This week’s Trapital memo is brought to you by trac
I’m excited to kick off Trapital’s new partnership with trac!
trac provides hundreds of thousands of artists with new ways to turn their music into money. Their mission is to accelerate the growth and maximize the success of every artist.
trac can get your music on every streaming and social platform. With a personalized artist profile, your fans will easily be able to find your music, merch, NFTs and more to build your brand. trac can also help you track your impact with robust analytics to get your music to the people who need to hear it.
trac will help you get 100% of what you make through:
– Distribution – get your music heard around the world with the most powerful services available
– NFTs – Step into the future of monetization by offering your fans unique ownership opportunities.
– Wallet – Be confident knowing your earnings are paid out to you safely and securely
Visit trac to learn more.
Who wins when there are too many songs?
The music industry wasn’t built for this moment.
Not in the traditional sense, at least.
Record labels struggle to break new stars. The most popular artists can release great music that gets forgotten about quickly. It comes and goes like a news cycle.
In past eras, artists relied more on gatekeepers who controlled distribution, including outlets with large megaphones, like radio stations, late night shows, and award shows. Artists hoped they could get some air time or video time with someone who had access to that megaphone.
Sure, there were smaller megaphones that reached niches. Mobb Deep got more airtime on a New York hip-hop radio than the duo ever did in the South. But that’s not what niche means today. Today, niche is using a platform that can tell which Mobb Deep fan is in the top 1% of people who stream “Quiet Storm,” then those fans can connect with others around the world in the music video’s YouTube comment section.
We knew where this was going.
The blog era, the mixtapes, and the SoundCloud rap era were all indicators. But now that it’s finally catching on, let’s breakdown who wins, who loses, and how best to navigate the industry where gatekeepers have less power, the barriers to entry keep lowering.
The power laws take over
Superstar artists win in this scenario. When fans have more options, they want more of the hits. In saturated music markets, those hitmakers are most likely the artists who have had fans for over a decade (Taylor Swift, Drake, Adele, Harry Styles). In fast-growing markets, newer stars have emerged (Bad Bunny, Burna Boy, BTS) who are well positioned to be the established acts of the next decade. The record labels and publishers who partner with these artists also win.
It’s also a great opportunity for niche artists. They can focus on fans who actually care about their music, and filter out the fair-weather fans who only care about mainstream popularity and what’s “in.” This type of success was much, much harder decades earlier. An artist can make millions without being a household name, being played in supermarkets, or having their music ring out in the streets.
As long as their costs and expectations are in line, then there’s plenty of success to be had.
The platforms also win. They are the primary channel for both superstars and niche artists to distribute content. The digital streaming providers (Spotify, Apple, Amazon, etc) win even more since there is an influx of revenue-generating songs from artists who don’t have major record label deals. The more successful indie artists are, the more leverage the DSPs have on their supplier, the major record labels. Spotify’s goal is to lower its dependency on revenue from record labels since they have to pay the labels.
Social platforms like TikTok and YouTube also win. They are the top of funnel to capture attention, especially for the superstars who still care about awareness building.
The “artform” gets left behind
The allure of the music industry for many people who grew up in it was the belief that good music always rose to the top. If label execs developed an artist, put in the effort, spent the money to market them, they could bet on success. But that’s harder than ever.
Many of the legacy distribution channels have lost their power. Radio play, Saturday Night Live appearances, and award show performances mean less and less each year. There are several artists who are regulars on press junket but still can’t sell nearly as many concert tickets, album sales, or get as many streams as artists who never get those looks. The larger this divergence becomes, the harder it will be to justify the expense.
To be clear, these channels can still be successful in their own right. The Grammys aren’t going anywhere. Radio advertising is still a multi-billion dollar business. But for the artists themselves, the relative importance declines each year.
It’s also a tough time for artists who get “stuck in the middle.” This can happen to the niche star whose team overestimates their global impact and invests too much money too soon. It’s the BuzzFeed problem. It was successful during its rise, but all the VC funding and the $1.7 billion valuation set it up to struggle.
The same thing has happened to plenty of artists. We’ve all seen the great breakout debut album, the sophomore slump that sounded expensive but was too mainstream, and the follow-on mixtapes that bring the artists back to their roots. It’s a journey that many artists know too well.
Another group that struggles are the record labels without superstars who actively release music. The cost structure of their business isn’t built for niche artists. They need new superstars. They want to homeruns that return the whole portfolio. The blockbusters that makes up for the commercial disappointments.
It’s harder and harder to break those stars today. That’s why labels offer more favorable contracts to keep those artist who are already proven. It’s also why they are eager to find the next superstars from non-English speaking markets that are less saturated. It’s all connected.
This shift is bigger than music. It’s happening in Hollywood. It’s happening in all forms of content and media. But since music is often first to get disrupted, there’s a larger disconnect between expectations and reality.
There are many artists sold on the belief that they can be the next Kendrick Lamar. The challenge today is that even if they have K.dot’s talent and adapt his playbook for today’s era, that merely gives them a chance of success. TikTok algorithms can have artists think that those millions of views on a viral post will translate to millions of concert tickets sold.
The power laws of music are stronger than they are in any other form of entertainment. The platforms, superstars, niche stars, and the companies they work with have all benefited. It’s everyone else that has to catch up.