Trapital - is winter coming?

​

is winter coming?

​read in browser ​

Hey! Today’s newsletter is a brief one. I covered two topics:

• Hipgnosis’ struggles to raise more money for catalogs
• Trapital’s new podcast episode on TikTok​

Let’s dive in!

Was this forwarded to you?

is the party over?

This week, Financial Times released an article (paywalled) on music investment firm Hipgnosis Songs Fund and its growing pains. The fund is:

• unable to raise money because its stock price has fallen
• has failed to complete potential deals with musicians
• has not bought a new song in more than a year

Some of this is unsurprising given the rise in interest rates and the current economic climate. Some may also see this as a referendum on the controversial catalog acquisition movement. As Music Ally points out, Hipgnosis and its founder Merck Mercuriadis had plenty of haters. I’ll never forget reading the anonymous quote, “Fuck that guy. What he’s paying is obscene.”

But regardless of how you feel about Hipgnosis, its struggles should be noteworthy for anyone who has enjoyed music’s bull run in the streaming era.

It’s not just the investment funds that have benefitted from the music industry’s revenue growth. It’s the major record labels going public. It’s the major acquisitions of independent companies. It’s the publishing companies that have a much bigger share of revenue. And it’s all the web3 music companies that benefit from the investors (who became rich from web2).

I still believe that the best companies will rise up. Deals are still happening, like Kobalt’s $750 million sale. And new music investment funds are still being created, like Coop.

“Winter is coming” may be a bit strong, especially when investors like Bill Ackman are still bullish. But the climate is not where it was back in fall 2021.

If you don’t have access to the Financial Times report, then check out Music Ally’s explanation.

affinity for the creator, or affinity for the platform?

This week’s podcast episode is all about TikTok’s takeover plans. I recently wrote about TikTok in Trapital, so I won’t rehash that here, but Denisha brought up a few points to consider.

For creators, TikTok's functionality is both its superpower and its kryptonite. It’s the fastest platform to gain a following, but it’s the harder to build true fans who will follow you off that platform.

That’s by design. TikTok’s goal is to keep you on that app. It also positions TikTok as the brand that consumers have an affinity for, more so than the creators who make all the content.

The app’s ‘For You Page’ turns TikTok’s algorithm into the curator. It’s another reason why TikTok is the new MTV. The TV network’s VJs and program directors had a lot of control of what we thought was cool. TikTok’s algorithm is now in that position.

Listen to our full podcast conversation here.

money moves

• Will Page on UK’s live music resurgence​
• Want a curated snapshot of the new music business? Get Your Morning Coffee's free newsletter in your inbox every Friday
• Coop, a web3 music fund, raises $10M to invest in startups, NFTs, and artists
• How Ticketmaster makes pricing decisions (and captured $500M from dynamic pricing)

enjoy Trapital? share it with a friend

Tell them to sign up. I'll send them next Monday's memo. Hit the link below to share:

Or share Trapital quick via text, email, or Twitter.​

coming soon from Trapital

Podcast: Roy Wood Jr. He came back on the pod to talk about the business of comedy. Here’s our first episode. Hope you enjoy!

want your company featured in Trapital?

We are looking for a few more sponsors in Q3 who want to reach the artists, creators, and execs who read and listen to Trapital on a regular basis. Want your company to reach Trapital's audience? Reach out to us here.

​