aligned incentives

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Hey. I can’t believe I’m saying this, but RIP Rich Homie Quan. He was a good person. He was a guest on Trapital in 2022 and kept it real the whole time. So young, he was only 34 years old. My thoughts are with his family and loved ones.

Today’s memo is about Atlantic Music Group. Not about the leadership drama but the artists themselves. This part has been overlooked and is likely relatable to others too. Let’s get into it.

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a different approach

I recently listened to a podcast where an Atlantic Music Group exec said that their goal was to get their artists to perform at Madison Square Garden. It’s a great goal that requires a strong catalog of music to grace that stage. But it’s a goal that has become less correlated with the metrics that matter to record labels.

Let’s be clear. Atlantic Records has hitmakers. The label is home to Ed Sheeran, who released two successful albums in 2023. He has four of the 40 most-streamed songs on Spotify of all time (#2 Shape of You, #13 Perfect, #26 Photograph, and #32 Thinking Out Loud), which is more than any other artist. Sheeran now tours in stadiums for years on end. Everybody eats in the Sheeran business.

But the other stars at Atlantic, like Bruno Mars, take time between projects. Bruno Mars’ last solo album, 24K Magic, was a moment. It dominated the airwaves for years, swept the Grammys, and elevated Bruno to another level.

But 24K Magic was released in 2016. Barack Obama was still in The White House at the time. If we count Bruno’s 2021 joint album with Anderson .Paak, An Evening With Silk Sonic, has dropped two albums in the past eight years.

The great thing is that when Bruno Mars drops, it matters. Each album has multiple hits. Since 24K, he’s had years of lucrative tours, festivals, and residencies. But touring and recorded music feed different parts of his business.

Atlantic is also home to Lizzo. She’s the rare contemporary artist who can sell out Madison Square Garden on back-to-back nights, and win a major Grammy award, but has yet to release an album that tops the Billboard charts. Lizzo has around 60% of the Spotify monthly listeners as Latto, who recently opened for Lizzo on The Special Tour!

Lizzo’s business is about depth, not breadth. She’s stronger for live music than for recorded music, which will likely take a gap year.

And then there’s Cardi B. Invasion of Privacy was another Grammy Award-winning album for Atlantic. But that album came out six years ago. Cardi’s life has changed a lot since then. She’s pregnant with her third child and recently filed for divorce. But Cardi has also done plenty of festivals, private gigs, and other lucrative shows ever since.

Plus, it’s not the best sign that Cardi recently “joked” that Atlantic Records is a correctional facility.

Other popular artists on the label, like Coldplay, are in legacy mode. Artists like Sia, A Boogie Wit Da Hoodie, and Ava Max have their fans, but they’re not as big as the others.

The frequency of releases makes it harder for Atlantic, one of the industry’s flagship labels, to maintain its market share. Its competitor Republic Records has released 14 albums combined from Taylor Swift and Drake since 2018. Their newer albums may not be the same quality as the older ones that are beloved by fans, but the volume is hard to compete with.

Artists with leverage put their focus on what’s most meaningful, which is often what’s most lucrative. It’s no secret that Taylor Swift and Drake have two of the most artist-friendly deals in the history of the music business. They are incentivized to drop album after album. They tour often, drop music often, rinse and repeat.

Meanwhile, it was just a few years ago that Warner Music Group’s former CEO Steve Cooper said that Taylor Swift’s deal was too artist-friendly and not “the right side of economics” for his label.

Atlantic Records superstar deals may not be as friendly, sure. But is the difference so great that the artists are incentivized to focus more on their live performance business than their frontline album releases?

If we dug into the economics and looked beyond market share or vanity metrics, would Atlantic deals net out in the long run?

Each artist’s circumstance may be slightly different, but it’s a noticeable difference.

Hope you enjoyed this memo. If so, please share. Forward this email to someone who should read it. Text it to a friend. Drop the link in the group chat.

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​https://www.trapital.co/memos/why-some-artists-are-incentivized-to-release-new-music​

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