because at that point he had his own young money imprint. But all of this is happening and you know, Birdman and Slim had a problem with it. They could have said no. But I think the fact that they leaned into the change that was happening, you already saw what 50 Cent did with his mixtapes in the mid two thousands. You get drama, you get the other folks in the south to be able to help make this happen. And I think it worked out well for them.

[00:27:34] Zack: Yeah, absolutely. That's a really good point too. So, you know, I mean, I guess when you have a label that has been that successful, that long, Yeah, there should be a couple different options for what the best move was. Yeah, I like that as a sleeper pick. 

[00:27:47] Dan: Yeah. And Lollipop is the best selling ringtone of all time too. over 5 million ringtones sold, and I mean, ringtones, were selling for like three bucks each to that point. So I mean 15 million just from folks wanting to, you know, have, you know, that little jingle on there, Motorola razors or whatever the hell people were using at that point. But, what was your dark horse? Oh 

[00:28:10] Zack: Oh man, that's a really good question. I don't know. I mean, I guess it was just so clearly the Universal deal to me. But, you know, and Drake wouldn't really be considered a dark horse candidate, I guess you could say. As time went on, you know, some of the subsequent deals that they worked out with Universal, you know, maybe some of the deals where they were able to get Universal to tackle some of the back office stuff. I mean, it's very unsexy, but you know, that's clearly an area where they needed to improve. So, let's say,to give us some cash in terms of like higher distribution fee in order to have Universal, you know, cover some of this stuff. It's kinda like a boring, dark horse candidate. But you know, I mean, you could say that that's probably useful in terms of buttoning things up and you know, there was a lot of smoke, like we said, but you know, nothing ever, like the house never burned down. So, you know, maybe, maybe those kinds of arrangements really kind of help prevent something like that from happening.

[00:29:03] Dan: And I think that back office piece also just makes me think about the broader partnership and the expertise that they were able to lean on. And a question that I actually didn't explore, but now I'm thinking more about it, is how different do we think that the Universal partnership would've been, let's say Cash Money had partnered with another label under the Universal umbrella? Because obviously part of this is very close. There was Universal Republic at the time and they've been hand in hand working with Monte and Avery Lipman ever since, and they are two of the most highly regarded executives in the game that have now being, year after year after year, the label with the number one market share. And part of that is because of Cash Money itself, but it's also because of all the other stars, even outside of that label, they have been able to bring it to, as opposed to many of the other labels in the Universal Umbrella or the umbrella of Universal Music group labels that have not had that consistency. So I also think there's a dynamic there where, let's say there's another world where cash money was under capital or cash money was under some of these other labels that have struggled to stay relevant, what that would've looked like.

[00:30:10] Zack: Yeah. I mean, I think if you, if you kind of need to go back to Def Jam, you know, some of the back and forth that Def Jam has had over the years. It gives you an idea of, or even as like a top label, the kind of trials and tribulations you might go under. But you know, when you're coming in, you know, going directly to Doug Morris, you know that that gives you a lot of leeway, a lot of leverage. You got that line straight to the top. And, you know, even with somebody like Jay, it took him, it wasn't until, you know, I don't know, when he was dealing directly with Doug Morris, when Doug, this is, I think around the time of Blueprint three, and Jay had that line. I gave Doug a grip. I lost the flip for five stacks. He could have the album. They bet 10 million on a coin flip and like, you know, one way or the other. So, you know, but Birdman we're doing that like, you know, 15 years earlier, having that kind of direct line. So, you know, again, I think going straight to serve them incredibly well.

[00:31:09] Dan: Definitely. Yeah. Another, another piece too. So, two other, like sonically three other dark horse candidates, I'll bring 'em, but they're all under the same thing, was Bird Man's ability to win bid wars and win huge bidding wars, I think is an underrated piece of this record label. So I'll bring up three of them. First one, go back to 2004. So this is around the time thatCarter came out and Wayne was considering to leave Def Jam, and this was around the time that Jay-Z had just became president and Jay-Z pushed hard, make that happen and couldn't leave cash money for Def Jam. That was the thought, right?

[00:31:43] Zack: Yeah. Yeah. Carter boys, and there were all these, you know, kind of …

[00:31:49] Dan: Yeah, they're trying to push the whole Carter board thing and yeah, Birdman was like, all right, come through. I'll give you your own imprint and you are the president of that imprint and let's continue this thing. And that obviously sets up young money and then the next 15 years after that, right. So he does that. Yeah. And I think that's huge because then that sets the stage for the bidding war for Drake, because Drake drops so far gone beginning of 2009. And this is like, you know, everyone is trying to, it's like when Yaba sweepstakes we're seeing in the NBA right now everyone wants this person and everyone is going after them. I mean, truly Greenwall Lior, everyone was trying to get 'em. And it was that connection that Drake had with Cortez, Brian and Jay Prince Ja Prince and that whole crew that I think eventually helped keep him on the cash money roster there. So that was a huge one. And I think we saw something similar with Nicki Minaj as well. A couple months later. Everyone wanted her to beat me up. Scotty the mixtapes were hot and he and Wayne, Wayne was like, no, I want her to be the, the first lady of the label. That was the whole thing in the two thousands, right? Everyone wanted to have the first lady. You saw it in the nineties, right? But like everyone wanted to declare and elevate this person and rightfully so, but like that's who we had. And then we obviously saw the beginning and the middle part of that next decade. Just go on one of the all-time runs. So Bird Band's ability to win against the biggest people in the industry for record label that his men, you know, his brother own is really impressive for sure.

[00:33:21] Zack: And you know, it served Lil Wayne well in the end because Young Money became something that he was able to sell for, you know, about a hundred million dollars for his stake later on too. So, you know, keeping that ownership as opposed to just chasing the biggest advance time and time again we see in hip hop. You know, it's so important. But, you know, I was thinking the other night, it is funny, like everyone has watched New Jack City, and it had been ages, ages, ages. And if they reminded me, I mean, how much of the whole Young Money, Cash Money situation is modeled after elements of that movie. I mean, even just like, The name Cash Money or C M B Y M C M B. The shirts, like the shirts, are incredibly similar that, you know, a lot of the lines, even the Carter, you know, the albums are named. I mean, the Carter was the building, you know, where Wesley Stein's character was like running this whole operation you know, that's kind of like another interesting element to the whole, you know, to the whole narrative. Like, you know, these guys coming out of Louisiana, you know, had their eyes up on this very New York kind of, you know, almost role model, for a business. And, you know, they had been hustlers. They were kind of modeling themselves after these, you know, fictional hustlers in New York and, you know, and then in a way out hustled sort of like the New York record label establishment. So I thought that was kind of an interesting, you know, little side bit of color to the whole story. And, like a bit of irony as well, you know, when you talk about, South versus, New York kind of situation too. 

[00:34:59] Dan: And I think that also speaks to some of that mentality too, because here you have Birdman that was getting inspiration from a black crime movie. And I think a lot of the ways of him doing business are very much central on, okay, I wanna support and uplift the black community, do what I can here and grid. And I think, you know, part of how he was able to do that has, you know, been quite controversial just with certain artists he's had on. Yeah. But still, I think that ethos stems back from ownership in trying to keep things in-house as much as you can. And it took them a lot to even partner with other artists from other parts of the countries and stuff like that, that I think you saw with Dino Brown and how he was in that movie and how he carried versus I think someone like Jay-Z who record label Rockefeller named after one of the great white business magnets that you had in this country. Right. And so many Jay-Z bars, whether it's Black Axl, Rose Black, Kirk Cobain called me this. I feel like, you know, people always get on Kanye for some of that. Like always trying to like be okay. I'm, you know, the black version of whatever X person. But I think Jay-Z, you know, also had a lot of that too. And then I think also looking at his business mentality, a lot of his success came from his huge and lucrative partnerships with established companies in this space. So the inspiration I think also became kind of telltale sign for the type of businesses these types of folks ended up creating too. 

[00:36:23] Zack: Yeah. And you know, I mean, you know, brown was a really ruthless character. And you know, I think there's like the money and the success that's glamorized. But you know, it's a gritty movie. I mean it seems like he is not a likable guy in the end. You know, without giving too much of the plot, I'm sure everybody's seen it, but like, I was like, wow. Yeah. I don't know if I'd be wanting to model myself after this dude. You know, he's pretty brutal. But, you know, even on the, you know, kind of the lighter side, there's a scene where he's like giving out turkeys at Thanksgiving. Yep. And you know, the Cash Money guys always give out turkeys in New Orleans at Thanksgiving and I wonder if they got that directly from the movie. You know, cuz so many of you know, from the Carter. You know, the c n b kind of, kind of like whole, you know, ethos there. I wonder how much of that they just pulled directly from the movie, so…

[00:37:16] Dan: Oh, yeah. I could definitely see that mentality too. And speaking about it, you know, full circle. I could also see Birdman having a bit of that cancel that bitch mentality too, in short situations.

[00:37:28] Zack: Right, right, right, right. Exactly. So, yeah, I mean, and they won't talk about that part of it, the interviews maybe, but you kind of get the sense of like that's where the negotiation and the cash element of the Cash Money comes in. Yeah. 

[00:37:42] Dan: The aita literally held people over the balcony of a building to get what he wanted. Right. Yeah. Yeah. A lot of that came through to fruition. But next category up here. So missed opportunity. Is there anything that you look at that you're like, man, obviously it's an overall successful company. Is there anything you look back on about what if they did this differently or what if they did that differently?

[00:38:02] Zack: I think the number one thing I wonder is what if they had sold the whole thing, you know? A year and a half ago, could they have gotten just an insane multiple? I mean, you know, you're seeing like Springsteen staying and all these guys getting hundreds of millions of dollars for their catalogs. So, you know, I get it. And there's, you know, catalogs, hip hop catalogs are valued differently from rock catalogs. And also one of the benefits of rock catalogs is they're usually, you know, written and owned by, you know, all the rights are with the band. There's not like a million different producers coming in. It's not as complicated. So like, you know, they can sell the whole thing, you know, a hundred percent of the rights and you don't have to, you know, it's not like you're just buying like, you know, I don't know, 30% of this and 50% of that and whatever. It's, it's not this complex web, let's say there may not be as many things that haven't been papered over as there were with Cash Money, but man, you know, there were some pretty insane, numbers flying around and I really wonder if, you know, if they had, been applying some of, you know, 20 or 30 x multiple. To whatever they were pulling in, you know, which is, you know, they can just sit there and make, you know, tens of millions of dollars a year, just off of this catalog. I mean, so what would the market have been if they had went and sold the whole thing at the peak of the catalog? Boom. That's what I really wonder. 

[00:39:21] Dan: That's a good one. So I guess some high level back of the envelope math on that. So let's say that the peak of the catalog boom was like December, 2020 maybe, and then like, you know, into the spring of 2021 and we definitely saw some 30 x multiples there and at least the last public number I saw, and I think you had this in one of your latest articles as well, but that Cash Money's Masters generated around 30 million annually, or 20 to 30 million. Was that the number?

[00:39:49] Zack: Yeah, I think it was at least 30. And you know, cuz Bird, like most of hey Birdman, you know, has been making like close to 20 million a year, for a while, give or take. And you know, most of that is just, you know, the catalog. So yeah, I mean that's just his cut. And then if you figure you double that for Slim, yeah, probably, you know, it was around 30, 35, something like that, so, you know. Yeah. I mean, are they gonna get a 30 x value even at the peak? I don't think so because just hip hop wasn't getting that kind of valuation. I don't really understand that because everybody's like, oh, rock and roll music gonna stand the test of time. It's like if you ask the average 20 year old who Bruce Springsteen is, they're not gonna know. I mean, so I would argue that hip hop is actually gonna be more valuable down the line. But just the valuation, you know, that's not what people have been paying for. So even at the peak, you know, I, I don't know that I saw any valuations anywhere near 30. I think Kanye was shopping his catalog at one point and wanted a 30 x multiple, but, you know, didn't get any bites. So I think it comes down to like, yeah, what kind of multiple could they actually have gotten? 

[00:40:56] Dan: Yeah, because even more recently, so yeah, we're recording this now. January, 2023, there was a report that just came out about Dr. Dre selling a collection of music assets that I believe are worth different multiples. But the number that I heard from that was, They generate around 10 million per year and that he wanted 250 and he's getting just over 200 million or somewhere between that. So that's around a 20 x multiple for a deal. That sounds like it was still coming underway in 2022. So if you were to put that multiple on, let's call it 35 million for maybe what Birdman and Slim have collectively, then that is you're talking $700 million. So that's a pretty sizable number, not a billion. But maybe if there are some concerns about, maybe there's a bit more of a split of who owns what. We didn't even talk about publishing right now, but there may be a split too, especially if everything was captured. and even thinking about quality control, for instance, and I think they got around 400 million, 300, got 400 million, but this was last year. So I would assume that 500 to 750 sounds, if I heard a number there, I would be like, sounds about right. If I heard a number lower than that or higher than that, I would probably be surprised one way or the other. 

[00:42:15] Zack: Yeah. Yeah, I mean I think that makes sense. And it's not just one artist, you know, obviously it's a whole bunch of artists and a bunch of pieces of different artists. But I think another thing, and this is maybe one of the reasons why the hip-hop valuations are lower, is like when you have all those producers, it might not be as easy to get, you know, to get clearances for using stuff in commercials and that sort of thing. Whereas if you buy a hundred percent of the rights, there's no question. Right. And so I'm not even sure if somebody owned 1% of, of something, whatever. Like I don't think they would have some, like, veto right. About the song being played in a commercial. But, you know, when you start to have so many different parties owning bigger stakes, a particular song, it can get a little convoluted and, you know, I do wonder if that's a big part of it as well.

[00:43:00] Dan: Yeah, no, that's a good point. Yeah. Cuz I think sampling also is a huge piece of that as well. The missed opportunity for me, this is a bit more of a specific one from like a timeframe, not like a specific move, but Birdman and Little Wayne not settling and squashing the beef, the issues that they had in the mid 2010s. I think we lost out on Wayne. I know Wayne was in prison during part of this, but we lost out on his momentum. We lost out on a lot there because I feel like a lot happened from the Carter four coming out in 2011 to the Carter five coming out in 2018. I believe. There was so much back and forth. There was so much drama. You know, Drake was going on his all time run at that point. Nicki was doing the same. And the fact that the signature biggest artist is literally tweeting out, I want off this label, but it's not that easy. Or sending these messages out in the middle of Wayne and Drake having their tours and him still being on albums and trying to figure out how to drop things.

I think it was obviously a great decade in run, but I think it could have been even greater if they were able to solve some of that stuff and figure it out. 

[00:44:11] Zack: Yeah, a hundred percent, you know, that that was like, it's a long time to be going between, proper albums, you know, so, and I think that was a really interesting time in the music business. And, I mean, the music business changed completely right from, from 2011 to 2018 from being, you know, oh, this new streaming thing is gonna be important to like, you know, it is the entire business basically. So, you know, and I think that an artist like Wayne, you know, as somebody whose music translates really well to, you know, to that medium. And, you know, as we know, hip hop is a monster on streaming and, you know, tends to do really well. So I would've been really curious to see if he had been able to continue that momentum, you know, just how much bigger he could have gotten in that period of time too.

[00:44:57] Dan: Yeah, definitely. The next piece we add too, I think we talked a little bit about this just in terms of how did the label handle the transitions? And I think you just mentioned it there. They were able to do a lot of it well, especially the mixed day piece and the ring toes. And then I think a lot of it laid the work for streaming and Drake is streaming, did a lot of that, the Cash Money labels. So I think that worked. But this next question is interesting though, because it's been around three years, I think it's been at least three years since you did your deep story, the Forbes cover story on Cash Money, where you went down and interviewed them. And then I know it's been four years since I had written a piece around the time that Drake had completed Scorpion and we knew that it was going to be, or at least I thought the future may be bleak. And I think the question that you pose into the piece was, can they strike platinum again? It's been three years since now. What do you think? 

[00:45:48] Zack: You know, I don't know. I mean, the rules for platinum, like what constitutes platinum have changed so much that, you know, all it takes is, you get, you know, one hot signing and they do really well on streaming and suddenly you have a platinum whatever. And, you know, it's like, okay, I think that, you know, Drake is gone. Wayne is gone. When I went down there, they were really big on blue face and Jack Reese, you know, I don't know what either of them are turning out to be like, I mean anywhere near Drake, Nikki, Wayne, et cetera. Jack Reese is the king of R&B though, right? That was the whole thing too. So what I'm gonna go with, no, I don't think they will begin Drake Platinum. But I would caveat that by saying it doesn't matter because they can just sit back, and collect these checks. And that's gonna happen. That'll happen even if, you know Drake and Nikki and Wayne retire. I mean, their back catalog stuff is still gonna be a gold mine. And you know, when I was down there, what they said was that they're forever in business with Drake. But they wouldn't get more specific. And so what I took that to mean was, you know, at the time, you know, he was kind of an ex extra kidding himself. But even once he's gone, they're still sitting on these, you know, their share of the copyrights that will be, you know, Drake is a streaming king and they have a big piece of that. So, yeah. Do I think they'll strike platinum again? You know, probably not, but I don't really think it matters. I don't think so, what are they gonna do? Like what are they gonna do? They're gonna sit back and collect those checks. Yeah. 

[00:47:26] Dan: Yeah. I came to the same spot as well. I guess platinum in the purest sense of having a chart hit. Sure. There could be a legacy hit that gets, you know, some viral thing on TikTok and then that becomes a hit. Like, I don't know, I don't know if I like slow motion singles, like juvenile when platinum, but I feel like that's the type of song I could see go viral and some TikTok thing and then bring new, that's one of my cat favorite Cash Money songs. And I feel like I could see something like that happen. But I feel like you were kind of posing it more so in the moment of looking at these runs of like late two thousand, late nineties, early two thousands, that Cash Money is like a platinum moment or mid two thousands. Wayne's mixtape ran late two thousands, early 2010 or to mid 2010s. Young Money rises to the highest of heights. I don't think we'll see that moment again. And it's crazy cuz I think there’s times where maybe things could have happened. You had the rich gang moment where he looked like he was so close with Young Thug. And I feel like especially in 2014, people expected Thug to go on to that superstar level and still be very successful. But I think that the stock for Thug at that moment was a little higher than it may be actually reached. And I think some of Thug's proteges kind of reached the heights that we thought Thug would've reached at one point, just in terms of a commercial success perspective. But it just never quite happened. But again, they own this. It's not like they missed some opportunity. This is something that is literally generating tens of millions per year and that's not changing anytime soon.

[00:48:54] Zack: Yeah, yeah. Absolutely. So, you know, it's funny, they have, I guess just to sort of like switch gears a tiny bit, but you know, last moment when they said when Birdman and some said they're forever in business with Drake. It wasn't in Miami, but I met with them for some follow-up questions in New York. and they have, like within Universal's building in Midtown, they have a Cash Money conference route. Like there are actually these, I mean I don't think it's diamond play, but the door handles are giant dollar signs, like the Cash Money logo. And, and it looks like they're diamonds in the dollar sign and whatever it is. But, you open up the thing and you go in and there's like all these plaques on the wall and it's just a conference room that's always there. And it's sort of like their designated conference room when they, when they cut the tat. And I remember, yeah, we sat down in that conference room and I really tried to press them on the Drake thing. And I mean, if you dig up the Forbes story, we did a video too. And there's this great kind of tense moment where I'm like really kind of pushing them about it and they're like, we're forever in this with Drake. And like, that's it. And it's clear that's all you're gonna get out of that. But, you know, so, in terms of striking platinum again, yeah, I mean, I could almost envision a scenario where Drake like does the Super Bowl and he plays some, you know, catalog hit that never went platinum. And just purely by the exposure of people hearing it be like, oh man, listen that again, it just suddenly goes platinum again. You know, or for the first time. But yeah, short of that, I know I'm gonna agree with you. I think probably not again, but that it doesn't matter anyway. 

[00:50:32] Dan: Yeah. So we have a couple questions left here. This one, and I think it's maybe similar to the fourth you're bringing up, but if you were in Birdman and Slim's shoes today, is there anything that you would be doing differently?

[00:50:44] Zack: You know what, I think I go back to that question of like, would you sell the whole thing? Especially if the prospects are kind of dimming a bit and, you know, it's like, I don't know though. I mean, you know, it's like if you're getting up there in age, like would you sell you, you know, you got this great house that you bought, you know, you got this great penthouse apartment in New York that you bought. For like, you know, a hundred thousand dollars in, you know, 1982. And, you could probably get, you know, I don't know, 10 million bucks for it. And then you could just like rent and do whatever you want and you know, for the rest of your life. But like, you don't really need the money. Like, you're fine as it is, like you sell it. Like what would you even do with the money that you got? You really love living in that apartment. Maybe you just stay. And I think that's kind of the point. Like, just remember being in the studio with Birdman and he doesn't need to be doing this. Like, he doesn't need to be running around with Jack in Miami trying to make him the, the king of r&b or whatever. But he truly loves it. Like you, you can tell that he's passionate about it and. After the interview was over, and I wish I had this on tape, but we're just like a dozen of us sitting there in the room. And, Birdman, he goes, Zack, why do people think I'm scary? And I remember he said, he was like, really pointy moment. He's like, I'm respectful. You know, I'm not a clown. I don't turn tables over. I don't scream and yell. I'm respectful. Why are people so afraid of me? And I thought for a minute and I said, you know, as like, look man, like, to be honest, I think the base tattoos really are kind of like off putting some people who are not used to that sort of thing. And, he was like, yeah, I've been thinking of getting them removed. You know, I think it'd be better for business. So, you know, it's like there's still this element of, you know, even though he's made it and he's got everything he wants, there's still this part of him that came from a different world. That, you know, he's kind of like still stuck between two worlds, between the world that he came up in and the world that he can afford to live in. And, I think, you know, where he feels at his best is in the studio. So why would you sell that whole thing? Why would you, you know, I mean, why would you kind of give that up? And I think Slim likes it too. And you know, they have this really funny relationship and, you know, Birdman's in the studio and Slim does live the business. And that's kind of the breakdown of it. And I just remember, like after this interview, you know, after leaving the studio, I went and we were all supposed to have dinner together and I went off with Slim and we waited for like a half an hour in the parking lot for Birdman. And he just never showed up. And then we went to dinner and he just never showed up. And it's cuz he wanted to stay in.He just stayed in the studio all freaking night. Cuz that's what he really loves. So, yeah, I guess it's a long way of saying, what would I do if I were them? I mean, you know, probably like the financial advisor advice would be. Sell this big thing and then you're totally set for the rest of your life. But you know, if it's throwing off enough, more than enough money, tens of millions of dollars every year for you to live on, what's the point? You know, why not just do that and do what makes you happy?

[00:53:59] Dan: I think that's a piece that often gets for guys and understands what some of this stuff is, that some people really just love the craft. It makes me think too about someone like Martin Scorsese or Steven Spielberg and these directors that are now in their seventies or eighties, they're not doing these movies to try to make more money. Well, granted, yes, I think they're bought into the financial success. They want fair terms. But this is what they enjoy doing. They've been doing it since they were kids and they wanna just find outlets to be able to do this in the best way possible. And I think the same could be said about Birdman of wanting to be in the studio and just wanting to have that energy. And if you sell that, then what do you do? I think especially for someone like him that's stuck to the thing that he does well. And you know, like he isn't out here like Jay-Z trying to be mogul in the sense of having different things. I mean, there's a mogul aspect in terms of media ownership, but not in the sense of like, yes, I own this, I do this, I do that as well. Sure. Maybe there's some smaller things that are in the, you know, new Orleans or, or the Louisiana area, but not in that same way. So I do think that speaks a lot to that. 

[00:55:06] Zack: Yeah. And I think they have dabbled in other stuff for sure. And you know, real estate, and I think there was some period of time where they had like some oil rigs or something like that.They had a vodka called G T V. They were trying to really build up Y M C M B as like, as a clothing line type of thing, rather than just merch. But, you know, none of that really kind of like ever went viral in the way that any of their artists did. So, you know, and maybe because it was that they just didn't have the passion for it that they have for music. Like that example of Birdman. So, you know, Jay clearly has the passion for the business. He clearly has the passion for, you know, doing the champagne thing or, you know, doing the VC thing. And you can tell cuz he's out there doing it. He’s doing it cuz he loves it, and he makes money. But, I think it's hard for something to do well if you aren't truly passionate. Because consumers can kind of see through that. And also, you're not gonna go the extra mile for something if you don't truly care about it either. Definitely. 

[00:56:08] Dan: Definitely. And mine is a little different. And this may be more so from a selfish perspective of what I would do, but that's part of the question, right? Yeah. As someone that is such a fan of the vibe and the culture that they were able to create, I want to be able to relive that in different ways. I wish that Birdman and the team could patch things up and there could be a true Cash Money reunion tour that goes across the country. I know there's been different things here or there, but the same way that Didat did the Big Bad Boy Arena tour in 2016. I wanna be able to see that. I'd love to be able to do that. And I also wanna see a music biopic and the same style and the same budget and energy of Straight Outta Compton. I would love to see that about the Cash Money story. And to be honest, I feel like, I know there's a lot of energy around these biopics, but like I may be biased because it's the genre I like since Street Outta Compton came out, I just haven't seen one that's, you know, as good as that. And sometimes it's a bit frustrating when I see movies like Bohemian Rhapsody or Elvis, which I think they're fine, but I don't think they're as good as Straight Outta Compton and they're getting all these awards and stuff. And it makes me think that okay, I don't know whether it'll get Gary Gray back again or someone that can, you know, tell this story in a great way. I would love to see that unfold, but I think you would also need buy-in from the artist because obviously the fact that the relationships are straight can make some of this tough. And the willingness to tell the story in an honest way and the fact that there's kind of two sides to everything. Is Birdman gonna be bought in if he and his brother are being shown as, you know, like predatory loan sharks, like screwed people over. Right. Are the artists gonna be happy if it's making it seem too favorable to Birdman? So I know there's some contentions with how the story is told, but it's still something I would love to see done in the right way. 

[00:57:56] Zack: Yeah. Not to mention, how would you clear all the music, you know, how would you handle that? Although maybe now it's a little bit more streamlined, but you know, again, you know, a lot of different cooks in the kitchen there, so you never know. But yeah, no, I'd love to see that too. Oh man. That people asked. 

[00:58:13] Dan: All right, so last question here. Who won? If there's one person, artist, executive from Cash Money, who would you say is the winner of everything that's happened over the past 30 plus years?

[00:58:24] Zack: You know, I think there's a lot of winners, a lot of losers, A lot of you get kind of a little bit of both, but I'm gonna go with Slim, you know, I mean, Slim has been in the background, like Birdman has gotten some more of the glory, but he is also taken a lot more of the heat. I mean, he has taken basically all the heat, I think, and Slim has managed to just sit back, run this like incredible business and make just a boatload of money without taking some of the heat that his brother did. So, yeah, I'm gonna go with Slim. How about that? I wanna know, what do you think? I like that answer. 

[00:58:57] Dan: I'm glad you said that. Yeah, because I think it would be both, but Birdman is my answer. The bidding wars that he won over the years. The ruthlessness of just getting the deals done, staying true to what he knows. There's a lot that I disagree with, and there's a lot that I wish that he had done differently and a bunch of missed opportunities, but they did something that we have not seen done in hip hop before, and we may not see that again, just because of how things have changed and evolved over time. So it really is a credit to that happening. So yeah, I love the Slim take too, because the fact that he reaps the rewards without, you know, any of the backlash. Like I've never seen anyone tweet or get frustrated about like, oh yeah, you know, Slim's really screwing these artists over. Slim's really doing this. You know what I mean? It's always a photoable Birdman, you know, like, right. But yeah. Oh man. Such a fascinating label. Yeah. Before we close things out, any final thoughts on Cash Money records? 

[00:59:57] Zack: Well, you know, I wouldn't say also, About Slim. You know, there's this, somebody had a great quote. It was some writer and they, it was some famous writer, and they said, a writer's fame is the best fame because you are not famous enough to get bothered on the street, but you are famous enough to get a good table at a good restaurant. And, you know, in a way, I think that's, that's kind of what Slim was able to do. Like, he could get, you know, what, whatever he wants, he could have, but nobody's kind of bothering him about it. And I think that's how he wants it. And, you know, Birdman, whatever he wants, he could have sort of, but what he can't do is walk outside without, you know, everybody harassing him, you know? So, you know, I think that to some extent he's more interested in the spotlight. You get the good with the bad. But you know, I think that spotlight it's important, like being able to turn it off is a really great luxury to have to turn it on and off. And, you know, once it's on all the time, you'll never be able to turn it off. So I am going to Slim for that. Yeah, for sure.

[01:01:02] Dan: And Slim also did get memes made out of him from telling Charlamagne off of the Breakfast Club, either or that too.

[01:01:08] Zack: Yeah. Or the Birdman hand rub. 

[01:01:11] Dan: Is that the Birdman hand rub? Yeah, the No clap though. I mean, I need to put on that though, but man, what a moment. Yeah, yeah. All right. Toasted Cash Money. And this is a fun one. What a fascinating case study. And yeah, we're gonna tell the stories that don't get told elsewhere. So Zack, thank you for coming through and thanks again for this Young Money, Cash Money t-shirt for those folks watching the videos. You can see this is the one last time I was in New York, Zack came through, he was like, I got something for you. And yeah, I had to make it happen. 

[01:01:40] Zack: That's right. I should have worn mine today. But, it was in the laundry. You know. It was in the laundry. . 

[01:01:45] Dan: Oh, yeah, definitely. All right, man. Thank you.

[01:01:48] Zack: Appreciate it. All right. Have a good one. Thanks again. Yep. 

[01:01:51] Dan: All right, cool.

[01:01:53] Dan Outro: If you enjoyed this podcast, go ahead and share it with a friend. Copy the link, text it to a friend and post it in your group chat. Post it in your Slack groups. Wherever you and your people talk, spread the word. That's how Trapital continues to grow and continues to reach the right people. And while you're at it, if you use Apple Podcast, go ahead, rate the podcast, give it a high rating, and leave a review. Tell people why you like the podcast. That helps more people discover the show. Thank you in advance. Talk to you next week.

I had a great chat about the future of streaming and more with Ari Herstand, who isan independent artist who also runs Ari’s Take, an education business to teach others artists about the industry. He just released the third edition of his book, How To Make It In the New Music Business.

Ari joined me to discuss how artists are navigating new music releases. It's increasingly getting out of the artist’s hands in favor of the uncontrollable algorithms powering the likes of Spotify and TikTok. Ari says it’s like, “playing the lottery.” 

While algorithms are taking the human element out of music discovery, that human touch has found itself into new artist monetization tools like NFTs. It has inverted what Ari calls an artist’s “pyramid of investment” for an artist growing their fanbase.

Ari and I covered a lot of ground on this episode. Here’s what you can expect to hear from us:

[3:10] Waterfall release method infiltrating Spotify

[8:15] Music discovery power shifting away from human, toward algorithms 

[11:40] DSP’s purposely pulling power away from playlist editors

[19:21] TikTok isn’t for every artist

[21:26] Evolving team structure of an indie artist 

[27:55] Role of music NFTs

[31:44] How Sammy Arriaga sold $250k of NFTs to non-fans

[40:02] The Pyramid of investment 

[49:10] Ari the musician vs. Ari the educator 

[50:05] Updated version of How To Make It In New Music Business book

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guest: Ari Herstand, @ariherstand

Learn more about Ari's book, How to Make It in the New Music Business here: https://book.aristake.com

Learn more about Ari's Take here: https://aristake.com/

This week’s sponsor is Laylo. Join artists like Kodak Black, Sam Smith, and others who notify their fans instantly when they drop merch, tickets, and more. Create your own drop page for free in seconds at laylo.com

Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital

Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.

TRANSCRIPTION

[00:00:00] ARI HERSTAND

I'm not a good recording engineer and I'm not a producer. So that's another team member that I'm going to hire when I make a record. Like I'm not Finneas. I'm not going to make a record in my bedroom. Like I can't do that. And that's not what I want to do. Like honestly, that doesn't inspire me. What inspires me is to make music with other people.

[00:00:26] DAN RUNCIE INTRO

Hey, welcome to the Trapital Podcast. I'm your host and the founder of Trapital, Dan Runcie. This podcast is your place to gain insights from executives in music, media, entertainment, and more who are taking hip-hop culture to the next level.

[00:01:36] DAN RUNCIE

Today's episode is a playbook for all the indie artists out there. I had a great conversation with Ari Herstand, who is a musician himself, and he's also the founder of Ari's Take, which is his education business that focuses on how artists can make it today, especially indie artists. How indie artists can make it today in the new music business. And that's actually the title of the third edition of this upcoming book. Ari and I talked a lot about some of the new and updated insights that he has in this edition of the book, specifically around streaming, and how artists are starting to favor and prefer focusing on algorithms and how that can get them more listeners and where playlists currently sit with artists prioritizing them. And we also talk about NFTs, TikTok, and Ari's concept in the book called the Pyramid of Investment. This is a great conversation for anyone that wants to better understand the music industry, especially for the growing segment of independent artists that are carving their lanes out for themselves. Here's the episode. Hope you enjoy it.

[00:01:48] DAN RUNCIE

All right, today we are joined by Ari Herstand, who is the author of his new book that's coming out, how to make it in the new music business. He's an artist himself, and I was lucky enough to be a guest on his podcast a couple months back. So Ari, it's great to have you on. And congrats on the book coming up.

[00:02:06] ARI HERSTAND

Yeah, thanks, Dan. Thank you. Thank you. Very exciting. The third edition and get ramped up for that. But it's great to be here with you today. Thanks for having me.

[00:02:17] DAN RUNCIE

Yeah, definitely. And I know for you, one of the big topics of the book is just how artists continue to evolve with how they're releasing music, how they're paying attention to what's going on with streaming right now. I feel like you have a good vantage point for this because you're doing so much of this yourself with your own releases. What are some of the big changes? Because I know that everything post-pandemic has been a little different, and now we're heading into this new phase right now with the new year. What's the big thing for you that you're seeing with the evolution?

[00:09:07] ARI HERSTAND

Right. So every artist needs to ask themselves what their intentions are with their release. And so, you know, the beautiful thing about the new music business and the scary and daunting thing about the new music business is there really isn't a right or a wrong way to do anything. There is the right and wrong way for you. And that could be the wrong way for me. So everyone, you know, it's based on your intentions and what your goals are for the release. If we just go, you know, more in the mainstream realm or let's just say your intention is to be successful on Spotify. Because that's a metric that most artists these days are kind of using to gauge the success of their release. And they want to have the best chance of, you know, grabbing that Spotify, being being blessed by the Spotify God, I guess. So to do that, there is a very specific release strategy that has been studied and now tested and now used by everyone from Lizzo and Krungman to Maggie Rogers to Robert Glassberg. And that's the waterfall release method. And Indie artists, you know, that are just releasing their first few singles are using this as well. I mean, this is the waterfall release method. And I'll break this down a little bit on what this means. This has started to get used a few years ago, but it really picked up last year in 2022. And now 2023 is I think going to be the year of the waterfall. But basically what it is is that, you know, you release singles leading up to the album. That has been happening for years now. However, here's what gets a little bit more where where it gets a nuance on how those singles are released. It's you don't just release a single song anymore as a single. You release your first single one song. That's just the one song released one second now your second single is that the new song is track number one. And the previous single that you released is track number two. So it's technically your second single, but it's kind of like a two song album. If you really go that way, if you're tuning it up, if you're an artist is to the artist asking this all the time. Well, how do I do this in my district? back end or whatever, like doing it's a two song album. And the way that the streams maintain for the previous single and that you don't lose your playlist inclusion, all that stuff is you use the same highest or C number. And so it's if you use the same highest or C number that used when you released that track, a month prior, it will be identical stream counts. And then a month later, you release your third single, but that's now a three track album. You know track number one is the new single track number two is the single you release a month ago and track number three is the is the single you release two months ago. And as long again, use the same highest or C numbers, it'll be included in the same playlist. They will be identical tracks, wherever they're included on people's algorithm, personal playlists, all that stuff. You can do this. People are doing five or six singles that way. And then the album and this release method, you know, this could take eight months, essentially, if you want to do one single every four to six weeks, and then the album. How you can kind of look at it, is you're building the album. And so it doesn't have to go on order, you can pick whatever order you want based on your singles. And then the final album is the album order, no correlation doesn't have to be the single order, you can pick whatever order you want each time. The track art can be different each time. I've seen it, people do different single art for each release. I've seen people just use the album cover for every release. So you know, at the end, you might have like six singles released that each have a few different songs on them. And then the full album, some people pull those previous singles down. So if they want to get a clean discography going up there, you just have a final album at the end of the day. And the previous singles with like the two song album, a three-song album, the four-song album before they pull those down. But you're not going to lose any playlists, you're not going to lose any stream counts because you're using same iris to scene numbers each time. So that is a release method, and the reason people are doing it this way is for the Spotify algorithm because Spotify likes to have regular releases. And if you send somebody say, hey, here's my new song and you send them the link, they're going to listen to that song. Now, if there's nothing, no other songs following that song to listen to, after your song finishes, Spotify is going to recommend them something to listen to or they're going to jump off and listen to something else. Now, if you give them the songs to listen to that after your previous releases, they'll stick around and keep listening to it. So the reason people are doing this is for the Spotify algorithm, but also to keep their fans engaged. So like say, here's your single number four and they listen to it and like, oh, cool. What now? I'm going to go back to listening to my favorite artist. Unless you have singles three, two, and one also there. And like, oh, I'll just keep listening to the other songs on this essential playlist. You think of it, whatever you want, a four-song album, a four-song single, a playlist of your new singles. However, you want to think of it, the user is just thinking, oh, I'm clicking on this link or new music Friday, or I'm in my release radar. I see this new single come out by this new artist I like. And then Spotify is going to start to recommend those songs through the algorithm. And the best thing about continuing to release the and the waterfall method is like those previous singles stay included in release radar. So this is like what has been figured out by labels and managers and artists over the last few years. And based on what Spotify wants to see and basically what they're being rewarded for with the algorithm from Spotify. And you know, I think a few years ago, everybody was chasing the playlist editors and like, oh my gosh, if I can just get included in the rap caviar, then like I'm set forever. Whatever the playlist inclusion, the editorial playlists are not as powerful right now as the algorithmic playlists are. That is a big change. Is like three, four years ago, people were like, oh, it's all about the official editorial. Now you want to trigger that algorithm because that is now personalizing every single user's playlist based on what Spotify thinks that user likes to hear. And you want to get your songs included in that. And people are just letting Spotify feed them now based on the algorithm versus seeking out playlist

[00:09:27] DAN RUNCIE

And why do you think that that shift happened from the playlist prioritization to the algorithm? Was it something internal with Spotify or is it just a natural decline in the power of playlist?

{00:11:40] ARI HERSTAND

Yeah, I mean, the main thing is is let's think about what Spotify's intentions and goals are. Their goals are to keep users on their platform as long as possible. And they've discovered that if you feed users songs that they want to hear and have a higher success rate of them continuing to listen and stay on Spotify, then they're going to follow that. Then Spotify is going to do more of that. So they've been AB in this for years. They're like, OK, do people stick on our platform on Spotify longer by listening to our editorial playlists that human beings employed by Spotify are creating? Or do they stick on our platform longer by the algorithmic playlists that are internal robots are curating for them, the algorithm is curating for them. And what they found is that people are sticking around longer with the algorithmic playlists. So they're now doing more of that and realizing that this is what it is engaging users to stay on Spotify longer, because that's what users prefer. The algorithm has gotten a lot better at learning people's tastes, music tastes, than any singular playlist editor. And the other thing is, when we're talking about indie artists, is that why indie artists need to refocus their efforts into more of the algorithmic lane versus the editor lane, is that playlist editors, I mean, it's like playing the lottery to try to get an official Spotify editorial playlist. For one, with 100,000 songs being uploaded every day, you have a very, very hard chance of getting selected being one of those songs that is going to get included on. The very select few Spotify editorial playlist spots. But the algorithm, there's billions, literally billions of playlists that theoretically that they can put you on, or the algorithm will insert you into various people's radios or discover weekly or whatever. You have a much better chance of getting there. And then if users respond, well, do your song there. I mean, you pop up on someone's discover weekly, and they click save. I like this song. I want to hear more of it, and they don't skip it. That sends signals back to the Spotify algorithm, like, oh, this song is performing well. Let's try it in more algorithmic labels. Let's try it in more radio. Let's try it in more of these. And then theoretically, you'll just get included more and more, and then it'll just kind of snowball onto itself.

[00:12:46] DAN RUNCIE

Yeah, I think the algorithm getting better, that what you mentioned, is likely one of the big drivers of this, because if I think back to the days of, let's say, like the mid 2010s, the algorithm still felt a bit similar to those old Pandora algorithms where after the seventh song, you start hearing the same thing over and over. And if you're comparing that to, let's say, what Tuma Basa was doing at Rap Caviar at the time that, of course, yeah, I think Tuma is going to be the better curator of what you have. But if you're shifting things to now, where these algorithms just get better and better and better, then, and I think as well, over time, a lot of the playlist also had that alert. There was a bit of the, oh, this is the new radio. This is this, but then, yeah, when the playlist is better and better, even as a Spotify user over time, you can see that, okay, they do have a better sense for where things are. So naturally, it did shift the behavior. And I think you kind of saw this more broadly with, you know, outside of music as well, with movies or TV shows and other things. I think the algorithms do get better over time.

[00:16:02] ARI HERSTAND

Oh, absolutely. Yes, we're seeing that, you know, absolutely across the board with Netflix and Hulu and Prime and all that stuff. But, I mean, you bring up a good point about, you know, the human and the human playlist editors and what, you know, the power has shifted away from these playlist editors in part because Spotify is pulling the power from that. Because, you know, they're not giving the playlist editors free reign. It's kind of like if we can compare it to, you know, radio stations back on the day that the DJs had the power and they could play whatever they wanted. And that was like, you know, when the 70s and the 80s and maybe even a little bit into the 90s, you know, the DJs could play whatever they wanted. And they were all powerful because that's how people discovered music. Then Clear Channel took over and bought up all the radio stations and was like, oh, guess what? These are the only songs that you're allowed to play now. Here's the list. And then every week Clear Channel would update that list and send the list to all the DJs and say, you can choose, but you have to play these songs. So then the DJs became less powerful because that power was removed away from them by the overlords, which was the owners of the station, which was Clear Channel. The same thing has started to happen on Spotify. The editors used to be the all powerful DJs. They used to be all powerful playlist editors. Now they're overlords, they're owners, Spotify has come to them and be like, well, guess what? Your playlist is not keeping people on this, on Spotify and on the playlist long enough anymore. So you're only allowed to do three new songs a week. And in those three songs don't really perform well, then you're either gonna lose your job or you're not going to have the liberty to choose the song anymore. And of those three songs, they actually have to be from this list, which is the song that have already been pre-tested on the algorithmic side. So it's kind of like we see the same thing as it's like, instead of clear channel dictating the list based on their private marketing rooms and studies with surveys of listeners like they used to do when they would test songs with radio with market groups, now Spotify's testing songs with the algorithm and then they send those songs to the editors and be like, okay, these songs are proven. So when Tua was selecting the song for Rap Caviar, he was at the start of it. But as it got later on and on and what's happening with today's topics with Rap Caviar and all of them, he's just not one person anymore that's shooting. I mean, when Troy Carter was at Spotify and kind of in charge of all this, he said this and this was mind you four or five years ago, this was happening to them. It's like with those big, big playlists, he's like, it's no one person that is deciding this. These songs are tested and then we decide that it was going to go into those big playlists. But now that's happening on every playlist top to bottom.

[00:16:25] DAN RUNCIE

Right. And circling back to what you had said at the beginning that this, of course, is shifting artists to that focus on how they're releasing music, the waterfall strategy, but tweaking that specifically for what they're doing with singles leading up to the album. But I also have to assume that to a certain extent, some of this does become table stakes in that everyone, as you mentioned, is doing it that knows what they're doing right, whether it's you or it's Lizzo or others. So once that's kind of the lay of the land, are there additional things that, you know, artists that you're at least suggesting that artists should or shouldn't be doing or at that point does become more and more dependent on things that are independent of the release, whether it's the artists fandom, the quality of the music and so on.

[00:19:21] ARI HERSTAND

Absolutely. And this goes back to the intentions. And so, you know, it's no secret that in 2020, 2021, if even a bit last year in 2022, the Tiktok was, you know, a massive driver of streams. And so it's like, for some artists, that was where they found success. But, you know, and this is where we get into what are your intentions and who is your fan base? If you're making kind of straight ahead rock and roll, that's going to appeal to like 35 year old plus or you're making like throwback traditional R&B, that's similarly going to appeal to a 35 - 40 year old audience and up. Your marketing methods should not be Tiktok. So like if somebody's like, oh, you got to do a Tiktok, well, like, no, you don't have to do it. You know, you have to understand who your audience is, if your audience is on Tiktok, then maybe. And if your music that you make could be tiktokified, it's like, you know, it's like it's funny, you know, and all that and with Lizzo's song About Damn Time. You know, the thing that went viral on Tiktok was like the seven seconds of the first line of the second verse. It's like the most random shit that catches on Tiktok that you just like don't even know and oftentimes it's just like, you just never know what's going to catch or not. And it's like, so yes, Tiktok that can be a strategy. Absolutely. And it's like buying lottery tickets. So like the more you post, the more, you know, tickets that you're buying the higher profitability you have of something catching and then people using that bit, of course, there's deeper strategies that you can implore if you really want to study this. If you're like Tiktok is the method and the way that I want to go, totally like you can, you can work influencer marketing. That means, you know, get hundreds of influencers with varying audience sizes, micro influencers, macro, whatever kind of budget you have, pay them a little bit of money to use your song or your snippet of your song, your 15 seconds of your song in their video. Have everybody do it in the same week. And hopefully that gives you a chance that inspires more people to use that same 15 seconds in their videos. Sometimes it works. Sometimes it doesn't. It's kind of like back in the day, you know, when labels would work a radio campaign and spend $300,000 on promoting a single at radio. Sometimes it worked. Sometimes you lost $300,000. And that's what we're seeing right now with influencer marketing campaigns because Tiktok is so fickle and random that you don't know if it's going to work. And if you spend $100,000 on an influencer market, so that is one way.

[00:19:38] DAN RUNCIE

Yeah, I think the Lizzo point is key with that because I know that she spent and her team spent a lot of time focused on trying to make that whole album special pop on Tiktok. So to your point, the fact that they probably thought it would have been the bad bitch of clock live but then ends up being a completely different line that ends up going completely viral because don't know how exactly it's gonna go but the fact that the team put in work means that something was able to pop there.

[00:21:26] ARI HERSTAND

The beauty of TikTok is that you can test and test and test and test and test for free, especially like indie artists are doing this all the time. So like yes, Lizzo has millions of dollars behind her and a full team of people that can do this. I'm seeing this with indie artists doing this all the time where they're just testing on their own, you know, they'll post a few videos a day or a week or whatever with different snippets of their line, of their songs rather, and seeing which ones respond best. And then like, oh, okay, it's this part of the song. Like, you know, if they were Lizzo, they were like, oh, it's the first line of the second verse responded better than the other previous 15 snippets that I posted over the last three weeks. So let me do 10 more videos of just that first line of the second verse and see if it was a fluke or if this is actually about a pattern that I'm on to something and they're like, oh, that is what's connecting. And like, oh my gosh, 20 people just posted videos using that the first line of the second verse and they're like, all right, let's keep doing that. And then you kind of, you know, this is how you discover what work is just trial and error, whether you have a label of, you know, 20 social media experts doing this and a million dollars behind it to like, throw gasoline on the fire by hiring influencers to do this. Or if you yourself and your best friend in your bedroom figuring this out, it's the same strategy.

[00:21:46] DAN RUNCIE

Yeah, that makes sense. And especially with the fact that Indie artists can tweak it, it is free to essentially tweak on TikTok. But I'm curious to hear your opinion on just how the Indie artists specifically can have the ideal team structure. Cause like we said, on one end, you have Lizzo's million dollars behind you on the other end, you have, yeah, it's you and maybe your friend can help you do this. But somewhere in the middle is that successful Indie artists that doesn't have the, you know, major record label resources, but it's still tweaking things. So even if we think a bit more broader than social media, what does that team look like? Like maybe even for yourself, like what does that team structure look like to make sure you have all the pieces in place to run a successful Indie business?

[00:27:12] ARI HERSTAND

Totally. I mean, it's a great question. And I talk about this in the book. I've updated the new team. I call it the new team. Because there's been the traditional team that's been around for decades. And that's what everybody understands. Like your art manager, your personal manager, your record label, your booking agent, your publicist, your attorney, you know, a publisher like this. That's the traditional team that, you know, you'll read about in the other music business both written by lawyers that were written 30 years ago. Most in the industry on that level, they haven't really updated that team. But when it really comes down to what we're looking about in the new music business with Indie artists, especially before you get those big players on your team, you still have to run your own business yourself. And sometimes we've seen a lot of NDRs that don't ever want a record label. And that's totally fine. So, you don't need that scene, remember necessarily. But what you do need is to be putting out regular content that's representative of who you are as an artist. And so what does that require? Well, it requires video content. Okay, you need someone on your team that can make really good video content. If that's you, cool. But sometimes it's not the artist. And so having someone on the team that's good at video, videographer, whatever, an editor, that is a key number of the new team that is extremely necessary. Say with a photographer, you know, it's really important to kind of have regular, new high quality photos or any kind of photos, whether it's your, you know, candid photos when you're around, when you're on tour, photos from the stage, from behind you with the audience there showing what you're about, promo photos, press photos. So like a photographer. It doesn't need to be a full time member on the team, but I think doing regular photoshoots and having people that are regularly pumping out photos. Again, it doesn't need to be as formal as like a record label or a team member like that. It's like, oh, you're my best friend. You have a new iPhone and you're really good at taking photos. Let's like take a lot of photos all the time and continue to post them. And that counts too, you know, and same with like a designer, like a graphic designer, you know, there's so many used cases where graphic design is gonna be necessary, whether it's designing your album cover or it's merch items or it's show posters or, you know, any other cases where you need something design. Again, it doesn't need to be a full time member of the team. It could be someone you enlist over Upwork that you hire to do that or it could be a friend of yours. That wants to help out. And then there's this role that I call the digital specialist. And, you know, managers and labels of column, it's like, are they calling digital? They're a digital person and it's like, oh, you know, we're going to send it over to digital. Basically, what that is, is like they specialize in social media advertising. This is something that is is really crucial when it comes to the release strategy that we're talking about previously. Virtually every single record label, it be label up to the majors down to individual artists that are releasing music on their own on that have a little bit of a budget are now running social media ads. It takes a lot of time to learn all this and it's a specialty for sure whether you're running ads on, you know, via the meta ads manager with Instagram and Facebook or Tiktok ads manager, YouTube, Google ads, all that stuff. That's what a digital specialist can do and then they kind of monitor everything and then they gather all the assets and then they help kind of guide the strategy. And so all this being said is like these are team members that are important to every indie artists career right now. They don't need to be individual people that handle these roles. I've seen indie artists that do all these roles themselves and they're their own team right now and that's cool. If they can figure that out for me personally like I know that I'm not a good recording engineer and I'm not a producer. So that's another team member that I'm going to hire when I make a record like I'm not Finneas. I'm not going to make a record in my bedroom. Like I can't do that. That's not what I want to do. Like honestly that doesn't inspire me. What inspires me is to make music with other people. So like I'm the type of artist that I'll get into a studio with eight other musicians and we'll track something live, you know, and like that's what I like doing them inspires me. But I need a producer. I need an engineer. I need a mixing engineer. I need a mastering engineer. These are all team members that I might enlist for that one recording. You know, but other people like Finneas was Billie Eilish's first team member. And he was her recording engineer and producer and like she had that built-in team where they could be pumping out music to Soundcloud regularly early on. Whereas like a lot of artists don't have that but some do. It's like again, what are your intentions? What inspires you? What kind of music do you want to make? But there are certain roles that can be filled by either your brother in down the hall, in the bedroom or by someone halfway around the world and Upwork. But these are the roles that can be filled and the jobs that need to get done.

[00:27:55] DAN RUNCIE

That makes sense. I know another thing for these teams is someone that is always keeping their eye on the new big thing or the new small thing to be able to test out just being able to figure out what's there. And the past couple of years, Web 3 and NFT specifically have guy and even more traction and I think maybe in the most recent year got a little bit less traction to just a more overall transaction level. But as we're heading into 2023 now, how do you look at NFTs as part of your strategy and how do you look at Web 3 more broadly for what artists are doing and any examples that you may have of like yes, this person that is an indie artist that wasn't just a mature artist like did it and they've done it really well.

[00:31:44] ARI HERSTAND

Absolutely. I don't see Web 3 slowing down anytime soon. I still see that this is as a digital society is heading. It's evolving for sure. Bitcoin isn't kind of what is all encompassing anymore like it was five - six years ago. It's not even just the mouth crypto currencies and it's not even just about NFTs like NFTs. The reason that it's lost a lot of its initial luster and sheen is because when it first kind of caught on, you know, early 2021 or so. It was like that was the sexy new thing that nobody quite understood but once you got it you're like well, this is crazy at the digital collectible.Cool I collected playing cards when I was growing up, I get it, sweet, that's what this is the digital collectible one of one okay cool I understand it so that was like. And people are trying to find used cases like you know we initially heard about Kings of Leon was like one of the first that did like an NFT album and they tied you know physical experiences to their NFTs like you get front row tickets that you were one of the NFT holders for life and you could redeem the NFT for proper tickets. So that was like the first way by say now we're seeing is more used cases and people that are creating them independently so like I had on the podcast on my podcast the name is Business Podcast. Sammy Arriaga, he's a Latin country artist and he's a really great, really cool crossover artist. He is a country musician but it's kind of with Latin infused country music it's really cool. He had a deal with Sony, he was signed to Sony as an artist and any of the publishing deal for a while they you got dropped up. It wasn't up to the major label success standards that they were hoping for. I got dropped. Then he actually had a little bit of success on TikTok in like 2020 and then he pivoted to NFT's in 2022 actually, I believe. And just cut to the headline, he made over $250,000 on his NFT of his album or actually of his song. Just one song to be honest. And how he did it, what was really interesting, it wasn't because of his fan base because the vast majority of music fans right now still have not come around to NFTs. They're not really in the metaverse. They're not in the crypto web 3 community yet. But the web 3 community is still very, very strong. It is thriving and kicking. If you can tap into that, then you can actually have a lot of success there right now, currently today. Now in five years, I do believe that most music fans, there will be used cases and every artist will have something to do with NFTs and Web 3 and micro and bastine which I'll get to in a second. But what Sammy did was he went to that Web 3 community and where do they primarily? Just at the time and still really is on Twitter and specifically Twitter spaces. What he did is he went into these Twitter spaces rooms. These are like the audio, Twitter spaces, the audio, new version of clubhouse and any space that was talking about NFTs and Web 3, he'd pop in, he'd listen for a little bit and then he'd raise his hand and I asked to come up and speak. They'd invite him to speak and he's like, hey, guys, you've been talking about NFTs for the last hour. I play you a song that I wrote, actually about an NFTs and it's called Metagirl and it's a META Metaverse Metagirl and they're like, oh, okay. So essentially, then he played the song. He's like, you can actually get that song right now as an NFT, the links in my, you know, pin the link right here and they were like pin the link in the Twitter space and that's how we did it. And he made $250,000 just from doing essentially by busking on Twitter spaces.

[00:32:18] DAN RUNCIE

How many Twitter spaces did he do to make that happen? 

[00:35:05] ARI HERSTAND

It was a lot, you know, because some of the 100 people, some of the 1000 people, but you did it for a while and like, that's a way, you know, that's not a scalable method necessarily that I'm encouraging people to like go busking on Twitter spaces and make an NFT. But he was able to do that and by finding that community, now, you know, Baratay is another indie artist. She was one of the first to kind of start experimenting on NFT platforms and selling NFTs. What she also did early on that we're now starting to see more widely adopted was she not only would release NFTs tied to her songs, but she would tie royalties to the NFTs, meaning you don't just buy an NFT as a digital collectible that you're hoping to resell and make a little money on. You're actually buying a percentage of ownership of the song or like a royalties as I should say of the song. So like she had one time, you know, auctioned off, I guess, you know, and it was through a blockchain platform. I believe she used royal at the time, which is NAS's platform. She like gave away 40% or sold 40% of one of her songs to people. So you could buy whatever percentage you wanted and it was valued at a certain level. And then you can buy that. Now, those platforms are starting to pop up like I'm on the advisory board of label coin and they're a new platform that, you know, started by a booking agent, Mark Miller, who I've known for years. And he approached me and he's like, Hey, here's what we're doing. And it's essentially it is the same concept. Using blockchain technology, but essentially being able to sell a percentage of royalties for your song. So you could theoretically like say, I'm going to sell 50% of the royalties of my song. And it's like, I'm going to sell it to a thousand people. So you could buy like, you know, a half a percent or a quarter of a percent or a small percentage. It's like buying stocks, essentially. It's like, you know, like the Robin Hood from music. So we're starting to see that and the blockchain technology that the whole infrastructure is built on because it's just more streamlined that way. And so like, we're moving to in the future when these platforms likely, book, coin and royal and the others like really start to break into mainstream is the fans are going to think, Oh, I have to learn cryptocurrency and I have to get a wallet and, you know, buy some of Ether, you know, from the Ethereum and buy some ether and like. You know, that is the heavy lift that why it prevented so many people from getting the NFTs. Like I want to learn how to do this and pay gas fees and blah, but like all the shit that it takes hours and hours and hours and hours just for one person to buy like one NFTs. It's like we're getting a little away from that and it's gonna be like a fan is like, oh, I'm gonna get 10% of royalties of Ari's new song and it's done in 10 seconds. And like they don't even know

[00:36:33] DAN RUNCIE

Yeah, it needs to be as easy as like buying something called the Amazon, right? Like it needs to be instant. And I think that I agree there. I think that was probably one of the biggest gaps for a while. There was all these things. And some of it I think is natural with any new technology. There is an adoption curve. It's always gonna track the enthusiast which at least in this recent era congregated mostly on Web 3 corners of Twitter and we're discussing things. So I think it's really smart, you know, for artists to, you know, jump in on Twitter spaces the way that they did. It was really interesting to hear that in a lot of ways yeah, they weren't even reaching, they're like die hard fans. They were just reaching people that were interested. But that said, I think so much of this rings true with something else that's a concept in your book, the purement of investment. And I think I look at this a lot of ways, almost like a inverted sales fund if you will, address in terms of building awareness, the decision intended and actually getting people to act on it and knowing that you can obviously generate revenue at each level of those streams. But NFTs, especially if they're used the way that they could is something that does sit at the tip of that pyramid. It's not gonna be everyone, but it is something to monetize the die hard fans that you have. But even there you could adjust where it sits based on what you price it, how many drops you have and so many other things.

[00:40:02] ARI HERSTAND

Absolutely, yes, the pyramid of investment on this concept that I have in the book, I'll just kind of break it down a little bit so people understand. It's like, you think about it, you know, this is financial investment. I also have a pyramid of engagement, which I'll get into a second, but what just investment at the bottom of that pyramid, we have the people that don't really spend any money on you directly, they might stream your song, they might stream your music, you might make a little bit of money from what their actions that they're taking like the stream of your music, but they're not like spending money on you directly. So that's the bottom of the pyramid and that's where the vast majority of the music of fans, audience, listenership lives just across the industry. But as we go up the pyramid, you know, then there's like, those that might attend your live stream and like tip you over that or they might just like tip you here and there and you know, in the digital realm, sure, it's a live stream, it's on Twitch, or whatever, or like, you know, they can tip you in real life or something, they're going to your shows and they'll tip you. So it's like the tippers essentially, then you go up a little bit higher, that people are actually buying tickets to your shows. Now they are actually directing money directly to you and they're coming to your concerts, they're your ticket buyers, your concert goers, then you look a level higher, they're the merch buyers. They're the ones that buy merch at those shows or buy merch online, but you know, your store or from your Spotify profile or whenever they're buying merch directly from you, they're like, I'm a real fan, I want to buy merch. Then we go higher and then we're into that category of fan clubs, crowdfunding campaigns, you know, investment, NFT, three point, you know, with that whole realm of like, I'm like such a big fan that if they're on Patreon, I'm going to be their patron. If they're running a Kickstarter, I'm going to back their Kickstarter. If they're selling a percentage of their royalties of the new song, I want to buy that. And then at the very tippy tippy top of that, it's kind of a little bit of out too, but it's like those that are buying the VIP packages. So it's kind of like a combination of it all. It's like that, am I going to, you know, go to the show and I spend the $250, you know, do a 10 sound check and get the merch package and do that whole thing. So it's like that's all at the top. And so you think about this as the pyramid of investment, you're going to have fans at every level of that and you want to make sure that you cater to all of them and that you don't exclude some. So it's like, you know, I think people can kind of have understood this concept when, like, I first got this like six, seven years ago when Patreon kind started to hit after Kickstarter. And I saw some of my friends that were running Patreon campaigns and Kickstarter campaigns, I know simultaneously. And to me, that seemed counterintuitive. I was like, wait a minute, your fans are only going to do one or the other. It's like, they're going to either back your crowd and bring you an album or they're going to be your patrons, right? No, I was wrong. What it was, was really like Kickstarter was below on that pyramid. There were more people that are willing to drop a hundred bucks this one time, this one year to back your Kickstarter, but then there's fewer people a little bit higher up on that pyramid that are going to pay you $10 a month on Patreon or Substack or whatever it's going to be, Band Camp, any subscriber service that are a level higher that will be your subscribers and then it just kind of keeps going up from there.

[00:40:28] DAN RUNCIE

Yeah, I think that makes sense. And the thing that I've often thought about the model too is that of course the revenue that you get per fan does increase as you go further up that period. But if you were to multiply that by the number of fans in each of those tiers, do you think that the tiers do start to equal out roughly or what does that look like for you?

[00:41:39] ARI HERSTAND

That's a really great question. I don't really need data to back that up, but that's a really great experiment and something that should be studied, I think like an artist that kind of, yeah, I'm going to work on putting those numbers together. That's a great idea. It's kind of like along the lines of the Thousand True Fans Concept, where this concept is, you know, they say that if you can get a thousand people to pay you $100 a year every year for the rest of your life, rest of your career, now you have a career and that's all you really need is a thousand people to pay you $100. However, if you break that down a little bit differently on the government of investment, you don't need the thousand people to pay you $100. You could get a hundred people to pay you $400, you could get 200 people to pay you $200. You could get, you know, 400 people to pay $50, you could get 700 people to pay you $20 a year, you know, and you could really break that down a little bit differently. And so it's like, how are you going to get to that $100,000 a year mark if that's your goal or a million dollars a year, if that's your goal. And it all these fans are going to fall somewhere. All this money is going to fall somewhere on that pyramid of investment.

[00:43:12] DAN RUNCIE

Yeah. I think about it this way too, maybe from like an example perspective. Let's look at someone at the top. Look at someone like Beyonce. I could see her. I would need to do the math. But let's just say ballpark speaking, she gets $30 million a year revenue from her music, right? Purely from streaming. I could also see her getting $30 million a year from, let's say she does a few concerts that year or a few special one offs. She could also get $30 million a year from doing two private shows of performing at a wedding or something like that or performing at an Uber private event. So each of those things can equal that amount. But yeah, I think that way to break down the thousand true fans, I think is important too. Because I think when that theory came out, Kevin Kelly's, I think it's back in 2018, but it made a bunch of sense. But I think for most people putting things out, yeah, even that requires a bit of segmentation there. So it's fascinating. And I'm sure so much of this is fascinating for you as well. Because I feel like you kind of have two examples of this with the businesses that you're running. You have Ari Herstand, the artist and you have your own, pure, mid of investment. You also have your visit of this podcast, the courses and the book as well. And for you, I'm sure I know you have a team that helps with each of these things, but do you look at it any differently between the two, you know, yourself as an educator that is sharing this information combined with yourself as the musician?

[00:49:10] ARI HERSTAND

Yeah, I mean, absolutely. Like, I think, you know, why people have responded to the artist take business and my book and the artist take account of me and the music, the podcast and all the stuff that like, I do on the music business education front is because I am a musician. I have that musician's empathy. I've, you know, lived it and living it and it's like, I understand how hard everything is. It's like, you know, I'm not just saying it to say it like NN because I read it somewhere. Like, I'm living it. I'm interviewing people that are living it. You know, I put on two different hats like I look at myself almost now as like part journalists and like kind of, you know, in the lane that you're in where by interviewing more people, we learn more and that's great. Like, I know my perspective and everyone's perspective can be limited to their own experiences. So I try to widen my experiences by widening my information base by talking to more people. So the whole point of the podcast honestly was just to talk to more people, smarter people than me that are doing bigger things and more successfully than I was doing. So I could learn from them and then share that information. Like I've always interviewed people from like artist take and writing for other publications and I then made the podcast basically public. With my own music career, you know, the intentions have shifted. But when I started Ari's take as a blog 10 years ago, I made 100% of my money from my music. I was like a full-time artist, touring artist releasing music, all that stuff like touring most of my year, going on plenty of national tours. The intentions have shifted when I realized where I can be most useful and necessary. So like I don't tour anymore. You know, I'll do one-offs here in there. Like when I'm with my new funk project, Rasmentisdrake, it's like I do in a kind of an immersive funk experience. And I want to keep that in one place like we did in L.A. in like last summer, we did, you know, a 16-show run in L.A.. That's like my creative outlet. Like I do in the intentions of that, I want to top the Spotify charts and like go on tour. So like why I keep going back to like what are the intentions for every artist is like they're different. So my intention for that was like I wanted to sell out all those 16 shows and like that was my own function for the off thing. Or I wanted to at least, you know, get people a good experience and have a good time doing these things. Like I released a solo album last year under my own name. And the intention of that was honestly not I want to go on tour or I want to, you know, and get millions of streams. It was just like I went through a break out and I needed to write these songs and release them for my own mental health and just like honestly just for my own well-being and like get these songs out there. And people connected with them. And that was wonderful. And like I heard from tons of people that really resonated with the songs. Like that was something that you know gave me some perspective to is like, my focus right now is not making a living just for my soul of singer songwriter project like it used to be. That being said, there's a place for everything. And so, you know, I covered this concept of like the multi-hyphenate. Everyone's a multi-hyphenate. Everyone from Beyonce down to me and any other indie artist that is working at a day job or whatever, everyone's a multi-hyphenate. Like, your job title can start with musician and then it can be, you know, what else? Like, some people are musician, lift drivers. Some people are, you know, musician, entrepreneur, CEOs like, you know, Dre as Beaks, headphones is like, oh, he's an entrepreneur and a business person. And so it's like, I don't think the artists need to feel like shameful or insecure about their other hyphenates, their other job titles. You know, at the end of the day, you want to do what inspires you. And so for me, you know, my idea of success is making a living, supporting the kind of lifestyle that I'd like to live doing what I love and offering value and meanings to people. And so I've kind of structured my own life in a way where I go to where I feel like I'm needed and then where I can bring value to people. And that I've found, you know, most useful in kind of the artist take blame and the music business lane of everything I'm doing. But at the same time, like, I'm an artist. Like, I'm never not going to be an artist. Like, that's just like who I am. That's like what my soul is. And so it's like, I can't ever stop doing that. Like if I don't want to force myself to ring out as much money from that, there's no shame in that. Like that's, you know, sure, you know, I always say it was all the time to be, it was like, if you're happy making music from home and putting it online and you're making like 50 grand a year by doing that. And that's like what you figured out how to do. You've got some same theory, you're on some ads, you got some streaming, whatever. And like you're doing that and you're happy. Wonderful. Could you make a hundred, 200, 300,000 dollars more if you like one on tour or up your merch operation or like, you know, started a Patreon or launch an NFT or something like that? Maybe. But do you have to? But no, of course not. Like do what makes you happy. Like if that's going to make you unhappy because you're chasing more money and like why? Like you don't need to do that. Like do what makes you happy. And that's the big thing. And so it's like, you know, I'm constantly figuring that out for myself and I encourage other artists that figure it out for themselves.

[00:49:30] DAN RUNCIE

Yeah. And I think that's a good way to put it, right? There's so much action now. You know, there's so many opportunities in everywhere. It isn't multi-high fit. It is really up to you how many hyphens you have behind that name and how heavily you want to push all of them. And I think the other one for you is author. And of course you have this book coming out in a couple of weeks. So yeah, before we let you go, let me just do one more close to let people know the updates with the book and when to expect.

[00:50:05] ARI HERSTAND

Yeah. So It is out January 17th, 2023. You can get it wherever you find books with its Amazon or Barnes and Noble or your local bookstore. And I don't know when this is airing or gonna go live, but if you're in L.A. on January 17th, join me at Barnes and Noble up at Grove and we're doing a book signing and a live podcast recording there. But yeah, I've added a hundred new pages to it. I've updated stuff in every section. I've rewritten chapters, but scratch, of course. A lot of stuff we talked about today is in the book like NFTs and Web 3 and TikTok and live streaming. A lot of stuff that didn't exist three years ago. So I've completely rewritten the majority of the book. So you know, if you have the first or second edition of the book, I encourage you to check out this third edition. It's very, very different and updated.

[00:50:46] DAN RUNCIE

Good stuff, man. Excited for you. Thanks for coming on. This is great. 

{00:50:50] ARI HERSTAND

Thank you. 

{00:50:54] DAN RUNCIE OUTRO

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Sean “Diddy” Combs is one of hip-hop’s most serial entrepreneurs. His business track record stretches 30 years with successes in completely-different industries — music (Bad Boys Records), clothing (Sean John), spirits (Ciroc and DeLeon), media (Revolt), among many other ventures. To take a closer look at Combs' empire, I brought on Tarik Brooks, who is the president of Combs Enterprises. 

Many chalk up Diddy’s entrepreneurial success to his influence and brand alone. While Tarik doesn’t deny Diddy’s star power, he also argues that line of thinking understates Diddy’s business acumen — his ability to spot trends, attract talent, raise capital, and so forth. 

Not only that, but the broadness of Combs Enterprises is a unique competitive advantage. Diddy’s different businesses across sectors give them unique data points that can drive decision-making. The group announced a new foray into cannabis in late 2022. However, they won’t enter the space completely void of knowledge. Using insights from Revolt or Ciroc, they can glean how customers think about cannabis already. 

Tarik and I dove deep into Diddy’s sprawling business empire this episode — the “why” not the “how” behind Puff’s success. Here’s what you can expect to hear: 

[0:00] Combs Enterprises’ focus in 2023

[2:22] Synergies between Diddy’s different businesses 

[4:40] Using Revolt Summit as a testing ground 

[6:29] Origins of the “Ciroc playbook”  

[9:32] How much strategic overlap is there between Ciroc and DeLeon marketing? 

[15:41] Entering the cannabis space

[18:00] Regulatory challenges in the cannabis industry

[26:01] Why Diddy is not just another celebrity entrepreneur 

[30:03] How Combs Enterprises invests in startups

[34:21] Did Diddy really back Elon Musk’s purchase of Twitter?

[36:45] No rush to sell Bad Boy Records catalog 

[41:32] Sean John comeback 

[47:05] Diddy’s attempt to buy the Carolina Panthers in 2018

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guest: Tarik A. Brooks, @tarikamin

Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital

Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.

TRANSCRIPTION

[00:00:00] Tarik Brooks: Twitter's impact in society is certainly bigger than how it shows up from a profit and loss and from a market cap perspective. And when you look at, you know, where Twitter is trading today is trading at a fraction of like Facebook or like Snapchat is the question from an investment perspective with some you could create meaningful.

[00:00:33] Dan Runcie: Hey, welcome to the podcast. I'm your host and the founder of Dan Runcie. This podcast is your place to gain insights from the executives in music, media, entertainment, and more who are taking hip hop culture to the next level. 

[00:00:53] Dan Runcie: All right, today we got my guy, Tarik Brooks, the president of Combs Enterprises. Second time on the podcast. Great to have you back, man.

[00:01:01] Tarik Brooks: Happy New Year my brother. Great to be back. 

[00:01:03] Dan Runcie: So what's the latest from the House of Combs?

[00:01:08] Tarik Brooks: Things are wonderful enterprises, man. Tremendous 2022, where we did a lot of investing in our existing platforms and in new platforms. And so, you know, the big push in 23. Is to operationalized and grow a lot of those new platforms. You know, a lot of people are familiar with the cannabis deal, which we announced late last year. We're gonna close that deal and get that operational. We've also been working on an e-commerce platform with Salesforce, called it Power Global, that will launch this year, you know, released music last year. That did great. I mean, he and a sub-Christian. You know, with the first father and son duo to be number one. At the same time, there'll be more projects from Love Records coming in this year. So a lot of new things are in 23, so I wanna accustom a lot of exciting developments. 

[00:01:56] Dan Runcie: And I feel like one of the strengths for him whenever he is launching a new brand is being able to find some type of synergy between something that he's done that's already worked and finding some way to tie it all together. And for you, I know you've been there for a couple years. Is there like one company or one tie in that really stands out about, oh yeah, what Puff is able to do here? Tweak the formula a little bit, brought it over to this company and then it helped that one too.

[00:02:22] Tarik Brooks: Yeah. It is interesting, man, like, because you know, with the ecosystem we have that there are synergies all over the place that we work hard to exploit everyday. What I'll tell you bigger thing is that underneath our ecosystem sits the core premise, a core belief that our culture drives culture, that our people drive what's cool and what's next and what's hot in a meaningful way. So, you know, you go back to blues and jazz and rock and roll to hip hop, TikTok, viral dances, like our people drive that. And so if you look at all of the different elements in our ecosystem. What you see are different sectors that we drive through our cultural presence. And so when you look at our platform through that lens, you see how they all fit together. So then synergies just become finding places where, you know, we can work together to make one plus one equal three or four. Right? And so like, you know, easy examples when you think about how you know our brands will show up at the Revolt Summit. So Revolt hosts this amazing event every year in Atlanta. 10,000 people come. It gives us an opportunity to kinda have revolt, touch to people, but also have ourown touch to people for us to do research for new companies that we're developing the test concepts. These are ways that we don't place there with our ecosystem. I mean, I look at a great example. Deleon tequila. Used Druski in an ad, you know, super funny guy. Did a tremendous job with the ad. We then, you know, connected in with the team in Revolt and he did something with Revolt. It ended up being a great, great opportunity there. So like throughout our ecosystem, you see all these opportunities that exist with our portfolio companies and with the companies that we invest in. We think about how we invest and part of it is all the stuff you expect from any traditional investment vehicle. You know, do you have great leadership? Do you have a strong destructive concept? But what we also know about there two or three ways that this thing could be utilized is our ecosystem for the company. So it's an everyday activity, you know, finding, exploiting, and developing those things 

[00:04:31] Dan Runcie:  You mentioned earlier about the Revolt Summit and how that can be a test space for whether it's new products or new things. Can you talk more about that? Cause I think that's really interesting. 

[00:04:40] Tarik Brooks: Yeah, so I mean this past Revolt Summit, the team at Empowered Global, which is the eCommerce platform that I just mentioned, had a space set up where they could introduce the concept to the participants at the Revolt Summit. And more than that, we actually had, and it was, I gotta find you a picture of this. A digital vending machine that was filled with black-owned products. So, and kinda like what you would see at the airport where you have vending machines, where they kinda have, you know, non typical vending machine products, headphones, and different things like that. Our vending machine that we had set up in the Revolt Summit was all filled with products that were owned by black that came from black owned companies. And so that was like just a real example. In that moment, we were able to introduce people to the concept of the platform, try out some new tech and get real time feedback from people who we believe will be a part of that target. 

[00:05:34] Dan Runcie: That makes sense. Yeah. Because you wanna have people that are first bought in, you get the people there and I think the people that are gonna attend Revolt Summit likely end up being culture shapers or mavens within their particular area themselves. They start saying something's good, and then they can, you know, go back and that's how you're able to spread things.

[00:05:52] Tarik Brooks: 100%. It's the way, you know, everybody talks about it in terms of synergies, but we like to talk about it in terms of not planting there, right? Like we have these resources, we have these brands that mean something to people. You know that the most impactful thing we can do is find out how putting those brands together at different times in different ways produces more information, produces more insight, produces more, you know, revenue generating opportunity than any of those entities in silos. So for me, like the silo is the enemy, right? Like the key is to have all of our leaders and all of our team members continuously engaging in a very fluid way.

[00:06:29] Dan Runcie: Yeah, the one that always stuck out to me too was Ciroc and the on the ground promotion for that, because there are so many through lines going back to The Bad Boy Days, the Bad Boy Street team, and then the Ciroc Boys. It's very similar playbook and being able to help push that. 

[00:06:45] Tarik Brooks: Yeah, I mean, look, and again, the playbook is the same. It's the same. You know, when you look at what the spirits industry looked at at the time, it was very different from today. You know, a lot of folks don't realize at that time the only people really trying to market, know black people in the hip was more liquor. Right? Cause I know I wasn't on the team back then, but what I can tell you is he looked at how nightlife worked and how the culture was working and evolving and saw a huge opportunity for an aspirational luxury product. And then was able to apply a lot of the same tools that were driving his success in the music business in spirits. And so that's how you end up with us showing up better than most people in the nightlife, us being able to have the DJs, you know, be a part of our experience. Cause Puff knew back then, in which he knows now how powerful DJs are in the culture and in the communities he lives in. If you look at even now, like a lot of, you know what he's posted socially as, you know, the efforts around love, records, respect. Like, we get what algorithms can do, but understand like DJ is culturally important. Like they mean something to their communities and they mean something to our culture. And in that way they have outside influence, that I think people still underestimate. 

[00:08:00] Dan Runcie: Yeah, I think as much as things have been movement streaming or NFTs or whatever it is, people still wanna go to the club and people still want to be in the hands of a DJ that knows what they're doing and can introduce them.

[00:08:12] Tarik Brooks: Absolutely. There is power and curation. Right. And look, theoretically A.I. will be able to kind of take that input and lead curations that are solid. But you know it's tough to replicate, you know, instinct. And natural art, you know? Exactly. That's the thing, right? Like to be able to think you can do it with just an algorithm means it's all science. And I think, you know, most entertainment industries, particularly when you talk about the power of a DJ, are art and science together. That art is that intuitive thing that, like you, some folks just have, they know when to play the right record. You know, not just cause it's a similar bpm, but they know, cause they know that crowd, they know that venue. They know that audience better than most other people do.

[00:09:00] Dan Runcie: Definitely. And I think too, a lot of that we definitely saw with the Ciroc Playbook, but I wanna spend some time in this conversation talking a bit more about Deleon because, I think that that is relatively newer business for other portfolio, but I think there's a lot that's similar, but the lot that's different too in terms of how you've all rolled it out, what you've done, how you've done things differently. So love to start there and maybe start first specifically, how much of the Ciroc Playbook was used with what you've all done so far with Deleon?

[00:09:32] Tarik Brooks: Yeah, so I think the core premise stays the same, right? What Puff has been amazing at throughout his career is being able to spot and help develop trends very early. And he saw back in 2013, 2014, that the next wave in spirits was gonna be, you know, brown spirits, in particular tequila. And so when he formed the joint venture with Diageo, that he built that knowing that a tequila wave was coming. Now from the perspective of how industries developed, tequila and vodka are two very different places, right? It is very big, very mature right now, trying to fight off the growth of some of the spirits that are taking customers away, whereas tequila is smaller but fast growing. And it's also very nuanced. So like when you think about what we've been able to do driving Deleon's growth, and Deleon right now is the fastest growing tequila in the country, right?It's on fire right now and just, you know, small plug, you are new to tequila. Deleon are absolutely amazing. I will put them against any tequila that's out there, you know, so smooth ice cube, orange slice. You're good.

[00:10:41] Dan Runcie: But any numbers to share in terms of like, cases sold or anything like that?

[00:10:45] Tarik Brooks: So look, I'm not gonna go into the details on cases, but again, this is Nielsen’s data,this is not coming right? So right now, you look, it is triple digits right now, you know, comfortable cause to disclose. But what I would say is, you know, part of the Deleon story is making sure Deleon is relevant in culture. And when you hear Deleon Lemonade in the young Miami, I'm not sure when, when you see Deleon on, when you see Deleon sharp in these things, it's a part of ensuring Deleon is relevant in the culture and shows up the right way, but there's also a big part of the future of Deleon that will grow. Talking about the liquid itself, you know how we get to such a high quality. It is the fact that Deleon is aged in both American whiskey and French red wine barrels to get the distinctive taste that, like, that's just part of the story that we're still just beginning to tell and roll out as we build it. And from our view, we are building, you know, iconic, long lasting brands. We want Deleon to be thought of the same way you think about Johnny Walker or Hennessy or any other great brands that are out there. So our view is like you don't rush that thing, you develop that story over time. You feed people in, you bring people into the brand and then you culture that and as soon you cultivate that audience, you know, as it grows. And so, you know, a lot of the kinda principles that we've applied in growing, we're applying to Deleon, but we're also being very aware that, you know, vodka and very different liquids develop differently, Exactly The same. And you think about that as you start to position the brand. 

[00:12:24] Dan Runcie: Yeah, cuz I think that was a good point that you mentioned just in terms of how vodka has been the market leader just from a type of liquor for so long. So you didn't necessarily have to do that piece of it, but it was more so Yeah. How do you bring this brand that I think some people may have forgotten about, but bring it to the same level as your great gooses in your others. 

[00:12:44] Tarik Brooks: Yeah. People know people, I mean, look, the way Ciroc hadn't been positioned in a way that was creating a lot of noise, a lot of impact, and I think, you know, part Puff's genius was figuring out that it was amazing juice. It was amazing liquid, with beautiful bottles. So if you positioned it the right way in culture, you could create a wave. And that wave has been historic. This was a brand that was doing, you know, cases annually and now this is a case brand globally. Huge brand in the spirits industry in a sector that was big, vodka's a very, very big sector. Tequila we're growing Deleon as the sector's growing as well. So it's just, again, from a marketing perspective, a different set of challenges, but the same principles apply to how we think about leveraging culture. Leveraging, you know, our ability to kinda set trends to help drive a career meaningful brand, but it all also starts with a great quality liquid that we stand by. I mean, one of the things, right? Yeah. I think one of the things has always been super consistent about is the authenticity around, like, standing behind the products he brings to market. There's not a variant of Deleon or flavor that gets released without Puff. Personally, we stamped that saying, you know, this is okay to go to market with our income.

[00:14:03] Dan Runcie: Right. Yeah, cuz I think the distinction too on the flip side with tequila is like, not even that it's so much education cuz I think a lot of people know tequila, but just getting the consumer a bit of a visual of yes, this is the setting where not just our brand but this broader aspect. And I know there's 1800 and there's like others too. Yeah. But like you all be able to be like, hey, This is where, so some of that, what I think worked so well for sag, just in terms of thinking back to those like Vegas promo shots where they had all the people there being able to, you know, have whatever the tequila and Deleon equivalent is of that.

[00:14:39] Tarik Brooks:  Yeah. I mean, look, I think a part of the tequila growth story is helping people understand that, you know, while they may have been introduced to tequila, you know, with shots on spring break or something like that, you know, once you learn more, you learn a much more complex liquid that can be enjoyed a lot of different ways mixed drinks, neat, you know, over on the rocks, you know, and all the other kinds of occasions. So I think part of our experience is helping people understand that it's versatility is part of why it's growing as fast as grown. 

[00:15:11] Dan Runcie: Yeah, and I think too, just thinking more broadly about spirits and things that people enjoy you all now going into cannabis, I think that there are definitely some similarities there. People wanna be able to relax and enjoy what they choose, but so different in terms of not just regulation, but the culture. How has it been, just, I know, even thinking about the origins of that deal, how some of that playbook and mentality can be leveraged for what you all have now with this massive opportunity in cannabis?

[00:15:41] Tarik Brooks: Yeah, I mean, look, there are certainly two categories that are at very different stages, but you know, you could argue they've been on similar journeys, right? Like there was a point in time when alcohol was prohibited. When you look at the history of cannabis, you know, you start to realize a lot of the way this product category was treated was less around the specific impact of the product and more around the specific influence. The culture that was around, you know, before that was hip hop, cannabis was huge in the jazz community. And the jazz community was something that black people were bringing and spreading throughout the United States in a meaningful way and, you know, real impact culturally, and there were folks that didn't wanna see that happen. And so a part of the criminalization of cannabis was connected to slowing down the influence of that jazz, that black culture. And so you've seen over the past years been that cannabis has been illegal, you know, the disproportionate criminalization of black people as it relates to cannabis, more than white people. And so this opportunity is an opportunity that gives us a chance to basically through doing good sound business, you know, rights and historical wrongs. When you look at the last 10 years of legal cannabis, Despite, you know, the overcriminalization of black people, it is dominated by white men. You know, 85, 86% owned by white men. Black people only own 2% of the space, and so for us, particularly coming in this way, it gives us an opportunity to kind of make change and enter the business at scale to be able to come in with a three state footprint and be able to use that as a platform to help change the cannabis ecosystem to make sure to use our platform to enable black and brown people to participate in the industry in a number of different ways. To be able to use our voice, to be able to help shape the way regulators and lawmakers think about how cannabis needs to be developed going forward, and continue to do what we do at our core, which is bring our audience, great quality product for them to enjoy.

[00:17:46] Dan Runcie: That makes sense. And I do think that those stats you mentioned are just around the 2% of the business, that is only being, again, like I said, at this point, currently run and administered by black people. And that's in America, right? 

[00:18:00] Tarik Brooks: In America in the US. It is gonna continue to be a leader in global cannabis. So a lot of countries look to see, you know, what the US is doing and how they're thinking about deregulation and how they shape their rules. And, for us it's a big part of what we do is helping people to see how the way things are set up negatively impacts our community. So when you look at, you know, the cannabis industry broadly working to change the way cannabis is scheduled by the federal government and how it's treated by the federal government and how banks are able to interact with cannabis companies. All of those things make it hard for the industry broadly, but it makes it extra hard for us because when you look at industries without those, We don't get the same access to capital, we don't get the same access to opportunities. So it's one of those things where, you know, once again, we're starting from behind the eight ball, but what our, you know, perspective allows us to do is start from a different vantage point, right? Like it is an extremely difficult time to raise money in cannabis. And so for us to be able to pull off something, this big speech. You know, the success and track record that Puff has had building quality grants, building quality companies, and being able to find the kinda talent you need to come in and create value. And so we're excited man. We think this is gonna be a huge event for the cannabis industry. We think it's gonna be a huge event for us to help our community create meaningful wealth. Cause ultimately, you know, as business people, we wanna use our skills and resources create wealth for our community.

[00:19:36] Dan Runcie: Yeah. And like you said, definitely, you know, huge undertaking and make this happen. Can you talk a little bit more about some of the steps to get from the first idea, maybe it's you and Puff talking about, Hey, you know, we should do this, we should get into this business. Then boom, the announcement comes. Like, what were some of the steps to help make this happen? 

[00:19:53] Tarik Brooks:  So we have been exploring the cannabis industry, you know, with different levels of intensity since looking at opportunities. Starting to understand how the industry works, getting closer and closer to the space, you know, building relationships with entrepreneurs and companies in the space to kinda understand how things develop. I joined the board of Cresco Labs, you know, one cause I wanted to learn more about the industry. I thought they were a great company. But two, from that vantage point, you were able to see how the industry works and how things develop. And so when this opportunity came along, which was really driven by Acquisition of Columbia Care by Cresco. They, by regulation, have to divest assets. This opportunity to look at a portfolio of assets that are good, you know, good, strong businesses. Generating revenue, generating cash flow today to be able to come, bring those into our portfolio and then do what we do to create meaningful brands around those assets seem like a phenomenal opportunity. And so, look, these things take time to develop and it's a long process of, you know, doing the due diligence, raising the capital, going through all the steps you have to do to actually close a deal. But we believe it's gonna be a phenomenal historic deal once it's closed and wherever operated. And we think, like, look, when you look at pub's track record of building brands in music, in fashion, in spirits, you know, should extend, we believe it's gonna extend itself to cannabis and meaningful given how influential and impactful cannabis is in culture.

[00:21:28] Dan Runcie: And we definitely know that there are a lot of regulatory challenges in this space for sure. And I also know that there are several other celebrity investors, even some in hip hop that have started businesses in this space and haven't necessarily been able to help take them to the next level. Do you have thoughts about some of those, I guess how business now moving forward can help address and overcome some of those hurdles that maybe some others weren't quite able to get past.

[00:21:58] Tarik Brooks: Yeah, so I take those in pieces. What I would say is, you know, we believe over the long term, the federal view on cannabis will change. We believe cannabis will ultimately, eventually be legal, you know, throughout the United States and in all 50 States. But we don't know when that's gonna happen. And so none of our investment thesis, none of our modeling, none of our business case was built on imminent regulatory relief. And so while, you know, we hope for it and we wanna help shape how lawmakers think about it the same way the rest of the issue does. Nothing in our core premise for doing this deal was built on the expectation of regulatory relief this year, next year, five years from now. Right. So that's the one thing I would do. That said, we wanna be immediately a part of the conversation cause cannabis is so connected to our community. And so we're gonna jump into that conversation at the state level. We're gonna jump into that conversation at the national level. Now going to the second part of your question. You know, one of the things I think is the biggest, you know, misnomer when people think about, you know, Sean comes entering cannabis, is thinking about this as a celebrity cannabis deal, right?

When I think about this and when Puff and I have always talked about it. What we think about. A guy with an amazing track record of building culturally relevant brands. Is that relevant in cannabis? Yes. Check, right. You know, does he have resources and the platform to be able to raise the capital to do a deal like this. Check. Does he have the ability to attract the kind of talent you need? Check right. Now. You also then say, is this celebrity extremely valuable in getting the word out? Brilliant. Absolutely. But that's not the core premise of what we're trying to do, right? Like we will get as much value through all the things we can learn throughout our ecosystem and how our customers and all of our other businesses think about. As we'll get from Sean Holmes, the celebrity. Right? And so from that perspective, you know, we don't expect to have our business be a celebrity driven brand per se. It's gonna be built on the back of great brand building, great marketing, and very strategic and efficient operations.

[00:24:07] Dan Runcie: And I think that ties into something you had said in a recent interview about how insights from Revolt, for instance, can inform some of the decisions that you make with the cannabis business.

[00:24:18] Tarik Brooks: Yeah. I mean, look, when you think about an ecosystem like ours that spans from spirits, music, media, fashion, with every interaction with our audience, you create. So every time posts go up from their social media, you know, there's data that comes back. Every Ciroc transaction generates data when Revolt has shows on all the different platforms that has shows on cable, YouTube, In app, all those different platforms generate data. As you compile that data, you're able to kinda look at it with a different lens and pull insights from that. What we're then able to do is take the data that we get from the cannabis industry that everybody else in cannabis is getting. But when you start putting those things together in unique ways, that's how you start to generate interesting insights that everybody's just not gonna have access to 'em. So that's where we think, again, we have a real competitive advantage in how we think about what we do in the space. That'll impact everything from, you know, how our stores look and feel, and what that experience will be what products we lead with how we think about price points, how we change things from state to state. A lot of that will be driven by insights that not only come from the cannabis industry, but that are informed by the other businesses in our portfolio as well. 

[00:25:32] Dan Runcie: And this steps into, I think, a broader conversation of some of the categorization of someone like Puff and the work that he does in that the media can often put him alongside other people who have happened to be a recording artist on a track and compare their business ventures in the same way. And what you're essentially saying is, You can't compare us all the same way. Did they build a revolt?

[00:26:01] Tarik Brooks: It's so hard cause it's like, I don't wanna deny how impactful he is as an entertainer. Epic performances. When you think about, and not just performances in music, performances in movies, performances on Broadway. Like the guy is quintessential, entertaining. You know, by all means, like you can't argue that. But I think when you try to look at him narrowly as just that you are really missing the picture. Cause I think that underestimates or understates, how difficult, it’s to build a bad boy into a success, to build a success, build a revolt, to build us rock, to build a Deleon, to build three schools, like that, that's not just on the back of him. An amazing entertainer, right? Like that speaks to his business instincts, his ability to spot trends, his ability to kinda find and cultivate talent, like those are all things that are universal in business. Leave aside what he's been able to do as an entertainer, I would argue, had he never got on the mic or touched the stage, he would've been just that successful business person just on the back. His business, you know, acumen and abilities. And so that's where, when we're in these conversations and people think about, you know, in cannabis this came up recently, people say like, well, you know, celebrity brands haven't really worked. And I'm like, lemme take a second to help you understand why this is different from a celebrity brand opportunity. The other thing that's different that I think is important for people to understand is when we take control of these assets, we'll be fully vertically integrated in the States that we operate, which, we are gonna cultivate, we are a process. We are gonna manufacture, we're gonna distribute, we're gonna sell. So these are all pieces of the business value chain that we'll operate. Again, not so relevant from the celebrity space. This is all around how do you build and run high quality businesses? And that's where I think you have to look at our business portfolio to understand how impactful Puff is throughout his career. And you just don't see those things that the only lens you're looking at is through him as the celebrity. 

[00:28:10] Dan Runcie: I could see this topic also coming up in some ways, potentially from an investment perspective, where you all have companies that are trying to either get you to invest or you're evaluating them and at some point someone on the other side of the table may come to you and be like, Hey, well if you invest in us, can we get a shout out in a song? Can we get an Instagram post? Can we do this? Like these things that view Puff as the influencer as opposed to the business leader that has all of these things.

[00:28:39] Tarik Brooks: Yeah. What I found just in my experience and I've been working with Puff almost six years now. Most of it typically comes with how people were introduced to them and the depth or lack thereof of their understanding of what he's been able to do throughout his career. There's a lot of stuff, you know, people just don't necessarily, you know, attribute to him in the way they should. So usually that journey is one where it's about informing people to say things like, let's make sure you have all the perspective and then think about kinda how this can make sense. Cause again, there's no denying his impact and influence as a celebrity. He's huge. Like, he's a big name, he's an iconic person in culture. But I think to only think about him that way now, I think when people start to understand, you know, what working with Combs Enterprises means more broadly, you start to understand the power of the platform that we really have. And that's where I think it gets really exciting for the people. 

[00:29:35] Dan Runcie: Yeah, I agree. That makes sense. From an investment perspective specifically though, do you feel like, is that something that often needs to be addressed with startups or with founders or others that may be whether deep down they may be looking for something and I'm more so asking that in a way because I've seen it happen to others and given this conversation, I can see that especially being somewhat frustrating where it's like, Hey, I hope you're not just interested in this to think you're gonna get a shout out.

[00:30:03] Tarik Brooks: Yeah. I mean, so look, I'll tell you when we are evaluating investment opportunities and people are looking at ideals, I don't think that is a thing that people are using as their primary driver. Do I think there are people who will be like nice to have, do they hope to get to meet them? Do they hope to get all those? Sure. Right. Like, again, all 'em, all those kinds of things. But I think when we get, you know, evaluating real deals. I think one thing that surprises people is the rigor with which we do our due diligence and our analysis, right? And so that's the first thing you see to say like, well this is not just, you know, high level celebrity thing. This is being looked at with real deep due diligence and real deep analysis. And I think from there it starts to shake away that kinda filter of, oh, oh, I'm gonna try to just get a celebrity deal done. Cause it's just not the way we do business. And I think people get that. 

[00:31:02] Dan Runcie: Right. Yeah. Leslie. Yeah. Especially if there's a due diligence process that they're seeing on their side. And maybe we could talk a little bit more about that, like from a high level, for a lot of the investments you do, maybe less like the cannabis deals, but more on the venture side, do you have a particular sweet spot in terms of, you know, this is normally the dollar amount range, or this is normally what we put in, or this is normally what we are looking for?

[00:31:26] Tarik Brooks: So, we have, you know, flexibility, right? We're not a fund that has to, you know, stick to a certain sector or a certain stage of growth the way, you know, funds are typically mandated to do so. We do have flexibility, but that said, going back to the earlier comment I was making, we tend to look at businesses where we see some application. At places within our current portfolio. Right? So like, I don't know that you'll ever see us do like, you know, some like heavy machinery deals or you know, enterprise software, things like that. Cause that's not natural, when you look at interface with the businesses we operate in, it becomes a lot more interesting for us. And so while we apply, you know, the very standard kinda ways of assessing, you know, the quality of the leadership team, the uniqueness of the opportunity, how opportunity is the total addressable market opportunity. Ultimately, we look at all those things just like every other, you know, person who investigates an opportunity. I think where it gets unique is for us, once we've gone through all that, we then sit back and say, okay, you know, how many of our businesses could actually utilize this offering? You know, how many different places do we think we can use this throughout our portfolio? And then it starts to become even more interesting. So, that's kinda how we get there. Now, to be clear, like we don't have a hard mandate or a set of funds. We have to put the work in the way the fund does, and so we tend to be very, very opportunistic. We pick what we do very carefully to be investing. So as we see economic conditions change as we see market conditions. We're able to just say like, all right, let's take a step back. Let's wait and see how things play out. And I think that helped. I mean, it helped us avoid, you know, some of the frustrations some folks are seeing in the web and cryptocurrency world. Cause we weren't forced to go aggressively and do something too fast. We saw the market was evolving and so we were able to take a step back, and continue to evaluate it. So from that perspective, there's a lot of flex. 

[00:33:35] Dan Runcie: Yeah, that makes sense, especially given that, yeah, there's no fun mandates though. It's not like you're burned because there's a winter or something like that.

[00:33:44] Tarik Brooks: Absolutely, and the reality is we're always investing in our core portfolio as well, right? So we think about whether we wanna put millions into, you know, a startup passively. Part of the kinda analysis is to know where we could deploy in our current portfolio and does that make more sense? Right? And so there's that kinda flow of how we think about deals as well.

[00:34:07] Dan Runcie:  Yeah, that makes sense. A couple months ago, there were headlines that Puff had apparently done an investment in Twitter around the time that Elon Musk had. Was that actually a thing, or did that come through or?

[00:34:21] Tarik Brooks: Look, so like Puff and Elon like have a relationship.You know, Twitter is a very interesting situation in that when you look at, you know, the side like Twitter's impact in society is certainly bigger than how it shows up from. You know, profit and loss and from a market cap perspective, and when you look at, you know, where Twitter is trading today is trading at a fraction of where like a Facebook or even like a Snapchat is I think, at this point. And so the question becomes, you know, from an investment perspective, like do you think, you know, with some changes you could create meaningful value in Twitter, that platform. And so I think while you know, the kind of, the kind of statements in the press were overstated. There was a small investment in Twitter, but it's nothing. People get pieces of information and run, so we just, you know, we gotta sit back.

[00:35:17] Dan Runcie: Yeah. And I think the way you framed it is correct. Right? I think it's definitely one of the 40 billion companies that creates more headlines than most other 44 billion companies we could probably even think of.

[00:35:29] Tarik Brooks: Absolutely. Absolutely. So, like with some decisions to be a much more viable company than today and the verdict's still out, like those changes happen in real time and cause of how, you know, big the platform is in society. You know, you're seeing those things play out in the press and, you know, I'm sure Elon's campus is trying to work as methodically as they can through those changes. As they figure out what is the right, you know, kind end state for, for that platform. 

[00:36:00] Dan Runcie: Yeah, definitely. The other side of the investment piece, of course, I think we talked a lot about Combs Enterprises point Capital, but on the other side of it too, thinking specifically about everything happening in music catalogs over the past couple of years, everyone wants these valuable catalogs with this timeless music. Combs has one of the most valuable hip hop, r&b black music catalogs of the past 30 years with Bad Boy Records. There hasn't been any public news about any sales, but I am sure that people must have been calling nonstop trying to at least see what they could get in there. What were those conversations like? I'm sure at some point it must have come up of Rick, whether it's running the bum numbers or even thinking through like, what would this look like? 

[00:36:45] Tarik Brooks: Yeah. Well look, I think as you know, like part of the interest in these catalogs is driven by the fact that, you know, the returns they generate aren't really correlated to the market, right? Like they’re like if you have, you know, a high quality performing catalog, it's gonna generate returns and generate cash flow irrespective of the ups and downs of the markets. And so that's attractive to investors. That said, for those same reasons, it's attractive to us, right? Like it is a great quality, high performing catalog. And for us, part of how, you know, we think about things, we think about like Puff's long-term vision, right? Like we're getting back into how he's getting back into music now with Love Records. You know, he's gonna build that platform in the way that makes sense as you think about the way culture and the music industry continues to evolve. And for us, we're in no rush to get rid of a portfolio that could be a part of that. Like who knows how you think about those assets in the future. And so for us, we're spending a lot of time thinking about what the future of music is gonna look like. And you know how Puff is gonna participate in that, what that looks like. And so for us, you know, again, you don't have, you know, some of the time constraints that you get from being they're public company or you know, money at a certain time. So we had the benefit of being able to go slow and kinda take our time and basically run experiments at our own pace to figure out what we wanna do. And so from that perspective, people have, you know, continually come through with offers and with opportunities and things. And we've purposely taken our time as we've about what, you know, Puff's experience of music is gonna be over the next, you know, next years as he climbs when he talks about it's his second, right? Like he's at the point of his career where he's accomplished and he's thinking about what that second looks like. Music has always been a very important part of his life, and so music is gonna be a part of that. Second, we're shaping what that looks like. And so from our perspective, there was no reason to move. 

[00:38:46] Dan Runcie:  That makes a lot of sense and I think for you, there's two things that are different with you all compared to some of the others. Two of them you touched on, but one of them is that you already have the infrastructure in place on how to do things that can help maximize the asset of the Bad Boy Records catalog. It isn't like one of these situations like where the Whitney Houston catalog, like it was dormant before Primary Wave came in and obviously they've like, you know, forseed it since they acquired it three years ago. And it isn't like one of these other legacy artists that, you know, the estate may be in shambles and things just aren't lined up. And yeah, for them it probably makes sense to just get a lump sum of money and be able to distribute that instead of hoping that your relatives who may not be trained in managing this type of asset can't continue doing it forward. Like you all have that. And I think that's part of it.

[00:39:37] Tarik Brooks: Yeah. And I think there's a couple ways to think about it too, right? Like, cause these artists work so hard to create these assets. You know, why sell 'em? Why get rid of them? But I think there's a couple ways you can think about. You can say one, alright, we may be at peak pricing. And so it's like, you know what, lemme sell while things are hot. You know, take the cash, be able to take the money off the table and invest other ways. You also, particularly with younger artists to say, all right, I'll sell this catalog, but if I'm still creating, I can continue to create and you know, build new works that will create value as well. And so I think there's different logic for different artists in terms of, you know, why they think about selling and why they sell when they do that, you know, in some respect make, particularly if you're looking at it from a purely financial perspective. But again, we were unique in the way that we have an ecosystem that helps continue to keep catalog relevant. We're back in music now, and so again, that also helps to create the halo effect across all of our ecosystems. And so for us, there just really isn't a rush to move too quickly, like where we can think about what is the kinda value maximizing way to utilize the catalog and whatever else we're doing to create the best outcomes. 

[00:40:54] Dan Runcie: Right. I think that's a good way to put it too, like you said, numbers are there and if you wanna sell, there are sound financial reasons that someone may choose to do so for you all, and given Puff's current goals in music, it just may not make the most sense, but with that though, shifting gears a bit, one business we haven't talked a lot about is Sean John and I know this is a business that the team had sold a couple years back. The company that bought it. Things didn't quite work out there. You all then bought it back recently. So where are things right now with Sean John?

[00:41:32] Tarik Brooks: Yeah, Sean John is super exciting, right? So you first start with an iconic, you know, street brand, right? You know, this is again another example. Being able to see where fashion was going, seeing how, you know, folks in our community were wearing other brands to get particular silhouettes and have it, you know, look a certain way and feel a certain way, and then be able to build a brand. That became a real like a foundational piece of, you know, hip hop culture. And through that process, Puff was the first African American man to win the CFDA award, which is the biggest award you can win in fashion, right? So truly iconic sold the brand. The buyers at the time weren't able to figure out how to maximize it, so they created the opportunity for us to buy back. And so what we're excited to do now, and we're in this process with Puff of really reimagining what can and should be for this generation, right? Like as much as you know, we all love the iconic valore sweatsuits and all rest it like, maybe that's a part of the future. Maybe it's a different brand position, different way, but like spending time. Actually really ideate on that and get to the right concept to bring it back again. We have the benefit cause, you know, we operate this portfolio, we don't have the pressure to rush. Like we don't have to, you know, do something right away to be able to, you know, capture that value overnight. You know, we have the luxury of being able to take our time and what I found with Puff is he likes to be able to, one, work with the quality people he possibly can and really run ideas through the ringer in terms of, you know, having people question his logic, test the thinking. Really, really pressure test to see if it's the right way before we do something. So what I can say is, right now in the lab, like, you know, there's creative folks that are thinking through, you know, what Sean John could be and should be and isn't engaged in that process. And so it's exciting I think when we do hit on the market, we're gonna come back in a way that one pays homage to the legacy of John, but then isn't just caught in what to be, is really thinking about what the brand could mean and should mean to, you know, new generations.

[00:43:41] Dan Runcie: Yeah, that makes sense. And I feel like when it happened too, it definitely generated some excitement. So I feel like there's some good momentum. 

[00:43:47] Tarik Brooks: Yeah, I think a lot of the folks who are dominating the fashion world now, were inspired, you know, by, you know, fans. So the fact that it's a brand is still, you know, relevant to people in different ways, gives us a great building. Like, I would rather be trying to kinda help people connect to this brand with so much history and legacy than trying to build a brand from scratch. You know? I think it provides a good foundation. Like's aspiration is to build iconic, long-lasting brands. So when you think about iconic brands that have been around for 55, you know, longer periods of time, that's what the goal is. And so, and those brands have gone through research, you know, any iconic brands gone off, of kinda laws and growth. And so for us, this is just really, you know, the second chapter of something that's gonna, you know, be a part of our community and our culture for years ago. 

[00:44:45] Dan Runcie: Yeah, for sure. And for you specifically, if we zoom out a bit, looking at the past six years since you've been there, we definitely talked a lot about wins, a lot of the successes. But are there any setbacks or are there any missed opportunities that you look back on, especially the past six years since you've been there being like, oh, I wonder if we did this differently with this brand. I wonder if we did that differently? 

[00:45:07] Tarik Brooks: Yeah, I think for us, one of the things I appreciate about Puff and it's a value that we both share, which you know, you look at everything as like a learning opportunity to say like maybe the outcome didn't go your way, but there was plenty of stuff you could learn from if you embrace the opportunity the right way. So like I look at the fact that it was back in was announced as an opportunity. We saw the value of the team and the value of the assets all around. You thought it was a great opportunity, pursued it. You know, the group that we were part of didn't win, but through that process, learned a ton about that space. You know, I met great people, you know, business partners and relationships that we still engaged with in different things today all came from that opportunity. So like, you know, while, look, I would've loved to be able to win that deal or bring that home, you know, I think there's a lot that comes from it. It sets us up for the things we do, you know, when I think about, David, we talked about the Revolt Summit earlier, right? Like, you know, as we were building the Revolt Summit, you know, we bring it back after, I think a year off. And then in 2020 the pandemic hit. So we gotta basically shut it down and go virtual. But like coming outta those were things we learned about how we're gonna in the future. So this year, you know, the biggest Revolt Summit ever, how's Metaverse versus online? Like all those things coming around. Again, learnings that you utilize going forward. And so, you know, whether it's you thinking through every single flavor in the portfolio or every single bab in the artist roster, even the ones that don't work out the way, you know, you want them to work out their stuff. You can learn from that help, impact and help you to be better as you move forward. That's the way we think. You know, and I talk all the time about just, you know, transparently looking at the things that go right and go wrong and making sure we're learning.

[00:47:05] Dan Runcie: Can we actually talk a little bit about the Carolina Panthers one specifically? Because I know you all said that you didn't win the bid, but was it an aspect of being outbid or the owners or someone just choosing someone different? Like how did that all go down? Cause I remember the headlines about it. I remember that there were a few other prominent black public figures that were in that ownership group too.

[00:47:27] Tarik Brooks: Yeah, I mean, look, what I would say is, you know, the person that you know ended up winning the bid, I believe, if I remember correctly, had, you know, the highest bid relationship. I think from that perspective, he kinda knew the league, well, and, and was prepared in a number of different ways to be able to take it down. And I would just say the group that we were part of kinda fell short in that way. But what's interesting is, you know, the number, and I just can't remember real time, the exact number he ended up paying for. When you look at the number that people think that the Washington Commanders are gonna command, and the number that the Denver Barcos commanded. You know, while that number he paid was high at the time, you know, it's not even half what somebody might pay for the Washington Commanders. And so perspective, you're willing to pay for something. You gotta live with the fact that there's just maybe willing to pay more for it than you. Right. And so, you know, we ended up being a part of a really sharp group that, you know, had thought really hard about, you know, what was in this case. You know, we rounded. So, you know, again, it's one of those things you learn from, right? Like, you know, sports, entertainment, and business is very unique. You know, assets, you know, come available at different points in time. It's all about thinking about, you know, what do you think the asset is worth? What do you think you can do with it, you know, to translate to what you think it should be worth. And somewhere in that analysis you get to what you think you should pay for, right? And that's where you kinda make your move. And in that case, you know that there were just folks willing to pay for. 

[00:49:12] Dan Runcie: Yeah, no, I think that's a good point too. Cause I feel like I might be misquoting, but I feel like the Panther's bid was somewhere, I think it was under 3 billion at least.

[00:49:20] Tarik Brooks: Yeah, I believe you're right. I wanna be careful. I just don't remember exactly. But yeah, I remember it being less than 3 billion and I think the number they're saying for Washington Commanders now, like 7 billion and so I imagine, you know, like when you think about where the value of that Panthers is going, probably going. They probably did really well. So I mean, again, and we believed it was gonna do well and continue to do well. I mean, when you look at the size of the deal, I guess Google or YouTube just did it with the NFL. The NFL is a platform, right? When you look at, at least for the last couple years, I haven't seen 2022. When you look at the list of the top 50 watched things on television every year, 40 plus of them are football games. Right? Right. It's just that powerful of an entertainment platform, so therefore commands the prices of command. 

[00:50:12] Dan Runcie: Yeah. Well, hopefully. Whether it's this group or some combination of others that we know we're interested in. Hopefully we see something happen soon in the sports ownership space. But this was great. I know we covered a bunch of topics in this one, and before we let you go though, is there anything that you didn't cover that the audience should stay looking out for or that we should be thinking about moving forward?

[00:50:34] Tarik Brooks: Yeah, I think 23 is a year that the audience should look out for a lot from, from the Combs organization. You know, music out of Love Records, including album and power, global e-commerce platform. Kinda reimagining how, you know, black people circulate dollars in our community. You know, the cannabis venture closing and beginning to build brands and establish meaningful footprints in the markets that it's in. There's just a lot of new things in 23, so there will be a lot coming outta our camp that we're super excited about, and so it's gonna be big. 

[00:51:08] Dan Runcie: We'll keep our lookout for that, man. All right. Appreciate you spending the time, man.

[00:51:12] Tarik Brooks: Thanks so much, man.Take care.

[00:51:14] Dan Runcie: If you enjoyed this podcast, go ahead and share it with a friend. Copy the link, text it to a friend, post it in your group chat. Post it in your Slack groups. Wherever you and your people talk, spread the word. That's how capital continues to grow and continues to reach the right people. And while you're at it, if you use Apple Podcast, go ahead. Rate the podcast, give it a high rating, and leave a review. Tell people why you like the podcast. That helps more people. Discover the show. Thank you in advance. Talk to you next week.

I had the pleasure of being the keynote speaker at New York University’s Annual Alumni Event for its music business department. Big thanks to Larry Miller, a professor and director of the program, for inviting me. 

It was a free-flowing conversation focused on how technology is reshaping the music industry from top-to-bottom. We’re well into the streaming era now, but some of the second-order effects are barely starting to ripple — particularly the oversaturation of content. It’s easier and cheaper than ever to release music, which explains how tens of thousands of new songs are uploaded to Spotify on a daily basis.

On one hand, this has ushered in a golden era of independent artists making a career without the backing of a label. On the other hand, value is increasingly accruing to the superstar artists. Most of these superstars were “grandfathered” into this new era as they were already household names before streaming took off. Reaching that same superstar status is harder and harder for new artists due to the industry’s oversaturation. 

Larry and I dove deeper into the issue during our conversation. Students also hit me with Q&A about burning topics such as ChatGPT, botted streaming numbers, and much more. Here’s what you can expect to hear on this episode: 

[2:02] Introduction from Larry Miller 

[5:09] Superstar artists like Taylor Swift and Drake shining brighter than ever

[10:22] Too many hits, not enough superstars

[17:23] How Curren$y “niched down” to break through

[24:18] Tradeoffs of going independent or the major label route

[26:47] Industry takeaways from Spotify and YouTube’s billions playlists

[30:32] YouTube’s competitive advantage over Spotify

[34:09] Evolving Trapital’s own business model

[39:43] Music’s bot problem in streaming and ticketing

[42:07] Is the music superstar dead?

[44:19] Picking a platform(s) as a new artist

[46:24] How oversaturated music landscape impacts listeners

[49:03] Is New York drill music the next wave?

[50:48] Pros and cons of AI music

Trapital’s first-ever Cultural Report for 2022: https://trapital.co/culture-report/

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital

Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.

TRANSCRIPTION

[00:00:00] Dan Runcie: Both Spotify and YouTube generated a tremendous amount of revenue for the music industry. I believe Spotify had last shared that they generated 7 billion for the industry. YouTube generates six or seven, I think it's 6 billion. The last thing that I had seen them put in. So that is a sign. Okay, great. You know, you tie that back into the numbers you shared before. You can do a little bit of backwards math to see how much of that is responsible for the overall industry with where it is now. So you see that, and then you also know that like anything else, the most popular songs drive most of that revenue. So you can kind of get a good idea to be like, okay, what are the songs that are driving? The music industry right now. 

[00:00:46] Dan Runcie: Hey, welcome to the podcast. I'm your host and the founder of Dan Ruey. This podcast is your place to gain insights from the executives in music, media, entertainment, and more who are taking hip hop culture to the next level. 

[00:01:04] (Intro) Dan Runcie: This episode is a fun one. We're sharing the audio from a talk that I recently gave at NYU. I was the keynote speaker at an event there for several hundred alumni and students. For the music business program, it starts off with a 10 minute talk by me where I'm giving an overview on the lay of the land with where things lay right now with streaming and music and social media, and how artists are doing their best to navigate all of the noise that's happening right now. And then it pivots into a conversation. Which is a fireside chat with me and Larry Miller, who's the head of the music program at N Y U, and we talk even more about what certain artists are doing, right? We talked about Currensy, who I recently had on the podcast a couple months ago. We also talk a little bit about me and Trapital and building this and where I see things going in the future. Really fun conversation. I really enjoyed doing this event and I hope you enjoyed this. Here it goes. 

[00:02:02] Larry Miller: Dan Runcie is the founder of Trapital. Trapital has become an amazing media platform and the quality and amount of content, really insightful content that Dan cranks out as remarkable. It's just remarkable. What it's about is the people who are taking hip hop and culture to the next level. That includes the artists who are becoming moguls, leaders who are reaching new heights and fans inspired by hip hop's growing influence. Dan, when he'd school, and I suppose even, you know, business school. This media company Trapital, because he wanted to see a change. The hip hop execs that he looked up to were becoming really successful business leaders, but he felt that they rarely got the coverage that they deserved. And he wanted to do something about it. So he launched Trapital in March of 2018, and the business has grown ever since. Tens of thousands of influential people read Trapital's weekly memos and listen to the Trapital Podcast every week to stay ahead of the latest trends. Trapital's been featured pretty much everywhere. Places like The New York Times and the Wall Street Journal, and the BBC and N P R,  C N B C and lots of other places are turning to Dan for insights on the business of hip hop. Dan's recent coverage has focused on lots of things. He's focused on the surprising differences between Spotify's and YouTube's. Billion stream playlists. Just looking at the ones that have done a billion on each platform. There are actually some pretty interesting differences between those two platforms. He's done significant work on how a venture capital fund from a 16 Z, Andreas and Horowitz invest money that is raised exclusively from black leaders in entertainment, sports, and business. He's done a report on the so-called decline in the influence of hip hop culture. He's done work on the future of ticketing. He's done a lot on DIY careers in hip hop, and done some really insightful reporting around Joe Kelli's amazing new book, Rap Capital, the Rise and Reign of Atlanta's hip hop culture, which if you haven't read it, get it. Dan got his MBA from a school in the Midwest, I think it's called Michigan, and he lives in San Francisco with his wife, and small child, daughter. Please give a warm NYU music biz welcome to Dan Runcie.

[00:05:09] Dan Runcie: Larry, thank you to the entire faculty, alumni for having me. It's an honor to be here. And I guess to start things off, because she's been brought up a few times, Taylor Swift has been a topic I know a lot of you thought about. So just outta curiosity, how many of you tried to buy Taylor Swift tickets this week? Okay, a few hands. Keep those hands up if you actually got Taylor Swift tickets this week. Okay? All right. Well, people will have to follow up with you all after to figure out exactly how you did that, but I think that's an interesting place to start with so much of what's happening right now in the music industry, because Ticketmaster, as most of you know, the whole entire app and the site crash because of the high demand. Ticketmaster put out this blog post and they said that they had five times the amount of hits compared to the Super Bowl, compared to other high days worth of events for this concert alone for Taylor Swift, and she's someone that's been on tour before. She's someone that has done plenty of things in music, but to see this kind of demand is pretty surprising. But she also broke a bunch of records with the album that she just put out a couple weeks ago, Midnights, and it's made me think about something we've talked a lot about recently, in Trapital. Something we've done a lot of research on. Right now there is so much music coming. I see, I think a few of you probably saw that music business Worldwide article, Spotify releases it. A hundred thousand songs a day get uploaded to that service. Most of those songs don't get listened to, to be clear, but a hundred thousand songs a day is still something else. And then as Larry had mentioned as well, Live Nation and a lot of these other event promoters and ticketing companies are having their biggest quarters and biggest years. And artists like Taylor are probably going to be having record years. And on the flip side, you also look at someone like Drake. Him and 21 Savage recently just put out their album, Her Loss. I think Drake gave one week's notice on this album, fourth highest streaming week that an album has ever had, which is pretty impressive. I know that Drake's a superstar, but still, even his past albums before this had plenty of buildup before where if you think about what he did with Scorpion or even the long buildup for an album like Certified Lover Boy. But the fact that Drake can announce on short notice is pretty surprising because if you think about where things are in music, you have more artists than ever that wanna tour. You have more artists than ever that are releasing music, but it's the superstar artists that are still the ones that people are gravitating more towards and they're the ones that are still getting most of the profits. But on the other side of the spectrum, things are getting a little bit tougher because Larry mentioned it a little bit earlier, but a lot of artists are struggling to make toward profitable, especially post pandemic the way that things are right now. Inflation costs are rising. It's costing so much more from freight costs to be able to travel with an entire production set from city to city, hotel airfare. So certain artists are selling out their tours or selling out their concert tickets, but they still aren't able to generate profit unless they increase the ticket prices. But even if you do that to a certain extent, the customers are going to push back. I'm sure a lot of people have seen all the complaints that people have had about how high the prices are, all these hidden fees. So there's a little bit of a squeeze there. And I think what we're seeing now is something that we've seen happen in the media, something that we've seen happen in music, but the fact that the barriers to entry have made music more easy to access, and now that we're in a post pandemic world, more people wanna be outside than ever. It's a lot of the artists at the top that are doing extremely well. But on the other side of the spectrum, while you do have some folks struggling, there are artists who are doing extremely well on the independent side of things. These are artists oftentimes that are owning their masters. These are artists that own their publishing rights as well. And because they've been able to keep a low cost and they've been able to essentially build from the ground up and continue to do it almost the way that a CEO in the music industry will be building up their business. They've been able to build pretty successful businesses too, in many ways. Leveraging the power of the internet because whether it's through SoundCloud or using YouTube or any of these other platforms, they can use their content or they can use their content to be able to drive awareness to their music. And then with that, they can then build up their audience and ultimately, Do that more successfully than they might have otherwise if they were to join one of the major record labels. So it's in this interesting piece because a lot of those artists feel like they have to make a decision, and Larry and I are gonna talk a little bit about one of them in a bit, but it's making artists, and I think many people in the music industry kind of pause because of the amount of content that's coming out, because of the amount of music that's coming out, it's a little bit harder to be able to pierce through. How many of you remember about a month ago, there was a billboard article that came out that said too many hits, not enough superstars, there was named something around that. Does that ring a bell? Okay. I've seen a few folks nod their heads there, and there were a few quotes in that article that stuck out to me because you had a lot of folks that are A & R or other executives in the industry that would say, we're doing all the things that they're telling us to do. We’re doing all the TikTok campaigns, we're doing the same press runs, we are creating the content, we're putting it out there. But even if we do all those things, We still can't guarantee that an artist that we think is going to be successful can get there, and that's because at the end of the day, the record labels and the artists themselves don't have control over the TikTok algorithms. They don't have control over the Instagram feeds to be able to tell what specifically is going to rise to the top and how you can break through another piece from that same article that stuck out to me. How many are you familiar with Steve? Okay. Pretty familiar. And it stuck out because there was a recent concert that he did and he was singing his song at the concert. The audience, the voices, got quiet once it got past that TikTok moment of the song. And if you're an artist, you're putting everything into your album. Of course you know that your fans are probably gonna sing harder to the hit songs under the singles. But because through the TikTok piece. I mean, it's just a reminder of how things are coming and where things are going. Even the concept of a one hit wonder I think has changed quite a bit because back when a lot of us probably were growing up, even if an artist was a one hit wonder, you still probably knew something about that artist. I mean, we can go back years ago, but even someone like Lou Bega who had that song, Mambo Number Five, or even someone like Trinidad James who had all gold everything, you still remember the videos, if you saw them walking down the street, you could probably recognize them. Or I've still been to, you know, a few events where I've seen some of these folks at. But now a one hit wonder could have just a song that you may hear a bit often, but you're recognizing it from some meme that someone else did on their TikTok video or someone else did. So you're engaging a bit more with the viral hit itself than the actual person that's making the music. So it's making things a lot tougher for a lot of artists who I think are the majority of them, wanna be successful, wanna be known and wanna get a few looks. But that middle ground of just wanting to be able to feel like you have that moderate place, you're kind of in the middle of the industry. It's getting a little bit harder to continue to have that being viable because now as I mentioned, you're starting to see a bit of this path where you have the superstars who are just getting more and more recognition as there's more and more options than ever. Or the independent artists who, even though the economics work in their favor, even though they may be able to do even better financially than some artists who may get more exposure than them, they may not be getting looked at the same, as some of their peers are. So it's a very interesting place for the industry. I think with that, it presents a ton of opportunity, but I also think that for certain artists, especially hip hop artists, there's a little bit of a mindset shift in terms of how am I releasing music? What is it that I wanna release? Because I think for a while it seemed like there was a blueprint that generally most people do. You put your music out, maybe you have a following on social media, you share that. You share a little bit of your personality. Hopefully a good manager can come to you if you find one or vice versa. If you do well, you're able to break through. Then maybe a major record label can find you. There was a bit of a general path, but now you're starting to see more and more of that split, and it's making artists in a lot of ways, think a bit sooner about what that decision is when you're still figuring out where it is and where you honestly wanna be. Do you wanna try to become the next Taylor Swift or the next Drake, or do you wanna try to do this a bit more yourself and have a bit more control over what you do? Because the thing is, even things like that, like becoming the next Drake or becoming the next Taylor Swift, have plenty of nuance part of other things that people have been talking about is how much harder it is for a newer artist to be able to hit the same levels. The fact that, you know, we're still referencing whether it's your Adele's or Beyonce's or Taylor Swifts, or Drake's, a lot of these artists have been famous years before TikTok was ever a thing. They still had a lot of that monocultural benefit of when they blew up, they were the thing, and they were able to benefit from that and have a lot of exposure. So now any of the platforms they had, it's all gravy. Now it's all added. They can use that to their advantage, but you are now trying to rise up and do that same thing, it's harder. Even someone like Olivia Rodrigo. Any fans of Olivia Rodrigo? So she is someone who I think Driver's License in a lot of ways for some people felt like the song blew up overnight and it did extremely successful, as did her album. But she was a Disney kid. She had been famous for years before leading up to that. So even that isn't quite at that same level. So it's a very interesting time in the industry. It's been a really great time to working the work we're doing at Trapital specifically to understand what this means. We're talking to a lot of different artists. We're talking to a lot of their managers, and really just making sure that we can share the best stories that we can about what's working, what's not, and highlighting those things. Cuz I think at the end of the day, you wanna find a way for artists to be successful. You wanna find a way for the people that are trying to build companies in the space to be successful, but it's very important to with the way things are trending right now, and a lot of people are saying, oh, it's oversaturated. Oh, we hope that we can eventually get back to a place that is less saturated. I don't think that's happening. The cat's out of the box at this point. If anything, there's gonna be more and more exposure more and more platforms. You look at how quickly TikTok grew to be a platform that has 1 billion monthly active users at this rate. There could be another platform that hasn't even grown yet that by 2026 could be that big. That's just how big things are from a connectivity perspective. So you never know what things could look like, but I think for where things are heading in the music industry there, it's a really fascinating time and even there's a lot of the established superstars that have done extremely well. There's still a ton of potential opportunity. I'll pause there cuz I know that Larry and I can talk a little bit more about that. But it is such a unique time and I think it's probably a good time for us to continue having the conversation because one of the people I do wanna talk to you about is Currency, who is an artist there. So we can do that in a moment, but yeah.

[00:17:23] Larry Miller: A New Orleans hip hop artist who's got a lot going, you guys know Currensy. Woo woo. So what's the deal and what made this especially noteworthy for you?

[00:17:36] Dan Runcie: So Currensy is someone who I had interviewed about a month ago and it was a pleasure to have him on as a guest on a podcast. I talked to him and his long-time business manager and partner Musa, and Currensy is someone who has been through each aspect of the music industry and I think in capsules a lot of what we've been talking about here. He first got exposure about 20 years ago. He was signed to Masterpiece No Limit label, and of course there's the whole New Orleans connection there. He ended up leaving New No Limit, and then he eventually signed on with Cash, Money and Young Money specifically under Lil Wayne. The thing is though, he actually ended up leaving cash money right around the 2007-2008 timeframe, which was a bit unique because that was the time that Drake and Nicki Minaj ended up joining them as well. And that label went on a pretty high trajectory after that. So some of the young money fans may often be like, oh, what could have happened? Right. But I actually think it was probably the best thing for Currensy because he realized that he was speaking to a slightly different audience, and specifically he knew that there were certain things that he was gonna be able to share with them that would resonate. That probably may not make sense trying to be on the next Lil Wayne mixtape or trying to be on the next Young Money collection or whatever it is. So he's been able to continue his career since, but he has a bit more of an interesting model where you see artists like him, NBA Young Boys, another one, but these artists are releasing albums every other month or releasing mixtapes every other month on streaming. And it's one of these things whenever people talk about that, it often becomes a bit of this question, where is this quality that's being put out? Or is this just quantity? And I think it's a very real thing. I mean, as someone that grew up enjoying a lot of music, even the artists that are successful now, from a personal fan perspective, you know? Yeah. It means something that, yes, you know, Beyonce drops Renaissance. We haven't heard her do a solo album since 2016, and she did one this summer. Okay. I'm listening. Same thing with Adele when she had hers, but I think that for Currensy, I'm not in, I may not be in that fan base demographic specifically, but the people that are following him on a regular basis love him. So he is focused on his true fans, he's found them. And by being able to do that, ultimately these people are gonna wanna hear from you on a more regular basis. Even if it isn't your best stuff, it's what they're gonna want to hear and it speaks to the flexibility that is offered now with streaming because before, just with how much it cost to release an album, yeah, it made perfect sense why you would wait and wanna save your best stuff for it. But if an artist wants to have the model where they wanna release frequency frequently and drop as often as they can, they can do that. And the platforms give them the flexibility. And someone like Currensy, the way he put it to me was, you know, there's certain artists that are gonna get 80 million streams a day. They're more popular than I am, but they don't drop as often as I do. And I'm gonna get my 80 million streams as well, even if I'm putting out much more music than they are. And for a lot of artists, they're still recording the same amount of music. They're just shit picking the best ones to pick for the album versus someone like Currensy's like, no, let me share most of it and share it with the fans. So it's very interesting to hear that. And then specifically since then, he's been able to take a lot of that money. He is solely focused, for the most part on tours. Really doesn't do too many festivals because he doesn't feel like that is where his true fans are. So leaning even more so into the true fan piece, been able to build up and create a few different nightclubs and places like that in New Orleans. He has an apparel company, Jet Life, so it's been a really interesting model for someone to leverage the tools that are available. And even though he may not speak to me or you specifically, he has his people. That to me shows the power of artists being able to focus on their niche and being able to build from there.

[00:21:38] Larry Miller: How broad do you think this, you know, phenomenon is? I mean, you made a point a couple of minutes ago that it's only gonna get bigger. There's only going to be more of this. And I think that the inference for the incumbents for, you know, the majors in particular is that they need to, you know, continue to, you know, innovate and unbundle the thing that they do and be really good and, and competitive at it. You know, the leverage seems to be moving overwhelmingly toward the side of the individual music creator. You seeing more of that?

[00:22:16] Dan Runcie: I think there's nuance there, and it's something I've thought a lot about because on one hand you do see the overall revenue share numbers, where the share of at least recorded music revenue from independent artists is continuing to grow, and I believe now it's over 30% and has continued to grow year over year, the past couple of years. On the other side of it though, if you're looking at the top artists on the Spotify charts or the top artists on any of these other charts, it's still mostly signed artists that are there. Those signed artists may not necessarily, let's see, be as many new names. Like it's gonna be harder for someone to dominate the entire list the way that Taylor or Drake do when they release an album. But most of the ones that are still there are still the signed folks. So I do feel like a lot of at least for the folks on the record label specifically and the people that are working there or the people that are working at publishing companies, they still are working with the majority of the most popular artists. I know there was a quote recently from Steven Cooper from Warner Music Group and he said, our record label is less dependent on superstars than it has been in the past. And I think there's a lot of truth to that just because you can see who's being signed to wear, you can see how many stars they've been able to develop ever since. And even though there may be less big names that they may have had. There's still a higher likelihood that a big name is gonna come from them than it would be from, you know, an independent group, from an independent artist. I would say, especially at the top level. Mm-hmm. I would say. Yeah.

[00:23:51] Larry Miller: Right. And so for an individual artist, they may need to go through a, you know, calculation that evolves over a period of time about whether they have the ambition. and the drive to become Drake or Taylor Swift, or if they can make, you know, just as much or maybe more on a probability adjusted basis doing it for themselves. 

[00:24:18] Dan Runcie: Yeah, I do think that. If you're an artist and you wanna shoot for the stars, I think that even though there's a ton more platforms and there's many other tools out there that are making it easier for you to own your masters and own the rights to everything that you have, even the artists that have ended their deals, they're much more likely to resign with the major record labels or resign with the publishing companies, but having you know better terms than they did before. You've seen that with the weekend, and you've seen that with a few of the artists, specifically, a lot of the ones signed to Republic Records, they've, you know, de-risk themselves essentially as assets so they're able to get better terms. And they may have gotten on that first deal many years ago, but I do think that that means a few things, right? That means that those artists themselves that are already established, they're more likely to wanna stay there. But I do think for the newer artists, there's still plenty of opportunity because there are still a number of companies that wanna be able to partner with them and help them build. Right. You were just referencing Downtown and one of their key tenants of their mission is, let's help you become a superstar where you can continue to own the assets that you have. And there's a tremendous team there that has a tremendous amount of backing and tools to be able to make that happen. So I think things like that are really, really interesting. I think we'll have to continue to see how it plays out to see if we can see someone that can continue to go that route without ever having to given it up. Cuz I think right now you've seen a lot of folks were traded in at least, you know, some ownership for their rights early on. But then once they got enough leverage, they were able to get them back, which I think is powerful and in their own right. But have we seen it the other way where they started off owning everything and they've continued to own throughout their career? I think naturally there's any type of trade off you have to do when you have a business partnership. So part of that comes with the territory. But with so much flexibility and so many more options, it's gonna be interesting to watch. And that's one thing I'm interested in.

[00:26:23] Larry Miller: You just mentioned the charts a minute ago, and I know that you just did a pretty deep dive on a comparison, of the billion stream or billion view charts that YouTube and Spotify separately came out with, that revealed some sort of interesting, you know, nuanced insights about what is similar but different about those platforms. What did you find? 

[00:26:47] Dan Runcie: Yeah, and I guess first for a little bit of context there, one of the drivers for this analysis was because, both Spotify and YouTube generated a tremendous amount of revenue for the music industry. I believe Spotify had last shared that they generated 7 billion for the industry. YouTube generates six or seven, I think it's 6 billion. The last thing that I had seen them put in, so, that is a sign. Okay, great. You know, you tie that back into the numbers you shared before. You can do a little bit of backwards math to see how much of that is responsible for the overall industry with where it is now. So you see that, and then you also know that like anything else, the most popular songs drive most of that revenue. So you can kind of get a good idea to be like, okay, what are the songs that are driving The music industry right now, and if you're looking at those two platforms specifically, a lot of similarities because I think some songs are hits regardless of the platform, but a lot of differences too. I think there are a few things that stuck out. Spotify specifically is a bit more leaned, at least as of right now. It's a bit more skewed towards English speaking music. I think that's just given where it's got a lot of exposure. In the earlier years, Spotify, a Swedish company, had a lot of exposure specifically in Western Europe, and then we're seeing it now with a bit more of a saturated market now in North America, but YouTube has been much more international. As a, you know, result. And in many ways, as a compliment, it was a free service and a lot of times it was able to reach and help and make sure that people could upload and reach people all across the world. And I think with that, we've seen a lot more artists from Latin America that have been able to excel quite far on spot on YouTube's list specifically. And we may not see them as high on Spotify's list. So that's something that was definitely a bit unique. With Spotify specifically, it aligns a bit more towards radio hits in general because you think about music itself, it is a very flexible type of thing that people wanna consume. You can listen to something on Spotify while you're at a friend's party. You can listen to it while you're, you know, on, on yourself, demand. You're hearing music on the radio, the grocery store. There's so many ways where the same song can resonate in a way that watching the music video, it's a little. Right, like it's a much more active thing. You're gonna probably wanna sit here and have this more visual engagement and experience with it. So with that, it highlights a few things. One, YouTube is probably gonna be a bit more aligned to what someone may actively choose to wanna listen to. So there's some insights there. But YouTube's also a bit specific because. The platform is a bit more driven by memes and things like that, that probably just don't get as much notoriety or become as relevant as they would be on Spotify. Like for instance, are you all familiar with the song?, Nelly and Kelly Rowland, Dilemma. So there's this iconic scene in that music video where Kelly is texting someone and she's using Microsoft Excel to text the person . And it's bizarre because it's something that probably didn't get that much, you know, attention at the time it came out. But now that people can rewind and look at stuff, it's fascinating. So things like that, you know, just don't translate the same way.

[00:30:15] Larry Miller: What about the community building and just the community-esque  interaction that has been natively part of YouTube for really quite a long time now that is still kind of blacking at Spotify? Is that a factor?

[00:30:32] Dan Runcie: I think so. And I'm glad you brought that up because I think YouTube's power in a lot of ways is, you can look at the comment section of a lot of these songs, and it's almost like a trip down memory lane, especially for some of these songs that you may not have visited in a little bit of time. And artists can see the name of their fan, they can interact with them, they can find a way to be able to try to build a bit of a community there. You can't necessarily do that on the same platform on Spotify. I think in a lot of ways, Spotify and maybe some of the other digital streaming providers from a strategic perspective didn't necessarily give artists the option to be able to see who their fans were, because I think in some ways that data has so much value, right? Spotify may share it as a flex every now and then through Spotify wrapped and things like that, where you can be like, oh, I'm in the 0.4% of Travis Scott fans. You know, I guess I listen to, you know, whatever song too often. But besides that, you don't really have that. But think about the power that an artist could have if they could do that themselves on YouTube. Even though you don't get that data, you can still see some familiar people. You can, you know, find some way to connect or go off platform if you can. And that creates the ability to build a niche. And I think in some ways it helps you have the algorithm just work in your favor, right? Like I think YouTube just being based in general off of, you know, it's the second biggest search engine, so you're leveraging everything from Google's power to be able to help power that. It just helps you as an artist be able to connect directly.

So someone I mentioned earlier, NBA young boy. The way that he's used YouTube has been pretty fascinating because he releases his music first on that platform and he's someone that's releasing music every time. And the way that he's been so focused on it, it's almost similar to someone like, do you all know who Mr. Beast is? The YouTuber? Yeah. I heard a few laughs there, but it's almost a bit of a similar mentality to that where he understands that this is his audience. He sees what's working in the algorithm  may continue to serve them, and because of the success from YouTube, he's been able to translate that to other platforms. So I do think that that's a platform, and I think there's a few of them, but artists being able to find a platform that allows them to connect with fans, and especially if fans in their niche or in their base happen to be there. It can be really powerfu.

[00:33:04] Larry Miller: I want to remind you that we're gonna have a couple of minutes for questions from you and you know, please figure out what you'd like to ask Dan. And I'm not sure exactly where we're gonna have a mic set up, but I know it's gonna be somewhere. It's walking around the back of the room right now. But first I have another question. When we were talking earlier, we had talked a little bit about the shift in capital business model and that where you had started out as a subscription based business and now that it is, you know, entirely sponsorship driven and that one of the things that that has afforded you is the ability to help build deal flow as the result of the subject matter and the segment of the business that you're in as an angel investor. And I wonder if you can say more about that, about what your experience has been and what your aspirations are. 

[00:34:09] Dan Runcie: Yeah. No, thanks for asking that for me. Going back a little bit. When I initially started Trapital, the thought was to have this as a paid subscription service model where I would have a free piece that went out every week, and then if you wanted to have additional pieces written, and it would be specifically for the people that were most interested, and it would be $10 a month or a hundred dollars a year, and I did that a little under a year and things were working and I mean, things were growing. I took a step back because I felt like what was most effective for me and what was most effective for the type of things I'm doing was I wanted as many people as possible to be able to be able to either read or listen to the stuff that we're sharing because I felt like this wasn't like I was writing about tech or finance where there were plenty of people that had been writing about this, but there was something that, you know, you were gonna get like a trade secret or some insights from me that you wouldn't necessarily get elsewhere like you had shared in the intro in the beginning. I largely wanted to start this to be able to elevate and hopefully change the discussion so that when people talk about whether it's the business leaders and the strategic moves that are happening, your names like your Rihannas and your Jay-Z's can be mentioned in, you know, in the same breaths as your Jack Dorsey's or your Jack Welch's or other people like that. There are successful people in this industry that are doing this, and being able to highlight that was effective. So the more that I could broaden who could have access to it and who could read it, the more that that would be possible. And I felt that there was opportunity from a sponsorship perspective, from other companies in this space, or even tangentially outside of the space that wanted to align with this type of content and the type of people that were reading it, that I knew that not only could it match the revenue that was coming in from the subscription, it could likely be even larger. And with that, the more people it reaches, the more that it helps everything else grow. And one of the things that it's afforded me is the ability to not just be able to, you know, write and share insights about the strategy of what's happening, not just from the artist level, but from the companies that are in the space and technology, where a lot of them started to reach out to me and wanted to get my advice on, hey, this is what we're building. What do you think of X, Y, and Z? But what that specifically offered then was leading to the next conversation where, hey, we're gonna be raising. And we would love to have you on as an investor specifically because we think you have the insights and we think that you could be a value add to what we're building. And you know, after I think, you know, a few of those conversations, that's where I say, you know, this is something that can be taken more seriously because the insights are here and the spaces here are obvious. And I think that it became more and more clear that I could use this as an opportunity to, you know, back and support a lot of the companies in the space, specifically the ones that were aligned with the way that I had seen clearly what was working and what wasn't. So it's afforded me the opportunity to make angel investments in several of these companies and something that I'll continue to do through the work that I do here. And I think having a podcast, having a newsletter has been a great way to do that. And ultimately just continuing to, not just me, but other folks on the team with their help as well, to make sure that the content and the insights that we're sharing is as helpful as possible. Cuz at the end of the day, this is research that we wanna be able to make it reach as many people as possible that are interested. And then with that, knowing that it's not just the content and the insights that are helpful, but actually being able to provide, you know, financial backing and support to the companies in this space that can help, you know, make it, you know, as strong as it can be, not just for them, but for the other companies. I mean, it's a space that has had so much innovation and I think one of the things that's been a bit frustrating to see at particular points is that a lot of the newer companies in this space have had a PR, and had a pattern of asking for forgiveness instead of permission from the music industry. Yeah. To be able to use the rights of a lot of the songs, to be able to have a lot of the partnerships that they should have in place. And it doesn't have to be that way. I think there are great people out there that are building companies the right way. They're having the conversations early on and being able to help be part of that movement has been really fascinating and inspiring to see as well.

[00:38:44] Larry Miller: Great. Thanks for sharing that, Dan. Let's go to your questions. I know that some of you have questions for Dan. If you do have one, there's an open mic in the middle of the floor and we'll give you a moment. Step right up. There is a questioner.

[00:39:00] Audience 1: Hey, how are you doing? I just have a quick question. I'm really curious on how you feel about just botting in the industry in general, because I feel like when you were talking about the YouTube charts compared to Spotify, there could be some discrepancies in the data just because it's a lot easier to bot on YouTube versus Spotify you can get flagged. So I'm just kind of curious to know what your thoughts are around those charts. You know how accurate the data is and also what you think about that in general. Because I feel like, especially in hip hop too, it's really prevalent and it's definitely a lot about getting the numbers and stuff like that. And a lot of my clients have, you know, similar thoughts about that. So I'm just curious to know what your thoughts are on the morality of that. Is it worth it? Is it not? All those things. So yeah. Thank you.

[00:39:43] Dan Runcie: Yep. Great question. I think I'll take it in two parts cuz I think there's issues with bots on streaming sites that are issues with bots on the ticketing side too. As you know, a lot of people have probably experienced it, but on the streaming side of it, it's something that I've looked at and thought it's frustrating and it's wrong because a lot of people are just gaming the system because I think that the technology has improved where a lot of things like streaming farms and things like that have been able to, it's become a little bit easier to be able to figure out like what to ignore, what not to include from a data perspective, where I think a lot of that's been ignored. But I think a few people, I don't know if anyone saw, but there was this video going around about how I don't know if it's true a hundred percent or not, but like Travis Scott's team, like gaming the system to be able to, you know what I'm referring to? Like, to be able to help boost the sales for Astro World. And it's one of these things where, okay, you could, if I'm taking a step back, directionally speaking, do I still think that he would've been as popular as he is without that happening? I still do. I mean, I think that there were so many things treading in that direction, but did that help? I'm sure it did. You know, so I still do think that it is something that is directionally, it can still give you a pretty clear idea over what's accurate and what's not. I think it's really hard to pierce through the top and be there consistently if it's purely driven by bots. But I do think that more likely than those things come to the surface in some way. Whether it's an artist that is streaming or they have tons of  social media followers, but then when it becomes time to try to sell a concert ticket, The tickets can't sell, and then that artist then has to downgrade a venue or they have to cancel the show because of things like that. These things always find a way to come to head. So I do think that in some cases, some type of retribution does often happen for artists specifically with streaming, just to get other questions in. I won't go into the ticketing piece of it. I think we all know how, you know, you know, horrible that that can be, but yeah.

[00:41:52] Larry Miller: Do we have another question? Oh, good. Hi. Welcome back.

[00:41:57] Audience 2: Who decided this way of asking questions? This is really weird. Hi Dan. Is the superstar dead? And if so, is that necessarily a bad thing? 

[00:42:07] Dan Runcie: Good question. I don't think superstars are dead, but I do think the definition of what we describe them as has shifted and it continues to shift over time. Right, because. Let's say we go back to the sixties or even, let's take a step back. Even if you go back to the nineties and say, okay, our superstar's dead. No one is as big as Beatlemania was before people would say, you're right. No one's as big as Beatlemania, but Whitney Houston and Mariah Carey are still very popular as our Boys 2 Men are whoever else. And I think that's kind of shifted now to someone being like, okay, well our superstar's dead. Can someone be as big as Beyonce? They may not necessarily be as big as Beyonce in that same type of way, but I mean, Billie Eilish had a pretty good year. I think even though I think she came out in the late 2010s, she still had her, you know, big moment 2019. I think we're also seeing, I think if anything, the biggest superstar potential now, just given the way that things have expanded, is on the international side too. You look at what Bad Bunny’s doing. I mean, that is a superstar at every definition. The fact that a non-US album or a non-English speaking album has been on the top of the billboard list for almost the entire year is incredible and the billboard is really just capturing what's happening in the US. So imagine if that was a worldwide list. So, yeah, so I think it shifts in that way where I think, you know, 20 years from now, people will be saying, oh, is so-and-so, you know, or a superstar's dead because no one will be as Bad Bunny be as big as Bad Bunny. So I think it continues to evolve.

[00:43:48] Larry Miller: Great. Hi, Max.

[00:43:50] Audience 3: Hi. How's it going everybody? First off, I just want to say, I can't believe you started this speaking about Currensy. I'm a huge fan of his and he has a lot of unique ways of releasing music. And so my question is, if you're a burgeoning new artist who's trying to get as many listens as possible, would you suggest trying to move forward in platforms that are really big right now? Or finding platforms that are emerging, trying to develop a fan base there where there's less competition?

[00:44:19] Dan Runcie: I think it's a mix, but I think, and maybe instead of the last piece of it in terms of finding platforms that are emerging, I think it's more so finding a platform that may seem less quote unquote sexy. But is that gonna be more so where your fans are where your folks like to be. Like for instance, I think a platform like Audio Mac has been doing pretty well over the past couple of years, and they may not get the same level of headlines that Spotify is, but if you are an artist that has a strong following in West Africa or in other parts of Africa, and you know that Audio Mac is one of the leading streaming platforms there. And then that's gonna work out tremendously in your advantage. And I don't know if I necessarily consider them like newer emerging, but I think it works out there. But on the other side of it too, still having exposure o on your Spotifys and your YouTubes and your Apple musics is still good as well because you want to, you don't know when that moment may be that you, for lack of a better word, like breakthrough and have that hit. And when you do, you wanna be able to still have something in those other places. Even if you had your home base on, you know, one of the platforms that may not get as much exposure but for the people you're trying to reach may be the best thing.

[00:45:38] Larry Miller: What do you got?

[00:45:40] Audience 4:  Hey. So, in a conversation of superstars, you know, you talked about the notion, the billboard, headline, you know, too many hits starting up superstars. The platformization of music where it is right now. Maybe it's a little bit harder for superstars to kind of come up and cut through the noise, but the potential, like you mentioned, to be a superstar is never any bigger in that sort of way. You mentioned the implications on, you know, from like the label side of things, from the other side of things a bit. In your opinion, what are the implications from a music consumption standpoint? You know, the average listener, people that listen to music in terms of the implications for music discovery, how music is in people's lifestyles and the way that it is now with platforms and just the superstar conversation as a whole?

[00:46:24] Dan Runcie: Yeah, I thought about this a few ways because I think that one of the things that we're missing a bit because of the way things are now, is that someone can have a song that is topping the charts, but it's not the way that it was maybe like 10, 20 years ago where, oh, if the song is the number one song in the country, oh, like I heard it on the way to the grocery store and then I heard it on the radio and then my friend was probably playing it when I went over their house in the afternoon. No, it's more likely to be that the super fans of this song have been like, you know, streaming the hell out of it and they just have been going nonstop and I may not even know who that person is. So a bit of that water aspect isn't necessarily there as much from a fan perspective. I think the other piece of it is the algorithm of the streaming services double down on this more because at least when I log into Spotify or if I log into one of the streaming services, I'm more likely to see the songs that I've been listening to before. I'm more likely to get some type of daily mix that is based on what I've been listening to before. It's harder for me to be able to see. If I actually wanna see, okay, what are the new top hits? Like I have to search for that to some extent and go out of the algorithmic feed. That's already been tailored to me. So I think it makes it harder for me to go search for those things. And in some ways, the platforms kind of design it that way because they're like, okay, if they know that I am Rihanna fan. They're more likely to want to share with me more Rihanna songs I haven't listened to than assuming that I'm gonna like whoever may be the rising artist right now. So I think it makes it tougher from that perspective. And I think a bit of that shared community isn't, isn't there as much. So I think from a fan perspective, I've kind of had a bit of a double-edged sword because while I think part of what attracted me to so much music and memories is being able to have those shared experiences with people as opposed to now it's like, you may have like these super fandom experiences, but it's with these people that may not necessarily be in your direct area, but you're all connecting online in this way that you may not have.

[00:48:33] Larry Miller: Okay, good. I think we have time for, well, let's ask this question and see how we're doing for time. Go ahead.

[00:48:39] Dan Runcie: Maybe you could do like a rapid round, we could get through.

[00:48:41] Audience 5:  Just really quick then, what are your thoughts on like NYC Drill? I know artists like Dio Sama are huge. Just on the data side like TikTok and YouTube, so what are your thoughts on it? Sort of, cuz I'm a little skeptical on it going really mass. Like, cuz we're really super focused on NYC. Just how big can Drill really get? 

[00:49:03] Dan Runcie: Well, I think we've seen, you know, the growth and exposure in the Midwest specifically. I think so you've definitely seen it there. I think you've seen artists kind of having their own moment, whether it's someone like Ice Spice, who I think has blown up pretty recently. But I also think that moments of it hurt, right? I think it really would've been cool to see someone like Pop Smoke be able to have the moment and the rise that I think he was going to have. But even that, I think it's kind of interesting the way you phrased the question, because I think even for something like Drill music, there's probably certain people that, like the concept of Drill music, don't like to reach them in the same way. But if you're in it, you probably already think that it's overexposed to some extent, which I think kind of speaks to this like broader dynamic that we're in, where if you're in something, it can feel like if you're in that niche and you're focus, and I know it may sound awkward to call Drill music niche in that way, but if you're in that group, then yeah, it can seem like, oh wow, this thing has been going on for a while, and now it feels like it's everywhere. But if you don't really tap into Drill like that, someone could be like, oh, what's this thing? So I think that's something I keep in mind with it as well. Like there's still so much more exposure out there. So I don't necessarily have those concerns for Drill music. If anything, I think we'll probably see other regions, especially in the US, continue to adopt it more the way that we've seen New York and the Midwest, specifically Chicago.

[00:50:26] Larry Miller: Let's go to what I think is gonna be a final question. Go ahead.

[00:50:30] Audience 6: Okay. I just had a question about your thoughts and involvement in like A.I involvement in the music industry. You know, just like in terms of the recording side.  perhaps may potentially be in the Live side of the music industry as well. I don't know if there's any applications for that? But just your thoughts on that.

[00:50:48] Dan Runcie: I'll keep this quick. It's funny, I was talking to someone about this earlier today. A.I and anything based on like GPT Three in general is fascinating because I do think it can be addictive for artists, but I feel like I can already see the headaches that are there with so many things, right? Because if it's based off existing content, and of course those content owners are rightfully gonna have certain issues about who's basing these A.I lyrics or songs off of things. I do think, though, that for certain artists it can be fascinating. I don't think it'll get to the point where someone could have like a song that they actually wanna release at a top level that is created by A.I. At least not now. The technology isn't there, but could it help with an artist that is having writer's block about a particular thing? I think it was interesting. There's a conversation. Bruce Springsteen was on an Interview and he was saying how like for him with A.I. he's looking at it as something where, you know, he's like, I've had months where I just didn't write cuz I essentially had writer's block. I just couldn't think of something to be able to put out there. But could A.I. just help jog my memory and even as someone that I am not a songwriter or a musician, but as a writer, I've been seeing these tools and the things they can do, and just being able to plus, you know, sign and then them being able to generate some thoughts, or at least a potential outline of, okay, what could this topic look like? It does at least help jog the memory in the way that reading an article or something like that can be such a fascinating space. I know we're over time, but yeah. Fascinating space. 

[00:52:31] Larry Miller: Thank you. We're gonna have to leave this here for now, but you can hang out for a while and chat with everybody as we run through the rest of our program and maybe even a little bit afterward. And so let's thank Dan for a really thoughtful discussion.

[00:52:50] Dan Runcie: If you enjoyed this podcast, go ahead and share it with a friend. Copy the link, text it to a friend, post it in your group chat. Post it in your Slack groups. Wherever you and your people talk, spread the word. That's how capital continues to grow and continues to reach the right people. And while you're at it, if you use Apple Podcast, go ahead. Rate the podcast, give it a high rating, and leave a review. Tell people why you like the podcast. That helps more people. Discover the show. Thank you in advance. Talk to you next week.

I’m digging into the mailbag for today’s episode. For the first time in over a year, I asked Trapital listeners and readers to send me their most burning questions about the music industry. I’ve pulled out nine questions from the bunch to cover on the show. 

We’re covering everything from NFTs to artificial-intelligence-assisted music creation to investing in music catalogs going forward and a whole lot more. I’m hitting you with my honest thoughts on each. Here’s a look at the topics:

[0:54] State of music NFTs 

[4:40] Customer problems as a music startup

[8:35] Lack of new music superstars 

[12:07] Future of AI-assisted music creation 

[17:00] Tradeoff for artists wanting ownership 

[22:11] Hasbro selling eOne

[26:16] Music catalog investing in 2023

[29:41] Globalization of hip-hop 

[33:21] Emerging artists as startup founders 

Trapital’s first-ever Cultural Report for 2022: https://trapital.co/culture-report/

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Sponsors:

MoonPay is the leader in web3 infrastructure. They have partnered with Timbaland, Snoop Dogg, and many more. To learn more, visit moonpay.com/trapital

Check out The Drop, REVOLT's weekly newsletter to stay ahead of the latest news in hip-hop and Black culture. To learn more, visit revolt.tv

Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital

Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.

TRANSCRIPTION

[00:00:00] Dan Runcie: If you're an owner of I.P., often times that I.P. may be the most valuable thing that you have. But does it always make sense for you to then be the ones that produce it? Of course, there's unique examples of this, right? I think Disney is a company that clearly does both, but Disney is such a unicorn in what it does in so many ways, and we've all seen that flywheel of what they've done, and that flywheel is so relevant because it's hard to see another company that could really do that to that level. But it's more likely than not that if you are an I.P. owner or it's probably in your best financial interest to partner with a company that you can leverage their production because they are skilled at being a production company to do that thing.

[00:00:46] Dan Runcie: Hey, welcome to the podcast. I'm your host and the founder of Dan Runcie. This podcast is your place to gain insights from the executives in music, media, entertainment, and more who are taking hip hop culture to the next level. 

[00:01:04] (Intro) Dan Runcie: From you, the listeners who make Trapital, exactly what it is. So this is a mailbag question where you all sent in your best questions. Some of you emailed them, some of you posted them on socials, but I looked at the questions and picked the best ones, and this is a mailbag episode. It's been a while since we did one of these, so it felt good to do one. I actually wanna do these more often just because I think the questions were really great and we're able to address a bunch of topics that we'll get into A.I, the future of music, globalization, ownership, and all the topics that we love to break down on capital and a few ones. So let's jump in.

[00:01:41] (Pre Roll Ad Moonpay) 

[00:02:11] Dan Runcie: All right. Today we have our one and only Mailbag episode from Trapital. It's been a while since we did one of these. I feel, maybe at some point earlier this year we did a mailbag, so it was finally good to dig back in, hear from folks and be able to answer the questions that a lot of you have been thinking. This podcast has grown quite a bit this past year and was in the 1% for the most shared podcast according to Spotify wrap, so that was pretty good. Some applause for that. And I wanted to bring in some of the questions from some of the avid listeners and readers we have. So I posted in social media, posted in the newsletter, and this is a roundup of the best ones. Covered a bunch of topics. We're gonna talk about the future of A.I and music, the state of NFTs, globalization, ownership, and a whole lot more. So let's dive into the first question we have here. So, Ken Penn wants to know what is the current state of music NFTs and our major labels as interested in them as they were? So first for some clear context, a lot of people have been asking questions about this because the general trends of N F T discussions from last year to this year is not quite what you would expect. A lot of people saw that Bloomberg report that came out earlier in 2022, I think they said, N F T transactions were down 97% from the peak that they were at in 2021. And if you type in the word NFTs in Google Trends, you'll probably see a slope that looks quite downward. That is very true, and that's clearly where that is. But I think there's a big difference between that, which I think 97% of that was the hype and a lot of the crap that you likely would only see at the height of the pandemic when money was flowing like crazy. Think about the time when like Pet rocks were being sold and Logan Paul was buying his NFTs or trying to sell his NFTs for whatever. If that was the top of the market, then I think we're seeing things level off a bit more now because you are still seeing partnerships from the major labels and from a lot of artists. I look at Warner Music Group. Warner's been active, more active than any other major label, I think, when it comes to active investments and being forward-looking and being public about those investments. And it was just six, seven weeks ago that they had formed a partnership with Open Sea, which is one of the largest platforms out there to be able to trade in as a marketplace to be able to buy and sell NFTs. So you also have other deals that we've seen. Universal Music Group recently hired two SVPs that are focused on web three with a pretty strong focus on NFTs themselves. And more broadly, you have companies like Public Pressure that just raised $6 million to continue to build in this space. I have said this a few times in this podcast, but I think that Web three and NFT specifically, you had to get through the.com era. You had to get through that heads.com phase of people just starting shit because it sounded like it was something that was gonna resonate, but after a lot of that didn't work out. You obviously had the.com bubble burst. That era still gave us Google, it still gave us Amazon and all these other companies that have still continued to be successful and be some of the biggest companies in the world today. And I think there was a very strong chance that we will still have that with this current wave. It may look slightly different in music, but I still think that we're gonna see, and we have seen more of the true opportunities, whether it's on the artist side of artists that are selling actual NFTs that their fans would find valuable and that others will wanna buy into as well. And I think you'll see this on the major label side with more investment going into acts that can actually reap the rewards from it. One of the biggest deals of 2022 when it comes to N F T sales was Snoop. and what he was able to do, just capturing that momentum. After the Super Bowl. We wrote, or I covered a lot of this in the culture report that Trapital put out will include a link to it in the show notes if you haven't checked it out yet, but still a lot of upside on NFTs. I do not see it quite as much as the bubble that I think was clearly there in 2021. A lot of that quarantine rapid growth needed to calm back down a bit, and I think NFTs are one of the areas that were hit a lot harder than others, but I still think that there's plenty of upside for people that actually wanna build and don't just wanna do grifter, whatever the hell else people were trying to buy itself time. Another question here is from David from Santa Monica, and this was actually a reply to a newsletter that I recently put out where I was talking about some of the cost challenges that music startups and music tech companies will face as in regards to working with customers and customer service and working and dealing with unprofitable customers and wanting to move further up. Mark's question was whether or not I had any data on the customer service costs that these companies have. And I wanna answer that question in a slightly different way. It's less about customer service in the same way that you know, you or I may go call Comcast or may call Xfinity when we're having an issue with our cable or our internet, but it's more so you are a client or customer that is trying to use this particular service, whether it's free or you're relying on it to grow your own business, and you are now having some challenges, you're having some type of question. The thing is a lot of the companies, especially a lot of the distribution platforms, started off being available to everyone, but I think they realized how expensive it is to serve the clients and to serve the customers who are not driving the most business possible. It's no different than a lot of people see when they're working with client services. Overall, your $2 million clients in a lot of ways can be so much more enjoyable to deal with and work with than your $2,000 clients or $2,000 clients will chat a nickel and a dime. They have a bunch of questions about this, that, and the third, but your clients that have a bit more money, they normally come in a bit more clear and confident with what they're looking for, and it can lead to better business in the long run. And I think to a lot of extent, the same is true with a lot of the artists that you end up serving or a lot of the customers that a lot of these platforms end up serving because a lot of their time gets spent with customers that just don't justify the ROI of how much it costs to have that person on staff continue to work and continue to coach and work directly with someone who's just not generating enough revenue to be able to justify the spend. And if you think about how a lot of the companies focus on these things, especially if you're being built out like a tech customer success. This is a role where whether even at the high individual contributor, or the middle level manager role, you're talking, you know, $150, $200,000 plus for someone that can do that roll on annual basis. I mean, I'm thinking of myself, it was six years ago at this point, I was offered a customer success role from a startup that has, you know, now been acquired. I believe the offer was right around that $150, or maybe it was a little bit more than that K range. And that's how much you're paying to have one person that is dedicated to not just you, but to other clients.

But if you were to fractionize my time, let's say that, you know, I was someone that was making $160k a year and I had 12 to 16 clients per year that I was serving, you have to justify, okay, is it worth $10k of the company's time to be able to continue to serve this person if that's what I'm spending my timeline, and we all know that it's less likely that it's gonna be an even split. So that's where these things I think, can often come into play, which is why I think you've seen a lot of the distribution services and a lot of the others start to be more selective over time. And they start to have cut-offs in terms of who they're willing to serve and who they're not willing to serve. And that's one of the reasons why I think we see that shift where, especially in music distribution, it ends up leaning itself towards just having a low cost option, like Distrokid or a tunecore where it essentially doesn't cost much at all to upload the services, but it's a bit more do it yourself or you get something that is a bit more boutique. But by being able to join the boutique offering, it's much more selective as a result. So the next question here is from Arthur from Twitter. He didn't specifically say his name, but it was a good question here. He asked, who gets more blame for the lack of consistent superstar X, labels or customers? The answer is neither. The answer is technology. If you're trying to blame anyone, I personally don't call it blame. I more so call it the driving factor, but this is more about technology. Technology was the driving force that lowered the barriers to entry for artists to be able to create more music than they've ever created, and to be able to release it the way that they've done it. And because they're releasing music the way that they've done it, it then becomes harder and much more noisier for new artists to be able to enter the scene and be able to hit the same heights that they did. And because of the increased number of options that are there, it makes it even easier for powers that be to continue to invest more in what they already see proven. Whether that is your superstar artist or ones who have already proven themselves that seem like they'd be most likely to be the next next bets, whether that's your Taylor Swift or your Adele, or your Beyonce on the proven side or on the artist coming up, whether it's someone like, Olivia Rodrigo, or like Blast, or Billie Eilish or someone like that. So these things that are, I think, a big factor just based on where things are and barriers continuing to be lower and lower. And there's been countless reports on just how difficult it is and how record labels are starting to feel like it's having a harder time to break new stars in the way that they once did. It's harder to have new superstars reach the levels that they did. I think you see this in some of the analysis that's been done on charts and stuff like that too. It's a lot of the same names that have been household names for over a decade that are continuing to stay there and it's harder for the new artists to really come through. So I guess if there's anyone to blame for that, we can blame the founders and the product managers from the companies that enabled the barriers actually to happen in the first place. I know a lot of people disagree. I do think it's a good thing that people have more options than ever just in terms of the artist's perspective, but just because I think that it brought a lot of flexibility. But with that, there's always trade-offs like any new technology brings. There's good with that. There's bad that comes with that. I do think that the pros and the cons outweigh them. I do think that the pros do outweigh the cons with that, but still very aware of the downsides of the current timing. This next question is from Joe Edwards and he asked, what is the ultimate potential of GPT-3? This is a hot topic right now, I think for a lot of folks, and it's a question that I think everyone from record labels to attorneys, to emerging artists are trying to figure out, but here's my perspective. I think that GPT-3 is a great tool that will be able to give songwriters an extra tool that they can have by their side. I think we recently heard Bruce Springsteen on a podcast talk about how he could use A.I., whether it's something like something that can help jog his memory or jog his thoughts, specifically if he's having a better writer's block and how difficult that can be for a songwriter. You just wanna be able to have a few things that can aid your process of bringing thoughts together. The pen that comes from that would ever truly replicate something that Bruce Springsteen would wanna put out himself. But just give it how advanced these tools get and how better and better they get. It's likely gonna provide some

inspiration that can be helpful. That said, I think it would be more helpful to help existing artists, and I'm a bit less bullish right now on new artists coming up. I think we all saw what happened with Capitol Records and FN Meka and that whole mess, while I don't think that that's all A.I. driven, part of that's driven by the people that were running it. I do think that that is an inherent challenge that some people may be a bit weary of, at least for now. But one place that I do think A.I. and GPT-3 specifically could be unique for is for giving certain artists or certain people the ability to access a sound catalog or an ability to access a group of songs that they can use to then scour to figure out what they can then glean from that to be able to create the new songs that are able to create lyrics that they could use in the future. The reason I highlight this is because I'm sure if you're trying to use a song that is based on a song that is owned by a major record label, the record labels and their lawyers will come after you, and it is something that I know that is already top of mind for. But there's a lot of music out there, a lot of music that people would want to hear that isn't owned or controlled by the major record labels. And I think in the same way that you saw platforms like Epidemic Sound or Splice and others be able to create, whether it's monthly subscriptions or other types of opportunities to buy access to a right to use any of the songs in the catalog. I think you could see something very similar to that happening with A.I. and GPT-3 specifically, because yes, if GPT-3 tries to scour all of the songs available, that is a legal nightmare. But if you're an artist and you wanna be able to pay $10.99 a month or whatever it is, to be able to access this tool where you could type. Any prompt that could help spur your thought, that could be a very great use of $10.99, especially if that gives you the ability to make the next album from your bedroom that could be nominated and win a bunch of Grammys or sell, or, you know, do a bunch of commercial success or just have enough success for you to be a standalone successful musician in your own right. Because I do think a lot of those things are likely to appeal more so to independent artists. I also think that we'll see some potential with GPT-3 with an artist that breaks out on TikTok in general, I almost feel like it's inevitable that there's gonna be some artist in 2023 that has some song that goes viral on TikTok, and people are gonna be like, oh, where did the idea for the song come come from? And the artist is gonna say, oh, I just typed in a prompt. Write me a song about X, Y, Z. And here's what came up. Because we already started to see little hints of how artists would use name generation or using tools to come up with things, right? You've all heard the story about how Lil Nas X used insights from Reddit and insights from Twitter to create Old Town Road and how he essentially engineered that song to reach a type of success that it did grant. A lot of that was outside of his influence, just given things going viral after the whole country music controversy. But a lot of the things leading up to that point were influenced by him. And I think even on a more simpler side, artists like Childish Gambino and Post Malone, I'm pretty sure that both of them got their names from some random computer generators. So there's been things like that that we've seen and I think we'll continue to see more of that. And I think even the answer to this question is gonna continue to evolve. So you could ask me this question in a year. I think I could probably have this as an end of the year podcast question for some time now. And their law used to be something new to glean. The next question here is from Mercedes G. She wants to know why don't artists prioritize ownership even though artists have been pushing ownership for decades? So this question is a bit nuanced because I do think that there are a lot of artists out there that do push ownership, and they are clear that they wanna be able to own their masters and own their publishing and understand the value. I think the challenge comes though, when it becomes a trade off and that trade off is likely offering the artist something that they couldn't have otherwise had because owning your masters and owning all those things sounds great and it sounds great if we assume that the artist could have reached the same heights that they could without giving up something in exchange.

The thing is, when an artist is starting to pop and they are already experiencing what some of the challenges are, being able to really hit that next level and whether that is something that they want to do because of some of the things I answered with earlier questions. With more and more music coming out, it's harder for everyone to break out. It's especially harder for artists that are already signed to two record labels to break through. That means it's gonna be even hard for an artist that doesn't have the major label resources behind them to break out as well, which could make them even more likely to wanna then sign with the major record label, especially if they are cutting you a check. I'll look at a few examples of younger artists as well. Look at an artist like Lil Dirk or even NBA Young Boy, I'm pretty sure little Dirk. Posted that he had gotten a 40 million deal recently this year. And I think Dirk is someone that has been popular. I mean, it's several years ago at this point that he was on double XLS freshman list, but even as an independent artist, it could have taken him quite a bit of time to ever hit that amount of money, especially if he's trying to cash it in on the moment that he has. So it's one thing to push ownership and it's another thing to still be able to say, you know what, no, I'm good. I don't want that check. Let me continue to do what I'm doing. When someone offers you an eight figure check that's right in front of you. And I think there's a bit of that human element that can sometimes get a bit lost cuz it's easy for the people in the pita gallery playing Monday morning quarterback to go say, oh, why would you do that deal? Or us to focus on some of the survivorship stories of Master P turning down a million dollar record label deal. Different people that may have offered it to him. Because for every success story like Master P, there are other people that turned those same type of deals down but it didn't take off the way it did for P and then they go back to the record label and being like, oh, hey, could I still get that deal? And the record label's like, no, like the moment passed and the only reason you're coming to me is because you don't feel like you have the momentum that you had before. So there's a few factors here that I think are important to consider, and there is that human element that I think just changes. It's one thing to be a Twitter pundit and put your thoughts out there, but it's another thing to really still say no when a company that you know, they're rolling out the red carpet for you their show, they're presenting the seven, eight figure check, whatever it is, and then you still saying, no, I'm good. And then I think you even see us at the highest levels as well. You look at the deals that you know, someone like Drake or the weekend, you're more so hitting now into the nine figure deals and these artists are more likely to be able to continue to have ownership, but they're still licensing their masters or licensing their music out to the major company. So there's still some trade off there. It's very rare that you ever are really seeing superstar artists that still are hitting those superstar artists levels that is like, you know what? I'm good. Let me just go release everything independently. Cause I think at the end of the day, if you are a priority on these labels, and if you are still getting the best that you can get, you're more likely to figure out, okay, what trade-off is commensurate at what level? And that doesn't mean there wasn't a better way that could be done optimally. My explanation here is more of an explanation of the entire landscape of less of an advocacy for one position or another. But I do think in general, just given how much harder it is for record labels to be able to truly, I think, focus and invest on that artist development piece because they're expecting artists to come to them when they've already hit zero to 60. I think it really puts the onus on the artist to be like, okay, are you happy at 60? Because if you're happy at 60, you may not need the record label, and maybe you think you could get to 70 or 80 yourself, but it may take some time. But if you're trying to get to a hundred, it's gonna be really hard for you to do that independently. So a lot of it requires some questioning on where you wanna go, how far you wanna go, and why that may or may not be as important to you. 

[00:22:52] (Mid Ad): Today's episode of The Trapital Podcast was brought to you by Revolt. Revolt is on a mission to curate and share the best of the best in hip hop culture and social justice. You may remember a couple months back I had the CEO of Revolt, Detavio Samuels on the podcast scene. He talked all about the mission and where things are going, and I think this is one leading company that is elevating what's happening in black culture. It was launched by Sean Diddy Combs back in 2013, and the multi-platform Network offers breaking news videos, artist interviews, exclusive performances, and original programming. They have content for everyone, like Asset over liabilities and original podcast with the host of Earn Your Leisure that gives you a behind the scenes look into the business investments of artists like Soulja Boy and Rick Ross. They also have the Drop Revolts weekly newsletter and curation of the latest in hip hop and black news, and they have the black print where sits down with innovators and change makers laying the ground up for the next generation for the culture. You can learn more and sign up for Revolt's newsletter, the drop@revolt.tv.

[00:24:00] Dan Runcie: All right, this next question here is about a specific deal that's going on, but it's gonna be a good one to answer. JB from Atlanta asked, now that Hasbro has sold E-One's TV and film division, could quality control be a potential buyer? So a few things to unpack here. Earlier in November, Hasbro announced that it will be selling its TV and filled divisions of the comp company. Note that this news, three years after Hasbro had initially acquired all of Entertainment One, which included its music division. And then I think it's been about a year now. My time may be off, but it's been about a year plus now that it had rolled off its music division, which then became Monarch, which is run by Chris Taylor and that team. You may remember them because they were the team that was involved with the selling and the acquisition of Death Row records and then that deal with Snoop Dog. But Hasbro overall has kind of been in this, oops, maybe we should have done this deal when they went and bought E-One. And I think the big takeaway away for Hasbro has been that if we want to leverage the IP that we have, and as many of you know, Hasbro toy companies, so it has the IP there, but it also has some brands that were in that production, like Peppa Pig and things like that. They can still own the IP, but they don't have to own the in-house production to be able to then leverage that IP and make it happen, and then when you own those divisions, it just can be so costly to try to do that. So they got a lot of pressure from Wall Street and other analysts to sell that division and focus on what they do. If you're an owner of an IP, Oftentimes that IP may be the most valuable thing that you then have, but does it always make sense for you to then be the ones that produce it? Of course, there's unique examples of this, right? I think Disney is a company that clearly does both, but Disney is such a unicorn in what it does in so many ways, and we've all seen that flywheel what they've done, and that flywheel is so relevant because it's hard to see another company that could really do that to that level. But it's more likely than not that if you are an IP owner or it's probably in your best financial interest to partner with a company that you can leverage through their production because they are skilled at being a production company to do that thing. So that was a lot of the reason why that sale happened in the first place. Now let's talk about the QC part of this. I would be very surprised if Quality Control was to go on and buy a TV and film division because I also look at Quality Control as an IP. I mean just given the ownership structure, they may joint own some of that with Motown, give the joint venture there. But they are IP owners that can then use that to leverage, whether it's the brand or the story of your little baby Migos and even the rise of coach K and P and and things like that. And while QC does do investments, like I know they're involved with SoundCloud and they have a few other things going. I would be very surprised if they went on to acquire a type of, you know, studio themselves. I know that QC does have a film division, but my impression of that has always been more so, yeah, let's stay quiet, let's have that something that we could have that small and manageable in-house, but if they still have a big release, I think they would probably wanna go to shop that and market the same way that any other big time producer would want if they wanted to push something further. No different than, I think you kind of saw with the Little baby documentary that eventually went on, Amazon was released on Amazon Prime a couple of months ago. So I would be surprised there, if anything, I mean, I think QC is one of these record labels that may be looking for an outside investor itself, but I'm not quite sure what the Motown relationship, just given the joint venture ownership there and how that may look, whether or not who the actual company is that owns, whether it's the brand or the artist or anything like that.

Moving forward from that. All right. Couple more questions here. So is music investing specifically, like in catalogs, is music investing still a good idea in 2023? And my answer is yes, but not in some of those 2021 pandemic era evaluations. And that's because I think what I liked about the catalog boom is that it brought awareness to something that I think a retail investors in the niche knew, but a lot of others weren't focusing on, is that there's a lot of value to be had with owning some of these catalogs because there's certain artists that I think do have the potential to just feel similar to a evergreen stock or something like that continues. Provide consistent revenue that isn't correlated with the economy time and time again. But I think there's a few things that happened that people may have missed. One, there is a decay curve with all of those assets. And even as much as people wanna tell you that the Beach Boys or Michael Jackson or the Beatles are timeless, everything has a decay curve. I mean, you could even go back, you know, decades, even. Frank Sinatra or Elvis. I know that you know that the movie that came out recently, but even folks like that, the discussions that are happening now about those people aren't anywhere near the type of discussions that you may have heard, at least when I was growing up, and that just shows you how much has changed in several decades since then. So, and I think the music listening would've probably aligned with that as well. So there's that, and I just think that the valuations that were being paid for a lot of these things probably just wouldn't happen again. One, because interest rates are nowhere near as low as they were, but I think even regardless of interest rates, there was a lot of overpaying for those assets just given the excitement. So smart on a lot of the artists for cashing out when they did and getting a lot of those returns because at least from what we've seen from a lot of the reports, You've seen some of these financial time stories talking about Hypnosis. And Hypnosis has at least from what the returns have been from their catalog has not been able to generate returns that a lot of the investors feel satisfied with and feel are in line with what they had, which is why I think you started to see more challenges there. There was almost an entire year period where the company didn't make an investment, and I think you've seen a lot of things ring true for others. There are still catalog sales happening. It just may not happen at the particular dollar amount that people wanted. For instance, there was Pink Floyd deal that was being talked about for a while. It's still being talked about. I believe they wanted $500 million, but based on some of the recent findings that had come out, the offers that they started to get were much smaller than they would've liked. So people are still interested in buying Pink Floyd. It may not be for the amount of money that the rights holders wanna sell it for, but there's still interest there, and I think that rings true all the way up and down the board. Listen, it wasn't even just music investing. The quarantine era of the pandemic led to a lot of sales for things happening that just probably wouldn't happen in the same way today. All right. Another question here is how does the globalization of hip hop Influence its business and cultural impact? And this question came from chat GPT. Someone had submitted this question and then it came back as, oh, what do you think is a good question to ask about the business of music or the business of hip hop? So this is a fun one. I know I've written about it a few times, but for the sake of brevity, I'll tackle it in two ways. First, A lot of the Western hip hop artists were able to reach a much bigger audience as a result of globalization, and I think it made it easier for some of them to launch global brands as a result. I look at folks like Rihanna and folks like Jay-Z. Look at some of the deals they've done with, whether it's ACE of Spades for Jay-Z, or the Fenty partnerships with Rihanna. These partnerships are tied in with European companies and there has to be some relevance for how big you are seen in Europe and other areas for those things to really have an impact. And I think you saw that compound as well. When you look at someone like Rihanna and Fenty Beauty, being able to enter Africa and just given the ethos of that brand being able to be inclusive and have shades for all skin tones, it makes perfect sense to be able to do it in Africa, which you just think about the beauty industry. This is an entire continent of people, especially women. Different complexion and skin tones that were largely overlooked by the many other major brands. So being able to have that influence there directly ties into an artist like Rihanna, you know, years, decades earlier, being able to tour in these places and being able to have her name out there, being able to be seen in that way. So I think it affects it from that perspective. And of course, Jay-Z, Rihanna are more so people at the top of that chain that are billionaires, but I think it really made a large impact on everyone else on the other side, I think it's made a huge impact on international artists too, because we've seen in so many other places that hip hop has truly been that connective tissue. It's really been that gateway that can help. Raise and elevate the voice of the unheard or elevate the voice of the people that may not have either gotten a chance to get their word out there or can really speak to some of the challenges that are happening. And that's the way that hip hop started. You look at Public Enemy, they saw themselves as the black CNN. They were trying to voice what's really happening. You listen to songs like Grandmaster Flash, The Message. This is what's going on in the streets of New York right now. And I think that if you listen to a lot of hip hop from other areas and you hear things translated, you're hearing a lot of that. And even someone like Bad Bunny, how he speaks about some of the challenges and the oppression that's happening in Latin America, or even things that are happening in Puerto Rico specifically, or even how we spoke out about disaster relief and even L G B T Q issues. It's not a coincidence that this is a hip hop artist that is doing this in their own language and that's happening. So I think we've just continued to see more and more influence and we'll continue to see how hip hop continues to be such a big driver. And it's not just Latin America. You're seeing it in France and you're seeing it elsewhere. And as globalization of music more broadly has made it more possible for artists in local languages to truly rise up. I think you're gonna see more and more of that coming from hip hop in a lot of those local language areas. All right. And the last question we have here is from Quai Bangs who asks, do I notice similarities in emerging artists that follow the start-up path to start-ups themselves? And I definitely do see a lot of those. And I like the question because I've been hearing so much from founders in the space and start-ups in other companies about two things. Truly identifying and seeing artists as founders, not just as the creative talent behind what they're doing, but they are the ones that are the founding person of this company that if successful as it can be, it'll be a company built around them to then help focus and really benefit and speak to their strengths and address their weaknesses as well. No different than a start-up would be who is that? Who are your co-founders that you're gonna find that may not be on the talent side, but can help with the business? Or if you wanna do it all yourself, who are the people that can be around you to at least help support in that way? And I think that you've seen some of those things happen, from time and time again. You look at the start of Dreamville, I very much do. Ibrahim Hamad and Jay Cole as two people that are in line with being able to do that and continuing to push forward, which I think has been pretty strong, seeing how they've been able to do that over the past decade. Plus, you look at any of these record labels and I think you're more likely than not going to see some type of tandem there. We talked about Quality Control. I think you see a lot of that too, and I think no different than a start-up may try to get equity for what they're doing. I think you're seeing certain artists start to explore this as well, whether they're trying to explore on chain, we're trying to sell tokens or they're trying to get a more formal structure in place. I recently had the investor, Cooper Turley, Cooper Tupa on the podcast, and he was talking about this as well, and how he's investing in companies that are looking at this investing artist specifically so that he can take an equity stake out of the artists themselves and be a bit, you know, less dilutive than a record label that may wanna take 80% of the cut moving forward in exchange for in advance. So there's plenty of trade-offs there. I think it's an interesting thing to continue to explore, but I think that it is a sign of what that path to the future looks like. Cuz I think that artists, our founders, at the end of the day, how they go about that, you know, is one thing or another. And who wears that CEO hat. Whether it's someone that artist proactively puts in place or it's someone. It ends up being at the record label that they signed to, or it's their manager. There's so many ways that these hats can be worn, so you'll be interested to see how it plays out. But wow, that was fun.

That was a quick bunch of rapid fire questions there, but this was really great. I hope you enjoyed it and I hope you enjoyed the podcast this year as well. Definitely continue to share it with anyone that you think would be in. And let me know if you have any other questions. We can keep this in mind. I wanna do these more regularly in general. So, yeah, if you're listening and you enjoyed this episode, send us a quick note, whether it's, you know, on social media or email. And then we'll keep them rolling so that the next time we do a mail bag podcast, we can keep it rolling.

This episode is a two-parter. At the top, I talk about the news at Motown Records with Ethiopia Habtemariam stepping down from her role as CEO and Chairwoman. After that, I talked to Zack O’Malley Greenburg about Hip-Hop’s wealthiest artists of 2022. 

After years of compiling the list for Forbes, Zack O’Malley Greenburg released the 2022 edition independently. This time around, he used insights from Columbia Business School to better grasp on the wealth of the industry’s biggest moguls.

Jay-Z tops the updated list with an estimated net worth of $1.5 billion. In second is the newly-minted billionaire Sean “Diddy” Combs. The rankings are rounded out by Ye ($500 million), Berner ($410 million), and Dr. Dre ($400 million). 

Zack joined me on the episode to discuss the rankings, and two artists in particular — Diddy and Berner. Diddy has a portfolio of diversified assets that include media, music, spirits, and now cannabis. Berner is the biggest surprise of the top 5 but has quietly built a cannabis empire with a large runway for further growth. Here’s everything Zack and I covered on the show: 

[13:56] Zack’s process behind putting the list together  

[15:40] The newest billionaire on the list

[16:41] The growth of Diddy’s DeLeon tequila brand

[29:02] Sean John’s place in Diddy’s portfolio 

[30:28] Diddy’s latest moves in cannabis and possibly Twitter 

[32:45] The evolving business of REVOLT

[36:19] Berner’s “surprise” $410 million net worth

[31:50] High potential for Berner’s business

[34:52] Berner’s business success supersedes his music fame 

[39:50] Drake moving up the ranks 

[43:50] Girl Dad stories

Zack’s Hip-Hop’s Wealthiest Artists list for 2022: https://zogblog.substack.com/p/hip-hops-wealthiest-artists-2022

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Zack O’Malley Greenburg, @zogblog

Download The Culture Report here: https://trapital.ck.page/a23b7a6a4a

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TRANSCRIPTION

[00:00:00] Dan Runcie: Hey, welcome to the Trapital Podcast. I'm your host and the founder of Trapital, Dan Runcie. This podcast is your place to gain insights from the executives in music, media, entertainment, and more who are taking hip hop culture to the next level.

[00:00:23] Dan Runcie: Hey, today's episode is a two parter. The first part of the episode, we're gonna do a breakdown on one of the more recent news that happened in the music industry. Motown Records CEO and Chairwoman Ethiopia Habtemariam has stepped down and there is a lot to unpack there. So we're gonna talk about that. And in the second half of this episode, we're joined by my guy Zack O'Malley Greenburg, and we are gonna talk about the recent list that he put out, which is his hip hop's 2022 list for the wealthiest artist. He has some new announcements, some usual names, and we break it all down. But first, let's start with the news at Motown. So it was last week, shortly after Thanksgiving. Ethiopia and Universal, and Motown announced that she will be stepping down from her role. This is a role that she has officially had at this level for just over a year and a half. I think it was March, 2021 that the role was announced, but she's essentially been the face of Motown from a leadership perspective for over a decade now and when the move happened, I think that there were a fair amount of people I could understand that could have been caught off guard by it. But when I start asking around, asking a few people questions who I know understand the situation pretty well, it's quick to see that what's being pushed publicly isn't quite reflecting what's actually happening behind closed doors. But before we get to all that, let's talk about some of the wins that I think Motown and Ethiopia have accomplished over the past decade, because I think these stand out and they're really important. I look at the 2015 joint venture deal that she did with quality control music, as one of those deals that can ultimately help bring a record label from its days of resting on its laurels to being able to get a bit more current. We've seen this happen time and time again. You look at Interscope in the early nineties. Interscope was a legacy rock and roll label. Jimmy Iovine was trying to figure out the next thing and then boom. Here comes Suge Knight. Here comes Dr. Dre and Death Row records comes through. Not only does Death Row continue to rise up with the supportive Interscope, but you also see Interscope adopt a bit of that cool factor and really revive itself, and now Interscope is continuing to be one of the strongest record labels that we have. You also saw that a few years later happened with Republic records and with cash money signs. The deal that I've talked about plenty of times on this podcast, that 1998 distribution deal and that deal did a lot for Baby and Slim, but it arguably did even more for Republic Records, which now I believe it's in its fourth year in a row, the leading industry or the leading record label in the industry when it comes to overall market share. And I do think that what quality control and Motown were able to do, do deserve some similar praise. But the slight difference here is that Motown for a lot of its time and even more so as we continue to learn, was saddled under the Capitol Music Group umbrella and didn't really have the opportunity to standalone as a true record label that could run on its own and be a standalone entity. The same way that we see with Interscope, the same way that you see with Republic. And some of the other record labels that are under the Universal Music Group umbrella. When the news first announced though, there wasn't as much chatter about Ethiopia's departure. You think about the times that Def Jam has turned over CEOs. There are think pieces on think piece. You can't get people to stop talking and sharing their opinions, and some of them on base, but people sharing their opinions about what Def Jam did and didn't do wrong, but there wasn't as much here. You saw a little bit in piece that Gail Mitchell at Billboard had done where I think she did a good breakdown. You could definitely read between the lines a little bit of some of the things that necessarily weren't being said, but what I think we started to unpack and what we started to get a sense for was, even though Motown had increased its market share considerably under Ethiopia's tenure, I believe back in 2017, it was around 0.4%. And as of most recently from what Billboard reported in 2022, it's at 0.95%. And that's great, more than double. And you think about how much more recorded music has grown from 2017 to 2022 now as well, that's a pretty huge growth and that's nothing to shy away from. The thing is, record label executives and the music industry aren't just judged on market share. You're judged on how efficient you are with what you do to acquire that market share. You're also judged on your ability to score deals and your ability to do it in a way that's efficient. Everyone still has a PNL at the end of the day. But I think the slight difference for some of these companies is that because they sit under the Universal Music Group umbrella, you may not necessarily know what's really happening unless you have a really discerning eye and you can put two and two together. And if you look at some of the moves that Motown has made over the years, there have been a number of big signings. But have those big signings always necessarily led to the type of results? You know, someone like Universal CEO, Lucian Green wants to see from a record label that now would be standing alone and no longer under the Capitol Music Group umbrella. You look at an artist like Lil Baby, who you know, through quality control, is part of that Motown collective. But, you needed a few more artists at that level and you needed to get them at affordable rates. And I think the biggest win that we saw from Motown in recent years was they recently signed NBA Young Boy. This is about a year after he started working with his record label, but how much did it cost to get NBA Young Boy? He had just posted on Instagram, this is two months before this deal was made public. He had just posted on Instagram, this was in August, 2022, that he was a 60 million dollar dude. You're saying you're a 60 million dude. A lot of people thought that was a cash money deal. They thought that was probably what Baby and Slim offered, but you later find out that this is what was coming from Motown, and I don't know if that's the number or not, but you can just assume a few things. One, NBA Young Boy was someone that just got out of his deal at Atlantic Records and he's getting out of his deal. This is the second most streamed artist according to HITS Daily Double for year to date for 2022. But as we also know about streams, not all streams are necessarily weighted the same, and those YouTube streams may not necessarily lead to the same payouts that you may get from the digital streaming providers. Your Spotify, your Apple music, your titles, your Amazon, and so forth. So you have that. You also mix that in with NBA Young Boy's audience isn't necessarily the type to go buy up a bunch of vinyl. They're not the type to go buy up a bunch of digital copies or then necessarily sell out an arena. And it's great that he has those streams, but he has those streams because he is dropping an album every other month. It's not the same as Columbia having a big release from Harry Styles and then monetizing the shit out of that. Or Kendrick Lamar having a big release on Interscope, and then that continues to do numbers and numbers. It's not the same type of thing in that way. So I think, even if you were able to win a bidding war, which is great, obviously a number of labels would've wanted to get NBA Young Boy. There's a certain price to everything, and even though we may not know the specific details, we can put two and two together. There are also a few other recent signings that could be called a bit into question. There were signings of Diddy and Brandy, and these are names that I think a lot of people, especially millennials and Gen X folks grew up with, and they're gonna be people who have done quite a bit in the music industry, but they're at a different stage in their career. They're hot. Their years of earning meaningful revenue for a record label aren't necessarily where they are at this particular point in their careers. That's okay. But does the price that was paid to get them, justify that. And I think there's kind of an unsaid thing where if you're signing someone who is already well off, they are likely doing this for their own choice, then it may cost a little bit more than an equivalent artist who could produce just as much from a revenue side as what you may expect from Diddy or Brandy moving forward if they don't have that name and that cache. And to be frank, the stability to not do a deal unless it's gonna be lucrative enough for them. And then you also have artists like Smino and Vince Staples who are talented at rap, and they definitely had the moment where you thought things were rising up, but they don't move units like that. And then it brings you back to the broader piece of what's happening, specifically with the JV, with quality control music. And I think that you've seen a lot of success there. Little Baby is one of the most successful artists that we've seen, but I think you just needed a few more artists, even Migos. I think that Migos in some ways from a commercial standpoint, peaked with that first culture album that came out. Culture two wasn't able to hit the same heights and Culture three definitely wasn't either. None of the solo artists were necessarily able to do that, and unfortunately there was some, you know, conflict between the Migos themselves. Takeoff is no longer with us. There's just a lot that just didn't exactly line up. It's really tough, and it's even tough to share it this way because I think one of the reasons you didn't hear a lot of chatter and discussion about this is a lot of people really wanted to see Ethiopia succeed, myself included. We wanna be able to see these black executives continue to reach the highest ranks that they can because we also wanna be able to see the same, whether it's toon feat at Def Jam or other. But the way that things are presented externally and this effort to necessarily hide things may have you thinking that these executives have more control and influence than they actually do. And they weren't necessarily given the same level of influence or control that John Janick may get at Interscope or that the Lipmans may have at Republic. So we really have to be honest when we're reporting these things and what we're showing and what we're not, because it does a disservice not only to the industry about, you know, trying to hide these things because listen. This is a place where there's plenty of people that are talented. People learn from where they can come through and it doesn't, and it isn't gonna hurt people the way that you think that it is. And one of the reasons that these things often can be controlled this way, the music's industry's PR machine can be so strong and it can have you having this, you know, Misconceived perception, and while I think insiders do know, there's a lot of folks who are on the outside that will eventually rise to those ranks who just don't necessarily have a clear picture. And anytime that there's that big of a delta, that's how information just doesn't necessarily get itself to the right people at once. And we wanna make sure that we're doing everything we can to empower the folks in the next generation. And I know a lot of this is swimming uphill. This is an industry that is controlled by a lot of lawyers, and it's an industry that really thrives on the PR of how things spin, but been behind closed doors. It's a very different situation. In some ways it's almost a stark difference to something like tech where so much of the drama and decisions that happen within big tech are happening. You know, out in the open you could see things and while some of that, you know, can be to a fault, I do think it leads in some ways to some better discussions around what success can look like and what opportunities can look like. So I hope we can all use this as a reminder to make sure that we're being transparent as we can. When we call things out, it helps more. Think and be able to have the right discussions about what success looks like, and the more that we can report on what success benchmarks actually are, so that you're not just relying on an imperfect key performance indicator like market share, and you're actually reporting on. Efficiency. It's great that someone landed a deal, but how much should it cost to get that artist assigned? And will that payout turn out the way that you think that it is? And at the end of the day, this is about PNLs. Are you bringing in enough profit to offset any of the loss? And is there future belief and potential in your ability to get the buy in, do it in an efficient way, and keep driving the business? Quite the buzz after Thanksgiving. We'll see what the rest of the year brings. I think things will be pretty quiet until things head into January. But with that, let's turn things over to the next part of the episode. Here's my conversation with Zach O'Malley Greenberg about the wealthiest hip hop artists in 2022.

[00:13:06] Dan Runcie: All right. We have Zach O'Malley Greenberg back with us, who recently released Hip Hop's wealthiest List for 2020. Your second year doing this independently, by the way. So shout outs to you on that. And it was great to see the results. We had some expectations, Jay-Z, number one, but there's two people I really wanna dive into with this conversation. Let me just run through the list first. So you have Jay-Z, number one, one and a half billion. Diddy to newly minted billionaire, 1 billion. You have third, Yey at five hundred million dollars. 4th, Berner, 410 million. And then we have Dr. Dre at 400 million. So let's start at the top. What was it like for you, not just releasing this independently, but being able to put it out and as you were putting it together, what were some of the stuff that stuck out to you?

[00:13:56] Zack Greenburg: Yeah. You know, first of all, this list is probably the thing that I put the most effort into every year. At the end of the day, you see these numbers, you know, 1.5 billion, they get reported. And it was the same in my days at Forbes, as doing it independently. People take the number, everyone with it. And I think a lot of times people just assume it's like, ah, somebody's pulling them, out of wherever. But you know, I would say I put more time into those numbers, than I have put into some cover stories, you know, that are several pages long. So it's going through each of these, you know, these superstars and figuring out, you know, what's in their portfolio. What is each asset worth calling? People, you know, who have knowledge, whether it's, you know, within the camps of the stars themselves, or industry experts that are covering, you know, the booze business or the weed business or something like that. Finding ways of valuing these assets. And, you know, and I think the new thing for me, aside from doing it independently was, I've been taking courses at Columbia Business School this year. I'm part of a fellowship where I sort of do my first year of business, school light, and get to bounce around and learn some of these concepts that, you know, maybe, I didn't know before I got to sharpen them. And it's given me some new tools for looking at things like Diddy, Ciroc Partnership and, you know, ways to value things that are a little bit weird and not sort of like a run of the mill asset. So, yeah, you know, I mean I think the big takeaway, the big surprise is probably Berner being on the list, being ahead of Dr. Dre. Like you said, I think Diddy being a billionaire, finally, you know, Diddy would say that's not news. You know, you would say that he should be higher. I'm sure it's been really cool to take a look at it, you know, independently and with some of these new tools in my toolkit to come up with, I would say my most active list.

[00:15:40] Dan Runcie: Yeah. Well, that's good to hear. And I wanna talk about Diddy first because I feel like. That's the one. I'll be honest, the news there surprised me a bit, not because I didn't think that Diddy was a billionaire, but more so because of how his business is and how things are structured. And it made me wonder, okay, how much has changed? Because I knew that Ciroc was the main thing that he had, that was the one of the largest drivers of his net. But you can correct me if I'm wrong, but I thought that the sales had peaked around the mid 2010s and maybe there was a slight decline, but maybe, you might have more intel on that. And I know that revolt and I know that business there. And with Sean, Sean itself, I know he had sold it and bought it back. So I was a bit curious to see or maybe hear how much net worth changed as a result of something that had appreciated in value versus your calculations of how you'd be doing this now as opposed to maybe how you had done it years back?

[00:16:41] Zack Greenburg: Yeah, I mean, so, you know, I think my methodology changed slightly. The breakdown isn't that much different. Ciroc is still the main component. You know, you could say safely, it's the slight majority of his 1 billion net worth. And it's a weird arrangement because he does not hold an equity stake. However, the deal is structured to emulate an equity stake because, you know, it wouldn't have worked as an equity stake cuz Ciroc is owned by Diageo, it's this giant public trade company. They couldn't really be like, Hey, here's, you know, a quarter of our company or something like that. There wasn't really anything to do with that. So it was more creating a framework around the Ciroc brand to function like an equity stake. So if Diageo were ever to sell Ciroc, Diddy would get, you know, let's say the proceeds after you back out the amount of money that Ciroc has put into the partnership. So, you know, it would be a lot. And there's no doubt that even if things have sort of flattened out a little, it's a multi-billion dollar brand. You know, I mean, if you look at something like Ketel One, you know, brands like that that have changed hands, you know, these are billion dollar brands and you know, Ciroc is I think number two behind Grey Goose. So it's up there. They're not gonna sell it, but if they did, you know, we're looking at a pretty big payday. So the question is how do you value something that isn't gonna get sold? And really, you know, you wanna really nerd out about it from sort of MBA type perspective. You know, thinking about valuing cash flow. That's, you know, one of the fundamentals of valuation in corporate finance and stuff like that. And, you know, there are formulas and without getting into like the, you know, sort of like more details of it where you can sort of enter assumptions into the formula and you can get a number. But basically what I did was I took the way I was doing it before I ran the numbers that way, and then I kind of did some pre cash analysis and kind of like average things out and any way you slice it, these Ciroc partnership is, you know, worth a little more than half of his, billion dollar valuation. The other things that, you know, I think perhaps I had been, you know, undercounted a little bit in the past or have appreciated. A lot since then, you know, revolt is still hanging around there. And that's another thing where the valuation could depend on you. Do you value it as, you know, sort of a, like a TV based entity, even though it's more digital? Do you value it as a news outlet? Do you value it as a tech startup? There are a bunch of different ways to look at it, but in any case, you know, he is the majority owner. Another thing that I think people sleep on is DeLeon tequila, that is really growing and he owns half of that. Actually. It's a 50-50 joint venture with the AIO and they're moving a hundred and something thousand cases a year now. Actually, you know, booze has done really well during the pandemic. You might imagine people, I don't know, I feel like we're back to, you know, some of our old ways of going out and doing things. People are drinking at home during the pandemic. So, you know, Ciroc and DeLeon didn't get hurt in the way that, let's say the live touring business did. So Diddy was pretty well slated there. And then you go through and he's got like a pretty immense art collection. He's got some real estate that's appreciated pretty rapidly over the past few years. You know, some of which he owns out, right? And, you know, you kind of add it all up. And, he's comfortably a billionaire. And yeah, I mean, if you notice like  you know, some folks when they hit that status or when they make the list or something, we'll kind of like to tweet about it. But, you know, I don't think I saw anything from Diddy because, you know, he's thought that he's a billionaire for, you know, years already. And, you know, maybe he was, but now I, I definitely think that he is and, I would expect, you know, to see other, let's say mainstream business outlets follow suit in, you know, kind of acknowledging what's definitely the attitude.

[00:20:40] Dan Runcie: Yeah, appreciate the breakdown there and thinking about just like different categories there. If thinking about Ciroc itself, as you mentioned, maybe the sales flattened out a bit, but looking at revolts specifically, and I know that business has, you know, gone through some evolutions as well over the past few years, would it be safe to assume that the biggest valuation change here for Diddy's assets that maybe brought him to a billion is daily owned and some of the artwork in terms of like what's appreciated? If we assume that whether it's Ciroc or Revolt have flattened out a bit. Like would those be the ones you say that had put him over 1 billion? 

[00:21:21] Zack Greenburg: Yeah, you know, he was pretty close before, last time I did it before was, I think it was three years ago. I think he was at 740. You know, personally, you know, without getting too deep into it, I would've put 'em a little higher. But, you know, you get your files. I did. And that spar deal and you know, you gotta create a consensus. And I think, you know, and Forbes always says it, it would rather be conservative about valuations that it would rather understand an overstate, but you know, so that's part of it too. Yeah, I think there's definitely been an appreciation in the value of DeLeon the real estate, you know, there's a lot of startup stakes, and he's not doing it as, let's say publicly as, Nas or Jay-Z, but, you know, he definitely hops in as an angel in a lot of, a lot of startups that, that have done well. So, but, you know, yeah, I think DeLeon doesn't get the glory of Ciroc, but you know, it's a younger company. There's more room to grow. And not to be a shit, but it actually tastes really good. I've tasted other, you know, celebrity tequilas and they're not good, but it is a tasty booze, if I may say so myself. And I think the way that he launched it was that he found this sort of, you know, like a boutique brand that had already won some awards and then he kind of got in with Diageo and, and they boosted. To where it is now. So I really think that's probably like where you could see a lot more growth, if he's gonna start to try to challenge Jay-Z for that.

[00:22:53] Dan Runcie: Why do you think that DLleon hasn't gotten that same amount of love that Ciroc has gotten, at least publicly?

[00:23:00] Zack Greenburg: I think a lot of attention was focused on, you know, like Casamigos or some of the other really big brands and it hadn't quite gotten to that level with the same, you know, distribution and mind share. And, you know, frankly, I mean, I think Diddy has been devoting more energy to Ciroc, but you know, you're starting to see it, you know, it's a little bit less in your base kind of vibe with the brand. it's like more of a sipping thing, less of the shots at the club kind of thing. Although I'm sure, you know, you could sit either or do shots at either at the club. But I think it's just not around as much. I mean, I think the case volume on Ciroc is still like 10 times more than 10 times as high as DeLeon. So, you're just not gonna see it around as much. And I think that's why.

[00:23:51] Dan Runcie: And the other thing too, that you mentioned is that DeLeon itself is actually a joint venture with Diageo, unlike Ciroc Partnership. So of course I know that the Ciroc partnership, now we're talking 15 plus years ago at this point when things kicked off and different positions, different leverage and relationships. So I wonder if the relationship is part of the reason why Diddy was able to have the type of ownership. Partnership with DeLeon that he may not have, at least in writing with Ciroc? 

[00:24:23] Zack Greenburg: Yeah, I think so. And I think that was part of his motivation, for how he structured DeLeon. He wanted to have that. Actual equity stake, you know, like ironclad 50-50 joint venture type thing, rather than an agreement that mimics a joint venture. So, you know, I think that the success of Ciroc definitely convinced Diageo like, all right,, we can do this with another brand. He's the guy. And, for my book, 3 Kings, I talked to some books over there and you know, I think I talked to the CEO at the time, and they couldn't have been more abusive about him. And of course, you know, like whatever, he's part of their team. Of course they're gonna say good things about him, but they were saying just like the attention to detail. Like he would, he would go to clubs and, you know, go to the bartender and be like, why is the Ciroc not on the top shelf? And what are you going to do? You're gonna be like, oh, sorry Mr. Coles gonna leave Joe here. You know, and they'll put it up on the top. I mean, it's sort of like a retail politics level of stuff. And you know, I always say that, that Diddy, you know, in a way, like you could argue. Who has had the most scheduled career and you know, who's the goat of, you know, on the business side. And you know, I think a lot of people would say Jay-Z, and they wouldn't be wrong. But, you know, I think Diddy in a way has done more with less because he hasn't been musically relevant in, you know, a really long time in that way. Still puts stuff out in whatever, but it's not like the anticipation that exists when Jay drops an album or even a verse on, you know, on a DJ Khaled song or something. And, you know, I always like to say that Diddy is kinda more like Richard Branson if he happened to just have had, you know, like a moment as like a big time rapper And you know, certainly as a producer, he's had ahead a lot of things. And not to diminish that, but he acknowledges himself. He says, I don't write rhymes, I write checks. And I think that's a strong student. I think it's especially impressive to see that he's done it without being particularly talented. 

[00:26:40] Dan Runcie: Yeah. I think that, His true line of being able to sell a lifestyle is what sets him apart in a lot of ways. He did it with his music. I think in a lot of ways. Bad Boys modeled after so much of what he learned at Uptown, and then you're able to transfer that lifestyle to, okay, this is the music that you listen to now. This is what you wear while you wear Sean John. This is what you drink while you're listening to this, right? Mm-hmm, you're gonna drink and this is the media that you're gonna watch. Now with the cannabis line that he just bought, this is what you're gonna smoke while you're enjoying this lifestyle too. Mm-hmm. And I think that a lot of those businesses have had varying success and we can go into that, but I do think that the ones that have been the most successful, Ciroc, Sean and the music, there's that tight connection and there's a key timing aspect that goes into all of it.

[00:27:35] Zack Greenburg: Yeah, and it doesn't even need to be his music. Right? That is popular in order for the Ciroc Formula to work, it's the Ciroc Boys, it's DJ Khaled, Summer Watermelon, or whatever it is. You know, I think his ability to make those partnerships, to find other people you know, who are kind of doing now what he was doing then musically are, you know, I think that that's part of the formula and that's why it works so well. And you know, I mean, it's funny, like DJ Khaled, you know, something like Wild Thoughts was doing exactly what Diddy was doing a couple decades ago, right? He was taking a song from a couple decades, you know, one or two decades ago and putting, you know, some new voices, the modern voices on it. And it was a song that was great before and now it's got, you know, like more kind of a vibe to it and you know, goes off the chart, so I think Diddy is just very savvy with that kind of stuff, even if it's stuff. 

[00:28:31] Dan Runcie: Let's talk about Sean John for a bit, cause I'm curious how that factored into your methodology with everything, because as many people know, he started the brand over 20 years ago and well, in 2016 he sold the brand, then the brand was up in auction, and then he bought it for public number I saw was 7.6 million. So now he has that back as an asset. How did that piece of it factor in for you and just the journey overall of Sean? 

[00:29:02] Zack Greenburg: Yeah, and not much now. You know, I mean, I think what factored in more was, sort of like his cash pile. Like he sold it for. Like, whatever it was five years ago, something like that. I think he got, he got 30 million out, 40 million, something like that, that he then put into other things. And uh, you know, obviously without him it doesn't do well. And so he went bankrupt and I think it's really smart for him to buy it back. You know, who knows what he might end up doing with this, but, I think there's just,  you know, like a tremendous market for sort of like nineties nostalgia right now. You know, I think Sean John, or even a Rocawear, if they could have, I dunno, that's a little more complicated, but I think that, you know, if he's at the helm and his part as a lifestyle, Would never count him out. So, but yeah, as far as what it's worth right now, it's sort of more of a rounding error and overall number. But, you know, be interesting to see what comes.

[00:30:04] Dan Runcie: And when you made your list around the same time, I believe that same week, there were two other announcements that came up. One was the cannabis company that he bought for, I believe it was 185 million. And the other one, I don't know if this one was a hundred percent confirmed, but did you see that thing floating around about him making an investment in Twitter along with Elon Musk's bid?

[00:30:28] Zack Greenburg: Yeah, no, you know that was all after the numbers got finalized, so, you know, those weren't really factored into it. But you know, I mean, yeah, it all makes sense. It's all part of the lifestyle thing. It's all part of the Diddy empire, the Diddy MO, and you know, he's look, I mean, on the cannabis side, right? Like he's puff daddy, you know, like what are, what are you puffing? It's exactly, it makes sense. It's like part of the brand. And, you know, if he could do the same thing with cannabis leaders with vodka, Which is to say like, I mean, I don't know. I think when he started vodka was not, you know, it was not really seen as a stylish thing. It was more like, you do a shot to get drunk. I mean, I don't know, maybe that's physics. I was in college when that happened, and that's when, that's sort of the vibe on vodka. But he made it like the champagne of vodkas. He associated his lifestyle with it and similarly, I think with weed, it's like, you know, we're in this very nascent part of the canvas economy, you know, becoming legal and, and sort of how do you start to differentiate brands, you know, and when you have legalization you can have, you know, like. The champagne of weed, right? You can start to differentiate, you know, like what type of buzz you're gonna get because it's regulated and you can actually say like, this is the thing that has this much THC and it's gonna give you this kind of high, versus like, this is just gonna knock you on your ass. I think it's a great place for him to get into, but you know, at the same time it's like, It is a really hard place to do business still. And you know, it is not without risk. It, you know, because it is not federally legal yet. You have to do, you have to do most of your business in cash. You can't get loans in the same way, especially if you have a plant touching enterprise. You have to do all these, handle all these different state regulations, which are constantly changing and are subject to the whims of, you know, clinical races and you know, potentially gerrymandering, all kinds of stuff that has nothing to do with Diddy. So, you know, I think that's the tricky part. And you know, also not being a first mover in the way that somebody like Berner is. But at the same time, it's like, you know, he fills a different niche in the mark potentially than Berner does. 

[00:32:45] Dan Runcie: And yeah, no, that'll be fascinating to watch. Yeah. I think the thing about Revolt is a great concept in the vision, of course. Makes sense. Seeing how influential Diddy was with MTV and whether it's the voter die shirts that he would wear or some of the other programming, he leveraged it so well as a hip hop artist. So if you know you have that impact, why wouldn't you wanna go start your own company and go do the same? Right. I think some of the timing just became a little tough in that he started the cable network in 2013. People are already starting to cut the cord at that point. And then I know the company's transitioned much more into digital media, but even that, given that so much of it is social media based, relying on other platforms and their algorithms, I think we saw so many of those companies in that same timeframe, even the ones that were perceived as being successful, whether it's your Buzzfeed or your Huffington Post or your Complex, like all of those valuations came back down to earth. And you look at a company like Revolt, which I think was largely playing the same game, although I think they still make tons of great content and there are tons of great, brilliant people working there. I think that the digital media itself and where things transformed was a bit tough. Like let's say that Diddy had started let's say 2007 as opposed to 2013, I think we'd be having a very different conversation, 

[00:34:03] Zack Greenburg: You know, or 1997 , you know, I mean, yeah. I think it could be a whole different conversation and, you know, yeah. That's one of the smaller pieces of the empire, and I think, like you would say, he would make a certain argument about it and, you know, valuing it more like on the line of being a tech company. But it's hard to escape the fact that it, you know, it still. I would say yeah, like primarily a media outlet point and whether it's, you know, via cable or the internet or whatever, it's like these are not, like, these are kind of tricky places to be, but you know, it does make sense. There is a demand for that kind of stuff and it's a crowded marketplace, but, you know, he does have something different to offer and, you know, I think that there's a reason why it's still around and, you know, it'll be interesting to see how it goes, how it proceeds as we enter like the next phase of this sort of media shake up in a amount of time.

[00:35:03] Dan Runcie: Yeah, definitely. And I think the other thing too, that I should have mentioned earlier is that given that this is a black owned media company, I know he's been vocal and Byron Allen and others have been vocal about advertisers not contributing the same level of money into black owned media companies that they would to, let's say, some of the Revolts competitors in the space that maybe started and run by white founders, white executives, but they're commanding more money from that perspective. So I think that's another tough thing there. But overall, like we said, this is a small piece of the overall pie. And yeah, it'd be interesting too. Especially the newer businesses, how many of them can continue that Ciroc magic, the bad boy flavor? And see? See where that lifestyle keeps going? Yeah. All right. Now let's talk about the other big one on the list, Berner. And based on the response that I saw from people sharing the list of people talking about it, this is the one that surprised a lot of people. But I know it didn't surprise you because you've been following this for a while. You've been talking to Berner, getting a better understanding of his business. So it'd be great to hear the breakdown because I think a lot of people out there may know Berner now more so for this product than they may actually know his music or anything else that he's done in hip hop up to now.

[00:36:19] Zack Greenburg: Yeah, absolutely. So, you know, I think Berner is one of the most fascinating names on the list. Definitely the most surprising. But, you know, I've been following his work for a while and, you know, he is a master marketer and his whole journey about how he turned cookies, cannabis, You know, it is a billion dollar company and it's just a little tricky to value, but, it is a billion dollar company and the way he did it, you know, I would say it's a case study, but it's actually pretty hard to emulate. It is sort of like a singular way of doing things. So, you know, for the people who don't know the background, Bernard born in California and San Francisco grew up there, moved to Arizona as a teenager and, and would bring back good weed from California when, whenever, you know, would make trips back to his old stomping grounds. And that's how he kind of got his start. He moved back to San Francisco, during the early, you know, weed legalization gold. Worked at a dispensary and, you know, kind of popularized this Girl Scout cookie, strain of weed. And so his thing would, at the dispensary, he would, you know, they used to sell things. It was sort of like an index car with the name of the strain. It was very clinical. But he would sort of like do these doodles and cookies and, you know, these like bright colors and stuff. And, and it started to get some tension. He became, you know, Wiz Khalifa's weed man when he was in San Francisco. And on one occasion brought this fully butted six foot tall weed plant onto the stage at Khalifa's show. And, you know, I think it was sort of instrumental in that Khalifa had created the Khalifa kush and all this. And so Bernard ultimately parlayed this sort of underground, you know, weed connoisseur image that he had as both on the legal and illegal markets into this brand. Cookies started opening stores, created a clothing line that, you know, kind of goes along with it. But the thing that he did with the way he set up this company is pretty, pretty unusual and very hard to value, but I think is quite brilliant. He started striking these partnerships with dispensaries and, you know, essentially it was a licensing deal where he would get a cut of revenue. And then the other part of the deal is that he could also buy out any of these partners. At market rate, at a time in the future, you know, in the future to be determined. And you know, like some of these numbers are out there, but you know, I think the system-wide sales are close to half a billion dollars now. And he gets a cut of that. But you know, at any time he could decide to roll all you could raise money, roll all these partnerships up into one giant weed company that's, you know, making. You know that, that kind of revenue and, and suddenly, you know, all you need to do is you put a multiple on that and, and that'll tell you what the company would be. If he rolled it all up and bought everybody out. And I talked to Wall Street analysts about this and covered the space and they said, you know, yeah, you could put like a five x multiple on this, so that would mean it's you know, yeah, like about a $2 billion company. Then you have to factor in the cost of buying out all those partnerships. You know, long story short would probably be about half billion dollars because it is a very tricky business. In fact, you have to be very liquid when doing everything in cash. It's kind of complicated. People I talked to, you know, bankers and stuff, said, yeah, you would apply a private company discount due to the uncertainty of the market, things like that, that's operating in it, you know, you would knock 20, 30% off of that and you know, so that it brings it down to around a billion dollars and then Berner still owns about a third of it. And so there's the bulk of his fortune right there, you know, so his stake is probably worth around $300 million. This point, I figure. And I think that's pretty conservative. You know, you add in some other thing invested in the clothing line, which he owns, you know, a huge part of still, you know, some homes, cash stuff like. And you get to that 400, 2 million number.

[00:40:27] Dan Runcie: Nice. Yeah, I've been seeing people wearing the cookies hoodies, walking around San Francisco, walking around other places. But definitely seeing the apparel thing push and I feel like he has one of those brands there are probably seeing even more of that stuff. I think it was a couple weeks ago I was driving by and I saw the store in Hate Ashbury neighborhood here at San Francisco. So yeah, no, definitely making moves. A few things there that stuck out. So he of course has his own standalone stores. As you mentioned, there's 55 of them across the country right now. And he also was selling them to other dispensaries. And I'm sure if and when weed does become legalized across the country, that will then just make things even easier from a distribution perspective from other places that he may be able to sell any otherwise. So in some ways the investment isn't just based on what's currently there or there's also a speculative nature. As this underlying product becomes more and more legal, there will be more opportunity to further sell this and further have its reach to different places. 

[00: 41:36] Zack Greenburg: Absolutely. And the clothing line also builds the value of the cannabis brand. And you know, if and when it is federally legalized, you gotta think. I mean, you know, this is one of the top brands in the business. And in fact, you know, there aren't really brands in this way in the cannabis space. There's strains, it's almost saying like in beer, you know, like, yeah, people like IPAs or people like those or whatever, but there isn't really like a Budweiser yet or a dogfish head, you know, or something like that. And, you know, to go back to Diddy, there's not really a champagne of weed. So, you know, I think that Berner has built up all this credibility in this space and, you know, if, when it goes legal, it's like to be one of the top weed brands in this space that is going to, you know, potentially rival or, you know, at least kind of start to eat into alcohol business. I mean, you know, 2 billion is not a large number for a company. There's a lot of potential for it to get a lot bigger and, you know, we can get into the whole. There's definitely a lot of arguments, pros and cons, about the benefits of THC and Cannabis General. And, you know, we will be here all day on that. But just from a business perspective, you know, it seems like we're headed toward legalization. Berner actually thinks that republicans are more likely to make federal legalization happen. He said, cause they're all about their paper. So I'm not saying who he's voting for anything. I don't. You know. it was an interesting perspective and, you know, like I think that he's really got kind of the key to where…..

[00:43:15] Dan Runcie: One of the other things that sticks out to me about him is that he's someone who is much more known, at least on a general awareness perspective, for the business that he's built as opposed to the music. I feel like his music was a bit more of a regional thing and he puts out a ton of music, but it never hit the same levels as some of the other artists who are having nine figure net worths as well. And I feel like there's often this thought, and which I do believe generally is true, that the artists who tend to be the most successful with product sales and investing and some of the more lucrative business opportunities that artists have done, they're more likely to be the household names who have been releasing music and touring for decades than a lot of times it's because they're releasing products that are lending their names, so they're leveraging their influence to now sell things that have a larger stake in and can be bought time and time again. He's a little different though because he doesn't necessarily have that. I'm curious what you think about that piece of it, because I think so many of the hip hop cash lists over the years do have at least somewhat of a correlation as to who are the more well known artists or who are the more popular artists at the time, and not necessarily who is building the strongest business, you know, that is being worth the most, and that is not correlated with how much mainstream popularity that artists may have.

[00:44:44] Zack Greenburg: Yeah, for sure. I mean the funny thing is when you look at it, he is the most prolific artist on the list. But, you know, he has the least name recognition as well, right? I mean, Jay-Z, Diddy, Kanye, Dr. Dre, none of them are putting out music at the pace with which Berner is putting out music. But everybody knows who they are and not everybody knows Berner. You know, I think you could almost argue like, well, are you really gonna put him, you know, on the list with these guys who have that much more name recognition? But you could also argue, should we really be treating, you know, Diddy as a rapper anymore than we should be? You know, treating Richard Branson, as I know Richard Branson didn't actually rap ever, but, you know, effectively Diddy is just focused on business at this point and you know, he puts out songs here and there. Music is an ancillary Berner also used. You know, the Music Chief boosts the weed business, but he's in the studio like all the time, more than any of these guys. Yeah, it's just kinda fun.

[00:45:48] Dan Runcie: I think another person that maybe thought of a similar way, someone like Chamillionaire who had one really large hit, mm-hmm. But wasn't necessarily known for having classic after classic after classic album or touring the world in the same large ways as some of the other big names we did, but his investing journey is something that has been pretty well documented and I think as a result, he's definitely further than a lot of the other artists that came around the same time as him that may have had even more commercial success. So I feel like even though there is a lot of a correlation between who are the most well known artists and who are the wealthiest artists, he is someone else who is a bit similar in that Berner way of, hey, yeah, there may have a smaller overall impact from the music itself, but was able to wisely use that and then now leverage that into something where, you know, the artist is making more money from the business moves and more known for that now. 

[00:46:49] Zack Greenburg: Absolutely. I mean a great example of Chamillionaire and, you know, the work that he's been doing in the startup world. So at the same time, it's like if he hadn't had that one day hit, you know, would he have been able to get into, you know, the Silicon Valley kind of fear in the same way, you know, I don't know, but I think all it takes is one hit to be in the mix. And certainly like Burner never had that one hit, right? He just had a lot of, you know, really solid albums and stuff, but he was doing it in San Francisco. And I think, you know, in that way that you see somebody like Jamon Green getting really involved in the startup world, would he have been that guy if he were in, you know, like Cleveland or something? You know, I don't think so, but if you're in the mix, in the Bay Area, you're just gonna have access to a lot more opportunities, you know, in the startup world. And I think the startup world, cannabis world, you know, it. Kinda the epicenter. So in a funny way that the two have a lot of commonalities I think are familiar.

[00:47:51] Dan Runcie: Yeah. This is good. I'm excited to see what next year's list looks like as well. And I know you may not be able to share publicly, but in order to get the five, you probably evaluated a few others. Are there any names creeping up, arising up that you think may make a  2023 appearance?

[00:48:08] Zack Greenburg: I think, you know, Drake is creep enough, big new deal. You know, he doesn't have quite the same level of, you know, sort of like outside assets. Like he doesn't have, like a Ciroc or a cookie or what have you. And, you know, I think he does have this whiskey, Virginia Black, but it's like, never like still around, but it never really took off and it only tastes okay. It's okay. I don't think taste ultimately matters a lot of times with this stuff, but I'm kind of surprised that he wasn't able to like boost a little bit more. But I don't know. When I think Drake, I don't really think whiskey. Maybe that's just part of it. I mean, I could see him with more champagne maybe. 

[00:48:51] Dan Runcie: Yeah. I'm interested to see for him how this new deal he has and the music that he makes as a result ends up factoring in, because of course we know that music itself may not be the largest revenue stream for a lot of these artists. Drake has this huge deal with Universal and Republic now, and he's releasing music more frequently than ever, and we can assume that it's likely because he's getting better upside and margins for the music he's releasing. So if he keeps up at this, like two, three albums a year clip. I mean, the numbers are gonna speak for themselves. Last year he streamed more than all pre 1980 artists. Like it's gonna catch up. 

[00:49:29] Zack Greenburg: Yeah. Yeah. I think the other thing with net worth less as opposed to. Is that, you know, it's just harder to get on these lists if you are a big cash earner. Like if you are earning a lot on an annual basis, you know, things get factored into that, like taxes and cost of living and all that. And so, you know, you're getting these huge outlays, but you know, it's not in the same way that it was like going into this, this growing asset that can be valued. And in a way that's kind of like a quirk of the system because, you know, I'm valuing Berner’s stake in cookies, you know, like it's not tax, right? Like  if he were to sell it and he were to get $300 million, you know, whatever, a third half of that would be gone to the government. But that's not baked into the formula until he sells it. So you know, this is how Bloomberg and Forbes do it. It's just kinda what it is. But, it means that if you are holding assets, you know, the taxes aren't taken out. Whereas if you're a cash earner, that gets deducted before it gets added to your cash pile. So, it just means Drake is more likely to be at the top of, you know, let's say top earning artist. And you know, it's a little harder for him to get to the top…

[00:50:59] Dan Runcie: That's a great distinction. No, we'll definitely keep that in mind for next year. Do you think you'll do another top earners of the year list as well?

[00:51:05] Zack Greenburg: I don't know. Maybe, we'll see how it goes. Being a new dad, and doing this full time program, you know, this fellowship at Columbia that I mention. It takes a lot of time. And you know, I don't wanna put out a list unless I have the time to really dig in and get the numbers right. But yeah, you never know. I got this one out. So, there could be more. More to come.

[00:51:28] Dan Runcie: And I think on that note, just talking about dad life in general. Let's close things out there. So by the time this comes out, your daughter will be six months old and we can both share one funny thing that our kids did this past couple weeks. So I'll let you start.

[00:51:44 ] Zack Greenburg: Oh, man. Well, I think the thing that's really most exciting is that she's laughing now and the thing that she mainly thinks is funny is when I'm laughing. So like, we'll get into this thing, I will make myself start laughing and then she'll go, ha ha. I go, ha. And, and it’s very dorky, dad life. But, that is like one of my favorite things to do is have like, sort of a laugh off with Riley. So, yeah, I don't know, man. I pick her up from daycare every day and she just gives me this huge smile and I know that she’s still really young, but I can tell that she's specifically recognizing me, you know, and that we have this bond already. That there's like a specific connection. I just had no idea that babies could sort of, like, differentiate people and start to have unique relationships in that way. And that, it's like the best part of my day every day. So… 

[00:52:41] Dan Runcie: That's awesome. That's awesome. Yeah. How about you? 

[00:52:42] Zack Greenburg: Yeah. How about you? 

[00:52:43] Dan Runcie: Yeah. I feel like there's something about that. Like yeah, the first couple of months I remember I would like, ask my wife, I'd be like, you think she recognizes us? Like, because she understands who we are. And I think over time there was like, yeah, no, we can get that in. Even things like now, The mirror is something that she is obsessed with. I'm sure you probably feel the same with Riley too. But yeah, the mirror. At first it was kind of looking at the mirror where there's like, okay, what is this screen? Who is that person that I'm seeing? But I think now it's like looking at us through the mirror and like seeing that it's us. And maybe she's starting to be like, oh well, I see them through this. Like she probably still isn't at the point where it's like, oh, I can see that's looking at me. But she'll look at that other person staring at her in the mirror and start smiling and stuff too. So I'm like, oh, that's cute. So yeah, man. Wild time's flying by. She'll be five months by the time this comes out. Wild man. 

[00:52:35] Zack Greenburg: Yeah. . Yeah. Yeah. We do a lot of like….

[00:53:38] Dan Runcie: oh, yeah, yeah, yeah. Where's that? Little, little peek-a-boo style games. 

[00:53:42] Zack Greenburg: Yeah. Yeah. In the mirror. Yeah, exactly. Exactly. We'll have to have our kids together sometime soon. I guess, you know, but of course babies, not so interactive with each other yet.

[00:53:54] Dan Runcie: Yeah. No. We'll get there. That'll be fun. Zack. This is great, man. Good work as always. It was great to see the list and again. The fact that I think you got just as much coverage and buzz and recognition for this, doing it independently is a great sign. Not just for you, but I think in general for people that are always questioning, okay, you know, what's the power of what I do elsewhere versus individually. So great job on that and we'll definitely keep tabs on this coming years. But great work, man, as always. Appreciate that.

[00:54:25] Zack Greenburg: Thanks man. Same to you.

Rich Homie Quan was one of the defining rappers of the music era that preceded the industry’s shift to streaming. He — along with the likes of Future and Young Thug — made “mumble rap” a hot commodity in the mid-2010s. But while Future and Thugger continued their careers, Quan took a hiatus from the game, until now.

Quan dropped his first project, “Family & Mula”, in almost three years back in October. During the long layoff, Quan admits he lost both his confidence and heart for rapping. He refused to quit on himself during the down period, which only spurred him artistically and business-wise. 

That’s because the eight-track EP is also the first under his independently-owned Rich Homie Entertainment label. Now ten years into his career — most of which spent under a label — Quan felt now was the time to go independent. Not only for the creative freedom, but also for the CEO role that comes with it. 

I caught up with Quan to reflect on his 10-year music career up to this point and how he envisions the next ten playing out as an independent artist and a CEO. Here’s everything we covered:

[2:41] Reflecting on the loss of Takeoff

[4:07] What Quan misses about his “come up” years

[5:16] Why Quan went independent at this stage of his career 

[5:40] Taking on a CEO role

[7:57] Why Quan doesn’t like his hit record “Flex”

[10:33] New partnership with Troy Carter and Suzy Ryoo's Venice 

[14:44] Differences between Quan the CEO and Quan the artist 

[15:54] Rising as an artist before the streaming era took off

[17:25] Distinctions between album, EP, and mixtape 

[20:16] Quan’s non-music business pursuits 

[21:56] How pandemic re-motivated Quan to do music

[24:00] Quan wants more credit for influencing Atlanta sound

[31:14] Quan’s 10-year vision for himself 

[35:54] Did Quan start “deluxe” project drops?

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Rich Homie Quan, @RichHomieQuan

Download The Culture Report here: https://trapital.ck.page/a23b7a6a4a

Sponsors:

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TRANSCRIPTION

[00:00:00] Rich Homie Quan: I was kind of afraid of my creativity on that song. You know what I'm saying? If that makes any sense. Like, I don't know. Cause I make a lot of music, man, and it's a lot of songs that's probably similar. That's like that. That will never come out only because of my mind. But that's why lately I've been letting the team I create, decide, you know? Pick which ones they feel like that needs to be heard. You know what I'm saying? So that's why I've grown as an artist slash CEO.

[00:00:31] Dan Runcie: Hey, welcome to the podcast. I'm your host and the founder of Dan Ruey. This podcast is your place to gain insights from the executives in music, media, entertainment, and more who are taking hip hop culture to the next level. 

[00:00:51] Dan Runcie: Today's guest is the one, the only Rich Homie Quan. R.H.Q came through to talk about his partnership with Venice and how this is a new start for him as an artist. He's independent now. He's seen what it's like on the label side. He's seen what works, and what doesn't work. But this is his opportunity to have more creative control. To see more of the money that comes in and out, and ultimately have more of a say on what makes the most sense for building his career and moving. So he talks about the benefits of the Venice partnership. He also talks about some of the other things that he's working on as well. We talked about his real estate game and how he made over a million dollars this past year from his real estate business. We also talked about where he sees himself in Atlanta's influence. He says he's top three and not three from the city. So you have to listen to hear the name chops that he has in here. Some of the other multimedia projects and a whole lot. Quan also recorded this one while he was getting his hair braided, so I gotta give him credit for multitasking. Shout out to Quan. Hope you enjoy this episode. All right. Today we got the one and only Rich Homie Quan with us. Man, before we get started with any of this stuff, let's just do a quick check, man. How are you? How are you living? How are things right now?

[00:02:03] Rich Homie Quan: Oh man, I'm good man. Mentally, better than ever. I'm just in a good space right now, man. I love the space I'm in, probably better than ever, man. I'm good, man. Yeah. How about you, man? How are you, you know what I'm saying? Mentally, you know what I'm saying? You know, spiritually how you feeling? 

[00:02:021] Dan Runcie: Yeah, I mean, I'm good. I mean, things have been good getting ready for the holidays and everything right now, but, I feel like it's kind of been a tough week, I'm not gonna lie. Thinking about take off and just thinking about artists passing so young. I mean, I mean, I know that this isn't anything new necessarily, but it just feels like it's been so much recently, so I've been thinking a lot about that.

[00:02:41] Rich Homie Quan: That part, you know, like I've been trying to get it out my mind, man. Cause like me and Takeoff wasn't close, but I have worked with him, you know what I'm saying? On numerous occasions, on numerous occasions. And with him being from Atlanta, man, it just hit, that one hit a whole lot different, man. That one touched me, man. That one hurt me, man. That hurt a lot of us, man. You know what I'm saying? Like I think I was walking say the best man, like hip hop took big ill man that that was a humongous ill man.

Humongous.

[00:03:10] Dan Runcie: Yeah. And there were so many of you that came up right around the same time. I feel like you came out and then they had the moment, like there were so many of y'all from Atlanta that rose up.

[00:03:22] Rich Homie Quan: Yes. Yeah. So that's why it's like, I, I kind of felt a different, like I saw, I saw before, um, they were with QC all us sitting on Gucci couch before we, before we got our first million, when we still were grinding and grind mode. So like, just to see that and know like, man, that could have been me, that could have been any of us. You know what I'm saying? Like, so that, that one definitely like hit me. Alright man, real hard.

[00:03:47] Dan Runcie: Yeah, for sure. And I mean, you were just talking about it, you going back to being I QCs couch. I was just looking back at the double like cell cover, the freshman class for you on the cover. And man, it was such a moment. I mean, when you think back to that moment when everything was rising up, like what do you think on the most, what memories stick out to you the most about that time?

[00:04:07] Rich Homie Quan:  Uh, what memories stick out about the most? I would just say more so recording in the music, being so. Because at that time we didn't have all those eyes on us. So then, you know, like we could say whatever and when, and no one, you know, we can say how we really felt. You know what I'm saying? Because you was in that grind and it just, you know, once you get to a certain level and certain things, you can't say no. Cause you know what I'm saying? You got certain people looking at you and that dissecting your words every, every type of way. So I would just say, man, just a recording process, man. Then man, the way we record the way, it'll be all five of us in the booth at one. Or maybe you should say it this way or this way. And it was just a know, just a vibe man. And the learning experience, man. Cause we were so young at that time, like we didn't know we'll be here 10 years later, you feel me? So yeah, that's the beauty of it all. 

[00:04:56] Dan Runcie: And I mean, for you 10 years later, you've done a few interview recently. You talked about why you wanna be independent and what this next chapter looks like for you? What has been the big thing that's made you wanna have this next chapter? Be independent, be on your own terms as opposed to how the last decade was up to this point?

[00:05:16] Rich Homie Quan: Would say the most important part about being independent and what I wanted about it, what I wanted, uh, from it more so, it was just the fact that I had tried everything else. I had tried being with the other independent labels and I just thought it was my turn. I had saw every side of the sword, but just this side of the sword and it's just been so much more fun.Just when I say fun, it's more so from a business side. And I say that because at first I was such an artist mode. It was hard for me to be a CEO, but to continue to say I'm a CEO when I'm not doing none of the CEO shit. And I say that to say like, I'm not in tune with the conversations, or I'm not on every phone call. I'm not CC'd in those emails and those important emails. So now man, with me being a ceo, I'm more in tune. You know what I'm saying? I'm knowing, I'm knowing what the budget is for this. Uh, just understanding the budget, know what I mean? Understanding, so, you know, just taking this a whole lot more serious, being independent, knowing now, like it's really the, that's why I'm probably in this such great space because I know the opportunity I have, I know what I've done.

[00:06:27] Dan Runcie:  You talked about seeing the money and just being able to see what the costs are looking like, what the money's coming in. What was the biggest surprise there? Cause I know you didn't see a lot of that as the artist, but now that you're being CC'd on those emails, now that you're seeing those things, did anything stick out to you?

[00:06:40] Rich Homie Quan: The most? To me, uh, it was just more so of money I would see go without videos and stuff like that, and I would have no knowledge on my input when it's my money that's paying for these. That made me just put my, you know, like, damn, I would've rather shot the video with so and so and so, and maybe, you know, it could have been better for a cheaper number than a number of, uh, someone who's big, big, like, you know what I'm saying? So it just started making me like, way more in tune man, just way more in tune and like, how can I call my c myself a CEO if I'm, if I don't have those last say sos on, you know what I'm saying? Who, who, who I think should shoot the video. So it's like, yeah, I just want to stay in tune, man. And stay at it. Stay at it. Yeah. All the way around the boy, man. Like I'm getting older now and I still got people I look up to and I'm looking at some of the transitions they had to make. You know, sometimes you gotta realize everybody can't go with you. Right. And that's part of better. 

[00:07:40] Dan Runcie: And I feel like you're talking a lot about something I've heard you talk about at other interviews too. Creative control, being able to have more say so over the process. And I was surprised it stuck out like a song like Flex, which was a hit that people liked. Like you really weren't feeling that song as much. 

[00:07:57] Rich Homie Quan: Oh, oh. Like one of mine like, because I felt like at the time Flitch came out, I was such, I was more so of, I don't wanna just say a street rapper, but those were my fans. My fans were like the people who came up from similar situations to me. And I just didn't want my fans to ever think like I was crossing over or making crossover music. And, cause that was one of them songs. Like it wasn't a, I was known for making pain music, you know what I'm saying? So to say. And uh, that was one of, one of those still good different records, but it made, it was, it was a gift and a curse to me cause it made me realize. It's not what I like, it's what people want, and it's all about the fans. And that was my biggest song, like solo to this day. So it's just, it, it just made me realize like co you just, just focus on making the music and let the people decide for you, which is which man, you know what I'm saying? But it turned into a good situation, man. To this day, I still patrol. I still perform Flex Man, you know, so still getting paid off. So, you know, that's. That's one of the perks, man. You know what I'm saying? Trust your team. Definitely trust. Trust your team. The ones that love you, who love you, that you keep around.

[00:09:13] Dan Runcie: Yeah, and I feel like that's a balance I hear from even the folks that have been doing this in entertainment for years. I feel like Denzel was someone who had said, he's making all these equalizer movies, right? But he's like, those movies pay the bills so that I can do these August Wilson plays and all of these things that really mean something to him. So I feel like Flex might be that for you, that gives you the ability to do the stuff you really wanna put out so….

 [00:09:38] Rich Homie Quan: And that's what it was like. I was kind of afraid of my creativity on that song. You know what I'm saying? If that make any sense. Like, I don't know. Cause I make a lot of music, man, and it's a lot of songs that's probably similar. That's like that, that will never come out only because of my mind. But that's why lately I've been letting the team, I create, let the team decide, you know? Pick which ones they feel like that needs to be heard. You know what I'm saying? So that's why I've grown that as, as an artist slash ceo, know what I'm saying, getting outta the artist mode and going step back. I trust these guys enough. You know what I'm saying? Not, they're not gonna make me look bad, let alone make themselves look bad cause they're part of this. This represents them as well. 

[00:10:15] Dan Runcie: Definitely, definitely. And if we fast forward a few years, here you are now you have R.H.Q Entertainment, you recently have the joint venture launch with Venice. Shout out, uh, Troy and Susie, the folks over there. Talk to me about this. What's the vision for that joint venture? Where are things going? 

[00:10:33] Rich Homie Quan: Oh man, where are things going? I think, uh, the world is starting to see, and we haven't even got started yet. That's the crazy part. Like we haven't even got started yet, but like, you know, it was one of those situations. The distribution was nothing I hadn't had. You know what I'm saying? So like I said, it's all about me, like always throwing new things and never want, try nothing twice. You know what I'm saying? Like I still don't know like what my future holds, but I just know like, man, Venice has just been such a tremendous help to the RQ brand and for what I got going on, it just fit perfectly. And it wasn't one of those, or we just jumped straight into it. I think like a big shout outta Red man. Cause red, like he did not give up man. And it might have took us six months to get everything just done the right way where everybody's comfortable. And most importantly, everybody wins, man. You know what I'm saying? Big shout out Detroit. I was just with him last night. He flew down here, man. It was tremendous. Every time I'm, I'm big on energy and energy last night. Created a crazy vibe, man. You know what I'm saying? At the vintage man, Susie, everybody, the whole team Alyssa. I don't wanna eat nobody out, but man, uh, I love it, bro. I love it man. And it was the best situation for me. And like I always like to say, I don't wanna encourage no younger artists or anybody upcoming who wants to do music. I'm not saying independence may not be for you because at the same time, music takes money and sometimes a label situation may be the best for you. It just wasn't the best for me anymore. Cause it's something I. You know what I'm saying? And with me being in the game 10 years, like kind of saw it all. And now I know what's best for me, man. The creative control, you know what I'm saying? And like, and I still have a partner, you know, I still have a partner, man, but now man, I'm, I'm really boss ceo and I'm, I'm loving it.

[00:12:24] Dan Runcie: So now that you do have a partner, but like you said, they're not a record label, it's more on the distribution side. What are the things that they are gonna be doing for you and like what does that partnership look like in terms of your role, in terms of Venice's role? 

[00:12:37] Rich Homie Quan:  Okay. You got a partnership, man. It's more so of a, uh, like a lot of things I didn't know, like on the technology side of things and stuff that's showing me, man, you know what I'm saying? Even with more opportunities outside of. You know, I'm, I think that's the biggest thing now, man. You know, opportunities outside of meals, you know what I'm saying? Movie ventures and stuff like that that I had no idea that I thought I could tap into, but you know what I'm saying? It's showing me, man, it's beautiful man. It's beautiful man. Feel top priority. It feels better. You know what I'm saying? Like I've been in label situations. The team we got over there, they're working hard on 80% of these labels I saw, and I.So that, that's what I love and that's what it's been, that being able to show me, man, that like they ain't playing, they ain't, they ain't playing. You know what I'm saying?

[00:13:26] Dan Runcie: Oh yeah. Cause, cause I mean, Troy gets it and I know just seeing the way that they've structured things, a lot of it is thinking about how to think beyond streaming too.Right? Like what does web three look like? What do NFTs look like? 

[00:13:39] Rich Homie Quan: Exactly. So that's what I'm saying. It's stuff that I had no knowledge of. Of course I hear it, but now I. A person who can show it. And that's what I told him last night. Like, man, it's different when you, everybody that's talking, but you, you've shown and prove everything you said, man. So, and that's a big, and with me being able to have a direct line to him to be able to talk to him, you know, like, and no showing on the labs.

[00:14:29] Dan Runcie: No dope. No, that's for sure, man. So yeah, it's been good to hear you just talk about the ownership and just what it means to be a ceo. And I know it's two different hats you gotta wear. Do you feel like Quan the CEO is any different from Quan the artist? 

[00:14:44] Rich Homie Quan: I would definitely say according to CEO is a whole lot different from the, uh, from the artist. And that's only because as an artist, I be in my mind a lot. You know what I'm saying? I be in my mind a whole lot. But as a CEO, I get it. Where you gotta get out your mind. It, it ain't about your mind or your feelings, man. It's business. You know what I'm saying? It's, it's business and, and that's why I have to separate. It's what they're totally. And is only corn as an artist with the microphone, whatever. When I'm not the microphone, it's about the family and it's about the beast. You know what I'm saying? In that order. In that order, and God, of course, first with him being first, you know what I'm saying? I'm backing up. You know the son. 

[00:15:23] Dan Runcie: Yeah. No, that makes sense. That makes sense. Yeah. And thinking back just about your career, I feel like we're just talking at the beginning of the conversation, right? Whether it's you, Migos, Rockos, a few of you that came up in this same timeframe, but I feel like y'all were a little bit early then when streaming really took off. And I often wonder like, man, like they obviously all had successful careers, but would things look any different, and maybe it was like two or three years later when you saw how streaming was streaming really copied what y'all were doing.

[00:15:54] Rich Homie Quan: I remember, yes. I remember that. Like when the first, like my biggest records, like those were so hard copies, you know what I'm saying? It's been like, it wasn't no streaming, it was just like, but a lot of my packs packs. You know what I'm saying? Me and record sold like no, like, you know, physically. So it is different. Like there was still city players then and stuff, you know what I'm saying? So it was, when they first started talking streaming, I was like, I can get paid out that, nah man put, I wanna sell money just now. Like you said. I really feel like they got something from the numbers we were doing and, and turned it. All the way. So I love it, man. And that's why this run here is more important. Cause I'm gonna get me some of that. No money, I promise you that.

[00:16:37] Dan Runcie: Oh yeah. A whole lot. Yeah. The thing. Yeah, the thing. I feel like that you all. A lot was just dropping in the frequency of when the mix tapes came out. Right. It was like you didn't let up.

[00:16:49] Rich Homie Quan: Like all Now and now Mix Tapes are album, they're no more mix tapes, you know what I'm saying? Like I think I saw something from He is gonna bring mix tapes back and it's like even now Mix tapes are album, then there was still mix tapes. Right. You know what I'm saying? Like come on. But yeah, it's ok. I got something.

 [00:17:07] Dan Runcie: I know, man. I know. So, yeah. So you had the recent release that came out. It was an EP For you though, how do you distinguish or make a distinction between EP versus albums versus Mix tapes now? Just given that everyone is putting out music and however they wanna label it, maybe. 

[00:17:25] Rich Homie Quan: Yeah. Yeah. To me, I differentiate 'em only because man, like, so what? I just put out the little EP man or mix tape. I feel like EP mixtape, same. Mix tape. I'm doing, I'm, uh, I would say I'm rushing the music, uh, album. I'm gonna take a little more time. You know what I'm saying? It's gonna be a little more thought out. It's gonna be, cause I still look up to my favorite albums coming from your, coming from your tis first album. You know what I'm saying? I'm looking at the structure of those and the instruction of those can't be within a month, two month process. That process may take a. You know what I'm saying? Because you know, I need the content to rap about, but that's the only way I differentiate towards the time I put out a man. You know what I'm saying? Time. 

[00:18:09] Dan Runcie:  Yeah, that makes sense. And I feel like for the most part, you can hear that from a lot of artists. Once in a while you'll hear a mixed tape that people feel like it's just as goods an album, but for the most part, The more effort that you hear or you hear to the production quality, you hear it in the bars and yeah.

[00:18:25] Rich Homie Quan: And they last longer.

You know that last longer. That's why I feel like a lot of the music is here, you know, today and gone in two weeks because it's so much similarities and that's why I've been trying to stay creative with the process. Stay corn, don't change my style, but I can't evolve in my sound. And when I say what I mean, it's like, you know, I don't see the same stuff I used to see. Now I'm rapping about the things I'm seeing now. Cause I'm old. I'm trying to put my peers and the, uh, the younger generation on real estate, man, that's probably less jewelry. Let's be, you know what I'm saying, little less flashy and get the things that really matter. You know what I mean? We, we screen the block, let's go buy a couple of properties on the block. So now, now we have a reason to, you know what I'm saying? Stuff of that nature, man, you know, and me just, you know, respecting my position and, you know, playing it.

[00:19:13] Dan Runcie: Yeah. You been getting more real. 

[00:19:16] Rich Homie Quan: Oh man. A whole lot. Whole lot. And I think last year, you know what I'm saying, a million plus on real estate, you know what I'm saying? And not a music checking ball, you feel me? Just last year. So I definitely getting into a whole lot more, man.

[00:19:31] Dan Runcie: Nice. Was that a rental property or a sale property to be here? 

[00:19:37] Rich Homie Quan: Uh, rental. A couple of flips and me selling my first. Nice. You know what I mean? Yeah. So it's like, yeah, I did a million plus in real estate. No rap, no rap cap. And is this mostly in Georgia or is it El you got,  uh, not only in Georgia, you know, like I'm born and raised here, now I'm getting on. Now I have, I'm getting to the level I'm going out, you know, in different states and, you know what I'm saying, going to buy, you know, smaller, smaller stuff and just, uh, revamping them, doing resell. I'm doing a clip flipping and stuff like that, man. 

[00:20:08] Dan Runcie: That's what's up man. That's what's up. Appreciate that, man. Yeah. Are there any other businesses that you've been getting involved with outside of music? Uhuh, you? 

[00:20:16] Rich Homie Quan: Yes, sir. Uh, also with the 18 wheelers, got a couple of 18 wheelers, you know what I'm saying? We got box trucks, you know what I'm saying? A couple of car lots and stuff like that. Car mechanics, some stuff like that. It's every type of way to keep it. Keep it rolling man. Keep it moving, man. You know what I'm saying? The pandemic opened my eyes up a whole. And I really had to take advantage of that time opposed just sitting in the house making babies.

[00:20:42] (Mid Ad) Dan Runcie: Let's take a quick break to tell you about a podcast I am sure you'll love. It's called nineties Now, A show all about the music, movies, tv, pop culture, and more from the nineties with a twist of what's happening. It's hosted by two radio vets, Kelly Alexander and Sharon Highland, along with their millennial producer Alex Brisson. The three of them navigate all that is and was the nineties, and you'll hear a wide range of nineties music. They had a really interesting episode about Diddy and Bad Boy and him starting a new record label. They had another breakdown on Beyonce, especially with Renaissance coming. And they look back at the decade that was the film, the TV, and so much more. And you'll also get to catch up with some of the beloved actors and actresses and entertainers that made that decade what it is. You can find nineties now on all of the major podcast platforms. Also check out their website nineties now.com or follow them on social media at nineties. Now fm

[00:21:44] Dan Runcie:  I hear you on that man. I hear you on that. What was it like for you during the pandemic? Obviously you couldn't tour. I know that gave you an opportunity to explore these other ventures, but what was it like for you. 

[00:21:56] Rich Homie Quan: uh, the pandemic? Uh, what was it like for me? Uh, I would say that's definitely the moment I caught my groove back in the music. Opposed when I had took that long break. You know what? Being here. Cause I had just moved at that time. I had just moved and got me another house. I had bought my, uh, the house for something. And when I moved, I didn't set the studio equipment up for like close to a year. Just I, I'm syn like, come on man. And I think, I think the Migos might have had a just drop sign. I'm had my employees just dropped, but I'm hitting like in a competitor mode. Like I go drop me one two with just like, man, get up off your ass and go. Go get up off your ass and go do something. And since that day, man, I haven't started recording. I built, I built the studio back at the house. A new one, A dope one. That's where I'm at now. And get here, get it done. And it's just like my whole mindset changed like, nah man, we ain't giving up. We ain't quit right now. Nah, man, I'm from Atlanta. We, we don't throw in any white flash. You feel me? It's going hard. I think, um, it started with that then from dropping some music, uh, in Lincoln with Ben and them trusting my plan and wanting to have my back, you know? 

[00:23:05] Dan Runcie: For sure. What has it been like for you with live music just coming back in general? Have you been going and doing as many shows as you were doing before the pandemic?

[00:23:17] Rich Homie Quan: I would definitely say I'm doing more shows than I was doing before the pandemic, and that's probably because of the new music we've been dropping. But I've been trying to get like a little more social, social active on the social media a little bit too, man, that's, that's played a part and me just, you know, like I say, taking it a whole lot serious, more serious now realizing that the game don't need me, game doesn't change the players do. And realizing that I need the game, so let me act like I need this shit like you. Changing my mindset shit, man. That's, 

[00:23:49] Dan Runcie: Yeah, no, that makes sense. And in other interviews too, you've talked about your place in Atlanta hip hop and your respect in Atlanta, hip hop ain’t you say you feel like you don't get the credit you deserve.

[00:24:00] Rich Homie Quan: Nah, I don't, I don't, I don't get the credit. Uh, I don't, uh, like I say, I feel like the sound, like the Atlanta sound today. I feel like I should be one of those ones in that heavily influenced sound. You know what I'm saying? But I wasn't vocal about it then. So I don't respect them. But they know, like we know, like we know and they know, you know what I'm saying? Like you can't mention the Atlanta sound today without mentioning corn. Corn, period. Period. You know what I'm saying? That's why I'm, you know, top three and I'm not three. And that's, that's, that's what it's been. And I'm gonna show, I'm gonna show these people that I'm gonna show you. I'm gonna let the music show you. It ain't just me saying it. I know what I, I know what we've been working on. They gonna see what I'm top three.

[00:24:44] Dan Runcie: And so top three are not three. Who? The other two? I don't know. That's what the people decide. I didn't know three because, like I, but cause it's really like a five in hour. Like I got like a. And the five will be, um, no order. Savage is up there and it's just for today. It's not all time. You know what I'm saying? Bro. You got Savage up there. You got Future Up, you got Thug up there, baby up there, and myself up there and I'm just, you know, I'm top three and three. That's for everybody else. 

[00:24:47] Rich Homie Quan: I don't know. That's what the people to decide. I didn't know three because, like I, but cause it's really like a five in hour. Like I got like a. And the five will be, um, no order. Savage is up there and it's just for today. It's not all time. You know what I'm saying? Bro. You got Savage up there. You got Future Up, you got Thug up there, baby up there, and myself up there and I'm just, you know, I'm top three and three. That's for everybody else. 

[00:25:16] Dan Runcie: Yeah, no, I hear that. And I mean, just here are the names you think about, thinking about you and a thug. I mean, I feel like lifestyle is one of the most influential songs of the decade.

[00:25:27] Rich Homie Quan: For sure,  for sure. Yeah, for sure. Or lifestyle and definitely that the uh, the rich game mix tape, the rich Oh yeah. Tape as well as the still going in. And I promise I never stopped going in that influenced the sound that influenced the sound man. Cause that's when the differences came. The some type of wave and, oh man, that room was crazy that that decade did. It definitely influenced the sound.You know what I'm saying?

[00:25:56] Dan Runcie: Yeah. And I mean, even just the way that you see that artists are trying to do multiple things on a track, whether they're trying to sing, they're trying to real like the, I feel like you dug a lot of you were doing that early. So you combine that. You combine with the frequency that people are released in music. We, a lot of these pop stars just, you know, try to do different things on the, at all.

[00:26:23] Rich Homie Quan: You know what I'm saying? Like Yeah, I think, I think we showed it like they ain't gotta be a single, the hold the tone. And I think it more people just want to go try like that. Cause I know I can't sing, but I can hold a decent song where I can make you, I can, I can trick your mind. And I think a lot of people want to try that and that's why, that's why you hear it so much. It's an unorthodox sound. We ain't trying to sing, but it does sound, we try to hold a song and you hear that in 80% of the music you on the radio today. If you weren't hearing that then 10 years ago, that's all I’m saying.

[00:27:09] Dan Runcie: Yeah, no, you see where the trend is for sure. But yeah, I mean, For you. I do know that, you know, even though you had that moment, there was a period where you know, you weren't released in music and there was, I know that in past interviews you've talked about how it was a bit of a difficult time for you. What was it like for you to be able to come back from that? I know you talked a little bit about how the pandemic was an opportunity for you to reset things. What was it like for you to really be able to come out of that and then still be in the place that you, you are today? 

[00:27:42] Rich Homie Quan: Oh, man. To come outta it, I think it was just like amazing. Took a whole lot of praying for one, stand down and like I said, man, not wanting to give up, man. You know what I'm saying? Knowing like, I think I, I started something beautiful and it's still so. So many pages I've yet to get to, and I know I'm capable of getting to, I get to scratch the surface and like me being such an asshole to myself, you know what I'm saying? Like on days I would just make up, I would wake up mad just for no reason and like the people around me didn't deserve it. You know what I'm saying? Like. I'm the leader and a lot of times like, man, I just know, like I couldn't, I couldn't continue to live like that and call myself a child of God, man. You feel me? So once I got that cloud, my head, man, it felt, it felt amazing, man. But I had to take it a day at a time like it. I wouldn't be talking the way I'm talking now if I didn't get filed over. Like it was some tough, tough, tough nights. Like I think, like I said, I went a year without getting in the. And I've always kept me a studio, like at my house, like a nice, yo, I didn't, I didn't listen to the radio three years, you know what I'm saying? But I'm still doing shows. Like I never stopped doing show, but my, my heart wasn't in my mind, was there, but my heart wasn't it. And I think like in this bitch heart gotta be in anything. And I like for my shit genuine and you know what I'm saying? My heart just wasn't in it. So sitting back in this house for that, Um, reminiscing on a lot of things, a lot of memories, those good ones. And waking up one day is like, well, this is how you gonna hear your story. And I myself telling myself like, you better than all these niggas. But in order to say that, you gotta go put in the work to be able to show, show that. And that's what it was, man. And I ain't got, I ain't got, I did in room since I do everything down here. I sleep down. You as you see, I'm getting my hair braided down here. We play the game down, the vibes down here, it your energy out. Don't even come down here. You know? And that's just what it been, man. 

[00:29:58] Dan Runcie: And I've imagine that some of that exact competitive nature too, right? Yeah. You don't listen to the radio for three years. You're focused, you're locked in, but you're still performing. When you start listening to the radio again, I'm sure you're hearing what's popping off and you're like, no, I'm better than these.

[00:30:13] Rich Homie Quan: Oh yeah. Like when I'm hearing, I'm like, oh, this what people going crazy about. Oh no. We got to, we got to go to work.To go to work. And it was like, and when I started going to work, like at first I didn't, I felt like, um, cause I, I was so used to doing songs fast, like going crazy. And when I got back in there, it wasn't like I just got back in there and was the, it was the corner I am today. Oh no, it took time. It might have took six months before I got back to playing my songs back in the car from my, for the people around me. You know what I'm saying? So still I had to gain my confidence back, man. I had to get it back man. But I got it. Oh, I got it. I got it.

[00:30:50] Dan Runcie: And I know too for you, I feel like there's a few things, cuz obviously it's you as an artist, like we're talking about Wanda artist building that up. You've got the confidence and you got the swag back with that. But I know that you've talked a lot about how 10 years from now you want Wanda CEO to be doing more of the work and you don't necessarily wanna be making music as much. You talk to me about what you see that 10 years from now looking like.

[00:31:14] Rich Homie Quan: Uh,  10 years from now is a long time and I try not to see that. Like, and when I said. Cause I try to make like real short term goals that are real possible. But I do know and I like 10 years from now, I'll be 43 and I probably said 12. Cause 45 sounds like a better number just to leave it alone. It um, I won't be focusing on Coin the artist, but as far as point the CEO coin, the CEO may start writing more. Cause I just love music that much, but I still can never not see myself created. So, uh, I've been even dipping into it now, like more writing. Writing more, but I would probably doing, writing more, focusing on, cause I been trying, I've been doing models moderat lately when they do the fashion show, I'm walking the runway. It's the first time I did that, I had just did the fashion week. So I'm already trying how that?

[00:32:05] Dan Runcie: How did you like doing the runway for the fashion show?

[00:32:07] Rich Homie Quan: Well, I haven't done that yet. I, I do that next week. But just the fashion snow itself, just going to fashion week in new. Aw man. Amazing man. Like, just being around people like, oh my, like, I was almost like, I didn't want my phone. I, but I was, man, that's the boy from my show out. You know what I'm saying? Just like seeing Cal coo, no, see, uh, you saying boat? Amy? What's her name? Amy W Winnie. Winnie Harlo. Yeah. Winnie Harlow. Man. Like just seeing her in person, just made and being. Front next to talking to court a like, dang. It just gets you in different room. I'm, and I'm saying like, I maybe could do this. I maybe we could do this for the next 20 years after rap. You know, I'm saying stuff like that. So it's just like, you know, other stuff. Even like being an author, I wanna come out with a memoir. I'm ready to write my book, you know what I'm saying? Cause I do want to get in movies and I, uh, wanna come out with a autobiography movie one day. So, not even me playing myself, but at least writing it. I'm trying to get in directing, trying to get in. I see 10 years from now I see myself, that guy, man. 

[00:33:11] Dan Runcie: Yeah. Okay. I feel like we're gonna see you at the Met Gala next year or something.

[00:33:15] Rich Homie Quan: For sure. For sure, for sure. I'm gonna be at, uh, try to be at a whole lot more of a man, a whole lot more and all this stuff that's clean. I just gotta let 'em know I do this shit too.

[00:33:26] Dan Runcie: The memoirs are good. I mean, Gucci's was good. Ross's was good. I mean, there's so much, and I mean, you're obviously gonna be able to tell stuff that no one's stole before. You're gonna have the …

[00:33:35] Rich Homie Quan: Yeah, and I got stories that, I got stories that I know like, I mean, I just don't give that, I think that would be dope into a book. Like, especially me being real, I think it'll be more raw. Cause I love to read, so I would definitely give more, more details on my book, you know what I mean? I would definitely, yeah, it get spicy, it get spicy.

[00:33:55] Dan Runcie: Have you done as much on TikTok lately? Just, you know, whether you are the on camera, off camera and, and I'm have a lot of opinions about it.

[00:34:03] Rich Homie Quan: Yeah. I'm, I'm still adjusting. I'm still adjusting. I'm still adjusting. So now a lot of my TikTok has been like, like stuck on the music, but I'm starting, I'm, I'm gonna start, I'm, I'm gonna get a little more personal show, show the fans a different side of me. Cause that's what I'm transitioning to now. Like I am a rapper and that's what fans love. I'm transitioning just to showing them a little bit of, a little bit more of my personal side and just decide deciding which side of my personal side and what I'm willing to reveal. No, that makes sense. Cause I want to be authentic. I don't just wanna get on there cause everybody's doing it. I wanna have something different to offer and that, you know, it's authentic. You're getting a real me.

[00:34:42] Dan Runcie: Yeah, like, I can't see you trying to do some like trick, like, you know what I mean? Like everyone trying to do these visual tricks.

[00:34:48] Rich Homie Quan: Like no, never, never, never, never, never. That, that, that goes against my morals and ethics, you know what I'm saying? Like , you know what I mean?

[00:34:57] Dan Runcie:  Yeah. No, for sure man. Well, no man, I'm excited for you, man. I feel like this is a good chapter. I feel like whether it's a pandemic or other things, like these triggers that happen in life, give us a good opportunity. Just pause, reset, and come back stronger. And I feel like you got the infrastructure there to keep moving, man. So proud of you. Excited for you for what's coming, but man, before we let you go, give us a heads up of what to look out for. What should we look out for the next couple months coming? 

[00:35:25] Rich Homie Quan: Uh, next couple of months coming from me. We In November. Yeah. Oh shit. Some weeks after this, man, you can look for us to be reloading the family in Moula. You know what I'm saying? We're not gonna call it a deluxe, we're just gonna reload it. Cause I feel like the reloaded is a deluxe anyway. And I think like that's a trend I started years ago. So they, they, they say deluxe, but we reloading it with seven new songs.

[00:35:51] Dan Runcie:  Wait, wait. So, so you started the deluxe. 

[00:35:54] Rich Homie Quan: Yes. I'm not gonna say that, but it was called Reload. No, God, I'm not gonna say I started, but I think I did. You know what I'm saying? I think, I think men, I think Men Thug, what's the first artist doing? You know what I'm saying? The Duo Mix tape that they name the album. You know what I'm saying? So it's like a, you know what I'm saying? You know, history beats yourself. 

[00:36:18] Dan Runcie: Yeah. So dope man. We'll look out for that and we'll look out for the rest of this stuff coming from you.

[00:36:23] Rich Homie Quan: And more videos. Yeah, more, more videos in your face. A whole lot more. Yeah, man. More RQ, the brand, more RQ Time, Venice and more of us going up putting it in they face. Man. I'm on the way. We're here now. We're here now. 

[00:36:39] Dan Runcie: Love it man. I love it. Quan, it's been a pleasure, man. Thanks for joining. 

[00:36:44] Rich Homie Quan: Thank you, man.

Cooper Turley, better known as Coopahtroopa, is betting big on ushering a new generation of music. In September, he announced a first-of-its-kind investment fund focused squarely on web3 music projects and artists themselves. Coop Records raised $10 million and Coopah will be the sole general partner. 

He’s hesitant to call it just an investment fund though. That’s because Coop Records is also a record label and incubator. Coopah will invest directly into web3-native music artists in a “seed round” — turning emerging artists into venture-backed startups.

Structuring an artist’s company is what Coopah sees as web3’s biggest opportunity: resetting ownership dynamics. NFTs are another vertical of the Coop Records fund, in addition to the seed-stage investing in both companies and artists.  

Coopah joined me on the show to give us an in-depth look at how Coop Records is eying its investment opportunities. Here’s everything we covered:

[0:00] How Coop Records started

[2:06] Focusing on emerging artists, not established ones 

[3:35] Coop Records’ investment thesis

[7:24] Investing in artists during “seed round”

[9:50] Structuring artists as a holdings company

[11:40] What does an exit look like for artists investors?

[15:00] Artists as CEOs

[20:11] What makes a music NFT historical 

[22:28] NFTs as a replacement for masters and publishing

[27:18] Accredited investors vs. fan investors

[29:30] Artist success stories with community building on web3

[31:40] Focusing on story when marketing NFTs

[34:25] Optimizing for engagement not reach on social 

[39:24] How tokenization changes the artist-fan relationship 

[47:00] Predicting the year that music NFTs go mainstream 

[48:25] Coop’s big question for web3

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Cooper Turley, @Cooopahtroopa

Download The Culture Report here: https://trapital.ck.page/a23b7a6a4a

Sponsors:

MoonPay is the leader in web3 infrastructure. They have partnered with Timbaland, Snoop Dogg, and many more. To learn more, visit moonpay.com/trapital

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TRANSCRIPTION

[00:00:00] Cooper Turley: And I think that gets to this artist development piece more broadly is that you're trying to start the process much earlier, much earlier than I think a lot of the major record labels are starting now. Because I think they often wanna see artists having some proven. Track record before they're willing to sign them.

[00:00:24] Dan Runcie: Hey, welcome to the podcast. I'm your host and the founder of Dan Ruey. This podcast is your place to gain insights from the executives in music, media, entertainment, and more who are taking hip hop culture to the next level. 

[00:00:49] Dan Runcie: Today's guest is Cooper Turley, aka Coopa Troopa. He is the founder of Coop Records, which is a new venture fund, a 10 million fund that is focused on investing in the future of music, specifically in web three. He is someone that has made a name for himself as a thought leader in the space. He was involved with the Dow Friends with benefits and he's now started this fund to make economics better for artists and ultimately help them take more advantage of the opportunities that are around them. So we talked about a lot of it. We talked about how he views the space right now, why he started this fund, and what the fund's investing in. There are three main areas that we go into. We talk about investing in music startup. Investing in artist seed rounds and investing in NFTs themselves as an investible assets that him as a general partner and little Bited partners would wanna see returns from. So we talk about what the economics of that look like. I think that. Cooper stands out in a lot of ways because he has a much more nuanced understanding of how Web Three fits in with the broader ecosystem of what's happening right now in music, what some of the trade offs are with the financials, the relationship with fans, what services it offers versus the traditional record labels and more really insightful conversation, and I hope you enjoy it. Here’s our chat.

[00:02:07] Dan Runcie: All right. Today we're joined by Coopa Troopa who just launched Coup Records, which is his fund that is investing in the future of music and Web three specifically. And first off, congrats. I saw the announcement, it's really dope. So walk me through the process from thinking about you wanna start this fund to where you are now, today with it.

[00:02:28] Cooper Turley: Absolutely. Well, first of all, thank you for having me. I'm really excited to be here. I've been in music for the last 10 years in crypto for the last five, and so I've seen everything from ICOs to Defi, to Dows, and not most recently NFTs. You know, throughout that time I've been active across public markets as a trader, behind the scenes, as an angel investor, as a community builder, and as an operator. And when I started to think about how to connect all the pieces together, I've always been a fan of music. I felt like there was never really a clear vehicle to help elevate and amplify the space. And so I found coop records to be the best way to really just zoom in on this niche that I'm so excited about and figure out how to really help the founders, artists, and builders that are supporting this space everyday.

[00:03:05] Dan Runcie: Makes sense. What were the conversations like getting buy-in from LPs?

[00:03:10] Cooper Turley: Basically helping to explain what music NFTs are, why this is a vertical that you'd wanna invest in at this time and day? You know, historically I think that music has gotten a bit of a bad rep, cuz it's very antiquated in a lot of ways. You know, there's a lot of systems that are very complicated and hopefully we can unpack some of those on this episode. But, I think we through presents a new opportunity for artists to monetize in creative ways. You know, as someone who's been a curator my whole life, it's very easy for me to understand the value of investing in songs, artists, et cetera. But for someone who's not music savvy and not passionate about this sector, you know, the majority of those conversations are why would anyone wanna collect a song? Why would someone wanna invest in an artist? And trying to help people understand why there's an opportunity here that I think is. Influential and paramount for the next chapter of music. But once people get over that line, you know, I've kind of been able to build a brand for myself that I think speaks very clearly to why I'm so excited about music. And so for investors that are looking to get exposure to the space, coop records is a great way to get that exposure without them having to get as deep in the trenches as I am.

[00:04:07] Dan Runcie: Right. And I gotta imagine that that probably took a few conversations just given things that I'm hearing too, from folks. People, they understand the promise and the opportunity of what NFTs and what web three offer, but there's. Hesitation, there's still perception about what's going on and some of the headlines that people see. How did you communicate or address some of those concerns while still sharing the value add for what you have? 

[00:04:32] Cooper Turley: Yeah, I really focus on emerging artists. You know, I think that this is where the vast majority of value will accrue over the next couple years with Web three. And so when you think about investing in music, most people's mind goes to like, how do we get Drake to drop NFTs? I actually don't really focus on that at all. Instead, I think about how do we develop the next act that becomes Drake using Web three tools? And so for investors that are kind of hesitant about getting involved in the space, I point out early examples like X copier people, you know, crypto artists who really made a brand and a name for themselves on the back of selling their nfts. And obviously in the case of people, he had a major brand before, but it wasn't until the existence of NFTs and sort of these community based assets that they started to see monetization aspects with their fans and with their collectors. And so trying to highlight that there's an opportunity here to develop and support emerging artists new to Web three through music, I think it really made a clear case that. This isn't about trying to get your biggest celebrity to drop NFTs. I think that will happen at some point in time. But this is about investing in the infrastructure and the artists that are going to make this space very valuable over the next couple years.

[00:05:31] Dan Runcie: And one of the things I like too about how your fund is structured or reminds me a bit of Matt Pinkus and how his music fund is structured. It's not just focused solely on startups that are trying to build the next tech platforms. You're also looking more broadly. The NFT space itself and what that opportunity looks like and it'd be great to break each of those down. So let's start first with the music tech companies, cuz I know that's 85% of your fund looking at preceded seed stage companies. What's your thesis for the type of company that is a coop records company that you're looking for? 

[00:06:04] Cooper Turley:  I'm a really big fan of composability. So in Defi there's this concept of money Legos or protocols and platforms that could plug into one another. I believe the same thesis will play out with music, where we're gonna have music legos, where there's different marketplaces, service providers, tooling, infrastructure that can help sort of amplify what an artist can do with Web three. And so when I think about investing in a music tech company, I think about culturally, is this company aware and active within the pocket that I'm spending a lot of my time in? And then beyond being aware of sort of the artists, the songs, the type of platforms that are doing well in this space, do they have the open mindedness to wanna work in collaboration with those other platforms? So in accurate, we can kind of create this toolkit in this stack where if I am an artist who's new to web three, it's not about choosing Spotify versus Apple, it's actually about trying to develop a presence across many platforms. And hopefully those platforms. The life of the artist easier by making everything connect together with one another.

[00:06:56] Dan Runcie: And I feel like this speaks to one of the broader themes that I know you've talked about before, is. It can't be this approach of web three versus web two. These things need to be collaborative. No more zero sum games. How can you think more broadly about the opportunity there? How do you view that more broadly, not just with the fun, but also likely how you're seeing the space with any artist that you're working with too?

[00:07:21] Cooper Turley: I'm really laser focused on web three platforms because I think there's a lot more room for change within those platforms. You know, I have nothing against legacy platforms like Spotify have done fantastic work for artists and I think there will be at a time and day when they're able to enable music, NFTs to be purchased, collected, listened to within their platform. But the reality is these companies are so sophisticated that trying to move the needle is very complicated. And so for someone like. I'm running this fund as a solo gp. It's a relatively small fund, and so when I think about where I can have impact and leverage, it's typically working with very early stage founders. You know, I can get in the trenches and help to develop the product. Think about how we're onboarding artists, think about new marketing strategies. And so for me, I think right now it's about cementing the cultural relevance and value of this emerging wave of Web three music. And once that's been clear and established, we can take those same values, ideas, songs, artists, and help to bring those into the traditional industry in a more clear way. Because right now I think that a lot of the bigger players, let's call it major labels, et cetera, they recognize that there's value to be captured in Web three, but I don't think that they have the same level. Boots on the ground cultural awareness that maybe someone like, um, myself or some of my colleagues have. And so I think the challenge here is a, making it very clear what that culture is so you can start to translate it to larger players. And then once that they agree there is something of value there, you know, being able to act as a connector where you can say, Hey, maybe instead of going and doing a 500,000 or a million dollar drop for the biggest act on your roster, let's go ahead and find an emerging artist who's curious about the space and develop them with the course. Five or $10,000 drops and instead really build that community and that collector base in a very organic way.

[00:08:56] Dan Runcie:  And I think that gets to this artist development piece more broadly is that you're trying to start the process much earlier, much earlier than I think a lot of the major record labels are starting now. Because I think they often wanna see artists having some proven. Track record before they're willing to sign them. And in some ways your approach isn't too much different. Maybe it's just a bit of a different stage because one of the other areas that you're investing in is artist seed rounds. And can you describe. What stage an artist would have to be in order to be at the seed round, and what types of things you're looking for there from an artist?

[00:09:33] Cooper Turley: I think it's very similar to what I look for in companies. You know, has this artist been able to prove a little bit of traction? You know, have they demonstrated that they're culturally aware of where this industry is headed? You know, different things that I feel like are interesting to kind of describe. Cause it's not very concrete. Like you can't point to like a specific amount of sales or a specific amount of volume and say, okay, this artist is ready to be invested in. But it's really just a development process of like, is this person making web three a focal point in their career? I believe that that's something really important for me personally, cuz that's where I had the most leverage. But once they've demonstrated that they've been able to release on some of the bigger web through platforms, you know, once they've been able to collaborate and onboard other artists to the space, you know, you start to see that these people have like a little bit. Leverage was sort of their career. And at that point in time, instead of signing a traditional record deal, co records can really be the one to say like, Hey, let's go ahead and set up a company for you. Let's think about how we wanna do a cap table. Let's bring on some partners to give you the capital that you need to go and hire a team around you. So instead of selling your next three albums to a major label, you can instead fund this through accredited investors. And then over time think about the ways you wanna bring other partners into the fold, but not need to be so reliant on the capital to do that in the first place.

[00:10:38] Dan Runcie: And with the artists specifically, cuz I know that you've started the fund. Maybe for the people listening, is there a particular artist that you have made a seed investment in just so people can get a good idea for, okay, this is someone that we invested in, this is where they're at in their career, and this is what the opportunity is 

[00:10:56] Cooper Turley: Not publicly. I think by the time this comes out, we'll be right around there. You know, I can say that privately, behind the scenes we're working. The first round, you know, we've had some very serious progress on it. Investors are excited about it. We're going through the whole corporate structure, but for me, this is a very different lane because it's not as simple as just investing in the safe note of a precede company. You know, there's a lot more complexity around IP ownership, around revenue sharing around. Kind of how this artist thinks about their company and what kind of rights they're giving back to people. And so it's a slower process, but it's one that's currently in motion. I expect that we'll probably have the first one announced within the next one to two months, but I can definitely say there's one in motion that I'm really excited about. And I think, you know, by the end of this calendar year, we should have that one announced. 

[00:11:37] Dan Runcie: I think part of this too is also the structure of things. You mentioned this earlier, and I think for a lot of artists it's probably. Not necessarily a new way to think about it, because I think in general, artists do think of themselves as having multiple revenue streams, but in order for this to work, in order for you to be able to make an investment, there needs to be some type of, whether it's a holding company or some type of structure in place so that you can make an investment that would touch all of these things. Can you talk a little bit about what that looks like on the artist side?

 [00:12:05] Cooper Turley: Yeah, it's a fantastic question. I wanna start by saying, This is early days and so this is the first stab at it. I think that this model will evolve and change over time. The way we're thinking about it is there's one Hold Co, that represents the artist ownership across their various income streams, uh, that hold co owns subsidiary entities, one of them being a music entity, which owns the masters in publishing for that artist. One being a live entity, which owns touring and merchandising, and then one being a Web three entity, which owns NFTs and. And so all of that wraps up into the larger hold cow. But the reasons those subsidiaries exist is because we wanna limit liability to each of those different vertical. If there's an issue across web three, we don't want that to end up touching the masters. If an artist wants to go and sign a record deal, they shouldn't have to figure out what to do with their touring or what their NFTs to be able to enter into agreement with a different party. And so we've kind of split up the different verticals into buckets that make sense relative to the type of partners and the type of work that it is. But all of that rounds back up into this holding company and when it comes time to invest in the artist, quote unquote, that artist is selling anywhere from five to 10% of that hold cow to accredited investors so that they can have exposure and pass through to those underlying revenue streams. But there's not this sort of majority ownership, creative control, et cetera. It's really, here's capital and exchange for you to go do what you do best. In exchange for that, we have exposure to these underlying entities, which represent the artist brand in its entirety.

[00:13:27] Dan Runcie: And for an investor like you, I think most people listening have a good idea of what an exit looks like for a startup, but what does an exit look like for you as an investor, for an artist, if you're going in at that seed round?

[00:13:39] Cooper Turley: I think there's a couple ways it can pan out. You know, one I think would be IP acquisition. Let's say that there's a buyout of someone's masters or publishing, et cetera. You know, there's kind of larger capital inflections that can happen later down an artist's career. I'm more excited about this idea of taking artists public cuz it's something that hasn't really been done before, but I think will happen eventually. Where right now, if you're a fan, you can't really invest or bet on an artist. I think we're starting to see us at a very granular level with music NFTs, and it's something I would love to cover as the last bucket next, but to me, I think an exit here is helping an artist really take this company that we structure for themselves and explore what it means to go public. And so rather than only accredited investors being able to buy into that five or 10%, how do you invite fans to participate in that convers. I think that there's a lot of, uh, legal nuance there that needs to be figured out. And so I don't have that answer today, but I would say that more broadly, the two ways that this could happen is a, investors are seeing a return from the IP becoming more valuable, and they're being capital injected into the whole co. Or B, more optimistically the artist, quote unquote, going public by either, you know, listing on a traditional market or what I think is more likely is creating some form of a token, which represents exposure to this entity that's been set up to represent the artist brand in the first.

[00:14:49] Dan Runcie: Got it. And then from a structure perspective, do you ever hear any type of pushback or comments from artists who feel like, oh, you're getting a slice of all these revenue deals. This feels similar to a 360 deal. Do you hear any of that at all?

[00:15:04] Cooper Turley:  Yeah, I mean, it is a 360 deal, and I think that that's really important to like zoom in on, because 360 deals have gotten a really negative rep because of the percentage ownership that they typically encompass. So traditionally with 360 deals, it's anywhere from 50 to 80. When we talk about a 360 deal in this context, it's five or 10%. And if you start to look at the way that companies take on dilution and precede and seed stage rounds, it's kind of the same concept. You know, like that company is basically taking all of their revenue into this central entity and they're selling off dilution to investors. And so I think for artists, this is particularly scary because there's been such a history of people taking advantage of 360. But I don't think the structure with 360 deals incorrect. I just think the ownership targets that those deals are typically set at is what's really predatory. And so if we can zoom out a bit and instead say, Hey, five or 10% can give you a couple hundred grand, maybe a million dollars to go invest in a team around you, there's ways for that capital to be really value added where the dilution is actually necessary and valuable because it helps you advance your artist career in a way that you simply couldn't do without it.

[00:16:04] Dan Runcie: I agree with that. I think that that's, Testament of some of the challenges with the broader major record label system as well, right? It's not that people shouldn't be willing to trade some level of ownership in exchange to get a boost from the company. It's how much ownership, it's what the terms that the actual economics look like, not the economic agreement itself.

[00:16:28] Cooper Turley: Yeah, it's correct. And I think that it's something that is really important to help educate artists on. And this is the area that I'm actually most fascinated by is like artists really thinking about rights ownership, thinking about dilution, thinking about cap table management. And just with that in mind, I wanna highlight, it's a very specific type of artist that is willing to enter into this quote unquote, artists seed round. Because I think that most artists are not thinking about their brand as a ceo, but I think there are very selective artists who think about their entity as a business and for those specific artists being able to demonst. There's value in having employees. There's value in giving them long term options and equity, and having these ownership incentives be a little bit more aligned. I think traditionally music has existed in this weird ballpark where we've basically only ever sold masters in publishing. We haven't really experimented with equity or any of these other ownership vehicles that startups have been taking for the last couple generations, so I'm excited to explore it. You know, I by no means have all the answers, but I think. My time investing in precede and seed stage companies has given me a little bit of context on how things work behind the scenes, and I'm hoping that with a little time and effort, we can sort of mold those same practices and help apply them to artists more broadly.

[00:17:34] Dan Runcie: That makes sense. And I have to imagine too, with artists as well, there's some artists that love the mentality of being the business person themself that can be the CEO and wear multiple hats. There's other artists who I. As much as they want the business to work for them, they just wanna focus on the art. So there's specific things that you're looking for to determine, okay, is this artist gonna be wanting to be the ceo? Or maybe making sure that they are partnered with someone that may wanna be in that role instead

[00:18:05] Cooper Turley: Yeah, I mean, you just touched on it perfectly. I think that there's situations where artists have partners that are acting as their ceo, you know, and in many typical startups you have a ceo, a cto, a ceo, et cetera. Um, the artist isn't the only person that's responsible for their success. They're obviously the largest player in that. But it's less about, is this artist capable of being a ceo? It's more about is this artist capable of building a team around them that can. In tandem as a unit and as an organization. And if that artist is uncapable of operating as the CEO, because they're phenomenal at making music, it's very likely that there may be a manager, an agent, a business partner, et cetera, that could step into that role. And I think the biggest thing that I'm excited about is to realign incentives around the service providers around an artist. So whether that be a manager, an agent, a business manager, a lawyer, et cetera. Typically, all these actors are just operating on commission, you know, and they have five or 10 clients because there's no guarantee that they'll be with that artist in 10 years time. You know, these contracts aren't really a center aligned for those key players. But if we can instead start to create an instrument where a managers may be able to take a salary and then have equity that's vested over four years, I think there will be more situations where artists would be willing to enter into a full-time quote unquote agreement with their manager, because that a manager is now incentive aligned to actually spend all their time developing one. Instead of needing to commission off of five or 10 different artists just to be able to make a living.

[00:19:24] Dan Runcie: It's a huge point because there's so many managers I've talked to that just talk about how thankless that job is, and that's purely just from how they're treated, not even getting to the economic aspect. You start thinking about the economics about how managers are treated and yeah, maybe you'll get 10 to 15 to 20%, but if that artist levels up and then they wanna level up their manager too, they can just be like, Hey, sorry, I wanna move on. And you, the person that brought them from zero to 40. Now you have nothing. Right?

[00:19:54] Cooper Turley: Yeah. I mean, it happens time and time again from smaller artists to the biggest acts in the world. I mean, I don't have to name names here, but I think we all know examples of this happening time and time. And it's really just a game of incentive alignment. You know? And when I think about the term web three, to me that means ownership. And so for all of these different deals that I'm doing, it's about how do you create ownership incentives so that everyone who's contributing value to this entity is able to capture that in some way, shape, or form. And so I think it's a very difficult conversation to tell a manager, Hey, instead of taking a 15 or a 20% commission, you're gonna get a base salary and then have a couple equity percentage points that best over multiple years. But when you start to zoom out a bit, you start to see like, hey, maybe 1% of equity can actually be more valuable than 20% commission. Because if you're operating a multi-million or multi-billion dollar business, you know that's a life-changing amount of money. And so I don't expect this is something that's gonna happen in the short term. I think it's gonna take a very new class of partners, managers, agents, et cetera, that are willing to enter into these type of. Situations and these type of organizations. But I'm very excited to work with the emerging class of talent that's willing to try something out a little bit differently because I think that new class of talent is looking for an opportunity here. And I think that we've seen time and time again that the systems that exist today work, but I think that there's a lot of room for improvement and I'm excited to use some of the artists that we're working with help push the needle on what that could like. 

[00:21:11] Dan Runcie: Yeah, and I think the other point that you mentioned too, was aligned as well, just in terms of artists being able to have that team around them. We've seen so many examples where whether it's Jay-Z, having someone like a Dame Dash next to him, or you have Jay Cole and e Bama, they've been working together for years. Kate, uh, Kendrick Lamar, and the whole Top Dog team. These artists are doing it themselves, and oftentimes the ones that try to get stuck, so no different then. Yeah, a startup, if you're trying to raise money, they're gonna push back. If you have the technical co-founder being the same one that's trying to go raise money, right? Like you need to have some expansion there. So I think so much of that makes sense. I do wanna talk about the other piece that you mentioned though, the NFT piece of it, because the way that you're investing in these, I think could be eyeopening to some of the folks listening because you're looking. And I heard you referred to historic NFT opportunities and NFTs as collectables. Can you talk a little bit about what you're looking for if you're investing in NFTs through this fund and how that may separate from what a lot of people may assume when they think about an nft. 

[00:22:18] Cooper Turley: Yeah, so there's a really amazing market of songs that are being released as collectibles right now. You know, there's platforms like Sound xyz, where every day an artist is releasing a song with 25 editions as NFTs. And I've been really active across these markets for the course of the last two years. Personally, you know, biggest collector on Sound today, one of the biggest collectors on catalog. And I'm really excited about being able to collect these early songs from artists that are building in Web three. You know, the analog I'd make here. Music, rookie cards. You know, we have rookie cards for basketball players, for baseball players, et cetera. We don't really have rookie cards for artists, and I think in a lot of ways these early music NFTs are sort of the equivalent of an artist rookie card. And so personally, I've been doing this for the last couple years. I recently just put out a post called the Music NFT Collector Thesis. This is how we're thinking about collecting from the fund. But to really break it down, we're thinking about how do we sort of acquire early NFTs that represent historical relevance of this. Web three and Music NFTs have been around for maybe a year at this point. I think that there's a huge opportunity for fans to start getting involved by collecting the songs that they love and for the fund. I almost look at music NFTs as the new form of like masters and publishing. You know, it's not quite one to one, but there's almost this new market being formed of Tradeable assets that you can buy for something like 50 bucks when it drops, and then hopefully have the ability to resell at a later. And I think for the fund, you know, us being able to participate in these markets and say, Hey, we are aware of what's happening on the ground floor with the next generation of developing artists, we're actively collecting these songs that we can show that were there from them, beyond needing to set up a company and needing to do some crazy type of investment situation. And I'm really excited about the opportunity just to have. Ownership over some of these really early collectibles, cuz I think they're very historic in the development of these artists' careers and I believe they're extremely valuable and will continue to demonstrate. So in the years to come. 

[00:24:03] Dan Runcie: You brought up an interesting point just about how you feel like NFTs could replace what we are naturally thinking about masters in publishing. I guess in terms of how artists are monetizing and what their ownership looks like. Can you talk a little bit more about that and specifically how that could look or what that could look like? Years down the road.

[00:24:23] Cooper Turley: I mean, I'll start by saying that, um, masters in publishing are extremely valuable. You know, I think that this is a system that has worked for generations. There's a huge trend around catalog acquisition. I think that will continue to exist for many, many years to come. I think for someone like myself, me trying to get in the catalog acquisition game is not a smart move. You know, there's a lot of players with a lot more experience. There's a lot of people with a lot more money. The one unique advantage that I do have though, is developing thesises within this small pocket of web three artists, and the best way to get exposure to them is to simply buy their nf. You know the way that this looks is if there's the first song an artist ever released their artist rookie card, and there's 25 additions of that being sold for 50 bucks. If you zoom out and one of these artists becomes the Weekend, Drake Post Malone, Jack Harla, whatever it might be, there's a very high likelihood that those early additions are gonna be worth a lot more than $50. And so instead of trying to invest in the masters in publishing rights, those songs can also go on Spotify. They can stream extremely well. You can have relationships with major label. But I believe those early collectibles have a market of their own. These markets are not tied to any sort of royalty rights because it's just collectibles. You know, there's 25 additions of this digital vinyl. I can buy it for $50 and then sell it for whatever price I want in the future. And I think this is a market that not many people are paying attention to right now. But I think when it comes to new and creative revenue streams for artists, I think that collectibles are gonna be a very, very big market in the years to come. I think it's the most clear way that fans can start to get involved with sort of, Collectible nature of getting involved with an artist and as a fun, I think we're really excited to be participating here to say, Hey, we're really excited about this. I think there's some really amazing plays out there right now, and we're gonna continue to support artists on the ground floor to help develop this thesis. 

[00:25:59] Dan Runcie: Why do you think that a lot of people aren't paying attention? Or what do you think some of the, if there's friction or if there is just in a bit of a natural adoption curve, like what do you think's going.

[00:26:12] Cooper Turley: It's just new. I mean, this entire market has only been around for a little bit more than a year at this point. You know, in total, I think we have less than a thousand artists that have ever minted a music NFT before. There's probably less than 10,000 people ever collected one before, and so. Relatively speaking, it's just a very new and small market. And I think for a lot of players that have bigger fish to fry, it's probably not worth their time to invest buying records for $50 because they have multimillion dollar record deals in place. You know, and so for someone like myself, um, a lot of what I do is help educate artists that there's a lot of value to be captured in web through right now based on how early it is. You know, I think that there's a lot of unlearning that can be done with the way artists are releasing music in Web three. And so traditionally, when you're putting out a song on Spotify, most artists I know here in. They'll take eight weeks in advance to think about what distributor am I gonna put this out through? Am I gonna sign this to a label? What's my advance? What's my marketing rollout? What's my TikTok campaign? How am I getting pre saves? How am I making the music video? And what I've been preaching is like, Hey, if you have a song, you should put that out tomorrow. You know, like there's people out there that would probably wanna collect that record. And if you can 5 25 people to come and collect music in FT for 0.05 E, they're basically $75. That's the equivalent of half a million streams. And so I think trying to teach people that you don't need to have this giant rollout process to make this headline moment with music. We've gotten really conditioned to trying to shoot for the new Music Friday playlist. You know, all of these emerging editorial playlists. One of the beautiful things about the SoundCloud era was people were just uploading music in real time and if you had your finger on the trigger, you could go and just repost something and be part of a wider movement. And I think what's happening with music and FTS now is artists are gonna start to see that you don't need to have a six week rollout to put out a collection of 25 songs. If you make that song on Wednesday and put it out on Thursday, you can immediately get funding from your biggest fans and use that funding to go and market the rest of your career and instead be able to obviscate the need for a lot of those major capital advances that typically get artists caught up in a weird position in the first place.

[00:29:05] Dan Runcie: Yeah, that makes sense. I feel like if the funding's in place and you can replace early on, because I think for a lot of artists, the economics don't really work out either. Unless A, you own the underlying masters in publishing to begin, so you're just bringing on a. You know, revenue per stream or just general from what you're getting from streaming or on the other side, you're just massive, like Drake or someone like that. And your billions of streams per year brings in plenty of money. But for a lot of other artists, it ends up being either A, a loss leader if you're focusing solely on streaming or a, or you're leaving money on the table some type of way. So I feel like that approach is something that makes sense for a bunch of. On the investing side though, I have a few questions on this, but the first one, on the investing side though, how do you feel like the appetite will be for, let's say an artist does have early investors, the likelihood for those investors to be folks who are accredited, folks that just wanna be able to get a return, versus people who are actual fans of that artist. Any thoughts on what that mix may look like for the average artist that's going through the web? Growth cycle and the rep do growth curve?

[00:30:19] Cooper Turley: Yeah. I mean, I can speak on this from the artist seed round that we're doing right now. Every investor in that round has been an active collector of this artist for many, many months. Prior to that, they all have personal relationships with the artist. You know, they may be an accredited investor, but they're not just bringing capital. They've been active and supportive of this artist's career way before the seed round even started. And so I think if we zoom out, there will definitely be situations. Investors just want to put in a couple hundred grand and not really worry about getting involved on the ground floor. But given how early it is right now, most of the investors who are interested in participating in these capital markets are ones who want exposure to both NFTs and to the artist equity. And so I think that over time, collectors to me are a little bit closer to like early investors. Think about them like almost angels or sort of like seed round investors. Over time, collectors will start to mirror more fan behavior. But I think for right now, a lot of the collectors I know, they're just excited to get exposure to an artist's career and to go and support them more so than they are to really go to their show or to buy their merchandise, et cetera. And I think that's where a lot of the pushback comes for web through music is like, oh, these people aren't actually fans. They're just, you know, buying NFTs. But if you zoom into what that means, it's almost a different form of fandom where they're providing capital to be able to have exposure to an artist's career. And their expectations are a lot less on the fan side. I need you to collaborate with this artist. I want you to put out this type of music. It's more so like, Hey, we just wanna support you and your career however we can. Because the more that you're able to identify your vision and create a brand around it, the more valuable our NFTs are going to become. And so it's a very mutual relationship I think hasn't really existed in music in the past.

[00:31:50] Dan Runcie: You're really getting at this aspect of community and how artists can foster that, how they can build around them. We've seen the power of that in the SoundCloud era, so we've seen a lot of these things happening and what streaming in general has enabled to happen. What are some of the success stories that stand out to you when you're thinking about artists to be like, oh yeah, they've nailed community, or they're nailing community, like that's how you do it.

[00:32:13] Cooper Turley: Yeah. I would say a couple artists to check out. Daniel Allen, I think has done a fantastic job of this in the web three space. Latasha who started something called Zora Topia has done a fantastic job at this Early nft. Artists like Matt Cha os. Grady bloody white. I mean, the list goes on and on, but basically you see. The small pocket of artists that are really making web through a centerpiece for their career, and they're leveraging that into creating more community conversation. Where typically all these artists have a collector chat where once you've bought a music nft, you can get into a private chat with that artist. It's typically 20 people, 25 people, and that artist is in there every day saying like, Hey, what do you guys think about this demo? Hey, I'm thinking about dropping a song next week. Which one do you like more? What do you think I should do for the supply? Do you think we should do an airdrop? And that conversation is a lot more interactive. And I think in a lot of ways artists have typically maintained separation from their fans to kind of uphold this like form of mystery and this like storytelling aspect. But what I'm seeing now is that collectors are getting really close to the artists that they know and love, and those artists are realizing that for a very specific demographic of their audience, they can be very value added, asked the right questions. And so instead of just doing a meet and greet or doing like, you know, 50 people standing in line to say hi, back to back for an hour and a half, it's like, hey, if we wanna have a valuable conversation about the future of my career, These other people that I can turn to, cause I know they have exposure to my brand and they actually typically have experience That's very valuable and it's something that I think is gonna happen more and more with the next generation of collectors to come.

[00:33:37] Dan Runcie: Yeah, I think that's a good way to just think about the framing of it, right? Meet and greets can be great, but it's so transactional. It is really isn't an opportunity. And it kind of has a bit of this like hierarchical thing. Like, oh, I paid $500 extra at this concert to like take a picture with you. Versus no, like if you've really been with this person, then how can you help shape that in the same way that someone that was really early on can? So I feel like there's so many principles there and there's so much that aligns with, especially on the financial side. I'd love to hear your thoughts on the marketing side of it, because I know that's a piece that a lot of artists have had questions about, but I also think that we've seen from. Project specifically with Web three projects like outside of music where whether it is the creator themselves who's been able to market or get the word out effectively, or they've been able to just find ways to build their distribution themselves. What are some of the ways that you've seen artists who've been successful on the Web three Path have been able to replicate, or at least make up for some of the marketing that they would get from a major record label, but otherwise they're recreating on their own.

[00:34:47] Cooper Turley: I think it starts from the story, you know, like first of all, what is the music that you're releasing and what is the story behind that? But more importantly, like what is the narrative with how you're using the technology? And so almost fusing together like the creative side with the tech side, you know, whether this be something as simple as like creating your own artist website where people are mentioning s from, or it's something like, hey, we're using on chain splits to reward and compensate. 15 different contributors, five of which didn't touch the music, but were helpful in the development or the project management or the visual assets, et cetera. You know, I think there's new creative channels to help bring more people into the table, but I would say generally Twitter is kind of the main resource for all web three artists. You know, the ones that I see doing really well are typically putting out tweet storms, talking a lot about the drops that they're doing, why they're doing it, and how they're doing it. I see a lot of artists doing these sort of collector chats and more private investor relationships. If they have a bigger release coming out, it's not only about posting the tweetstorm, it's also about going and finding time to talk to some of your bigger collectors one on one and being like, Hey, what do you think about this? How can I get you involved? What are some feedback you would have on this drop? Are you excited or not excited? And I think typically with music, traditionally, how it's released, Artist makes a song, they have their internal team, and then they put it out to the world. And when it's out to the world, everyone forms an opinion on it. With Web three music, a lot of the time, there's a lot more happening behind the scenes before the release actually comes out, so that when it is time for one of these releases to happen, you start to see these things sell out because there was a lot of work put into the record before it came out, and that's not untraditional from typical music, but I think the difference there. Active conversations with your collectors is very new. You know, typically it's like people around a table at a major label that are talking about like, how are we gonna market on TikTok? But this is different because it's going and having very direct conversations with the people that are supporting you the most. And in aggregate that sort of. Neural net of all these different people talking about your drop in tandem. It creates this sort of network effect where when it does come out, there's almost a rippling effect that helps to make the drop become more successful. And I think that's something that I'm seeing being replicated time and time again.

[00:36:44]  Dan Runcie: And I know that, as you mentioned, Twitter has been a great space for artists to be able to share things. There's so much. There's so many people in the one three community that are active there, and I think have added to a lot of the discussion and narrative around it. But as someone who's active on Twitter myself, I know how small sometimes those circles can feel. What other platforms or what other areas are you seeing some of these conversations happen, and how long do you think until we're starting to see it not just becoming necessarily a Twitter thing, but it is expanding to more platforms and it's becoming a bit more of. Early majority, at least being able to catch on.

[00:37:22] Cooper Turley: I think it'll be Twitter for the foreseeable future. You know, I think that's just where the vast majority of Web three people live. And I think it's actually the one social platform where you can talk about Web three and not get ridiculed for it. You know, I think across nft, TikTok, et cetera, it's very taboo to talk about NFTs, and I don't think that those users are really as tapped into sort of like the valuable aspects of Web three. And so I think for the immediate future, let's call it the next one to two. Twitter, I think is gonna be the source for all of that. And to your point, some of these communities do feel very small, but I think that's actually one of the biggest differences with Web three. You know, I think with traditional marketing platforms, we optimize for impressions, we optimize for plays, for eyeballs, et cetera. On Twitter, if you have 50 people that are consistently showing up to each of your drop, you're doing an amazing job. You know, I think that this is the biggest thing that shows why Web three is valuable is you don't need to have a million monthly listeners to make a couple thousand bucks. If you have 25 people that are willing to come and support you, you can make the same amount of money and have a deeper relationships with those individuals. And so I always say to artists, Even if you're only getting three, five reactions on your tweets every single time, that's very impressive because the benchmark to move the needle and Web three is a lot lower because every individual person is much more active and the quality of those conversations is much higher than what you could expect from a TikTok, Instagram, et cetera.

[00:38:36] Dan Runcie: And I think in general, like with those platforms, you're more likely to reach people who are just casually following or passively engaging versus whether if you're already in that audience that's Twitter, you're likely reaching a more active fan base to begin with. And it gets to this whole concept of where can you not just reach followers, but reach people who are actual fans of their music? And a lot of the platforms that have grown tremendously large in the past few. Are much more overindexed on followers and less overindexed or or under indexed rather on true fans.

[00:39:08] Cooper Turley: Yeah. And so there's still a lot to be done there. You know, I do believe there's a world in which artists that are using Web three and music NFTs become viral acts that have fans in the traditional sense. I try not to like focus on that too much because there's a lot of work that needs to be done to get there. I think that will happen, but I don't think it's healthy to think. What that looks like today, because frankly, we're just far away from it, you know? And I think for me, helping an artist get a thousand collectors is much more important to me than how do they get 10 million streams on Spotify? You know, if the ladder happens, that's great. But I think the former's actually a lot harder to do because it's a much smaller design space. But, you know, I think there's something really exciting there. And a lot of the work that I do as a collector is really just educating fans on like, why would I wanna collect music? Like, why would I wanna participate on the other side of these? I think from the surface, a lot of bands got really bad experiences with NFTs because artists were just selling random drops that didn't really have any merit to them. They didn't actually care about the output. They were just kind of doing something to be cool at the time. But now what I'm starting to see is that these emerging artists, they really care about their NFTs. They care about them just as much, if not more, than their release strategy on Spotify. And for those demographic of artists. If you are a fan that's looking to sort of develop a brand for yourself around. I believe that this web through music space is a great opportunity to do so. And what we're now seeing is a very small group of music collectors who are building their entire Twitter brand around collecting drops on sound, or writing newsletters or writing mirror posts, et cetera. And I think those are the type of people that I want to try and amplify in Spotlight because it's a very much two-sided marketplace here. And in order for these artists to be successful, you also need to have collectors that are willing to be active in these markets and see success from the music they're collecting as well. 

[00:40:42] Dan Runcie: This is one thing that I keep in mind. More broad trends about like what's happening in music, but I also keep it in mind with artists and creators who are trying to expand beyond the folks that they're naturally reaching. Because if you're only going to try to focus on the people that you naturally reach on a regular basis, it, it can work. And I do think that it's kind of like shifting a bit of the psychology, because I think so much of us have been conditioned to just focus. Who is the next person you're gonna reach? What is your customer acquisition cost? It's not just artists, it's the whole industry that's thinking about it this way, but you can build a sustainable business if you are just focused on the pub shot reach. I know it's a bit of that thousand true fans mentality applied to web three, but I think that there's plenty of nuances there. And sometimes it could be less than that. Sometimes it could be more than that. But I think there's some really unique things. One thing. Interested to hear your thoughts on though is just with artists specifically and fans and just the nature of that relationship and whether or not the tokenization of their relationship changes anything. Right. Because I feel like with fans, there's a lot of this conception that because they don't feel like there's nothing that's like financially tying them to them, maybe that brings up, you know, a different relationship than they would if they do feel actually, you know, financially tied to the. Is there any downsides or is there anything that you think of in terms of how that broader tokenization of the relationship changes any of that dynamic or expectations?

[00:42:21] Cooper Turley: I definitely think there's downsides, and I think there's a lot of pressure that comes with it. You know, I think for artists that are selling nfts, you need to think about new mechanisms. Like, what is my floor price? What is my volume? Is this asset trading above what I sold it for in the first place? That's a lot of pressure, you know, and that takes a lot of time to get right. I think that over time people are gonna recognize. Collector is getting mad about floor prices. The same as a fan being mad about the type of song that you're releasing, where that's just kind of the name of the game. You know, everyone's entitled to their opinion, but it's not like there needs to be a huge reliance on that. I think the one thing the artists need to focus on is actually being consistent with what they're putting out in releasing. If you're giving it your best effort and you're doing things to add value back to early collections, to be able to engage with your community and doing things that show that you're being intentional, that to me matters a lot more than like, what is the price of the tokens themselves, because I think over. We need to recognize that not all fans are the same, and it's not like all music is only gonna exist as NFTs. What's gonna happen is that all these songs are gonna be available on Spotify. If I'm a passive fan, I can go and just listen to that song. There's no expectation for me to ever have a financial relationship with that artist. But the new unlock here is if I wanna go deeper on that relationship. This is something that I've wanted to do for a long time, and I believe many others do. I can now collect something that represents a limited version of that song. And for other people that are excited about that artist's career. Not only can we share on our Instagram story, we can now go into a private collector's chat and say, Hey, I was able to pick up this sold out drop. I was able to pick up one of their early rookie cards, and I think what we start to see is that the fan base gets a little bit more. It's delineated across different verticals where there's some vans who are just showing up to a concert, you know, all the time. I go into GA at a show and I'm like, how do I get these people to buy music and FT use? And the reality is most of them probably never will because they just wanna go and have a good time. They wanna party and forget about their nine to five job. And that's perfectly fine. But I think for the small subset of people who are really passionate about music, those active listeners being able to answer into these more deeper relationships, it's really gonna empower curation in a very new way. And I think the analog I would make here, Sites like Height Machine really drove the success of SoundCloud in a very massive way. You know, there was a demographic of curators who were saying, Hey, we love this type of music. There was all these different blogs, like This song is sick, you know, all these EDM blogs, pigeons and planes, et cetera. They were adding cultural zeitgeist to these songs. And I think the financialization of these assets is not only gonna incentivize people to wanna curate and write about these different article. It's actually gonna give them the means to sustain themselves on the back of doing so. Or if I'm a curator who's really successful at identifying talent, I don't need to go work for a major label as an a and r because I can simply spin up a newsletter on sub stack, go and look at the drop calendar on sound, xyz, and then the event that I'm able to really identify. Successful drops, I can actually start to make a living on the back of my taste. I think that's something that hasn't really existed before and something that I'm personally really excited to see happen more and more in the industry at large.

[00:45:08] Dan Runcie: That last piece is huge because it makes me think back to the blog era, especially at hip hop with just. How popular it was when, whether it was sites like Two Dope Boys or Now, right. And their influence on being able to have a mix tape that they're putting out. They're putting their stamp for approval. They're the media channel that's sharing the tape, that's being released from Dap Piff and being like, Hey, here is this new kid Cutty record that you need to listen to a kid named Cutty. You know, this is the mix tape. Check it out. Or the cool kids, or Charles Hamilton or whoever, one of these artists, The difference though, is that even though the artists in the blog era and the people who ran these websites in the blog era were so influential, and I think at a time they even had more influence than the major record labels did. They didn't capture the upside. They created the culture. They created the influence, but they didn't capture the upside. This allows that to happen in a way. The next version of Two Dope Boys could essentially be the one to, like you said, they could start up a newsletter, they could be able to release this and be like, Hey, I'm the one that is putting this investment in and then this is gonna stay there from here on out. That's something that's really special. And to be honest, I don't feel like there's enough discussion around that. So I'm glad you brought that point up.

[00:46:26]  Cooper Turley: Absolutely. And I think the one, the one thing I wanna zoom in on there, That doesn't require the artists to sell any of their masters. You know, them putting out 25 editions of a collectible song that a curator can go and buy and then help spread the word about within their pockets. There's no conversation around like, what percentage master publishing does this curator now have? Do I need to bring them into my creative decision, et cetera. It's a new market that now exists on the back of taste and curation, and I think in a lot of ways, music NFTs get pushed back cause they say, oh, you don't actually own the rights. Why do these things have value in the first place? I'm a big believer that community has a lot of value to it. You know, I don't think that art needs utility or needs IP ownership or Masters or publishing to be valuable. I think these curators are able to tell very compelling stories about the impact that music has and being able to add a new market into the equation through music and fts, it really unlocks a new mechanism for artist fandom that I think is very simple to understand. I don't think the average fan will be able. Rationalize what a master or a publishing right looks like. But I think they can understand what a rookie card or what a limited edition of songs looks like. And so I'm very excited to watch these markets mature. And I think that ties back into why the fund is collecting music, NFTs, cuz we believe that. More people are going to be able to understand what it means to own a collectible than they are going to know what it means to own masters or publishing. And so you sort of have these two different sides of the equation. I think they can both work in T and in unison with one another to make the aggregate music market more valuable as a whole.

[00:47:51] Dan Runcie: And I think your fun will be a, a test to see how well that works. So, It'll, it'll be, it'll be fascinating. I feel like the structures make sense. You have each day, each piece of it there. I'll be very interested to see what the returns end up being like for each of those categories. Right. Of course, you know, most of the fund is looking at your precede and seed stage music and web three startups, so I assume that it's naturally gonna be what the expectations would be for any young startup. But I'm very interested to see what those expected multiples or the exits will be for the NFTs and then, The artists seed round investments themselves. 

[00:48:26] Cooper Turley: Absolutely. I will say that the vast majority of the fund is going into web three companies, but time and time again, people get really excited about this idea of investing in artists. Again, do not have the answers whatsoever, but. I'm noticing people are really excited about that ballpark. So I'm excited to at least start that trend with this first fund here and in the future. I'm hoping that we can create playbooks for many artists who don't even use nft, use their web three to also start to enter in these agreements as well. But you know, I'm really excited about it. You know, like I said, I've been in music for 10 years, crypto for the last five. I feel like this fund is a great way for me to really fuse those two passions together. And it's a very small market right now, but if you made it this far in the episode, I hope that this is something of interest to you and I would love to keep the conversation going if you have more.

[00:49:06] Dan Runcie: Definitely. Before we wrap things up and let you go, one of the quotes you had mentioned, you referenced this earlier, the conversation too, that we're not at the point in Music Web three, where Drake is gonna come through and drop an album or a Bieber or a Post Malone or one of those artists. If you had to pick a year that you think that will happen though, what year would you pick?

[00:49:26] Cooper Turley: Uh, 2025. Okay. And I think what's gonna happen is that a lot of the biggest artists in the world will just happen to have NFTs under the hood. You know, I don't think it's gonna be like one of those major superstars doing their first drop as NFTs. I think there's like a developing culture of artists right now that are gonna really gain a lot of momentum over the next couple of years. And when they release that major album, you're gonna look back and see that their first songs actually happen to be minted as the collection of 25. A lot of major artists are really excited about this. You know, I spend a lot of my time talking to artists who are currently signed to deals that are saying, Hey, I wanna drop, but I can't because the major label doesn't let me. And I think what's gonna happen is that major labels are gonna wake up to how valuable these early collections can be. And instead of blocking their artists from doing these drops in the first place, they're gonna start to really ramp up and get engaged with them too. So instead of just like, how do we put this album out on Spotify? It's gonna be, how do we develop a relationship with these platforms and onboard our catalog into the. So the biggest thing that I see as a question mark for web three is do we recreate the same systems of Volt? You know, is there going to be a world in which the major labels are just driving the vast majority of NFT sales? I think you're already seeing early examples of this like Warner's partnership with Open Sea, and one thing that I think is really important for us to recognize is that artist independence is very, very valuable. You know, I think that artists owning their own rights and knowing how to run their own companies and run their own business is extremely valuable. And so I'm hopeful that there's a world in. Artists can coexist with labels in a more free form matter. You know, I'm hoping that there's a world where artists can upstream their most viral song to a label, but still retain the rest of their catalog. But I think what's gonna happen over the next year or two is there's going to be. A shuffling of different power dynamics from artists to label relationships. And I think the most forward thinking labels are gonna recognize that it's okay to give up a little bit of control so that an artist can run their business more properly. And if you have 20% of the biggest artists in the world, that's probably more valuable than having 80% of someone who's not really doing much with their career. And so I'm eager and excited to see what those relationships look like and hopefully try and, you know, form some of those early stage relationships along the way.

[00:51:41] Dan Runcie: But it's to your point, yeah, they would rather have 20% of that than 80% of the field at this point, so, mm-hmm. , I think we'll see more of that and actually we'll see more of that, not just involving multimedia, but involv. More merging technology. So yeah, it's only a matter of time. 2025 is earlier than I thought you were gonna say, but things move quick, so we'll keep the, we'll keep an eye out for it.Cool. Absolutely. Yeah. Thanks for coming on. This is great.

[00:52:07] Cooper Turley: Thank you, man. I just wanna say, I really appreciate this podcast because you're so well versed when it comes to both the music side, the tech side, and the financial side. I think that it's, Um, difficult for me to find pockets to really talk about the financialization of music. You know, there's a lot of pushback that comes from it, but you know, the way you structured this conversation I think really gives a clear picture of why I'm excited about more of the financialization of music. I think it gives a lot of credence to emerging artists and sort of the way I'm thinking about collecting. So really appreciate you making this happen. I think it was a fantastic episode. I'm excited to share with all my friends.

[00:52:37] Dan Runcie: Likewise, no. These are the conversations that need to happen, right? The more that people can talk about it, the more it just gets in the open and the faster things get to where it should be.So thank you for making the time. This is great. 

[00:52:49] Cooper Turley: Yeah. The last thing I'll say here in closing, I write a weekly newsletter called This Week in Music, NFTs. If you're interested in any of this conversation,

every Monday I publish a short edition that talks about upcoming drops, top stories, bonus read from the community. So if you're looking to get more involved in the web three space, that's where I'd recommend getting started. And then if you are a founder or an artist that's building something and looking for investment, the best place to reach me is via email coop Coop records xyz. But again, thank you so much for having me, man. This was a fantastic conversation. I really appreciate your time.

[00:53:18] Dan Runcie: Thank you. And if you're not following him on Twitter and you reactive on Twitter, make sure you do that. What's your Twitter handle?

[00:53:23] Cooper Turley: Twitter is at kooopatroopa. Good stuff. Thanks man. Thanks for having me.

Today's episode is a two-parter. Part 1 is on Spotify and YouTube’s billion streams and views playlists. After reviewing both lists, there’s a lot to learn about the streaming era and the strategy for both platforms respectively. I broke it all down with Tati Cirsiano, a music analyst at MIDiA Research.

Spotify’s list is more reflective of passive consumption. Spotify’s top-performing songs are more correlated with radio hits than YouTube, which is a more active consumption experience.

YouTube’s Billion Views Club has more international stars than Spotify. With streaming continuing to grow across the world and plateauing in the United States, YouTube’s list more reflects future music consumption. 

Part 2 is with Glenn Peoples from Billboard. We talk about its new Global Music Index that takes the publicly traded stocks from the biggest music companies in music to give an overall picture of stock performance for the industry. 

Here’s everything Tati, Glenn, and I covered on the show:

[3:03] Immediate takeaways from each Billions Club playlists

[5:15] How “meme traffic” impacted both platforms

[9:37] Passive consumption vs. active consumption

[12:11] International differences between Spotify and YouTube

[14:57] The Justin Bieber conundrum 

[16:36] How Spotify and YouTube enable fragmentation of fandom

[21:26] Gym-going and seasonality’s impact on streaming numbers

[26:14] Short-form videos eventual effect on YouTube streaming

[27:55] YouTube vs. Spotify competition intensifying 

[35:58] MIDiA’s upcoming predictions report

[38:33] What % of the Global Music index Spotify takes up

[39:23] Why music industry stocks fell further than the overall market

[46:25] Streaming platforms increasing prices

[50:22] What goes into calculating Average Revenue Per User for Spotify

[55:23] Spotify’s podcast strategy & acquisitions

[59:18] How much of Trapital’s audience comes from Spotify

[1:02:53] Why TikTok should launch it’s own streaming service

[1:09:39] What Glenn expects 2023 to look like

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Tati Cirisano, @tatianacirisano, Glenn Peoples, @theglennpeoples

Download The Culture Report here: https://trapital.ck.page/a23b7a6a4a

Sponsors:

MoonPay is the leader in web3 infrastructure. They have partnered with Timbaland, Snoop Dogg, and many more. To learn more, visit moonpay.com/trapital

Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital

Trapital is home for the business of hip-hop. Gain the latest insights from hip-hop’s biggest players by reading Trapital’s free weekly memo.

TRANSCRIPTION

[00:00:00] Tatiana Cirisano: Spotify's list is more of an accurate reflection of what the passive majority listens to, whereas YouTube is more of a reflection of what people are actively fans of and actively engaging, which is interesting because that was a question that we asked in our last episode where we were like, how do we measure, like, what are new ways to measure consumption? And I said, well, it'd be interesting if we could actually measure, you know, active consumption versus passive. And now here I'm looking at these two lists, I was like, oh, this is actually potentially an example of that.

[00:00:37] Dan Runcie: Hey, welcome to The Trapital podcast. I'm your host and the founder of Trapital, Dan Runcie. This podcast is your place to gain insights from executives in music, media, entertainment, and more, who are taking hip-hop culture to the next level. 

[00:00:57] Dan Runcie: Today's episode is a two-parter. We normally don't do two-parters, but these topics were so closely linked, it made perfect sense, so we had to do it. The first part of this episode is a conversation I had with Tati Cirisano from MIDiA Research, and we talked about the Billions Clubs. Spotify and YouTube both have their respective playlists that have over a billion streams and views respectively. So we talked about what can we learn from both of these playlists together. What does it tell us about the most popular songs that do well on streaming, but also what can it tell us about these two platforms individually? What are the differences between the two playlists? Are there certain songs that perform better on others versus that and why? And what that means more broadly for the sector, Just given how big these companies are. Second part of the conversation, I talked to Glen Peoples who works for Billboard, and he recently released this Global Music Index, which is a value-based index that takes the publicly traded stocks from many of the biggest companies in music, combines them, and gives us an overall picture of how we can look at the performance of the music industry, at least in the publicly traded companies. Hint, it's been a down year for stocks overall, so nothing too surprising there. But we talk specifically about Spotify, who stock is noticeably in a tougher place, at least from, where it was year to date compared to some of the other companies. So we talked about why that is, what to expect, and more. Really great conversations. Let's start things off with Tati. Hope you enjoy it. 

[00:02:31] Dan Runcie: All right. Today we have Tati Cirisano back with us from MIDiA Research and we're going to dive into the Billions playlists that are both from Spotify and YouTube. What a fascinating list that's like a tripped-out memory lane, telling you what songs are popular, but also how these lists are different. I feel like they both have somewhere between like 3 to 400 songs, but there's a whole bunch of different trends here. I know that we both have a bunch of notes here, but Tati, I'll start with you. What stuck out to you most when you were looking through these lists? 

[00:03:03] Tatiana Cirisano: Oh my gosh. So there's so many things. I guess I'll start with the things that stuck out to me that don't have to do with differences, but just stuck out to me in terms of just looking at both. And one was that I felt like there was definitely a dominance of songs and artists from the last decade and maybe even just the last five years, which was interesting to me because there's been such a debate recently about is old music or what we call catalog, which is often not actually old music. But is it sort of cannibalizing new music? Does new music have more to compete with? And that whole argument. So it was interesting to see that there actually weren't that many or weren't relatively as many older songs. I believe the YouTube Billion Views Club had, like, one song from the 70s. It makes more sense with YouTube. And I think YouTube had even more dominance with more recent songs. And that kind of makes sense because if it's visual-based, maybe some of these songs we don't have the music videos, or maybe they're not as good. But I thought that that was interesting just off the bat from both ways. 

[00:04:03] Dan Runcie: Yeah, I would agree. I think that YouTube's list did trend much younger, and there's a whole MTV effect of just what music videos look like then and now. But I also feel like what's important is with both Spotify and YouTube, that when these platforms accelerated in growth, a lot of the artists that were releasing music around those times accelerated and growth too. And I feel like I saw some trends there. If I think about YouTube and its rapid growth phase more so in the early 2010s. There were a few songs there that I saw, whether it was like a party rock anthem or songs like that, that streamed really well on YouTube. Still nowhere near a billion streams on Spotify. And I think on the flip side of that, on Spotify, there were a few songs that were in that late 2010s era when Spotify was in its rapid growth phase that weren't on YouTube's playlist. So that was one of those interesting things. Like, for example, I think Drake's song Nice for What, a billion streams on Spotify. It's in the Billions Club, but it wasn't on YouTube's list. And I remember that music video, I think it's at the skating rink and he has, like, Issa Rae and all these people in it. So there was definitely some influence of the platforms too. 

[00:05:15] Tatiana Cirisano: Yeah. And that reminds me, too, of with the influence of platforms, it felt like, there were, so okay on both platforms. I felt like there were a lot of songs that were driven by, like, a viral hit or a novelty, which kind of just goes to show how embedded music has become in, like, meme culture and social media and just like online culture in general. But it also, like, looking at the differences within that, it felt like, this is like, I mean, you'd need to do more of a real, like, study and look at the actual numbers on this, but just from scrolling over the list, it seemed like, more of the TikTok traffic is going to Spotify. Like, there were a lot of songs that had a billion streams that I just remember being moments on TikTok, like Dreams and the Roses, Imanbek remix, like those songs and many others had passed a billion streams on Spotify, but had not cracked the YouTube list. And then on the flip side, YouTube had a lot of stuff that was more, like, just these, memes about, I'm trying to think of an example, like the Dame tu Cosita song and video, like that. There were actually an abundance of songs on the Billion Views Club for YouTube that were linked to these videos, including Crazy Frog. 

[00:06:24] Dan Runcie: I saw that. 

[00:06:25] Tatiana Cirisano: It like that was just, like, that was a moment in time in meme culture that kind of preceded TikTok humor. I don't know, like you can almost track meme culture's impact based on these two platforms lists as well with TikTok driving more traffic to Spotify and sort of the old, almost like Vine humor going more to YouTube. 

[00:06:45] Dan Runcie: That point makes me think of two things I also saw as well. So I believe the first YouTube video that hit a billion streams was Psy's Gangnam Style. I don't think that song has a billion streams or anywhere close to that on Spotify's list, which I think speaks to your point about just the visual nature of that. And that of course is a pre-TikTok era. The other song I think that lines up with this a bit, and this is because of memes within the music video itself is Nelly and Kelly Rowland's Dilemma music video. That is the most popular YouTube video that Nelly has, and I'm pretty sure that Kelly Rowland likely has too. And it's because of this one scene in the music video where Kelly is texting on this 2002's phone and she has Microsoft Excel open, and that's what she's actually using to text. So they're both, you know, generating money. And Kelly was even talking about an interview semi-recently talking about, I didn't even know what Microsoft Excel was. They just told me to type. But over time, and now we obviously have a different relationship with texting. That type of event can blow up on YouTube in a way that not necessarily going to Spotify. 

[00:07:54] Tatiana Cirisano: Right. Like, there's an inherent difference in just what you're going to do on these platforms. Like, there's a number of reasons why you might look up a music video on YouTube. Maybe you like the song, maybe there's a celebrity cameo, maybe somebody told you that. It's a crazy, wild video and you're just curious. Like, there's a lot more reasons I think than there are reasons why you would stream a song. So that just by definition kind of opens up a lot of differences in these lists. 

[00:08:18] Dan Runcie: The other thing, too, that you mentioned earlier was the decades and how YouTube's list only had one song that I think that was before 1980 and there was only a handful even from the 80s and the 90s as well. And while Spotify had a bit more, I still think it was quite less. Last time I looked at Spotify's list, it was less than 10% of the 300-plus songs that were more than 20 years old. And I have to assume YouTube may be even closer to 94-96%. Part of that, I think, as you mentioned, is music videos, but I also wonder is part of it with Spotify having a bit more of a close link to radio play and just things that were popular on the radio at the time. Like for instance, a song like Goo Goo Doll's, Iris, that was on Spotify's list is not on YouTube's list. I don't necessarily think the song had like a memorable music video necessarily, but I think it's the audio of it, it makes people think of, you know, what was that movie that it was in? I'm trying to remember the movie that it was in. It'll come to me, but there was some 90s movie that was in, I'm drawing a blank on it right now. Oh, City of Angels. So it was in that, and then, but I just don't think that people, like, recognized the music video they would like, it wasn't necessarily this big, like TRL hit the way that like a boy band song was. 

[00:09:37] Tatiana Cirisano: I noticed the same thing where looking over Spotify's list, it felt very much like just a list of every radio hit of the past 10 or 20 years that it was really, really tied to that. And I wonder, like, this kind of brings me to another thing that I wanted to talk to you about with this, which is how my sort of theory with another reason that these are different is that Spotify's list is more of an accurate reflection of what the passive majority listens to, whereas YouTube is more of a reflection of what people are actively fans of and actively engaging, which is interesting because that was a question that we asked in our last episode where we were like, how do we measure, like, what are new ways to measure consumption? And I said, well, it'd be interesting if we could actually measure, you know, active consumption versus passive. And now here I'm looking at these two lists, I was like, oh, this is actually potentially an example of that. And the other reason that came to me is because at MIDiA, we've recently done a report on looking at different types of entertainment and how much of consumption is in the background of another activity versus focused. And YouTube, like, people that watch music videos on YouTube are much more likely to be doing that as a focused activity in the foreground rather than something in the background, which makes sense because it's visual, there's, you know, social features to it, et cetera whereas they're a lot more likely to just put on their Spotify music in the background of something else. So I wonder if that's also part of the reason that Spotify seems to have more of a tie to radio and those songs that were just kind of popular for everyone whereas YouTube is more what are the songs and artists and videos that people are like engaging with.

[00:11:09] Dan Runcie: That's a good point. It makes me think, well, on the YouTube side, I'm much more likely to listen to a YouTube playlist run, right? Like, I normally don't do that when I'm watching YouTube. I know YouTube has playlist, but I'm more likely to put a Spotify playlist on, which speaks to that. And I know some of the stuff that you've researched and the team has researched on MIDiA as well, is just this whole nature of probably a bit more on the digital stream provider side, but how to measure active versus passive engagement of, or actually listening to a song. And maybe this is a closer way to get a gauge for that because, you know, especially when these artists have these big week sales that'll come out and we'll see the numbers come through, it would be great to know, okay, how many people said yes, I want to listen to this Taylor Swift song from the Midnights album as opposed to people being like, oh, it just happened to be what's dominating today's top hits or if I'm listening to, you know, the number 50 or the top 50 songs in the US. These are the ones that happen to play. 

[00:12:11] Tatiana Cirisano: Yeah, yeah. That makes total sense. And I think the other reason why Spotify's list probably is more tied to radio is because it's a lot more, like the user base is less international than YouTube 'cause that was the biggest difference, looking at the two lists was just how few internet, like non-Western artists there were on Spotify's Billions Club versus YouTube's. 

[00:12:36] Dan Runcie: That stuck out too. And I think YouTube as well also had a list of artists that had the most Billion Views Club songs were and artists like Ozuna were high up on that list. I want to say he had at least 10 videos on YouTube that hit a billion. But on Spotify, it's far less. I think J Balvin was another one too, where there was a big discrepancy there. And yeah, I think the fact that YouTube has had much more of a market share and in general listenership in these regions outside of, you know, US and Western Europe as opposed to YouTube. So maybe part of that, where it's a signal of like, okay, this is where Spotify's clearly trying to grow and has been trying to get more share in. So, like, if Spotify achieved its goal, then it likely would have more of that and vice versa.

[00:13:28] Tatiana Cirisano: Right. And then it is YouTube's sort of a more accurate representation of, like, what the music landscape of the future looks like in that way where it will be less dominated probably by Western artists. As you know, streaming sort of infiltrates all these other places. And that is so interesting for, like, the fragmentation conversation that we've been having because it means things are just further fractured and, you know, there's going to be lots of artists and songs on these lists that we've probably never heard of. Like, it was so interesting to me because part of the, like, excitement that I had to do this little project of, like, opening the two and comparing them was, I was excited to be surprised. I was like, I want to see what things are on the list that I'm like, I have never heard of that. Or what is that? How did that end up here? And I did not have that moment once looking at Spotify's playlist. But looking at YouTube's, there were so many videos and so many artists that I just had never heard of, and that was exciting to me. So I wonder how much that's a product of YouTube specifically versus that being what will happen inevitably when streaming is more widespread.

[00:14:34] Dan Runcie: And were most of the surprises that you had, were most of them from an international perspective, or were there any Western-based music surprises? 

[00:14:43] Tatiana Cirisano: That's a good question. There were definitely a handful of Western ones that I can't think of right now, but the majority were probably just artists I'd never heard of or songs, yeah, artists I didn't know anything about that had billions and billions of views. Yeah, I don't know. Let me think about that. 

[00:14:57] Dan Runcie: Yeah. While you're thinking about that, one thing that stuck out to me was there were certain artists that I think surprised me both in a way of, oh, I thought there would've been more here, or there were actually a bit less here. One artist is Justin Bieber. So I know that Justin Bieber is very popular, but if you would've asked me who were the biggest artists of the 2010s, I probably would name four names, maybe even five names before I named his name. But if you look at, even if you're just looking at Western artists, the artist that is the one with the most songs on Spotify and the one that I believe has the most songs on YouTube as well, Justin Bieber is in the top three of both of those lists. I believe it's at least nine songs on Spotify and at least maybe 10 or so on YouTube. And there's something about that fandom that I didn't necessarily, I mean, I knew that he was huge. I knew that there were so many songs that were quite popular, especially the album that had, like, Sorry, and Love Yourself. Like, that one was huge, but I thought that there were other artists, like for instance, an artist like Beyoncé or even someone like Taylor Swift, who, I don't believe that Beyoncé had a song on the YouTube list at all, or a song that's really close to that. And at least up to now, I don't think that Taylor Swift has a song on Spotify's Billions List. I think that Blank Space will probably get there eventually, but I don't think she has a song this moment that's on that list. So to see the two of them who I think a lot of people largely think are two of the largest musicians in of the past decade, but to see someone like Bieber just have hit after hit on both of these lists, I was like, wow.

[00:16:36]

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iana Cirisano:

That's so interesting, the Justin Bieber conundrum of all of this. Okay, I have a couple of thoughts on that. I think, so he was sort of Made on YouTube, right? That's where he started posting clips. That's where he was discovered. And I think something else that this ties into that I wanted to bring up is how, with YouTube, the artists that reach these Billion Views Club, I think probably are more likely to have sort of built a community on YouTube which Justin Bieber did, and that was kind of like the roots of his fandom. So when I was reading YouTube's, like, blog about the Billion Views Club, and there were a bunch of artists' quotes, and a lot of them had to do with the artist saying, you know, like, YouTube was a place to build a community. And Alan Walker was one of the artists who said that. And he was someone who, he's an electronic music artist who when I was looking at the YouTube Billions Views Club, he came up again and again and I was like, it seemed random to me because he's a great artist. He has a big community of fans, but I just didn't think that he would have billions of views. But he seems to credit the community aspect for that. So I think that could be part of it. But then as soon as you said, oh but he's also one of the top artists on Spotify, I'm like, okay, but that's a completely different story because there's no community building on Spotify. So is it just that the fans are, that obsessed with the music that they're, you know, maybe migrating over and streaming there as well, or are we just misremembering, you know, how big of an impact Justin Bieber had? And then that brought me to thinking about how, I mean I think this relates to Taylor as well, but they both built their fan bases at a time when things were just kind of a lot less congested. So I think it was in many ways, easier to get a billion views or billion streams on something a couple of years ago than it is now, now that people's tastes are so fragmented. So maybe that's also part of the reason why, like, I wonder how many of those streams came from, you know, pre-2015 or something versus from then on. I wonder when they were accumulated. So yeah, that's sort of my rant of thoughts. 

[00:18:41] Dan Runcie: That one about Bieber is a good one because I didn't think about that, but I think it's absolutely right. He was doing all those cover songs of all these other artists when he's like a teenager. He's growing the base there. And to the point that you had brought up in an article a couple of months ago, we talked about the last time we're on the podcast, he is in a different category than someone like a Beyoncé or Taylor Swift. Like, when Taylor made Teardrops On My G uitar. I don't even like, that was probably around the same time that YouTube started. Like in some ways her fandom predated so much of what people know as music. And of course, Beyonce became a solo artist from Destiny's Child well before YouTube even started. So I think that's a good point there with some of it. The Spotify thing though is interesting, yeah. I mean, I think those songs did get a lot of radio play as well. Like everything off of that album, that Bieber's album that Sorry came on as well. Like, they got a ton of radio plays. So that ties into the Spotify piece of it, too, and maybe a little bit of misremembering of certain things of, well, and you know, like I'm a little bit older than the custom Bieber demo, so there could be some of it there where they may not hit me in the same circles that, the same way that, you know, someone did with Beyoncé for instance.

[00:19:53]

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iana Cirisano:

Yeah. I have another thought related to this that I feel like I'm struggling to articulate, but I'm going to try, which is that on the Spotify list and the YouTube list, I thought there was more overlap when it came to which older artists were on the list than there was when it comes to newer artists. And I wonder if that is also sort of further proof of this fragmentation that's happening because it would make sense that if a decade ago, two decades ago, people kind of had less to choose from to listen to. Everybody kind of has the same favorite artists from those decades that they've listened to enough to reach a billion streams. Yet now that people have more choice and things are fragmented more, their favorite artists and songs today are more varied. 

[00:20:39] Dan Runcie: Yeah. Yeah, no, I think there's something there because if you think about it, the lists are quite similar. And I think even if you look at YouTube's list, which I think even though YouTube's list is less reliant on radio, the biggest songs they have from the 80s and 90s are still the same songs that people have heard in bars and in stadiums and in TV commercials for decades now. So there's consistency there. Things do start to get a bit segmented to your point of where things are right now. So both of these platforms, in many ways enable the fragmentation of fandom. Their algorithms made it easy for people to have their own circles. So I do think that that piece of it is true. So I think that's a good point. 

[00:21:18] Tatiana Cirisano: Yeah. Okay. I'm glad I could put that into words 'cause it was one of those things where I had this thought and was like, does this make sense? 

[00:21:24] Dan Runcie: Yeah. Oh, yeah. 

[00:21:25] Tatiana Cirisano: Yeah. Fascinating.

[00:21:26] Dan Runcie: Another thing too, that stuck out, this stuck out a bit more on Spotify's playlist than others, but how certain songs have shifted from when radio, for instance, was more playing songs that I think people more often wanted to hear in their cars. But Spotify, it's on-demand, it's everywhere. I think, for instance, workout music is something that we've seen a pretty large uptick on with Spotify. A song like Eminem's Till I Collapse, which is in the billions playlist for Spotify, I don't think I heard that song once on the radio. Maybe I'm misremembering things just relative to how big Eminem's hits were in the early 2000s. But that song is one of his most played songs. And I think it's because it's a song that a lot of guys listen to when they want to work out. Maybe it's something that they also will play, like, I don't think they to like LA Fitness necessarily like on the speakers, but I think it's more so of like a, no, let me go listen to this while I try to, you know, set PR on the bench press or whatever. So I feel like there's things like that, also seasonal music, right? Of course, just Mariah Carey and some of the records and accolades that All I Want For Christmas Is You has continued to reach and all of the remixes and versions she's done of that song, like that doesn't happen without streaming, right?

[00:22:41] Tatiana Cirisano: I was going to say September was also on there, which, you know, every September everybody starts to sing. That is a seasonal song. So, yeah, no, I totally agree with you. And I also noticed that both lists had a lot of, like, upbeat music, like what you're saying, like stuff that people work out to. And I feel like it's for different reasons. Like I'm Spotify, maybe those types of songs dominate because like you're saying, they're the things that people put on in the background of something. Whereas on YouTube, the reason might be because those tend to have more vibrant videos. Like, I feel like more people are likely to watch videos for, you know, an upbeat reggaeton song than like some acoustic, I don't know, Taylor Swift song, even though she's a massive star. Like, overall, you know? And on that note, I don't know if this is just my, you know, anecdotal takeaway, you'd have to, again, like actually go through all the songs and do some data crunching. But I felt like Spotify had actually more varied in terms of like upbeat songs were on there. But also a lot of, Coldplay, a lot of like earlier Ed Sheeran, like, those more like, not so upbeat, more acoustic songs, whereas YouTube barely had any of those because again, I think there may be less likely to be something people watch the video of. I don't know. But that was interesting just how uptempo the two lists were. 

[00:23:59] Dan Runcie: Yeah. I would need to go back and check to see if like a song like Coldplay's Yellow. Is that on YouTube's list? 

[00:24:08] Tatiana Cirisano: It's on Spotify's, but I don't think it's on Youtube's.

[00:24:10] Dan Runcie: And that would speak to that, right? It's a more somber video. I'm pretty sure Chris Martin's head is laying like sideways on the pavement in that video, right, or on the bed, if I remember correctly. So yeah, it's just not going to be as, I think, yes. Like, if you have five minutes, like, this is the thing that I want to be able to get to. So yeah, it's such a fascinating distinction. And I think with it, it's clear that with both of these platforms, the two of them are really trying to compete more and more with each other, with both Spotify trying to get more and more international, YouTube trying to have more and more influence just in terms of the overall revenue that they generate for the industry. So I do want to talk about the two of them as companies distinctly, but before we get there, I think that the international piece and just how revenue is generated for each of these streams or each of these views will be an interesting distinction over time because, especially with Spotify, these streams that the artists are generating don't necessarily get weighted the same in terms of the pro rata and the pools that they get put into and then getting separated. So if one artist has a bunch of streams from a bunch of their fans, but a lot of their fans are in places where the subscriptions cost $2 per month to subscribe to Spotify, or there's a over index of free accounts versus paid, like these numbers don't necessarily reflect that, which is fine. I think we're just trying to get a gauge for what listening looks like. But the revenue may actually look very different for, let's say, thinking about like one of these, you know, 80s or 90s radio hits. The person that's listening to that account may be more likely to be paying 10 or maybe soon $11 a month for Spotify subscription if I'm just thinking about what that consumer may be like and therefore essentially getting more revenue per stream than some of the newer artists that may have a younger aboard international fan base. So that was another point that I thought was interesting. We won't have that data, but just based on inference, I feel like that's a trend in terms of where it's going. 

[00:26:14] Tatiana Cirisano: Yeah, that makes sense. And I also wonder, like, if short form video becomes the more dominant form of consuming video, and the people that are watching music videos on YouTube shift to watching 32nd videos that use music on shorts, like, what will that do to the revenue mix? And it'll also depend on if the way that UGC platforms payout to the music industry changes where it's no longer this, you know, blanket payment for uses and is more per use. I think there's a lot that could get shifted around there. And I wonder if, like, does that mean YouTube is sort of cannibalizing its own, one of its own sources where people that are watching music videos are now going to shorts instead? Or is there an opportunity? Like, I think there's an opportunity for both. But I guess these are just questions that come up in my mind when I think about it. 

[00:27:02] Dan Runcie: Yeah, it's like in some ways it's similar to when Instagram adds stories, right? You're trying to get a sense, is this additive or is this going to take away, And I think YouTube's goal is that would be additive, but you're bringing up, I think, a valid thing where it's a little different with music and how you're registering streams. And I do think that there's a certain number of people that the better and better that shorts get, there's going to be less desire to go check out the actual video. And if these songs aren't registering, I think at least for a stream or a view, it's 30 seconds of listening needs to be registered, at least to be counted as a stream. Then if that doesn't happen on a short end, you're just getting these clips, then how does that impact the actual artist themselves, right? 

[00:27:47] Tatiana Cirisano: No, you put it really well. Like, the better that shorts gets, the more it might actually threaten people going to YouTube to watch the video.

[00:27:55] Dan Runcie: Yeah. So many interesting, I think, things to just dive into with this. But I think it's a good point to just talk more broadly about Spotify and YouTube in general, just in terms of where they are, how both of them want the other one. And I think based on these blog posts and based on a number of the letters that, the emails that you'll see from Lyor Cohen when he's describing where things are with YouTube. There's clearly a goal to, you know, establish itself as the leader in the market. And I think the growth has been pretty strong, but of course Spotify, I think still with nearly 200 million paid subscribers is definitely, you know, I think leading on that front. But where do you see this play out in terms of whether or not the trends and clearly what these playlists tell us about the tendencies of these two companies and also where things are going and who we think will be more or less dominant, let's say five years from now? Let's not say 10 years. I think that's a bit too far out, but let's say five years from now. 

[00:28:51] Tatiana Cirisano: Yeah. Well, I've written about this, I've written a couple of blogs about this, but I think that YouTube does have a lot of advantages, especially for just where the music landscape is going. So one is that, in the streaming world, there's so little differentiation, right? All the DSPs kind of offer the same experience, the same catalog, the same price. But YouTube actually has a differentiating factor in that it's an audio-visual platform, and that they also have shorts, and they kind of have this ecosystem of apps that feed into each other. And that's sort of the second advantage, is that ecosystem aspect where, you know, based on our data, new generations of fans are really looking for more ways to actively participate in fandom and, you know, not just listen to a song, but create content around it. And YouTube has that it has this, you know, creator proposition. In many ways, YouTube was the first, arguably the first, you know, creator platform. The first place that you could post video content online and build a career around it. So, fans want this, but also artists need more ways to directly engage with their fans and monetize and actually not just be discovered, but sustain fandom and build communities. And that's the thing that I think so many social platforms lack, is they can help artists get discovered, but it's still really hard for them to connect the dots. So when you have YouTube, if you think about like the journey of, a fan through the ecosystem, you know, maybe they discover a song on shorts, and they can actually just click it and go straight, you know, go straight to the artist's YouTube page where maybe they watch the video that just came out and then they can go to YouTube music and stream the song, and it kind of creates this more frictionless experience. So I think we're already seeing a lot of consumers spend more of their music time on platforms that let them play around with the music, like the TikToks of the world and the shorts of the world. So if you have an ecosystem that combines that with streaming and the ability to just go seamlessly from one to the other, I think that's really powerful. And that's also why, you know, ByteDance launching a streaming service could really change the game. I think ByteDance and YouTube have a lot of the same advantages in that space. So I think YouTube is well positioned for the current era and what both artists are looking for and what fans are looking for, I guess is how I would frame that.

[00:31:22] Dan Runcie: Yeah. I think that YouTube's biggest advantage with this is that A, it still is under a much larger company that prints money from search, which is Google, right? So the fact that it in itself is the second largest search engine, largely because of Google, I think that piece of it will serve well. And I think secondly, the fact that when there's so many more things competing for your attention, whatever can make that have less friction, it can make it easier for people to access that platform as we've seen based on the rise of TikTok, I think those platforms do tend to win out in this area where you're ultimately trying to either capture or monetize attention. And the way that streaming is going, even though I know it can be lucrative for artists that own their assets or have favorable terms, it is a bit more of a measure of capturing attention for a lot of artists and being able to essentially market and position themselves out there to share what they have so that they can monetize elsewhere. And I do think that, I know I've talked about this previously, but just Spotify may be in a little bit more of a difficult position just given the fact that its ultimate goal is still to try to get more monetization from its non-music audio, whether it's your podcast or your audiobooks and stuff like that.

[00:32:41] Dan Runcie: And I think that is a little bit of a tougher bet relative to YouTube, China. going with shorts and essentially try to compete more directly with TikTok or just other things in general that are making it easier. That said, I still think that Spotify is more strong from a product perspective of actually being able to, you know, ease of use of listening, being able to find and skip to the song, and being able to listen to a song on my phone you know, turning off the screen and then putting it in my pocket. And I know that YouTube does now allow you essentially to do that if you pay for subscription, but I think the friction, at least in the consumer's mind, is a little different than it is with doing that with Spotify, even because you do that with Spotify for free account especially. So I do think that there are some pros and cons there, but to your point, I do think that because YouTube is moving more in the direction of creating less friction for people to use its product and just the fact that it's visual, it's engaged, and to your other point, it's a bit more directly connected to fans being able to actively choose what they want to listen to, like the data and all those things are going to be more impactful and insightful there.

[00:33:48] Tatiana Cirisano: Right, Right. So I think artists will kind of go to wherever the fans and the remuneration opportunities are, and I think YouTube is right now, providing more of that than Spotify is. Like, Spotify is a place where you can monetize scale, but you can't monetize niche. And YouTube is an ecosystem where you can monetize both. And I think there's no reason why streaming services in general shouldn't be a place where you can monetize both. But we haven't really seen that happen yet, and I think YouTube is moving in that direction. So I guess I come at this question because of the work that I do from such a perspective of what do the artists and the fans want. But of course, that doesn't necessarily mean that alone isn't going to, you know, make YouTube overtake Spotify. So I guess I'm a little bit biased just based on the work that I do. 

[00:34:38] Dan Runcie: Yeah, I could see that. Because there's just so many other, there's just so many factors at play here. It's such a dominant position and at the end of the day, nearly 200 million people in the world are paying for the service and that is much higher than a lot of these other services. It'll be interesting to see how this plays out though. I feel like to some of the points you brought up earlier. Just going back to the Billions Club, if we had this conversation two years from now, I'd be interested to see, one, which old songs creep back up and which songs that have come up recently end up rising up and hitting those places, and does it line up with a lot of the points that we brought up here? So I'm excited to see what that looks like. 

[00:35:15] Tatiana Cirisano: No, me too. And also what the pace will be like? Will there be just way more songs that have hit a billion streams in a shorter amount of time, or will the opposite trend happen because of fragmentation? Like, I'm not, I'm not really sure. So yeah, as always, excited to see definitely what comes next. 

[00:35:30] Dan Runcie: Well, Tati, this is great. Thanks for coming to share these insights. And I think now I got to go back and count how many Crazy Frog videos there were on YouTube's list because when I saw that, I'm glad you brought that up. I was just like, my goodness, I forgot all about this trend. 

[00:35:45] Tatiana Cirisano: Yeah, at least in that ratio, you know, we have confirmed YouTube wins. 

[00:35:49] Dan Runcie: All right. Before we let you go, what do you have coming down the pipeline? Are there any upcoming research or any recent things that you've put out that listeners should keep an eye out for?

[00:35:58] Tatiana Cirisano: Yeah, I would say coming up one of my favorite things that we do at MIDiA Research is our predictions report where every year, at the end of the year, we put out predictions for the coming year. And we also rate ourselves in terms of how much we got right from the past year. I believe our success rate is somewhere above 80%.

[00:36:16] Dan Runcie: That's legit. 

[00:36:17] Tatiana Cirisano: That's great. But yeah, so we always do I believe we always do a free webinar on that. It was free last year. So look out for that because it's a great chance to interact with us even if you're not a client. And it's a lot of fun. 

[00:36:30] Dan Runcie: Awesome, we'll look out for that and, yeah.

[00:36:33] Tatiana Cirisano: Yeah.

[00:36:33] Dan Runcie: We'll have to see. I'm curious about what the hit rate will be this year. So definitely let us know what the success rate is...

[00:36:39] Tatiana Cirisano: We will.

[00:36:40] Dan Runcie: from the ones you made last year, heading into this year. 

[00:36:42] Tatiana Cirisano: Awesome. Thanks, Dan. 

[00:36:43] Dan Runcie: Awesome. Well, thank you. This is great. 

[00:36:45] Dan Runcie: All right. Hope you enjoyed that first part with Tati breaking down the Billions Clubs. Here's my chat with Glenn Peoples.

[00:36:53] Dan Runcie: All right. Today we have Glenn Peoples with us who is from Billboard, and he just released this Global Music Index, which has stated that music stocks are down 44% this year, twice as much as the market. And Glenn, it'd be great to start here. What's going on? Why are socks down in the music industry?

[00:37:13] Glenn Peoples: Hey, thanks for having me. Well, stocks are down in general. So it's not that just music that's having a tough time at the stock market. You know, a big component of the Global Music Index, which I created for Billboard is Spotify. And Spotify has had a tough year, just like Netflix has had a tough year. There's, I think, enthusiasm for streaming stocks was high at the beginning of the pandemic and dropped quite a bit since then. And investors are not looking at growth so much as looking at margins, looking at profits, and so they're expecting a lot more from streaming services right now. So it's a tough time to be a streaming service, whether you're Netflix, whether you're Spotify. You could say, well, the investors got carried away. They were overvalued. Yeah, maybe so. It's just been a tough year for streaming services and when Spotify is that big of a component of the index, it's down, well, as of yesterday, it's down 60% for the year. And so that's a lot of market cap that's gone and that's dragging down the index. And that's the short version. 

[00:38:17] Dan Runcie: Right. So of course, it's a value-based index. Market cap is what defines it. And just so listeners know, how big of a factor is Spotify? Like, how much is their stock and their market cap weighted in terms of the overall index?

[00:38:33] Glenn Peoples: I would say it's probably, again, this is just ballpark. It's probably about 15% of the value of the index. It was a lot more obviously. I would say right now at its current price, it's 10 to 15%. Universal Music Group is the biggest component of the index, and there's some other companies just a handful that really stand out above everybody else. Live Nation, Warner Music Group, Sirius XM are some of the big ones. 

[00:39:02] Dan Runcie: The thing that stuck out to me about it is that, of course, Spotify stock is a huge piece of it, but even if you were to take out Spotify, the non-Spotify stocks in that index still are down more than the overall market has been this past year. So it also makes me think that there may be something going on that's a bit deeper than just streaming. 

[00:39:23] Glenn Peoples: Yeah, it's not just streaming. You know, a lot of music companies had a great 2021 and I think that they just had further to fall. So there were some really high valuations and it just sets these companies up for a pretty big fall when investor sentiment turns and the market turns. And ever since the Fed announced in, I believe, December, that it was going to start raising interest rates. You know, stocks have started to fall and Spotify definitely started to fall then. And it's been a long, what is that, roughly 10 months since then. Things have calmed down a bit, but stocks are, boy, they're really having a tough time. It's really volatile a lot there. I think there's two ways to look at it. One is what's the value of the stock? What's the value of the company as valued by investors? And what's the potential of the company based on the company itself and the intellectual property it has? And those two don't always line up. You know, Spotify I still think is a very good company. I think it has a lot of work to do, but it's growing at a good clip and I think they have good people there. But when you are a streaming stock and you're facing really a once-in-a-generation kind of environment with very bad inflation you know, crazy, I was about to say unemployment, but unemployment is not that bad. It's just a very strange time in the market and a very strange macroeconomic climate. And you're seeing good companies have very difficult times with their stock prices. You know, Universal Music Group is down. But the market is down overall and Universal's not going to escape the just general downturn of the market. That's saying something because Universal is the biggest music company out there holding up market share very well has a big share of the top 10, any given time, big artists. But you can't correlate stock market performance with company performance just perfectly. It's a very strange time in the macroeconomic climate right now. 

[00:41:23] Dan Runcie: Yeah. The interesting thing with the major record label stocks, and even some of these other companies that, yeah, even though they may not be streaming services themselves, when streaming makes up such a high percentage of the overall revenue for this entire industry, then Spotify's stock is in many ways going to be at least somewhat correlated to what we see with Universal given the fact that these companies have equity in each other, they're so dependent on each other, so a lot of that is given. You mentioned Live Nation earlier, and I think that their stock is interesting, too, because even though it isn't directly tied to streaming, that stock had hit record highs in the middle of the pandemic when there were no shows going on. So that just spoke to how much of a disconnect there was if you looked at how the company was actually doing in 2020 and even in 2021 when there were nowhere near as many shows as they had had in 2019, but they now are actually being able to realize more of that revenue. But the stock has adjusted in a lot of ways since. So there is a bit of this disconnect. I think there was just a good amount of excitement as well about what's happening in music as an investment class. Specifically, you looked at all of the catalog sales and the booms that happen thanks to the low-interest rates, and they're no longer low anymore. So you're also seeing that play a factor in, and you've also heard some of the acquirers of those catalogs expressing a bit of disappointment that the returns aren't quite what they thought the returns were going to be as well. So some of those things, I think, Brought some of the temperament and a lot of the companies that are in your index down to, I don't want to say necessarily down to earth, because I think there's still plenty of room for growth for a lot of them, but it's clear that we've moved past that era of the pandemic when things were just high for the pure speculation of where it could be in a few years.

[00:43:15] Glenn Peoples: Yeah, I think the honeymoon is over for a lot of music stocks. You know, music as an asset class was really attractive. And, you know, look, just the fact that Universal is public and Warner is public once again, and there are numerous streaming services from Tencent Music and Cloud Music in China to Anghami and Spotify and Deezer. There's a lot of music companies that are publicly traded right now and that says a lot about music as an asset, as a segment, set aside the problems it's had in the last year. So music companies had a great 2020 and 2021, and it's been downhill since then. But the fact that there are a lot of publicly traded music companies right now, and so much investor interest in music catalogs like you mentioned, I think says a lot about music as an asset class, music as an investment in general. Look, five years ago, how many publicly traded music companies were there? I mean, Spotify has been public for about five years. Pandora was before it was bought by Sirius. You know, but you didn't have Tencent, you didn't have Cloud Music, you didn't have Anghami, you didn't have Deezer, you didn't have Reservoir Media, or Believe. Warner was private. Universal was private. So the fact that Wall Street has taken a liking to music, I think says a lot despite what the stock prices say right now. 

[00:44:40] Dan Runcie: Yeah, I agree. The fact that this wasn't even possible, just shows what's happened. And a lot of companies, even outside of music, are starting to have money at least level back off now that the pandemic is over, now that the quarantine highs for a lot of these stocks are over. I'm interested to see where did things go from here, because I still believe that there's a ton of potential in each of these companies if the expectations and if the investors expectations of the market are where they need to be. I still think that music is a hot and a popular asset class, especially for investors. But is it 30 x value? Is it 30 x multiples for some of these catalogs that just bring 'em to certain valuations, or does it need to be more level? Because I do think that there's still plenty of value if those multiples and a lot of those things are where they should be. And even thinking about whether it's live entertainment or streaming in general, I think there's still plenty of room for growth. There's still a lot of opportunities there, but it's just being able to get a clear idea on, what is the actual TAM? What is the actual total addressable market for these areas? And I think if anything, you saw that chall