can't knock the hustle

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Hey! I hope you enjoyed last week's Trapital essay on the big three major record labels. The response has been strong so far and the audio version is now live. Please read and share if you haven't yet.

This past weekend we got a new Tyler, The Creator album, Soulja Boy vs Bow Wow's Verzuz, and memorable moments from the BET Awards. Saturday was my birthday too, so with all that plus the NBA playoff games, I couldn't ask for much more.

This week's memo covers my latest Trapital Podcast episode, explains Jay Z and Dame Dash's NFT lawsuit, pays respect to auto-tune's influence, and breaks down UMG and Snapchat's new partnership.

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new pod: Benjy Grinberg, Rostrum Records

Rostrum Records founder and CEO Benjy Grinberg looks back on his 18-year journey running the independent record label that helped put Pittsburgh hip-hop on the map. Benjy shares his story of working for L.A. Reid, rising up alongside Wiz Khalifa and Mac Miller, re-releasing their seminal mixtapes, and doing the same for that artists on his label today.

Tap in on Spotify, Apple Podcast, or watch the video on YouTube.

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​Jay Z and Damon Dash NFT lawsuit, explained

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On June 22, a New York judge ruled in favor of Jay Z to stop ex-Roc-a-Fella Records CEO Damon Dash from selling an NFT related to Reasonable Doubt and his 1/3 ownership of the record label. Three days later, on RD’s 25th anniversary, Jay Z and artist Derrick Adams collaborated to auction NFT artwork for the classic album.

the NFT hustle

This case has all the salacious Jay Z – Dame Dash drama hip-hop lives for, but let’s get the facts straight:

• Reasonable Doubt is owned by Roc-a-Fella Records (RAF Inc.)
• Jay, Dame, and Kareem ‘Biggs’ Burke each own one-third. No one stakeholder can sell the whole album or the record label’s assets.
• Dame does not want to sell the entire Reasonable Doubt album as an NFT. He wants to sell his one-third ownership share of Roc-a-Fella as NFT.
• The lawsuit claims that Dame’s NFT announcement implied that he was the sole owner of Reasonable Doubt’s copyright.
• In March 2021, Dame says Jay offered to buy Dame’s ownership share, but Dame turned down the offer because it was lower than he wanted.
• Jay Z’s Reasonable Doubt NFT is an auction of Derrick Adams’ artwork. It did not include any music ownership.

According to Rolling Stone, the announcement said:

“SuperFarm is proud to announce, in collaboration with Damon Dash, the auction of Damon’s ownership of the copyright to Jay Z’s first album, Reasonable Doubt…The newly minted NFT will provide ownership of the copyright, transferring the rights to all future revenue generated by the album from Damon Dash to the auction winner.”

To be fair, I can see why Roc-a-Fella lawyers pushed back on that language. It doesn’t clarify Dash’s one-third ownership percentage and can easily be interpreted as full ownership. If SuperFarm’s announcement was as clear as the statement Dash gave to Music Business Worldwide, this would have been harder to dispute.

But was Roc-a-Fella’s block of Dame’s NFT related to his refusal to sell it to Jay Z months before? Even if SuperFarm’s announcement was perfectly worded, Roc-a-Fella may still have been less enthused about Dame’s come-up, especially in the hot market for music assets.

why sell as an NFT?

Dame’s decision to publicly auction his share of Roc-a-Fella Records is odd, but I understand the intrigue. Both the NFT and music markets are hot. Dame can merge the trends and productize the releases. But that works best when the seller has a great public image and the earned media can further boost the sale.

He should ditch the NFT and stick to the enterprise sales. Dame can sell to a music investment fund like Hipgnosis, Round Hill Music, or one of the major record labels.

Some investment funds shy away from hip-hop assets due to sampling and the complexity of ownership. But this is an opportunity to own a 33% stake in Reasonable Doubt, The Blueprint, and The Black Album! Some investments are worth the extra work.

Read more about Jay Z and Dame Dash in How Jay Z and Dame Dash’s Split Still Impacts Hip-Hop.​

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why auto-tune was a disruptive technology

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Last week on Netflix’s This Is Pop, T-Pain shared that he fell into a four-year depression after Usher told him that he “fucked up music for real singers,” because of auto-tune.

Sadly, Usher wasn’t alone. Remember Jay Z’s “Death of Auto-tune”? Nas’ Hip-Hop Is Dead? There was a grown artist movement against the voice-altering audio device. T-Pain took an unfair amount of blame. (No one came at Cher like this!) It’s a classic example of how our culture responds to disruptive technology.

The next big thing starts looking like a toy

In 2010, venture capitalist Chris Dixon wrote “The next big thing will start looking like a toy.” Disruptive technology first gets ignored because it “undershoots” user needs, but gains more traction due to external forces.

The “toy” for auto-tune was the ringtone rap era. OG hip-hop artists refused to alter their voice, make snap music, or jump on any new trends. Instead, they struggled to sell CDs in the mid-2000s. Meanwhile, T-Pain sold more ringtones than albums by rhyming “mansion” with “Wiscansin.” Gotta love it.

The superstars and DIYs followed the adoption curve

But auto-tune’s expanded beyond ringtones due to two external forces. First, superstar artists jumped in. In 2008, Lil’ Wayne and Kanye West— rap’s two biggest stars that year—dropped “Lollipop” and 808s and Heartbreaks respectively. Both have used auto-tune in most of their albums since. Usher himself made tons of money off auto-tune with 2010’s “OMG,” his last song to top all the charts. This pushed even more stars to join in.

Second, music technology and bandwidth growth made it easier for artists to create their own music and share it with the world. Auto-tune helps solo artists add variety to their projects. If we played Travis Scott’s “Antidote” for someone in the 90s, they would be surprised to hear it’s just one person on all the vocals. The sound is so common that some don’t even know what’s auto-tune and what isn’t.

To say that T-Pain’s auto-tune use fucked up music is as ridiculous as saying Usher’s Ush Bucks fucked up our monetary policy. T-Pain was an early adopter who took heat for a technology that’s now mainstream. It’s happened before, and unfortunately it will happen again.

For more on auto-tune, read Pitchfork’s How Auto-Tune Revolutionized the Sound of Popular Music.

Snapchat expands music discovery with UMG

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Last week, Snapchat and Universal Music Group signed a multi-year partnership to make the record label’s full catalog accessible to all users. Snapchat’s new partnership is a clear rival to TikTok, but it’s also a reminder of how fragmented the music landscape.

Music discovery is top of the funnel for streaming services

Social media is one of the best places to discover new music. Most digital streaming providers have a Discover Weekly or New Music Friday-style playlist, but it’s not the same.

We trust recommendations from friends over algorithms. This is where Snapchat shines in the music industry’s value chain. It’s also where TikTok, Instagram, Twitter, Peloton, Roblox, Fortnite, and many of the other platforms I mentioned in last week’s Trapital essay.​

These platforms don’t compete directly with the DSPs. Music discovery is the ‘top of funnel’ for on-demand music listening on DSPs, which helps convert more paid streaming subscribers. But they do compete indirectly by helping the record labels diversify revenue streams and reduce reliance on the DSPs. I still doubt the revenue from music discovery tools can ever match the DSPs, but the labels would rather some of that revenue than none at all.

Where Snapchat can stand out

Snapchat’s popularity highlights our social media bubbles more than any other platform. Many people over 32 years old wonder whether Snapchat still exists. Meanwhile, people under 25 use the growing platform more than any other social media.

Snapchat’s user profile is different than TikTok and should therefore have different artists rising on the platform. Snapchat’s music team should study TikTok’s 2020 music report, identify the artists with potential who are not named in that report, target them to become Snapchat music superstars.

I’m not gonna act like I know who those artists are. I haven’t used Snapchat since the Obama administration. But my 17-year-old cousin, who uses Snapchat every day, believes that Polo G is a superstar. I’m not ready to agree with all that just yet, but Polo G has a growing and he’s just getting started.

The DJ Khaled Snapchat era is long gone. But there’s plenty of room for Gen Z artists to rise.

Read more about Snapchat and UMG’s partnership in The Verge.

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coming soon from Trapital

Trapital Podcast: hip-hop artist Call Me Ace is coming back on the podcast to talk about his latest projects, brand partnerships, and audience growth strategy. Drops on Friday!