Hey! Happy Friday. Hope everyone’s staying safe. Two announcements for you.
- As promised, the first Trapital data resource is live for annual members! It’s the Rap Investor List. If you have any thoughts, feedback, or investments you think should be added, let me know.
For monthly members, here’s a screenshot:
- Reminder – if you refer 1 person in your network to Trapital’s email list, you get 1 month of Trapital added to your existing membership. It’s easy! Share on social media through your personal referral hub or copy and paste your personal referral link:
Today’s update covers Erykah Badu’s $1 livestream, Drake’s new partnership with Quibi, and insights from Sony’s statement on COVID-19’s impact.
Why Erykah Badu’s $1 Concert May Open Doors
Since D-Nice’s DJ set, many artists have flocked to Instagram and Twitch to livestream to the masses. But Erykah Badu leveraged the power of the internet by heading to the other end of the barbell.
From Page Six:
Erykah Badu charged fans just $1 to livestream a concert that she performed in her bedroom — with a band wearing surgical masks.
Her “Quarantine Concert Series: Apocalypse One” show — which will help support her band while their shows are indefinitely on hold — streamed on her BaduWorld Market site Monday night.
“I got a house full of masked engineers, musicians, techs, who are all out of work…We have a few band members that’s stuck in other states…I called them earlier and told them today, y’all still on the payroll even though y’all not here.”
It’s dope that she did this her way. Viewership stats weren’t reported (which is the beauty of owning your platform) but hopefully she brought in enough to make up for lost payroll. The “On & On” singer’s goal wasn’t necessarily to generate profit, but the opportunity is there.
This is a reminder that livestreams don’t need to follow the same model. Her Quarantine Concert Series is an example of the barbell effect. From writer Mathew Ingram:
In a sense, the blogging world — or even the world of online publishing as a whole — has bifurcated to create what I call a barbell effect: sites or even publications like newspapers that are huge and broad and have powerful brands will likely succeed, because they can make advertising work. And those that are small and targeted (either by topic or by geography) will likely also be fine. Everything in the middle, however, is in for a world of pain, and in most cases will not survive.
The same opportunity now exists in music. Badu doesn’t have the audience of a hip-hop superstar, but those that love her, LOVE her. She may have to charge more than $1 to eventually make ends meet, but that, and her merch sales, will help monetize her passionate and willing fans.
I’m clearly an advocate of this model, my business is built on it! The business of hip-hop isn’t for everyone, but those that do appreciate it are willing to pay for the content (which is why you’re reading this). It’s also why Substack, where Trapital lived in its first year, exists to help people launch the Ben Thompson-Stratechery, one-person publisher model with a few clicks of a button.
There are important nuances with musicians though. The artists most willing to execute this are few and far between. It’s aligned with the ownership mentality of Chance the Rapper and Russ. But most of today’s rappers would prefer to open it up to the masses and earn money from sponsorship or brand partnerships.
It’s also an interesting opportunity for Twitch and other livestream services. Erykah Badu built her website, which is great, but there’s an opportunity for a Substack-style platform where artists can quickly set up a service for a monthly fee or a la carte for livestreaming concerts and content.
Is anyone working on this? If not, now’s the time!
The 48 Laws of Drake
From The Hollywood Reporter:
Rapper and producer Drake is going into business with Quibi.
The short-form streaming service, which is closing in on its April 6 launch date, has greenlit a series based on The 48 Laws of Power, the best-selling nonfiction book by Robert Greene. Drake is among its executive producers and will also direct an episode.
First published in 1998, The 48 Laws of Power has long been a favorite in the hip-hop community — it’s referenced in songs by Drake, Jay-Z and Kanye West, among others — and in Hollywood. Each episode of the Quibi show will focus on a different law, and the series as a whole will detail the art of gaining and keeping power.
If it wasn’t clear already, Aubrey Graham is ALL IN on streaming. In the past nine months, he’s had partnerships with HBO (Euphoria), Netflix (Top Boy), Showtime (Ready for War), 100 Thieves (eSports organization that lives on livestream), Caffeine, and now Quibi.
It’s a smart bet, especially in the coming months since many of us will likely be in quarantine. It’s also fairly well-diversified. HBO and Netflix are blue-chip titans that aren’t going anywhere. 100 Thieves is riding a trend that’s exploded but shows no signs of slowing down. Caffeine and Quibi are high-risk, high-reward plays.
This 48 Laws of Power episode will also be referential to Drake. He’s been open about his desire to maintain his power, that top spot, in hip-hop. He is competing with J. Cole and Kendrick Lamar to see who can continue their runs. The episode he directs will likely have tons of meta-commentary.
The project is officially run by Drake and Future the Prince’s Dreamcrew. From the Dreamcrew website:
A co-venture between Aubrey Drake Graham and Adel Future Nur.
DreamCrew currently functions as both a management company and entertainment group; Producing Film, Television and special Projects as well as overseeing Drake’s professional career and business portfolio.
Drake has previously hinted at a transition into Hollywood. My prediction: Drake stays active in music until he’s no longer the top guy, then puts even more focus into production, OVO Sound management, and a bit of acting on the side, but “leaves the window open” for future albums or guest verses. He’s already laid the groundwork for a smooth transition. Whether that’s next year, three years, or five years from now, the move towards a livestream media mogul might be in the works.
Insights from Sony’s COVID-19 Statement
The entertainment conglomerate shared a statement on how COVID-19 is impacting its various business units. It’s a helpful proxy for what the rest of the industry—and many of you—are likely facing.
It doesn’t make sense to quote it, so here’s the TL;DR:
- Game & Network Services: no impact
- Music: delayed releases, interruption in supply chain for physical media, decrease in music licensing, canceled or postponed live events
- Film: closed movie theaters > delayed or terminated theatrical runs
- Electronics: shutdown manufacturing plants, disrupted suppliers, closed retailers > decline in sales
- Financial services: no impact
This report challenges what I wrote just a few weeks ago about COVID-19’s impact:
But most artists can’t live off their streaming numbers and album bundles like Lil’ Uzi Vert or The Weeknd. As I said last week, the big-name artists will be fine. The streaming services they use will be fine too. But the majority of artists who rely on live performance to make ends meet will continue to take a hit.
If we translate this to corporations, it implies that the biggest organizations “would be better off” than smaller ones. That’s obviously not true, and it made me question what I wrote.
Here’s a better way to put it. Businesses with low gross margins take the biggest hit. That’s true of the Mom and Pop shops that may not survive this economic downturn. That’s also true of the big, multinational airlines that live on razor-thin margins and are threatening layoffs if the U.S. government won’t bail them out.
For Sony, I highly doubt that the gaming and financial service side of the house can offset the music, film, and electronics losses. Sony’s not in the software industry where higher gross margins are the norm. The studio luckily released Bad Boys for Life to much success in January, but that’s it. Sony plans to release its fiscal year results on April 30. It will be interesting to see the impact, but even that will still only account for a couple of months.
Similarly, my superstar assumptions were off. According to Rolling Stone, music streaming is down 8% as a result of the coronavirus. The more an artist relies on streaming, the bigger hit they will take. Artists who rely on album bundles will also take a hit if the bundled merch items or physical media production has been disrupted because of the virus. That impacts the revenue and earned media projections that artists would have otherwise earned.
The well-diversified artists—especially those with revenue streams that can weather this climate—will be fine, but that’s not every big star. Timing also plays a big factor. The artists who just completed their major tours—and now wouldn’t tour anyway for another 18 months—are better off than the artists who planned to do a career-defining tour and festival run in 2020. They may not be able to recapture that momentum.
It’s a scary time for all, both big and small.