This week’s Trapital memo is brought to you by trac.
Give fans exclusive access before anyone else
In my previous newsletter, I touched on windowing – how it can be a smart tactic for artists and help build the relationship they have with their fans. What if you could market your music leveraging both Web 2.0 and Web 3.0?
trac is the solution to make this happen.
trac hosts a streamlined form of music distribution (across all DSPs), on-demand merch capabilities, monetizable artist pages, and diverse payouts. This summer, it’s launching NFT features that allow artists to release their music to die-hard fans as NFTs (free to fans) before distributing their music more broadly to streaming services. NFTs don’t have to be for commercial gain.
trac bridges Web 2.0 and 3.0 with ease and has made it their mission to help artists understand and execute in both worlds. Want to learn more about how trac can help you and your artists serve their fans? Learn more about trac here.
Diminishing returns of celebrity
In audio, big names don’t mean as much, but they still get invested heavily by music and media companies.
Spotify paid millions to sign big-name talent as podcasters. Some helped move the needle, but many of them didn’t. Record labels still invest heavily in artists who can capture headlines but struggle with gaining streams and selling concert tickets. As companies in audio get more efficient, this divide will continue to grow.
The shift from generalists to specialists
The days of monoculture were great for celebrities. They were generalists who checked all the boxes. They could sell blockbuster movies, have #1 hit songs, and be the People magazine’s “Sexiest Person Alive.” Many celebs are still multi-hyphenates but they rarely succeed at each level to the same degree. Blockbuster movies are now sold by the power of a franchise, not a movie star. The #1 hit song is most likely from someone known for being a musician first. And the real “sexiest person alive” is probably an Instagram model with 10 million followers.
With social media, platforms, and algorithms, celebrity power has shifted to specialization. It has even less influence in non-visual formats.
It’s why Spotify likely declined to make an extension offer to Barack and Michelle Obama’s Higher Ground production company after their first $25 million exclusivity deal. It’s also why some questioned the ROI of Prince Harry and Megan Markle’s podcast deal with Spotify, which took a year and a half to start after the initial signing.
In podcasting, shows like Call Her Daddy and The Joe Budden Podcast are the ones that do quite well. The hosts are specialized in that platform and are known for that content. Budden is originally known as a Grammy-nominated and independent artist, but he reaches bigger audiences now with his podcast.
Ironically, Budden has spoken on his podcast several times about his former Spotify partnership. Despite putting up strong numbers, he was never offered the bags that the bigger-name podcasters were given.
What industry leaders have been accustomed to
The business of entertainment has historically been driven by star power. To be fair, it doesn’t hurt to have an artist perform on Jimmy Kimmel Live! or another late-night show. But if the resources to make that happen could have been shifted elsewhere, then it’s a cost like any other cost.
Spotify’s former chief content officer Dawn Ostroff, who championed its podcast strategy, came from several TV networks and led Conde Nast Entertainment. She launched Vogue’s 73 Questions—a celebrity-focused video interview series. She spent her career monetizing fame and adapting it to digital formats. The people she signed to Spotify deals—Obamas, Harry and Megan, Kim Kardashian—all commanded audiences on several formats. It’s easy to see why they saw an opportunity to do the same with podcasts.
But as we touched on last week, audio is a very, very different medium. It’s less correlated with record-breaking book sales, Netflix consumption, and other formats that celebrities dominate. In audio, the content matters more. People listen to podcasts while multitasking and they’re more likely to gravitate toward voices native to the format.
The disconnect is true in music as well. I’m a fan of Megan Thee Stallion and sympathize with a lot of the shit she has been through. If buzz, performances, and media impressions drove sales, Meg would top all the charts. But her recent album Traumazine had less than half of the first-week sales of an album from another singer, Rod Wave, who captures a fraction of the headlines that Meg does. Her 2020 debut album Good News did relatively better. It has been great to see her on stage at the Grammys and Oscars. But still, she has yet to drive superstar revenue on the things that matter, like ticket sales, album sales, and streams.
This is an unfortunate dynamic for other women in hip-hop. They may have social media followers and plenty of earned media, but it doesn’t always translate to ticket sales or streams. Their followers are not necessarily fans of their music.
This is an industry built on star-making. But in the age of social media and algorithms, success is more specialized. There are “festival artists,” and then there are “tour artists.” There are “streaming artists,” and there are “album sales artists.” Similarly, there are “actors,” and there are “podcasters.” It has always been hard to succeed at all of them, and that’s especially true in a world with more specialists. And those that do, likely became “stars” before the landscape became as fragmented as it is today.
Today, the best path forward is to invest in talent (artists or podcasters) who are performing without much marketing or earned media behind them. They already have market pull. There are plenty of metrics that can prove they are diamonds in the rough. There is likely some radio of on-demand streams to social media followers, to ticket sales to vinyl, that can capture the right amount. These industries have endless data to analyze.
It can help determine where the real value is, and the marketing dollars can go even further.