Trapital - the ultimate marketplace
the ultimate marketplace brought to you by MoneyMade Hey! Earlier this week I finished jeen-yuhs a Kanye West trilogy. Honestly, it felt like a breath of fresh air. The directors Coodie & Chike were willing to show the good, the bad, and the ugly of a beloved yet polarizing artist. It was unlike many recent music documentaries, which often feel like low key infomercials. Sure, it’s fun to go behind-the-scenes of a Super Bowl halftime show or a major live performance. But jeen-yuhs was a bit more authentic, which I appreciated. Today’s Trapital memo is a breakdown on why Epic Games acquired Bandcamp. It also includes my podcast interview with former music exec and Visa’s next CMO Frank Cooper III. Let’s get to it. Sidenote: I saw The Batman this weekend. Loved it. I’ve had Nirvana “Something In The Way” stuck in my head ever since. So if Nevermind re-enters the Billboard 200 next week, it’s cause I’m one of the ones who has had it on repeat.
Was this forwarded to you? SPONSORED Want to invest in the music business? MoneyMade has you covered. Investing definitely isn't what it used to be. Bitcoin, NFTS, stocks, EFTs. Who can keep track? With the help of MoneyMade, you now have the opportunity to invest in the music industry too. Music royalties are different from your average investments. They are a form of passive income with the potential to deliver double-digit yields. Check out why music investing is the way to go. With MoneyMade, you can: - Evaluate and see performance for music royalties as well as every investable market and all major asset classes. - Have access to insight and data platforms that let you obtain the same data tools for free that typically only institutional investors have. This includes risk analysis, projections, correlation, and more. - See live performance data for stocks, crypto, and alternative assets all in one place. MoneyMade is making an exclusive offer for Trapital subscribers: free lifetime membership! What are you waiting for? Visit MoneyMade today to sign up and get started.
New pod: Frank Cooper, Visa’s new CMO Frank is one of the best marketing execs in the game. His resume is no joke: Motown, Def Jam, Tommy Boy, AOL, Pepsi, BuzzFeed, BlackRock, and soon to be the next CMO of Visa. We talked about the big deals he’s worked on, like Beyonce’s $50 million Pepsi deal. We also talked about the Super Bowl halftime show, BlackRock’s goals to improve financial literacy, and a whole lot more.
Listen to the Trapital Podcast here:
Why Epic Games and Bandcamp teamed up Last week, Epic Games acquired Bandcamp for an undisclosed amount of money. The news sparked a wide range of reactions. Some wondered why the company behind Fortnite and Unreal Engine would want an online record store. Others were frustrated that another artist-friendly company has “sold out” to Big Business, especially given Fortnite’s past clashes over music licensing. But this move felt inevitable given the position that both companies were in. Building the creator marketplace In a company statement, Epic Games CEO Ethan Diamond said that this acquisition helps its “vision to build out a creator marketplace for content, technology, games, art, music, and more.” Fortnite is still a leading metaverse player. Travis Scott’s Astronomical Fortnite concert in 2020 is still one of the biggest events yet in a digital environment with 28 million attendees. Epic Games’ acquisitions of both Harmonix and Bandcamp are signs that the company is still all-in on music. Bandcamp also has a loyal customer base. The customers who use Bandcamp are proud to pay their favorite artists and buy their products. If those same artists use Epic Games for livestream or virtual experiences, their fans may be proud to pay for products in the Metaverse too. There’s risk in treating superfans as endless pots of cash, but there’s still room to tap into that consumer surplus. Music is still undervalued The Tencent-backed Epic Games is the latest entertainment company to make big moves in music. In recent years, most companies have done it for two reasons. First, they treat music a loss leader. The digital streaming providers have all used music as a means to acquire more customers to sell them more lucrative products. Second, and most relevant to Epic Games-Bandcamp, they believe music will become more valuable over time. That can value can come from increased subscribers or additional platforms that will monetize music. This undervalued notion is especially true for a company like Bandcamp. Its business model is antithetical to the streaming era. It had “pay what you want” features before tipping-enabled platforms were a commodity. The platform was built on generosity. But in today’s music tech industry, it means that Bandcamp is leaving money on the table. The tradeoffs of profitability Ethan Diamond has said the company has been profitable since 2012. The Component’s Andrew Thompson estimates that the ~200 employee company made $21 million in net revenue in 2020. Bandcamp is a rare breed, but its desire for profitability may limit its ability to grow in an industry dominated by winner-take-all empire builders. Diamond said that this move will allow Bandcamp to build livestream functionality, expand internationally, and further develop its app and other user interfaces. Bandcamp has also wanted to push back on Apple’s high 30% cut on App Store transactions. This is a fight that Epic Games is all too familiar with. Those are expensive goals! They are hard to achieve in the near term for a company with $21 million in annual profit. In a non-VC backed world, Bandcamp could take its time and achieve all those with its own money, but that world doesn’t exist. If Bandcamp tried to do this itself, the internet might be onto Web5 by that point. This situation is not uncommon. Ask any recently-acquired indie record label, music distributor, or bootstrapped startup. They often reached a point where they felt limited in their ability to maximize opportunities for the artists they support. It led many founders—especially bootstrapped ones—to ask themselves some form of the following question: Am I content running my profitable business as is, even if we can’t take advantage of all the untapped opportunities available? Or would I rather sell the company, add some firepower to reach our potential, and accept the tradeoffs that may come with it? There’s no right answer. It all depends on the founder’s goals. But it’s not a surprise why a VC-backed company like Bandcamp, which has turned down past acquisition offers, would capitalize on this particular moment. Read more about Bandcamp in Andrew Thompson’s 2021 essay Why is Bandcamp Profitable and Spotify Not?
Looking for a new role? Is your company hiring? Check out the Trapital's job board. New roles just added! Work with the folks who read the same sources you rely on. Learn more here.
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: Dazayah Walker, Quality Control Music. I had a great chat with QC’s head of investments, Dazayah Walker. The record label and entertainment company has invested in SoundCloud, RIFF, and several other companies. We talk about what QC looks for in startups and a whole lot more. |
Older messages
the text message
Tuesday, March 1, 2022
Trapital Memo: what creators get wrong about texting, my interview with WME's Kevin Shivers, and Rick Ross cutting down trees
can’t tell me nothin’
Tuesday, February 22, 2022
Trapital Memo: Kanye West's stem player, a Donda 2 exclusive, and DTC music
the next episode
Tuesday, February 15, 2022
Trapital Memo: let's talk about that halftime show, Snoop Dogg's big week, and my interview with Tuma Basa from YouTube
a platform or a publisher?
Wednesday, February 9, 2022
Trapital Memo: what's next for Spotify after the Joe Rogan controversy?
the attention company
Monday, January 31, 2022
Here's the new essay on Spotify, a Trapital x Napkin Math collaboration! Read it here.
You Might Also Like
Bruce Springsteen Joins Zach Bryan Onstage in Brooklyn
Thursday, March 28, 2024
View on web New reader? Subscribe March 28, 2024 Bruce Springsteen Joins Zach Bryan Onstage at Triumphant Brooklyn Show Springsteen was a surprise guest at Bryan's triumphant Barclays Center show,
Viaplay Boss Vows Company "Will Be Different" After Horrors Of 2023
Thursday, March 28, 2024
View on web New reader? Subscribe March 28, 2024 Viaplay Boss Vows Company "Will Be Different" After Horrors Of 2023 By Jesse Whittock This email was sent to newsletterest1@gmail.com by
Tom Holland's Romeo Finds His Juliet In Brit Newcomer Francesca Amewudah-Rivers
Thursday, March 28, 2024
View on web New reader? Subscribe March 28, 2024 Tom Holland's Romeo Finds His Juliet In Brit Newcomer Francesca Amewudah-Rivers By Andreas Wiseman This email was sent to newsletterest1@gmail.com
AMC Entertainment Shares Plunge On Proposed Stock Sale As Chain Cites Soft Box Office, Cash Burn
Thursday, March 28, 2024
View on web New reader? Subscribe March 28, 2024 AMC Entertainment Shares Plunge On Proposed Stock Sale As Chain Cites Soft Box Office, Cash Burn By Jill Goldsmith This email was sent to newsletterest1
BBC Deficit Projected To Skyrocket To $620M Next Year
Thursday, March 28, 2024
View on web New reader? Subscribe March 28, 2024 BBC Deficit Projected To Skyrocket To $620M Next Year By Max Goldbart This email was sent to newsletterest1@gmail.com by Deadline. Please add email@
Richard Sharp Says Actions That Led To His Resignation As BBC Chair Were "Misrepresented Wilfully By Other Forms Of The Media"
Thursday, March 28, 2024
View on web New reader? Subscribe March 28, 2024 Richard Sharp Says Actions That Led To His Resignation As BBC Chair Were "Misrepresented Wilfully By Other Forms Of The Media" By Max Goldbart
'Mamma Mia!' Stage Star Sara Poyzer Told In "Grim" Email She's Been Replaced By AI On BBC Show
Thursday, March 28, 2024
View on web New reader? Subscribe March 28, 2024 'Mamma Mia!' Stage Star Sara Poyzer Told In "Grim" Email She's Been Replaced By AI On BBC Show By Jake Kanter This email was sent
Alice Coltrane
Thursday, March 28, 2024
Good morning. Today we're listening to Alice Coltrane, an American multi-instrumentalist and bandleader from Detroit. She exhibited prodigious talent at a young age, and went on to play in her
'Animal' Actor Bobby Deol To Play Villain In Yash Raj Spy Universe Film Starring Alia Bhatt and Sharvari
Thursday, March 28, 2024
View on web New reader? Subscribe March 27, 2024 'Animal' Actor Bobby Deol To Play Villain In Yash Raj Spy Universe Film Starring Alia Bhatt & Sharvari By Andreas Wiseman This email was
Beyoncé's 'Cowboy Carter' Started With This Performance
Wednesday, March 27, 2024
View on web New reader? Subscribe March 27, 2024 Beyoncé's 'Cowboy Carter' Started With This CMAs Performance The roots of Beyoncé's new country album go back to the 50th CMA Awards,