Trapital by Dan Runcie

hip-hop business + strategy


“The stuff that Trapital puts out is fantastic. Really interesting insights into the industry, artists trends, and market trends.”

Mike Weissman, President, SoundCloud

 

Maybach Music Group Didn’t Live Up to its Potential

Rick Ross’ record label looked destined to run the 2010s, but the culture wasn’t built for long-term success.

Where the hell did Wale get a Detlef Schrempf jersey? (Getty Images)

Not too long ago, the Maybach Music Group was everywhere. Rick Ross’ record label reached heights that few groups had ever attained: Five #1 albums in three years. Seven albums in a fifteen month span. Meek Mill, Wale, and Rozay were running game. The iconic “m-m-m-m-maybach music” drop was inescapable. If we ranked the 2012 labels most likely to run rap for the rest of the decade, The Untouchable Maybach Music Empire was near the top. Higher than Dreamville. Much higher than Top Dawg Entertainment.

But it never happened. Not even close. MMG wasn’t a “bust,” but it didn’t live up to its #1 draft pick potential either. We expected Anthony Davis. What we got was Andrew Wiggins.

MMG had its challenges, but the empire should have better weathered the storm. That responsibility falls on the shoulders of the biggest boss that we’ve seen thus far.

Inevitable conflicts

The drama between MMG label-mates Wale and Meek Mill was unfortunate yet unsurprising. Here’s a brief timeline:

  • July 2014 – Meek called Wale a hater for not tweeting about his album. Wale responded on Instagram and said that he did support Meek but didn’t get a response. Ross claimed he called them both and it’s Gucci.
  • Oct 2015 – Wale said in Breakfast Club interview that Meek brought a pencil to a gunfight in his beef with Drake. Meek responded on Instagram, called Wale a jealous clown, said he’s not on MMG, and that he should jump off a roof. Wale replied with sarcastic subtweets to mock Meek’s disses. Ross, again, told us that Meek and Wale are brothers and that there’s nothing to see here.
  • Jan 2017 – Meek and Wale “made peace” at Rozay’s birthday party.

Meek clearly hates when featured artists don’t tweet about his album. But if he and Wale were on good terms prior, it wouldn’t have escalated to Meek’s Twitter fingers.

The two rappers were polar opposites. Here’s an excerpt from Ross’ new memoir, Hurricanes:

“I first met Wale at King of Diamonds…Wale was a backpack rapper… So I was surprised to see him in a strip club, and I was even more surprised to hear his music booming in there… “No Hands” was a hit record but it wasn’t an accurate representation of Wale as an artist. Wale had depth. He could make the strip club anthem but he also made songs that resonated with women on a deeper level. He was the poster boys of the blogs but he also had the HBCUs and his hometown of Washington, DC, behind him. His music paid tribute to his Nigerian heritage and had elements of Go-Go and spoken word poetry.”

Wale checked all the boxes. He was an undervalued talent who got cut from his label after his debut album flopped. On paper, the “Nike Boots” rapper was the pickup that executives dreamed of. If there was Moneyball for hip-hop, 2010 Wale was the grand prize for the analytical A&Rs.

Rozay had a ton of respect for Wale, but their vibe paled in comparison to Ross’ first meeting with a 23-year-old Meek Mill at a Philly radio station a few months later:

Signing Wale was a decision that came from the mind, but signing Meek came from the heart. Meek and Rozay’s chemistry was stronger. Their tracks got more radio play. Their music hit different.

Ross could have focused more on Wale at the expense of Meek, but that would have been a mistake. MMG was built to play to its strengths. MMG’s distribution deals with major labels were designed to expedite releases. Self Made Vol. 1 was out before the ink dried on MMG’s 2011 deal with Warner. It was easier for Ross to operate with Meek at a fast clip since they were already in lockstep.

Wale’s objective value prop was clear, but Ross didn’t consider if he was willing to put in the effort needed to fully integrate a Seinfeld-loving backpack rapper in MMG’s Big Meech, Larry Hoover mafioso culture.

The Wale-Meek Mill situation played out like two middle managers lobbying for control at a growing startup. One manager attends wine tastings with the CEO and shamelessly posts pictures of the two of them on the company Slack like “yesterday was epic, loooove this company.” The other isn’t a culture fit, ain’t here for the politics, and wants the performance to speak for itself. Both managers can slight each other all day, but the underlying blame falls on your boy Yung Renzel.

The pros and cons of artist-friendly leadership

In Hurricanes, Ross mentioned a 2010 conversation with Lil’ Wayne that inspired his leadership style:

“The other thing I took away from that phone call was that Wayne wasn’t being supported by his people the way he deserved to be in his time of need. Considering how many records Wayne sold for Cash Money Records over the last decade I thought that was shameful. After the release of Teflon Don, I’d turned my attention to building out my label and that conversation was one of the things that got me thinking about the kind of executive I wanted to be.”

Rick Ross, unlike Cash Money CEO Birdman, is an artist-friendly executive. It’s similar to a founder-friendly venture capitalist. Founders know that the VC has their back. When things are good, they’re great. But those relationships make it difficult for the founder to lay down the hammer when needed. As a result, personnel issues last far too long.

In 2015, Ross explained why he refused to intervene in Meek and Wale’s beef:

“No, not at all. Cause it was unnecessary. It’s just like being a big brother. It’s just like every day in the studio with my homies. It’s always…that’s just the type of vibe we are, but that’s not personal. But most definitely, speak your mind and if you gotta get emotional to speak and make your point, you do that. Whatever it is. But this the squad. This the empire. It’ll never go no further than that. We’ll never shed no blood.”

Ross implied that intervention is only necessary if there’s a threat of bloodshed, but that’s ill-advised. This beef happened during an emotional crossroads for both rappers. Wale was frustrated with his career progress. He battled depression and substance abuse. Meek was in the thick of legal troubles and just got bodied by Drake. Nicki Minaj, Meek’s girlfriend at the time, stayed out of the Drake beef because of her allegiance to her Young Money running mate. The LAST thing either rapper needed was an internal beef.

Ross’ decision to ignore emotional jabs sounds like the guidance he likely received decades earlier as a correctional officer. In the mid-90s, William Roberts II was a CO in Dade County for 18 months. When conflicts between inmates arise, COs are taught to minimize the risk of injury, make inmates feel heard, but absolutely, positively, not pick sides. This is exactly how Ross addressed Meek and Wale! As the CEO and “big brother,” it was on Rozay to intervene. But there was no one else on MMG to check him and say, “fam, this is a record label, not a correctional facility.”

Team MMG (via Masterlab)

No one man should have all that power

In MMG’s prime, Ross was still signed to Def Jam and contractually obligated to release albums. He never hired someone like Ibrahim Hamad, the Dreamville CEO who runs point while J. Cole focuses on his music. There wasn’t a COO like Steve Pamon, who runs Parkwood Entertainment in tandem with Beyonce. Most successful labels have a non-artist in a critical leadership role. Instead, Rick Ross put the whole damn team on his back like Greg Jennings in Madden.

Ross also navigated his own legal issues and managed business ventures outside of music, like his WingStop franchises. It was all an impressive but unnecessary burden.

To cope with the stress, Ross took codeine. His drug use led to the seizures that have hospitalized him several times since 2011. He was forced to stop taking codeine, lose considerable weight, and take the medication previously prescribed.

It’s miraculous that MMG got as big as it did, but it shows how much more could have been achieved under a better structure.

In a 2017 Billboard interview, Ross was asked about his biggest mistakes as CEO of MMG:

“I mean, you know, just as a CEO and a boss, a lot of times you don’t follow budgets. You’ll just spend money based on your passion and your heart. A lot of times if it doesn’t work, it could be extremely faulty versus pacing yourself. You gotta pace yourself. You gotta make sure that the music connects as an artist instead of just going off the rip.”

Ross could have been referring to his failure to sign Wiz Khalifa in 2010, which came down to a lack of money to compete against the majors. He could be talking about the decision to sign Omarion (Maybach O) who came out hot with the 2014 hit “Post To Be,” but didn’t add long-term value.

It could also refer to his inability to help fund Meek Mill’s legal challenges during his time of need. Here’s what I wrote in July in a Member Update: Meek Mill’s New Label Says as Much About Jay Z as it Does Rick Ross:

The original Dream Chasers label didn’t break any artists. It’s easy to place blame on Meek’s legal issues and his untimely beef with Drake. But the real answer lies with Rick Ross. His laissez-faire leadership style didn’t help Meek meet his full potential and evade his personal struggles. When Meek and Wale—two MMG artists—had beef with one another, Ross stayed out of it. The Philadelphia rapper could have benefitted from stronger mentorship in those formative years. Dream Chasers was treated as an afterthought.

With Jay Z’s mentorship–along with Michael Rubin and Robert Kraft– Meek will likely get more proactive guidance.

Money was a recurring theme for Ross, but he could have made even more money with a stronger foundation.

When hip hop remembers this decade, it will remember Dreamville. It will remember TDE. It will remember OVO Sound even though there were plenty of issues there too (a future Trapital article, believe me).

Hip-hop won’t forget the Rick Ross grunt. It definitely won’t forget “Dreams and Nightmares” either. But there’s a chance it might forget how powerful the Maybach Music Group was during that brief stretch.

And that’s a shame, cause it didn’t have to be like that.

Trapital Mailbag Special: Grammy Awards Woes, Young Rappers Most Likely to Become Moguls, and Thoughts on a Rappers Union

I opened up the mailbag and answered some pressing questions from Trapital Members: Should the digital streaming providers invest in e-commerce? Are the Spotify Awards a step-in-the-right-direction to recognize global music or will it be more of the same? Will rappers surpass NBA players as the best sneaker endorsers? 

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | YouTube | Overcast | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Want to participate in the next Mailbag? Become a Trapital Member: trapital.co/membership

Jay Z’s Cell Phone Partnership Strategy, Explained

The 4:44 rapper has been on a career-long quest to turn his albums into B2B products that maximize mobile technology.

Jay’s photoshoot for the Magna Carta Holy Grail release. Cell phone in hand!

Last week was the anniversary of Jay Z’s The Black Album, which means it was also the anniversary of The Black Phone:

Remember this thing?!

The custom edition Nokia phone came preloaded with Jay Z’s 2003 album. “The Black Phone is at the forefront of the future which includes buying music instantly and taking it with you wherever you go,” Jay Z said at the time. This phone was the earliest example of the billionaire’s mobile distribution strategy, which is now an integral part of his playbook.

Kingdom Come, Blueprint 3, the Decoded autobiography, Watch The Throne, Magna Carta Holy Grail, 4:44, and Everything is Love all had some form of windowing exclusivity—many of them with cellular carriers or manufacturers. Jay’s albums were B2B products disguised as B2C.

Jay’s cell phone deals have had their hits and misses. The ones that missed were often ahead of their time (to a fault). But each misstep led to future success. It took time for this process to optimize.

It was a true career journey with three distinct phases:

The “Motorola Two-Way Page Me” Phase (’03-’06)

This phase was the wild, wild, west for cell phones. Nokia and Blackberry seemed destined to run the table. Powerful artists like Jay Z wanted to take full advantage of 1000 songs in your pocket and the opportunity to engage with fans. The Black Phone was Jay’s first attempt.

From Billboard:

“The phone also features Jay-Z True Tones ring tones and registered owners will receive weekly text and monthly voice messages from the artist for a limited time.”

See that? In 2003, Jay Z had his own boutique version of Community and SuperPhone. Ironically, Jay Z is now the last rapper we would expect to ask fans to text his public phone number. This is a guy who logs onto Twitter once every other year and likely regrets it soon after.

The Black Phone had the right idea, but the technology wasn’t ready to realize its potential. Mobile connectivity wasn’t advanced enough to seamlessly download (legal) albums directly to phones. Albums had to be preloaded on devices. That’s why The Black Phone was sold as a separate device and not a digital download. That’s also why U2 sold that red-and-black iPod preloaded with the group’s 2004 album. This was the height of music piracy. “Digital downloads” were a point of contention.

These preloaded devices also had limited reach. The Black Phone was priced at $124 after rebates and was only available at the now-defunct Media Play and Sam Goody. I’m not sure what’s worse, spending $124 or processing multiple rebates! It’s an especially big ask for a fan who didn’t need a new cell phone in November 2003. The Black Phone also tied Jay to a sole piece of hardware. The Nokia 3300 competed against the infamous Nextel chirp phone and others that were far more popular. Cell phone switching costs have always been high. The phone eventually became a novelty collector’s item for real diehard Jay Z fans. (And by “real diehard,” I mean the folks who get defensive when Kingdom Come gets hated on).

Sure, there is a “diehard fan segmentation” case to make for The Black Phone (a la Nipsey Hussle’s $100 mixtape). But that argument loses steam because the $100 mixtape had an intentionally limited supply. If the technology was ready, Jay Z and Nokia would have gladly welcomed more business.

The Black Phone became hip-hop’s Sega Dreamcast. In 1999, the short-lived video game console pushed its built-in modem and online multiplayer ability as a strong selling point. Sega was ready for the future, but less than half of U.S. households had a computer, let alone internet access. Many of those that did have the internet access still had to disconnect to make phone calls. The product was ahead of its time.

A few years later, Hov teamed up with Cingular to exclusively sponsor and broadcast “The Hangar Tour” leading up to the release of Kingdom Come in 2006:

“Cingular Wireless, the nation’s largest wireless carrier, and Island Def Jam Records have joined forces to bring one of the most unique music events of the year. The seven-city “Jay-Z Hangar Tour,” as part of the Cingular Sounds Live concert series, will kick off in Atlanta at 6 am for the first of seven shows in less than 24 hours. Jay-Z will perform 30 minute sets in Atlanta, Philadelphia, DC, New York, Chicago, Los Angeles and Las Vegas.”

Seven 30-minute shows in one day? Crazy. MTV did a play-by-diary of the day. It was intense, but Cingular was all about it. Here’s then-Cingular executive David Garver via Gigaom:

“As part of our overall Cingular Music strategy, we are committed to creating, producing and delivering these one-of-a-kind music events for viewing on the mobile screen…We are thrilled to help Jay-Z promote his new album, Kingdom Come, while capturing footage of his live performances for the exclusive enjoyment of our customers.”

The concept was there. And Cingular was eager to push its music capabilities. The company had launched a music streaming service back in 2005. But again, neither the technology or regulatory environment were there ready.

Here’s a clip from the New York show:

This video looks like it was recorded on a Motorola RAZR, which says a lot about where mobile streaming was in 2006.

Products that are “ahead of their time” will always excite industry experts, stans, and early adopters. But timing is an important factor in product-market fit, and it can’t be overlooked.

The “Obama on the Text” Phase (’09-’13)

By the time The Blueprint 3 dropped in 2009, the technology had improved. Jay had a brief exclusive partnership with both streaming platform Rhapsody and MTV to give fans early access before the official launch.

But things heated up in 2010 when Jay released his memoir and autobiography, Decoded. Hov teamed up with Microsoft Bing search engine for an expansive rollout. Here’s a short YouTube clip that breaks down how the project was a joint opportunity for Bing to show off its new navigation capabilities and for Jay Z to immerse pages of his books in unique locations across the world:

The book spent 19 weeks on the bestsellers list, Bing had an 11.7% increase in website traffic, and briefly entered the top 10 of visited websites. While it wasn’t a typical Jay Z album-cell phone deal, it informed his future cell phone deals in two ways.

First, it incorporated critical goals from both parties. Both Bing and Jay Z had new products to launch. They partnered with the Droga5 creative agency to maximize its potential. It was much more synergistic than The Black Phone deal. Nokia was selling its phones with or without The Black Album. The cell phone manufacturer had less skin in the game. The deal was similar to a sponsorship where the party receiving the sponsorship dollars is much more reliant on the deal’s success than vise-versa. When both parties have goals of equal importance, the end outcome is typically greater.

Second, The Decoded-Bing launch came after Jay Z’s 2008 Live Nation deal—one of the two most important hip-hop business deals of the past twenty years (the other is Beyonce’s surprise album). That partnership set the landscape for Jay Z’s ideal deal structure which includes these four elements:

  • exchange of capital
  • joint ownership for an important launch of a product, service, or company
  • additional funds for marketing, promotion, investments, or other expenses
  • leverages both companies core competencies and existing audiences

Jay Z got another crack at this in 2013. He interrupted the NBA Finals to let us know he was dropping Magna Carta Holy Grail, and that Samsung owners would get 72 hours of early access. It was a $20 million deal—$5 million of that was used to buy 1 million albums at $5 each. It was a much better deal than Jay would have made if he only sold his albums to the general public. There was controversy about whether the Samsung deal makes the album go Platinum, but Hov was less concerned about that. $20 mil is $20 mil. The true customer wasn’t the fans. It was Samsung.

Everything was good on paper, but yet again, the technology wasn’t ready. When the album launched, the Samsung app crashed. Hip-hop Twitter basked in the schadenfreude—even after the app started working. Jay Z later reflected on the incident in a July 2013 interview with The Breakfast Club:

“It was 20 million hits for the app and it broke. No one is expecting it, there’s no way in the world for you to calculate 20 million hits. It’s not even a number you can fathom. You cannot prepare a service for that.”

It was a politically correct response that he played off with a not-so-subtle humblebrag. But that doesn’t absolve Samsung or Jay from launching a product that can’t meet the capabilities of the available technology. A product manager’s worst nightmare is a crash during peak demand—whether its from high unexpected traffic or an overlooked bug. The end outcome is the same, and it’s a risk that could have been mitigated.

The “We just call the shots by simply moving our thumbs” era (’15-present)

The distribution channels for 4:44. The top box is the exclusive partners, who got initial access and their customers (green). The second box are the other digital streaming providers, and the third box are the brick-and-mortar retailers.

In 2015, Jay Z bought Tidal for $56 million, relaunched the service, but got off to a rough start. Here’s what I wrote last year:

“Meanwhile, Tidal quickly went from celebration mode to crisis mode. After the overwhelmingly negative reaction to Jay Z’s launch event, Tidal’s leadership changed hands an embarrassing number of times. Reports showed that the company had massive losses in 2015. Industry experts began to question whether Tidal’s value proposition was enough to compete with Spotify or Apple Music.”

Tidal’s value prop challenge still looms (read Why Tidal is Banking on Meek Mill’s Success for more on this), but Jay Z made out well in 2017 when he sold a third of the company.

From a 2017 article from The Verge:

“Earlier this year, Jay Z struck a deal to sell 33 percent of his streaming service Tidal to Sprint for $200 million, raising the valuation of the company to $600 million. Sprint announced the deal would include Tidal artists releasing “exclusive content that will only be available to current and new Sprint customers,” and a $75 million budget to fund and market that content.”

Jay Z made a sale that valued the company at more than 10x his purchase price just two years earlier. That’s impressive especially with all the turmoil and controversy that surrounded Tidal during that stretch.

But the real kicker is that $75 million was budgeted for exclusive content for Sprint. Five months after the deal was publicized, Jay Z dropped 4:44 as a Sprint-Tidal exclusive. This connected the streaming service with Sprint, which now had a vested interest in Tidal’s success (not too different from Live Nation’s interest in Roc Nation). And by partnering with a cellular carrier instead of a manufacturer like Nokia or Samsung, Jay increased his flexibility and integration capabilities.

It was the ideal partnership for Jay Z. The 4:44 launch still wasn’t perfect, but it was the best example yet. Technology enabled the distribution, joint ownership, and vested interest of all parties involved to get the product in the hands of the target consumers.

Jay Z spent the past two decades finding a way to make this happen. What he chased was a version of the strategy popularized by Microsoft in the 80s and 90s. The Windows operating system wasn’t (primarily) sold to end consumers. It was sold in partnership with IBM, which made it the standard operating system on IBM-compatible machines, which helped make it the de facto for PCs and business. Microsoft then leveraged its distribution to sell compatible and integrated products like the Microsoft Office Suite.

Sprint was an ideal partner in several ways. Jay Z had made it a point to partner with underdog brands throughout his career. Tidal is an underdog. Sprint is an underdog. Bing is an underdog. These partners might not match the industry leaders, but they are more willing to grant Jay Z the power desired to make his albums more lucrative than the average artist.

I once joked in a Trapital article that Jay Z’s next cell phone deal might as well be with Cricket Wireless. That may still be true. Jay did once said himself, “We don’t have any rules, everybody is trying to figure it out. That’s why the internet is like the Wild West. The Wild Wild West. We need to write the new rules.”

But all jokes aside, if anyone can turn a Cricket Wireless-album deal into gold, it’s the guy who has more experience than almost anyone in this space.

Why Netflix’s ‘Rhythm + Flow’ Was a Hit


Ace “Call Me Ace” Patterson came back on the Trapital Podcast to break down Netflix’s Rhythm + Flow. We talked about what worked, what didn’t, how the hip-hop competition show compares to American Idol and Making the Band, and what we expect from Netflix next season!

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | YouTube | Overcast | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guest:  Ace Patterson, @callmeacelegit, airplanemode.callmeace.com

Hip-hop’s influence continues to grow. Take your insights to the next level. Learn more about Trapital.

The Globalization of Hip-Hop, Part II

U.S. hip-hop’s competitive advantage has waned as regions across the world have developed their unique sound and influenced the culture.

Skepta (via Clash)

Read Part I of the Globalization of Hip-Hop here.

In a recent episode of the Trapital Podcast, I asked U.K. radio host, podcaster, and author DJ Semtex about the need for the U.S. cosign in European hip-hop:

“A few years ago I would have said it was imperative, but now we’re in a situation where the biggest rapper in the world is Canadian, so I think that’s gone out of the window… It’s still important, but you can crush it in the United States of Europe without a US cosign…

Let me put it another way. You shouldn’t be asking me how important is the U.S cosign, you should be asking me how important is the U.K. cosign.”

I normally don’t let anyone tell me what I should and shouldn’t ask on my own damn podcast, but he had a point.

British artists Skepta and Stormzy may still pursue collabs with U.S. artists, but the dependency has cooled. Rappers outside the U.S. have not only found their niche, they’ve established an ecosystem that American rappers now want in on. But for each region to maximize its potential, it will need to develop its own monetization strategy.

“Fight the Power” Made Waves Internationally

Public Enemy’s rise was a cultural inflection point. In the late 1980s, Chuck D used his voice to challenge the American government and media to do better. “Black CNN” was an outlet for the overlooked and misrepresented. That sentiment gained attention across the world. The worldwide class of unprivileged and disenfranchised identified with Chuck D’s lyrics (and to a lesser extent, Flavor Flav’s wildin’ antics).

In 2007, NPR journalist Jeff Chang mentioned the global impact of Public Enemy in an interview:

“The message of Public Enemy represented the conditions of the 1980s, racist, violent incidents going on. But at the same time, what I think people around the world heard in it was a generational change. A way for them to express their own voices.

Take for instance, rappers in Kenya. Kalamashaka comes out, hears Public Enemy, and is all of a sudden inspired just to imitate American rap. But now they rap in Sheng, which is their own language.”

The desire was there, but the infrastructure wasn’t ready to sustain international success. Kalamashaka was ahead of its time. The group didn’t have the backing that drove Public Enemy’s worldwide recognition.

American hip-hop had an established moat. The distribution, marketing, and promotional advantages were all in the United States. Other countries valued the product but didn’t have the resources to replicate its success (yet).

Focus on unique success

As American hip-hop increased its worldwide popularity, the industry tried to strengthen its competitive advantage by tailoring the mainstream U.S. sound for international appeal. More production value, less lyricism.

It’s a business decision that has fattened the pockets of American rappers. But it’s also left space for international artists to serve their own regions since technology had reduced the barriers to entry. The low-hanging fruit opportunities were for artists outside the U.S. to tell the stories that American rappers couldn’t. Many of them followed Public Enemy’s footsteps and shed light on their societal issues.

In France, rap duo PNL made a name for itself portraying life in the banlieue—the housing projects where immigrants often live. As Vogue described the group’s sound, “it’s a different, more realistic view of France, not just Jane Birkin chomping down on a baguette.”

From DJ Booth:

“A co-sign from Drake is commonly accepted as worth its weight in streams… But when Canada’s most famous anglophile requested to remix a song by France’s most prominent rap act, he was rebuffed. PNL, an independent rap group formed in 2014 by two brothers, Tarik and Nabil Andrieu, don’t collaborate with other artists, entertain interviews or acknowledge the press. Sorry, Drake.”

Turning down Drake is a pretty strong flex. It shows PNL’s confidence in its fanbase. And plus, can the OVO Brand risk another booing incident like at Tyler, The Creator’s Camp Flog Gnaw Carnival? Might be too soon.

Divine, India’s biggest rapper, focuses on class issues from his poor upbringing in Mumbai. His inspirations—Nas and Eminem—showed him how it’s done, then he made it his own. Like PNL, Divine built his brand where he was uniquely positioned to succeed. Even if an American learned how to rap in Hindi, it wouldn’t hit the same.

The international scene is not just limited to music about the struggle. Afrobeats, which is largely party music, has continued to grow in popularity. The sound, which originates from Nigeria and Ghana, has crossed continents. The sound has already benefitted from Drake’s co-sign in 2016 with Wizkid’s feature in “One Dance.”

The rise of Afrobeats is reminiscent of dancehall music’s rise twenty years ago. As a Jamaican, it was dope to see Sean Paul and Beenie Man become stars on the global stage. Every A-List rapper wanted a reggae fusion collaboration. But as The Fader called out, dancehall’s moment came and went because the music industry put the cart before the horse:

“Acts like Tanto Metro & Devonte and Elephant Man had major label deals that didn’t yield the global longevity they implicitly promised… How, for instance, do you bolster record sales with concerts, and ramp up radio spins with tried-and-true station visits, if the artist can’t get a US visa?… Historically, I’ve watched a lot of things stall when you have songs and records that get big to a point and then you’re trying to push them in the Midwest or certain places in the South.”

Regulatory factors were overlooked. Contingency plans were nonexistent. There were no local partnerships to address these solvable issues. Instead of ‘Def Jam Jamaica,’ we got Def Jam Vendetta.

The major labels have seemingly learned their lesson with a more thoughtful approach to the West African market. Sony Music opened its Nigeria office in 2016. Universal Music Group opened its division in 2018. UK’s Afro B was recently signed to EMPIRE. And earlier this year, Warner made a partnership deal with Nigerian label Chocolate City.

Monetization is a challenge

International popularity is no longer an issue for rappers outside the U.S., but monetization is. Music piracy is still rampant across the world. Here’s what I wrote about Indian hip-hop in a recent Trapital member update:

“According to Music Ally, just 1% of the monthly active users of music streaming services pay for their service. Spotify has boasted about its subscriber growth in India, but a majority of those users are likely on free trials and heavily-subsidized promotional offers. Music piracy is also a huge challenge in India. It’s nearly twice as high as in other countries.”

Spotify sells monthly subscriptions for less than $2 in India and still pushes to gain traction. The country’s own digital streaming providers, Ganaa and JioSaavn, are priced lower and have had strong growth, but run at a steep operating loss and needed an influx of capital, respectively.

In Nigeria, where piracy is equally rampant, many artists rely on revenue from ringback tones. Yes, the same ringback tones that made J-Kwon, Chingy, and Boost Mobile tons of money back in 2005. It was a $100 million market in Nigeria in 2017, but that shows how much opportunity there is for additional revenue streams.

Strength in partnerships

The goal of these new Nigerian record labels is to develop the infrastructure so it can better support artists. In thirty years, Nigeria’s population will double. It will surpass the United States and become the third-most populous country in the world. The audience will be there, but the monetization strategy can’t replicate the U.S. and Europe and expect the same success.

If we simplify the industry, there are two ways to make money:

  • extract money from fans
  • extract money from those who want access to fans

In regions where the fan’s willingness (ability) to pay is lower, artists rely on partnerships, licensing, and branding to earn their keep.

India’s Divine has been at the forefront of this. Instead of relying on streaming payouts from the 1% who pay monthly subscriptions, he’s been on his partnership game. One of his songs was featured in a Netflix original series. This year he released a semi-autobiographical film, Gully Life, about his rise in hip-hop. The film has drawn comparisons to 8 Mile, the Eminem film that navigated its own class issues.

The companies that succeed in these markets will act less like traditional record labels and more like management partners that can add value beyond music production. But that doesn’t mean 360 deals. It means offering a wide range of options to aide monetization, like Roc Nation’s management deals. Smaller deals might start with feature songs on Indian Bollywood or Nigerian Nollywood films, but the opportunities will expand from there.

The U.S. hip-hop market is starting to take after the global hip-hop market, which is a sign of changing times.

One of the most popular exposure-building opportunities in recent years has been The Rap of China, the Chinese rap competition show. When the show launched in 2017, it reached 100 million viewers within its first four hours of airing, and 1.3 billion in the first month. While the show had to adjust its content due to heavy Chinese government censorship, it has lived on to see its third season.

The show came the Los Angeles to find talent for its most recent season. Here’s a clip:

Several contestants prided themselves on rapping in both Mandarin and English. Bilingual lyricism was also a strong theme throughout Netflix’s Rhythm + Flow, the U.S.-oriented hip-hop competition show. In similar fashion, its popular contestants could rap in both Spanish and English. These are not coincidences.

The world has noticed the massive success of bilingual hits like Cardi B, J Balvin, and Bad Bunny’s “I Like It.” Even though a meme-oriented song like “Old Town Road” broke a record set by a bilingual hit like “Despacito,” and even though I wrote an article on how Lil’ Nas X will impact hip-hop, the global landscape will look more like “Despacito” than “Old Town Road.”

There’s an opportunity though, to blend both approaches. Given today’s landscape, someone’s probably working on it as we speak. And more likely than not, that someone lives outside the U.S.

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Trapital is written by Dan Runcie: info [at] trapital.co

Mike Weissman on SoundCloud’s Creator Strategy, How it Compares to a Startup Accelerator, and What it Means to be a SoundCloud Rapper


Mike Weissman, President of SoundCloud, came on the Trapital Podcast to talk about the streaming company’s business model, how it compares to a tech accelerator, SoundCloud’s growth in the Middle East, SoundCloud rap, and what sets the company apart from its competitors.

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | YouTube | Overcast | href=”https://trapital.libsyn.com/rss”>RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guest:  Mike Weissman, @soundcloud, soundcloud.com

Links referenced:

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Trapital is written by Dan Runcie: info [at] trapital.co