Trapital - all the way up
all the way upHey! I've been thinking about something since Coinbase went public last week. A bunch of VCs shared "pass emails" from when they turned down Coinbase. I would love to hear more of these stories with hip-hop artists and record labels. We hear them once in a while. Tons of record labels turned down Jay Z before Roc-a-Fella Records started. Fat Joe turned down Eminem six times. Dame Ritter turned down an investment opportunity from Russ. Every hip-hop artist has stories like this! Let's hear more of them. This week's memo covers reports that Apple Music pays artists more than Spotify, Warner and Spotify's podcast partnership, and hip-hop's push for a union. Was this forwarded to you? Sign up here. new podcast: BrandMan SeanMusic marketer Sean Taylor (BrandMan Sean) came on the Trapital Podcast to talk about building BrandMan Network, which now was 100K+ YouTube subscribers. His insights have helped artists beat those with 2-3x the budget. He's also worked with 24KGoldn and many more. Tap in on Apple Podcasts, Spotify, or watch on YouTube. Apple Music's "penny per stream" is misleadingLast week, Apple Music published Apple Music Insights: Royalties, a letter on its artist dashboard about royalty payments. The biggest takeaway is that Apple Music says, "our average pay per play rate is $0.01" which has led to dozens of misleading headlines that say "Apple pays artists twice what Spotify does." There are several issues with pay per stream calculations and what they imply:
Both streaming services are similarly priced all-you-can-eat buffets. But one company boasts that it's better for artists because of a back-end calculation that's irrelevant to how it runs its business and serves its customers. It would be like Hometown Buffet saying it was "more profitable" than Golden Corral because customers eat less there. Sure, that's one way to view it. But maybe the food at Hometown doesn't hit like the food at Golden Corral. Who cares if you earn more profit per customer if no one's eating that Salisbury steak?? Read more about Apple Music's letter, which 9to5Mac posted. Warner Music Group and Spotify partner on original podcastsLast week, both companies announced a new partnership to develop podcasts built around WMG's catalog of music. The podcast - record label wave. Record labels big and small are on a quest to maximize content. Before long, all of them will have podcast studios or partnerships with existing ones. Last year, Warner Music CEO Steve Cooper saw podcasts as an opportunity to drive more streams. He didn't have any set deals in place at the time, but he saw Spotify as a lead generation opportunity. Here's what he said on a 2020 analyst call. "There will be people that come to Spotify for a podcast and stay for music, and there will be people that come to Spotify for music and stay for a podcast. It does not impact our economics, either on the free side or subscription side. But hopefully, what it will do is create appeal to a broader audience." Spotify is expected to surpass Apple Podcasts in U.S. monthly podcast listeners by 2022, so it's a timely move. Harder than it looks. Music podcasts get tons of attention because they are cheap to produce. Podcasts like Song Exploder have taken off and gotten big-time Netflix deals. But podcast growth is hard. It takes a lot of time and a lot of reps, which record labels understand. The best podcast networks have strong underlying brands, which record labels themselves don't always have. It's the artists who have strongest brands in music. But when it's time for them biggest artists to leverage multimedia, they get the eight-figure checks from a video streaming service. This puts music podcasts in a peculiar spot. It will be interesting to see which types of podcasts get the greenlight under Warner-Spotify's deal. Maybe we'll see more companion podcasts to the Netflix documentaries. Or Warner will signs podcast talent to be personalities that discuss a particular genre on a regular basis. There's a wide range of opportunities. Read more about this deal in Warner Music Group's press release. Know someone who would love Trapital's Monday Memo? Ask your colleagues to join you. Copy and paste the link below to share: Or share Trapital easily via text, email, or Twitter. The push for a hip-hop union The deaths of DMX and Black Rob have resurfaced the push for a union to support hip-hop artists. This topic has been brewing for two reasons. First, today's superstars make a lot more money than the stars before them. Travis Scott grossed over $100 million in 2020. In a pandemic! Even in Lil' Wayne's prime, the most he made in a year is $20 million. The superstars before Wayne saw even less despite the fact that they paved the way. Second, some of yesterday's rap stars are now struggling. This is why Swizz Beatz wants to start that founder's fund where artists donate 1% of earnings to a set fund, which is distributed back to the past generation. It's also why Warner Chappell exec Ryan Press pledged $10,000 to the Rhythm & Blues Foundation which helps artists in financial need and medical assistance. The SAG-AFTRA awareness problem. All major record label artists are eligible for SAG-AFTRA membership, a union that the major record labels all contribute 12.75% of gross earnings to cover healthcare and retirement for artists and employees. According to a Rolling Stone article, the union has struggled with a lack of awareness among artists, even though all major record label artists are eligible. But I wonder if the "lack of awareness" is a welcomed issue. Pensions and retirement benefits were major setbacks for Sears, Ford, and many other 20th century businesses. Their retired employees are living longer than ever with increasingly high healthcare costs. These companies weren't built for this life. Could SAG-AFTRA manage the costs if all eligible musicians used the service to its full potential? I'm no union expert. Never been part of one. But I would love to see a model where signed artists are automatically covered, not just eligible. Read more about the hip-hop founder's fund effort in okayplayer. Share this week's memo on Twitter, LinkedIn, and Facebook. |
Older messages
ryde or die
Tuesday, April 13, 2021
Trapital Memo #35: remembering DMX, UnitedMasters, Diddy and REVOLT, Scooter Braun, and more. ryde or die read in browser Hey. It's been bittersweet to think about DMX since he passed away.
we ride together, we die together
Monday, April 5, 2021
Hey! Here's the long-awaited essay on Will and Jada Pinkett Smith. I know, it's about damn time! But hey, gotta get it right. At nearly 2400 words and two hand-drawn visuals, it's
loyalty, loyalty, loyalty
Tuesday, March 30, 2021
Trapital Memo #34: Issa Rae's WarnerMedia deal, the new 360 deals, vinyl sales growth, industry myths, and more. loyalty, loyalty, loyalty read the browser Hey! Did you see Peloton and
the era of consistency
Monday, March 22, 2021
Trapital Memo #33: Troy Carter's fanbase building, Drake's longevity, Death Row Records and eOne potential sale, and more. the era of consistency read in browser Hey! This week's
a seat at the table
Monday, March 15, 2021
Trapital Memo #32: Why Swizz Beatz and Timbaland sold Verzuz to Triller, Micah Johnson's million dollar NFTs, and much more. a seat at the table read in browser Hey! Last night I watched
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