Trapital - all about the beats

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all about the beats

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Hey! I’m bummed out by the claims that Swizz Beatz and Timbaland haven’t been paid by Triller for its $28 million acquisition of Verzuz. At the time, this move was so special because all the artists who had participated got a stake in equity. It’s a shame to see it play out like this.

​The Verge has a great breakdown on the situation.

This may hurt Verzuz' potential for future shows. Diddy and Jermaine Dupri (finally) want to match up, but in a non-Verzuz format out of respect for their boys. I bet Amazon Music has already called them both to try and livestream the event, just like it did for Drake and Ye last year. Let's see how this all plays out.

Today’s newsletter is on the business of buying and selling beats. This marketplace has transformed since the 2000s. I had a great chat about it with BeatStars founder and CEO Abe Batshon. Hope you enjoy!

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the business of buying and selling beats

In the 2000s, a handful of superproducers had a quasi-monopoly on selling beats. Timbaland bragged about getting half a mil’ for his beats while others only got a couple grand. The Neptunes sound dominated airwaves and has the data to back it up. And in pop music overall, it was hard to get a #1 song without the help of Max Martin. The market was top-heavy.

Top producers still get paid well today, but technology has democratized beat-making. Creators can now sell instrumentals — either under an exclusive license or not — to artists around the world for a fraction of the previous cost. Some of the biggest songs in the world have had beats that were bought for under $100. And with over $200 million paid out to creators to date, BeatStars is one of the companies that has led the shift in the economics of beats.

Abe Batshon started BeatStars during the Great Recession without VC funding. Back then, the music industry was in its dark days. CDs weren’t selling, piracy was still high, and some artists made more from ringtones than their underlying music. Bootstrapping was the only option for many startups at the time. But thanks to YouTube and other platforms, the ground was fertile for DIY platforms that brought music makers and fans together. Abe’s goal from the get-go was to break up that top-heavy, relationship-driven nature of buying and selling beats.

Today, the impact is everywhere. Lil Nas X bought the beat for his mega hit “Old Town Road” on BeatStars for $30. Artists used to pay 10,000x that price in the hopes of landing a song that big! Desiigner bought the beat for “Panda” for $200. TrapMoneyBenny sent a cold email to Drake, then got his beat used for his 2018 song, “In My Feelings.” This is how the market works today.

BeatStars’ producers have also been featured on songs released by Ariana Grande, ads for adidas, the NBA, and many more. Here’s a few key moments from my chat with Abe:

breaking up the beat-making monopoly

In 2003, The Neptunes produced 43 percent of the songs played on US radio and 20 percent of British radio. It’s a stat that still blows my mind. Those stats that speaks to the industry dynamics at the time. The internet leveled the playing field dramatically.

The BeatStars marketplace created accessibility on a global scale — but not everyone was a fan. Abe remembers getting negative messages from superproducers and industry execs for resetting the market and undercutting their rates. Despite the blowback, Abe didn’t lose sight of his original motivation.

Today, there are 3 million active BeatStars users who come from more than 100 countries.

not just a beats marketplace

BeatStars has also expanded to include music distribution and publishing. Its publishing operation is a partnership with Sony Music Publishing, which included a minor investment from Sony. Writers, producers, and artists can collect royalties and maintain ownership using the publishing arm.

The service is just over a year old but is already paying dividends. Abe told me that over the past 16 months, 26 different Billboard 100 songs have come from creators on BeatStars roster.

VC money entering the music industry

Abe grew up in Hayward, California — not far from Silicon Valley. Despite his proximity, he couldn’t get a meeting with VCs when launching BeatStars.

But a lot has changed since then. Streaming has matured the music industry and more VC money has poured into the space. Some of that money has went to into beat-making too. Both new startups and established companies are now selling beats to compete with BeatStars, Airbit, and others.

Abe said that BeatStars is not looking to raise more money. The company is profitable, and wants to use some cash on hand for its own acquisitions. Specifically, AstroBeats is looking to acquire technologies or communities that elevate what BeatStars is already doing.

Listen to my full conversation with Abe on the Trapital Podcast here:

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coming soon from Trapital

Podcast: TikTok’s takeover plans. I’m going to have a conversation about TikTok’s takeover plans with Denisha Kuhlor. Stay tuned!

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