Trapitalist Update

Ending the Membership (as is!)

​Hey! Thanks again for your patience while I paused memberships.

After much thought and discussion, I am ending Trapital’s paid membership in its current form. You will receive a partial (or full) refund as of June 12, the date of the last member update. I know, you may be bummed out! I understand. I’ll write a deeper post with much more context soon, but here’s the high level.

First, I am going to spend more time working with clients in a higher-touch capacity. I am excited to work directly with those who are taking hip-hop to new heights.

Second, as some of you know, I plan to build a different product. The Trapital membership you signed up for has followed the freemium $10 month / $100 yearformat that’s quite common in today’s newsletters. I’ve had both pros and cons in my experience with it. There’s a better opportunity to take Trapital’s premium offering in a new direction—specifically for the decision-makers who benefit most from these insights and resources. I’m excited about this, but I need more time, and would love to hit a few email subscriber milestones before it launches.

Instead of rolling over existing members, it makes more sense to start fresh. To process the memberships ending, you’ll receive a prorated refund on your membership as of June 12, the last day I sent a Trapital member updateIf you signed up for a membership after that date, you will receive a full refund.

Thanks again for your continued support! This wasn’t an easy decision, but pivots are sometimes needed. I’m excited about the future for Trapital, and you should be too.


P.S. – want to continue supporting Trapital in the meantime? Share Trapital with the one person you know who would benefit most. Share this link with a friend: https://trapital.co

Pausing Your Trapital Membership

Hey! I’m reaching out to let you know that your Trapital membership will be paused as of Friday, June 12. You will not be charged moving forward until you hear otherwise.

As you saw last week, I sunset the Monday and Friday updates. I need to spend the next week or so to prepare for next steps. I had planned to do this over the past few weekends so there wouldn’t be any breaks, but I need more time. I also needed to give myself time to recharge everything happening in the U.S. with racial injustice and my involvement in it.

This next iteration will focus exclusively on delivering value to those who can take action with Trapital’s exclusive resources and offering. The membership structure will likely change as well. I will keep you posted.

If you have questions in the meantime, please reach out.


Next Steps for “The Show Must Be Paused”

Hey! Happy Friday. As you know, today is the final Trapital Member update! I will follow up on Monday with more details and next steps. For more context on that change, you can read the explanation here or scroll to the bottom of the email.

Today’s update covers the next steps for the music industry’s #TheShowMustBePaused and Snapchat’s opportunities with Gen Z.

Next Steps for the The Show Must Be Paused

This week, Billboard interviewed the two music executives who started the #TheShowMustBePaused, Brianna Agyemang, and Jamila Thomas. They spoke about what went right, what went wrong, and what’s next.

Here’s a summary:

  • The “pause” started #TheShowMustBePaused as a day for both execs to reflect on the deaths of Floyd, Taylor, and Arbery, especially in the middle of a pandemic.
  • The #ShowMustBePaused spread quickly, but the message evolved like a game of telephone. “Blackout Tuesday” and the black Instagram squares were not their idea. Those efforts muddled the intent and blocked out the informative #BlackLivesMatter hashtag on social media.
  • On the actual day, June 2, they organized a 1,500 person virtual summit with industry professionals to develop a plan. After the summit, several labels made announcements and took action in support.
  • Phase 2 will start ASAP and will focus on social justice and systemic racism.

First, let’s breakdown Tuesday, which became a symbol for the “slacktivists.” We all know them. Some of you might be a slacktivist for particular causes. But as annoying as they are to the people who put in the real work—myself included— they still add value.

Part of the reason why the pulse on Black Lives Matter has shifted this time around is due to social media. Instagram and Twitter are social proofing platforms that cause users to question their intentions.

If all your friends are post vacation photos, you’ll want to book one yourself. If your friends post maternity photos, you may start to wonder when you’ll have kids. And if all your friends get involved in a misconstrued social justice campaign on Instagram, you may start to consider your beliefs on the underlying issue.

Personally, I saw black squares posted from people I’ve gotten into heated arguments about BLM in the past. This shift didn’t come from the echo chamber that’s been pushing this since 2014. It came from those who were once silent or resistant, but are now coming around.

I often think back to the Ice Bucket Challenge—another social media initiative with tons of well-deserved criticism. The ALS campaign was a self-indulgent, disproportionately funded phenomenon that wasted tons of water. But the money raised helped scientists discover a new gene tied to the disease. Viral activism has its regrettable issue, but good can come from it.

As mentioned, the next steps for #TheShowMustBePaused will focus on social justice and systemic racism. My interpretation is that social justice will focus externally. The music industry will use its economic power to fight police brutality and other racial injustice that impacts black lives. The power of major record labels and digital streaming providers can galvanize support from many. This can come in the form of donations, activism, and empowerment.

The systemic racism efforts should focus internally. It will force industry execs to look inward and adjust their culture. It will frustrate those who were happy with the way it was before. It will anger those who were on the “career fast-track” under the old culture. It will require tremendous inclusion work to ensure that any new Black execs hired or promoted gets the support they need to thrive.

Historically, systemic racism is the hardest to change. It hides in the “grey area” that is often explained away by those who “don’t see color.” Luckily, both Brianna and Jamila have more momentum than ever to change the narrative. Let’s hope that 2020 continues to shift this.

Why Snapchat Should Team Up with Gen Z Rappers

Yesterday, Snap CEO Evan Spiegel led the company’s 2020 partner summit. He shared some impressive stats that made many folks in tech and VC question past assumptions about the social network.

Ever since Instagram stories copied Snapchat, people left the company for dead. Angry tweets from Kylie Jenner and Rihanna didn’t help either. But it now has 229 million daily active users. To quote the presentation, “Snapchat reaches more people in the US than Twitter and TikTok combined.”

Here’s what I tweeted:

When younger artists like Lil’ Tecca, NLE Choppa, and Lil’ Uzi Vert have big moments, the same thoughts arise. Hip-hop media is more favorable to the older artists it personally enjoys. But that doesn’t mean those artists are bigger than the ones that they cover. They might lose media coverage, but they gain more direct fandom—especially if it’s on a platform that media outlets pay less attention to. Ideally, Snapchat has a great opportunity to partner more with Gen Z’s rising rappers.

Venture capitalist Turner Novak wrote an analysis and recap of Snap’s summit and growing business. I’ve highlighted a few opportunities where hip-hop artists can get involved.

Snap Originals: Content is a big opportunity. If 51-year-old Will Smith can succeed with a Snapchat show, then rappers who are one-third his age should be fine.

Snap Games: I just wrote a few weeks ago about how hip-hop and gaming are scratching the surface. Age and gender were huge opportunities. That bodes well for Snapchat, whose audience is 61% women.

Snap Minis: This tool allows friends to engage with other apps together. Early partners include Headspace, and agents for movie tickets, concerts, and voter registration. There’s a future where fans use this app to create a more interactive version of Ask Me Anythings between fans and artists.

Admittedly, I am one of those who overlooked Snapchat in recent years. I’m a little older than the target demo, most of my friends don’t use it, but that shouldn’t stop me from following along. There’s a big opportunity here. Let’s hope it lasts longer than DJ Khaled’s moment from a few years back.

Upcoming changes to Trapital:

1. Trapital’s membership will focus primarily on community engagement and data resources. In each survey I read, email read, and conversation with you all, I often hear that the biggest value-adds are engaging with the Trapital community and the data resources I had initially pitched at the beginning of 2020. To date, our Slack group attracts a few, but I can do more on the community front, especially since we can’t convene in person. Also, I have only publicized the Rap Investor List as a resource, and want to get the others to you as soon as I can.

Based on that, I will soon sunset the Monday and Friday Member Updates. A select few of you read every update, but most of you enjoy the free weekly deep dives and podcast more than those Monday and Friday updates. I had to make a change. Instead of continuing that pattern for another year, I want to refocus that time into what’s most valuable.

In full transparency, this will also give me more time to serve more consulting and advisory clients (learn more here if interested), and to grow Trapital further.

Here’s what to expect:

  • More hip-hop-related data resources like the Rap Investor List on various other topics. I’ve heard many of the suggestions, but I’m open to others too. Reply to this email if you have requests
  • More virtual meetups and hangouts. We did a COVID-19 related meet-up in March. My goal is to make these monthly. I’m aware that not “everyone” will attend these either. But the value-add will be greater for those who can, and that’s what matters

2. Trapital memberships wi​ll become Annual onlyExisting monthly subscribers will be grandfathered in at current rate. A lot of work goes into data resources. The $10 / month tier had too much churn to justify the time and effort put into these resources. The one-year commitment will also attract those most interested in the community.

These changes will happen over the next few weeks. I’ll likely share more in a longer post, but wanted to give you all a heads up.

If anyone has any questions or concerns, please reply to this email and let me know.

Protest Music and “SEO”

Hey! Sending this update much later than intended, my apologies. I had a busy weekend. Saturday I joined the protestors on the Golden Gate Bridge. My wife and I were on of the first people who joined the line to stop traffic on the bridge. You can see some pictures on my Instagram page here.

A few quick notes:

  1. The last Trapital Update will be this Friday June 12. After that, the membership program will transition to access to data resources and virtual meetups with Trapitalists. For more info and details on the reason for the change, read here or read the bottom of this email.
  2. The first database is The Rap Investor List. More are on the way. If you have suggestions on other databases you would like to see, let me know.

Today’s update is on protest rap and how it’s influenced by streaming era.

Protest Music and SEO (Streaming Era Optimization)

From Rolling Stone:

In the wake of George Floyd’s killing by a Minneapolis police officer on May 25th, streaming numbers for protest songs have soared. Vintage tracks like N.W.A’s “Fuck tha Police” that specifically call out police violence serve as a reminder that our current national crisis is nothing new. As Black Lives Matter resistance continues across the country, artists have channeled their anger and sadness into new protest anthems, directly inspired by Floyd’s death and its aftermath. Here’s how artists including YG, LL Cool J, and Teejayx6 have responded to the latest chapter of an age-old crisis.

In the past few weeks, Trey Songz, Run the Jewels, Juicy J, Meek Mill, and others have also released new music to commemorate this uprising. In the streaming era, a protest-inspired anthem can hit your favorite playlist in a few hours. Some artists have fancy home studios to make it easy, but that’s a luxury. Most can get this done with an iPhone X and a strong internet connection.

This trend helps hip-hop to extend the media cycle on this critical issue. Millions use Spotify and Apple Music every day. These songs get added to Black Lives Matter playlists that are prominently placed in each service’s user interface. Most of these services release their own “Black Lives Matter” statements. These playlists are a natural extension.

But it also tracks on two growing trends:

  • Today’s content creators have prioritized reactionary content (e.g. The Joe Budden Podcast)
  • Rappers are operating more like today’s content creators

On a recent episode of The Bill Simmons Podcast, Simmons talked about an unnamed A-List guest he had on his podcast in 2019. He thought the episode would put up numbers, but it didn’t. The downloads were lower than his other episodes where he recaps the NBA. It must have been frustrating since it takes less effort to riff on the NBA than securing an A-Lister. (For the record, I tried to figure out who this unnamed guest was but gave up. He has like 600 episodes. Nobody has time for that!)

The same is now true in music. “Reactionary Hip-Hop” is the music that’s influenced by recent news and search engine optimization on digital streaming providers.

In March alone, hundreds of artists released songs titled “Coronavirus” to capture the widespread media attention. I wrote about this briefly in The Coronavirus Come Up (and Come Down).:

This is the same trend I called out Wednesday’s Cash App article with the hundreds of songs named “Cash App.” Some of those name drops are genuine shoutouts, but most are there to get clicks and streams.


Last October, Rolling Stone’s Elias Leight wrote about this trend:


“…the practice of naming a song after something already famous — coasting behind a proven hit and enjoying stray beams of admiration — seems to be on the rise. A single by the producer Sam Feldt titled “Post Malone” is pulling in close to 900,000 streams a day on Spotify; blackbear’s “Hot Girl Bummer,” which plays off Megan Thee Stallion’s recent meme-turned-hit “Hot Girl Summer,” is doing even better.“Everyone’s fighting for attention,” says Barry “Hefner” Johnson, co-founder of the management company Since the 80s, which includes 21 Savage and J.I.D. on its roster. “If you can get a keyword, you’re gonna name something some shit for attention. You damn near have to.”

The abundance of music has enabled these tactics.

It may seem cynical to imply that some rappers made BLM songs to gain traction. That’s a fair critique, but I’m not questioning the music’s integrity. An artist can drop a heartfelt song and be fully aware of its SEO benefits. Both things can be true. And let’s face it, the likelihood of a protest song getting picked up by the most popular playlists is quite high.

This awareness in the current moment is great, but hip-hop still has an important role in “evergreen content”. Songs like Childish Gambino’s “This Is America” or albums like Kendrick Lamar’s To Pimp a Butterfly take time to make. They are so impactful that they create their own moments (that’s other creators make reactionary content to). But unfortunately, the entry barrier for that level of art is too high for most. It takes a whole lot of talent (and patience) to achieve that.

Reactionary music is a much lower lift. It’s a mentality that prioritizes distribution over product. It’s lead generation for the core business. It’s the core of today’s digital media era, and that’s not changing any time soon.

Thanks for reading. For those who missed it, below is the reason for the change in Trapital membership. Let me know if you have any questions. Have a great week!

Trapital’s membership will focus primarily on community engagement and data resources. In each survey I read, email read, and conversation with you all, I often hear that the biggest value-adds are engaging with the Trapital community and the data resources I had initially pitched at the beginning of 2020. To date, our Slack group attracts a few, but I can do more on the community front, especially since we can’t convene in person. Also, I have only publicized the Rap Investor List as a resource, and want to get the others to you as soon as I can.

Based on that, I will sunset the Monday and Friday Member Updates on June 12. A select few of you read every update, but most of you enjoy the free weekly deep dives and podcast more than those Monday and Friday updates. I had to make a change. Instead of continuing that pattern for another year, I want to refocus that time into what’s most valuable.

In full transparency, this will also give me more time to serve more consulting and advisory clients (learn more here if interested), and to grow Trapital further.

Here’s what to expect:

  • More hip-hop-related data resources like the Rap Investor List on various other topics. I’ve heard many of the suggestions, but I’m open to others too. Reply to this email if you have requests
  • More virtual meetups and hangouts. We did a COVID-19 related meet-up in March. My goal is to make these monthly. I’m aware that not “everyone” will attend these either. But the value-add will be greater for those who can, and that’s what matters

2. Trapital memberships will become Annual onlyExisting monthly subscribers will be grandfathered in at current rate. A lot of work goes into data resources. The $10 / month tier had too much churn to justify the time and effort put into these resources. The one-year commitment will also attract those most interested in the community.

These changes will happen over the next few weeks. I’ll likely share more in a longer post, but wanted to give you all a heads up.

If anyone has any questions or concerns, please reply to this email and let me know.

Why Republic Records Banned “Urban”

Hey. Thanks for the positive feedback on yesterday’s article and spreadsheet. This morning I recorded a short solo podcast where I talked a little more about this week’s events, and voiced-over my article. People have asked me to do this for a while. This was a good time to try it out.

​As a reminder, I am soon sunsetting these Monday and Friday Trapital Member updates. The membership will transition to focus on community events and data resources. Read more at the end of this article (I reposted what I included in Monday’s update).

Today’s update is focused on Republic Records decision to ban the word “urban.”

From Republic Records:

Effective immediately, Republic Records will remove “URBAN” from our verbiage in describing departments, employee titles, and music genres.


We encourage the rest of the music industry to follow suit as it is important to shape the future of what we want it to look like, and not adhere to the outdated structures of the past.

It’s about damn time!

For decades, this term has marginalized black artists. Record labels play a big role, but it’s bigger than them. It’s the urban radio stations. It’s the urban award at the Grammys where the nominees are only black. It’s the “urban apparel” label placed on all the fashion brands launched by hip-hop artists. The marginalization limits the reach. It hurts their image and revenue potential.

In February, Tyler, The Creator won his Grammy Award for Best Rap Album. It was still a proud moment, but he let his frustrations be known:

“It sucks that whenever we — and I mean guys that look like me — do anything that’s genre-bending or that’s anything they always put it in a rap or urban category. I don’t like that ‘urban’ word — it’s just a politically correct way to say the n-word to me.


When I hear that, I’m just like why can’t we be in pop? Half of me feels like the rap nomination was just a backhanded compliment. Like, my little cousin wants to play the game. Let’s give him the unplugged controller so he can shut up and feel good about it — that’s what it felt like a bit.”

These urban awards categories are why The Grammys have avoided some of the criticism that The Oscars has gotten. There’s no “Best Urban Picture” award. If The Academy ever proposed it, people would be outraged. Hip-hop’s numerous Grammy categories make it easy to avoid these issues. People want to be recognized in the same breath as their “non-urban” peers.

I believe that Republic’s move will push other record labels to eliminate the term as well. While Republic claimed it won’t impact the organization, it may for other labels. There are several Urban Managers and Urban Directors out there. If the divisions are simply renamed, the work won’t be done. Integration is the goal.

Radio stations may take more work though. Here’s what I wrote last year in White Rappers and Black Rappers Have Different Business Models:

Many radio stations are owned by broadcasting companies that own several stations in the same market. Despite hip-hop’s ubiquity as today’s pop music, these companies intentionally segment their stations to better sell the audience to advertisers. If the pop station overlaps too much with the hip-hop station, the stations lose value to advertisers who prefer targeted audiences. Therefore, pop radio remains as a channel to reach white audiences, and “urban” radio is the channel to reach black folks. The preferential treatment of white rappers on the pop charts is the problematic result.


When black rappers try to get on the pop charts, it’s an uphill battle. In an interview with Rolling Stone, Future’s manager said that he couldn’t get “Mask Off” to gain traction on the pop charts. Remember, this was Future’s biggest song. It gave us the #MaskOffChallenge! Future had folks dusting off their flutes and recorders from elementary school to participate in the viral challenge, but pop radio was like, “Nah, we good with The Chainsmokers.” You hate to see it.

This advertiser segmentation is pointless. Hip-hop is ingratiated in the fabric of pop radio. The audiences aren’t that different, especially now.

Pop radio lives on this archaic myth of the suburban soccer mom. There’s a belief that this minivan driver is fine if her kids hear Halsey on the radio, but gets nervous about Wiz Khalifa. It’s a meaningless distinction when both artists could swap beats and no one would notice.

Again, good call Republic for finally doing this. Hopefully, other labels and industry recognize the impact and take the necessary actions.

The Show Must Be Paused

It’s been a rough week for many of us. I know several of you have spoken out about the ongoing issues in America. I recently posted a statement for Trapital:

Today’s update covers a few upcoming changes to Trapital, a spreadsheet I compiled on hip-hop activism, and Black Out Tuesday.

Upcoming changes to Trapital Membership

1. Trapital’s membership will focus primarily on community engagement and data resources. In each survey I read, email read, and conversation with you all, I often hear that the biggest value-adds are engaging with the Trapital community and the data resources I had initially pitched at the beginning of 2020. To date, our Slack group attracts a few, but I can do more on the community front, especially since we can’t convene in person. Also, I have only publicized the Rap Investor List as a resource, and want to get the others to you as soon as I can.

Based on that, I will soon sunset the Monday and Friday Member Updates. A select few of you read every update, but most of you enjoy the free weekly deep dives and podcast more than those Monday and Friday updates. I had to make a change. Instead of continuing that pattern for another year, I want to refocus that time into what’s most valuable.

In full transparency, this will also give me more time to serve more consulting and advisory clients (learn more here if interested), and to grow Trapital further.

Here’s what to expect:

  • More hip-hop-related data resources like the Rap Investor List on various other topics. I’ve heard many of the suggestions, but I’m open to others too. Reply to this email if you have requests
  • More virtual meetups and hangouts. We did a COVID-19 related meet-up in March. My goal is to make these monthly. I’m aware that not “everyone” will attend these either. But the value-add will be greater for those who can, and that’s what matters

2. Trapital memberships wi​ll become Annual onlyExisting monthly subscribers will be grandfathered in at current rate. A lot of work goes into data resources. The $10 / month tier had too much churn to justify the time and effort put into these resources. The one-year commitment will also attract those most interested in the community.

These changes will happen over the next few weeks. I’ll likely share more in a longer post, but wanted to give you all a heads up.

If anyone has any questions or concerns, please reply to this email and let me know.

Statements from Hip-Hop in the aftermath of George Floyd, Breonna Taylor, and Ahmaud Arbery

This past week, several artists have used their platform to speak out, donate money, join protests, and find other ways to create change. I compiled a spreadsheet of the actions artists have taken. You can view it here.

I was inspired by Sherrell Dorsey’s The PLUG spreadsheet on tech companies that have made statements. I recommend you check out her work at tpinsights.com if you haven’t already.

My goal is to highlight those who have spoken out and inspire others to do the same. If any of your artists made contributions that I missed, please email me (with proof!) and I’ll add it. I plan to update this and add other views tabs to the spreadsheet that are related to hip-hop.

#TheShowMustBePaused – Black Out Tuesday

Tomorrow is June 2, Black Out Tuesday. It is a day for the music industry to disconnect from our work and reconnect with our community. The major record labels and several others have pledged their commitment. It’s intended to be a sign of acknowledgment for the black artists who contribute to this industry.

If you’re choosing to participate in tomorrow’s Black Out, what are you planning to do? I’ve heard a bit of vagueness and confusion from several people who want to support, but are unsure of what to do. If anyone has thoughts, reply here or post on Slack.

Stay strong and safe. Enjoy the rest of your week.


Def Jam Africa Has Arrived

Hey. Thanks for everyone who has shared and posted yesterday’s article on the blog era in hip-hop.

It feels weird to write about any hip-hop business news with everything happening in the U.S. right now. Yesterday, I shared a link to the Minnesota Freedom Fund, which fights to bail out protestors and end the cash bail system. If interested, there’s also a Louisville Community Bail Fund in light of Breonna Taylor’s murder.

There have been some interesting developments in music and entertainment though. Forbes backtracked on Kylie Jenner’s billionaire status. She reportedly fudged the numbers. Her “true” net worth is $900 million. Can’t say I’m surprised. I’ve shared my reservations about the Forbes list net worth calculations here and here.

Today’s member update is brief. It’s an analysis of the rising opportunity in Africa and the hopes that the global music industry gets it right.

Let’s Hope the Music Industry Gets ‘Def Jam Africa’ Right

From The Hollywood Reporter:

A little more than half a year after launching Def Jam South East Asia, Universal Music Group announced Def Jam Africa, a new division based in Johannesburg, South Africa, and Lagos, Nigeria, that will focus on “hip-hop, Afrobeats and trap talent in Africa” and report to Universal Music Sub-Saharan Africa & South Africa managing director Sipho Dlamini.


Over the past few years, the major labels have invested more aggressively in Africa — both to market streaming services and, especially, to sign talent — and Universal now has offices in South Africa, Nigeria, Kenya, the Ivory Coast, Cameroon, Senegal and Morocco…


… “What Def Jam Africa allows us to do is create an aspirational label. If a kid is making hip-hop, we want him to say, ‘I want to sign to Def Jam Africa.'”


When the deal was first announced, I tweeted “Def Jam is no longer a force, but its legacy matters. Rising artists will be inspired by the infrastructure expansion, even if they don’t sign with Def Jam Africa.”

It’s the same sentiment. Def Jam Africa signals identity and focus. There are too many genres of music for everything to fall under the wide umbrella of Universal. Def Jam’s presence will strengthen the ecosystem. Other labels, incubators, and companies will be stronger as a result.

The move is timely too. Apple Music has been active in Africa this past month. It’s expanding its streaming service into 25 African countries. Apple’s artist services company Platoon is offering African artists advances and healthcare. This past week, Apple Music announced its first African radio show, ‘Africa Now Radio with Cuppy.’ It’s great to see initiatives move forward despite the global crises.

It’s exciting, but there’s room for skepticism. The opportunities are tremendous, but will the industry get it right?

Here’s what I wrote last November in The Globalization of Hip-Hop, Part II:

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 industry has surely learned from those mistakes. But Def Jam “America” has its own issues to sort out.

The label drifted from its hip-hop roots when it signed Justin Bieber and Alessia Cara under Steve Bartels’ leadership. It recently parted ways with Paul Rosenberg after a two-year stint and is still in search of a new leader. Recent initiatives like Rap Camp have had marginal success. Let’s hope Def jam African is managed better than Def Jam America.

Universal Music Group needs to ensure that each region gets the attention it deserves. It needs a detailed plan that looks at specific regions and countries. What’s hot in Accra may not be what’s hot in Nairobi. Remember, most U.S. regions rose to power in hip-hop through grounds-up work. That exactly how the current wave of African regions rose up. The top-down support needs to amplify what’s there and lay the infrastructure down for stability. This is a long game move.

There’s a lot of opportunity in Africa beyond Def Jam. Let’s hope that the Western world’s influence does it right. If successful, there will need to be more than Def Jam Africa. We’ll need Def Jam Ghana, Kenya, Cameroon, South Africa, Senegal and so on.

Jay Z Wants his Deepfakes Taken Down, But it Won’t Happen

Hey! Hope you enjoyed your weekend. Now that The Last Dance is over, I’ll need to find something else to do on Sunday nights.

It was a great week for Canadian rapper Nav, who gamed his way to the top of the Billboard charts. Here’s a great thread from Gary Suarez on how Nav gamed his way to #1 on Billboard charts.

The Ludacris-Nelly Verzuz battle was fun. I expected Luda to win, but Nelly had a fighter’s chance if he chose the right songs! I expected to hear “Batter Up” and “#1,” but oh well. The St. Louis rapper had the time of his life despite his internet struggles, and that’s what matters. He and Luda made Hip-Hop’s Class of 2000 proud.

Today’s update is on Jay Z’s attempt to take down his “deepfakes” and why it’s a waste of his time.

Jay Z Wants His Deepfakes Taken Down

For the past few weeks, Jay Z and Roc Nation have been in an uphill battle to remove “deepfakes” from the internet. Clips of him reciting Hamlet “To Be or Not to Be” and Billy Joel’s “We Didn’t Start the Fire” have made their way to YouTube.

From The Verge:

Hip-hop mogul Jay-Z has become an unlikely source of inspiration within the budding community of artificial intelligence-powered impersonation, known colloquially as deepfakes, and the rap icon’s record label has taken notice and issued copyright strikes to shut some of it down.


It’s not that Jay-Z is being maligned without his consent, as a majority of deepfakes tend to do by pasting the head of female celebrities and other women onto the bodies of adult film actresses. Rather, this is the world of safe-for-work, audio-only deepfakes that dabble mostly in parody, as well as putting on display the awe-inspiring technical sophistication the field has produced in just a few short years time.

For context, the 50-year-old rapper isn’t alone. This Pitchfork article adds more context:

The JAY-Z clips are hosted on a YouTube channel called Voice Synthesis, which is full of famous voices delivering unexpected material. All posted over the past several months, these Reddit-friendly pairings include Bob Dylan covering Britney Spears, Frank Sinatra crooning “Dancing Queen,” and various presidents reciting rap lyrics—even the particularly believable George W. Bush take on 50 Cent’s “In Da Club.”


On April 26, in a new video posted to the channel, the simulated voices of Barack Obama, Donald Trump, Ronald Reagan, JFK, and FDR claimed that YouTube had taken down two JAY-Z clips at the request of his company Roc Nation. Two days later, both of those videos—the JAY-Z-ified snippets from Hamlet and “We Didn’t Start the Fire”—were back in place. A YouTube spokesperson told us that the takedown requests were found to be “incomplete,” but did not specify who filed them. The spokesperson said the videos have been “temporarily reinstated” pending more information from whoever filed the claims. The ball now seems to be in JAY-Z’s court. A spokesperson for the rapper has not responded to Pitchfork’s requests for comment.

Let’s cut to the chase. Jay Z won’t win this, and Roc Nation should put its energy elsewhere.

Roc Nation’s request to YouTube said that “This content unlawfully uses an AI to impersonate our client’s voice.” But using AI to impersonate a voice isn’t unlawful. First, there’s no copyright ownership over a vocal style. If that were possible, Drake could sue half the rappers on SoundCloud. Second, these are parody video labels labeled as deepfakes. Technically, it’s no different than SNL’s Kate McKinnon impersonating U.S. Senator Elizabeth Warren.

Even if Roc Nation pursued legal battle directly against Voice Synthesis, the outcome would be similar. The anonymous creator of the YouTube page (and its active subreddit) expect more takedown requests since AI has improved. Voice Synthesis plans to ramp up its videos that include fakes on The Notorious B.I.G., U.S. Presidents, and countless others.

Here’s Young Hov taking on Old Shakespeare. Exactly what you asked for, right?

An AI-inspired metaverse

That said, Jay Z’s concern is understandable. His “voice” can be wrongly used to make controversial statements, start beef with other rappers, or drop guest verses for artists he doesn’t know. At this point, Watch The Throne 2 may come from an AI bot before it actually comes from Jay or Kanye West.

The fake news potential is high, but it’s still a far cry from the Voice Synthesis videos. As AI improves though, a clearer line will need to be drawn. Roc Nation wants to set the precedent now, but it should hold its chips for if (or when) AI infringes upon his copyright in a harmful way.

Despite the fears surrounding the future of AI, there’s a silver lining here. Between TravisBott and Jay Z’s Hamlet soliloquy, fans are using technology to create experiences of popular artists. This is another example of the “fanfiction” I wrote about last week on Playboi Carti. His fans used his leaked vocals to make a new track. He quickly took it down. But there’s a world where fans are empowered to use an artist’s AI vocals to create their own music. These metaverse opportunities exist today in Roblox and Fortnite. A hip-hop version would have a lucrative opportunity if done right.

From last week’s update:

This is one of the reasons why gaming is so popular. In the Metaverse, players can create their own worlds. Those worlds are never as perfect as the professionally developed ones, but that doesn’t matter. It’s all about personalization and flexibility. It attracts hobbyists, amateurs, and budding professionals. It’s the same reason why fan fiction, homemade brewing, and other DIY activities are popular. Technology makes it easier than ever.


Today’s biggest artists have brands that are just as powerful as established companies. Their business ventures span as wide as a conglomerate. The next step is to become a “platform” that fans can build experiences on. TikTok, Vine, and other social media networks have opened the doors to what’s possible from a UGC perspective. The next level is to expand opportunities within music itself. it requires more work than a TikTok meme, but the rewards can be even greater.

In the future, fans can use AI to recreate music from their favorite artist. That music can be shared in fan communities or some other platform that the artist can monetize. The challenge is that most artists don’t own a platform built for a Metaverse experience. But what if gamers in a Fortnite Party Royale can use a Steve Aoki mix, fuse it with TravisBott lyrics, and create their own music? It may only attract a niche amount of users, and probably won’t sound as good as an actual, but that’s not the point. Fans are willing to pay for the interactive experience. If it can be monetized on a platform that the artist controls, even better.

We’re still in the early days. There will be more legal disputes on the way, but that may lead to more clarity in the long run.

As a reminder, there will be no Trapital Update on Friday 5/22 or Monday 5/25. Friday’s my day off and Monday’s a holiday in the U.S. This Wednesday, I’ll re-share one of my more popular articles. Talk soon!

Would a ‘Hip Hop Founders Fund’ Work?

Hey! A few quick updates today:

  1. Monday May 25 is Memorial Day in the U.S. There will be no Trapital content that day. I’m gonna turn it into a long weekend and take off next week Friday, May 22, so there will be no new content that day either. This will be my first day off in 2020. Taking a quick break to recharge. For those interested, my Trapital Calendar with Holidays and PTO is posted here.
  2. Thanks again to everyone who submitted questions to the Trapital Mailbag podcast! If you haven’t checked it out, here’s the link on Spotify, Apple Podcasts, and everywhere else.

Today’s update covers Swizz Beatz’ Hip Hop Founders Fund to give back to the genre’s pioneers, and LiveXLive’s pricing strategy for livestream content.

Swizz Beatz Wants to Start a ‘Hip Hop Founders Fund.’ Will it Work?

Earlier this week, Swizz Beat floated the idea of a ‘Hip Hop Founders Fund.’ The Verzuz founder wants to take care of the past generation. He shared his thoughts in a recent Instagram Live session with Joe Budden.

From HipHopDx:

“I want to raise a million dollars for each icon that started Hip Hop,” he says around the 10-minute mark. “Kool Herc on down. The fact we’re not paying taxes on who started Hip Hop shows we don’t fucking really love Hip Hop. The fact that we don’t pay taxes as artists to those icons that paved the way, took the lower cut for the music that allow us to feed our family… Fuck the government.


“We need to be paying taxes to the creatives of Hip Hop that gave us freedom of speech to move forward. I’m going to go so hard with that — Melle Mel, Grandmaster Flash and Sugar Hill Gang, minimum a million a piece.”


Budden was onboard and agreed wholeheartedly, saying, “Every new deal that gets signed, 1 percent or a half percent should go to rapper reparations. The way they made the 360-deal standard, we can make that standard.”

It’s a noble cause. It’s safe to assume that true OGs are less well-off than today’s rappers. They’re never on the Forbes List. They get recognized at award shows, but a lifetime achievement montage can’t pay the bills. They took a risk and gave hip-hop its name, but there was no “equity” compensation.

I love the concept, but there are a few challenges. First, deciding who gets funding will be subjective. Melle Mel and Sugar Hill Gang are obvious choices, but who else? Swizz did a follow-up chat with LL Cool J who was also down to support. But LL signed to Def Jam in 1984. Would he qualify for funding? Or is he disqualified because he has that NCIS money? I assume that LL’s living larger than DJ Cool Herc, but I’ve never seen that “Mama Said Knock You Out” rapper on a Cash Kings list either.

Second, if the goal is to take care of hip-hop’s pioneers, there are easier ways to do it. Instead of taxing all hip-hop acts, Swizz should first reach out to those who are most philanthropic. As I covered last week, many of them could be more effective with their giving. Swizz could pitch this fund as an alternative charitable contribution. That way, these artists can also get the publicity of donating $1 million to the Hip-Hop Founders Fund.

It plays into the vanity that exists in all public philanthropy. Social proofing is effective, especially when other well-off friends are paying up. Anyone who has attended a fundraiser gala can attest. Those pockets get looser when everyone else donates $100. No one wants to be the only one at the table who gives $25.

I understand the desire to create a “tax,” but it would feel less personable. To some artists, it may seem more like an obligation than a desire to give back. Joe Budden suggested a 1% fee on label deals. The reaction would be polarizing and not every label would participate. Today’s artists complain about the percentage points on their contract enough. A social security style tax may not get the response it desires.

Alternatively, some labels may buy in and pride themselves on giving back, but those will be few and far between.

LiveXLive goes pay-per-view with livestreams

The music streaming company LiveXLive has had quite the month. Last week, it acquired podcast network PodcastOne for $18 million. Earlier this week, the acquisition was scrutinized because LiveXLive accepted nearly $2 million in Payback Protection Program (PPP) funds. It’s joined the ongoing debate on how PPP funding was administered, and whether LiveXLive—a company with a market cap of $200 million—should give back the money.

But he livestream company is still making moves. Yesterday, it announced a pay-per-view livestream for events.

From PR Newswire:

LiveXLive’s Pay-Per-View (PPV) initiative will drive a new revenue-sharing model for both artists and LiveXLive via digital ticket sales, fan tipping, digital meet and greets, merchandise sales and sponsorship, enabling artists to go direct-to-consumer using LiveXLive’s PPV platform…


Digital event ticketing for single, multi-day and virtual tours further diversifies LiveXLive’s revenue model, adding to current advertising and subscription monetization. LiveXLive’s pay-per-view offering will include tour and weekend passes ($39.99 and $19.99, respectively) and an a la carte option for single shows ($4.99).

This initiative makes sense given the shift to livestreaming, but the pricing strategy seems off.

The “tour” or “weekend” pass is positioned like a music festival model. Customers have an “all you can consume” pass for all the digital events happening in a series. It’s a bundled purchase. This is an easy sell for in-person music festivals since fans are also buying an experience. In my 2019 article on Coachella and Rolling Loud, I wrote about how it’s less important for Coachella to have the biggest artists in the world. The machine works with enough decently popular artists. That’s harder to pull off for a livestream event.

This will also be a challenge with subscription monetization. Can a livestream network secure the content to attract a healthy number of subscribers to make it worthwhile? Potentially. An ad-free, subscriber-only option could work. But that also assumes that there will be enough livestream content worth paying for. Livestream content is ephemeral. A constant supply is more important than static access to archives.

The challenge is that high-priced live entertainment experiences don’t just attract die-hard hards. They also attract casual consumers who would never buy a subscription. For instance, I will buy a boxing match on pay-per-view, but I would never get an annual subscription to DAZN. This is where a splintering strategy works.

Let’s say LiveXLive charged $40 to livestream a Cardi B concert. I might pay the $40 and not think twice about it. But if I had two options: pay for the $40 livestream, or an annual fee of $50, I would pause and ask a few questions. What other big concerts are coming to LiveXLive? Does the company have exclusive deals with artists I like? If there’s one more artist I like, I can justify the annual $50 purchase. It plays into the economics and irrational decision-making of consumer behavior.

When people say that pricing is an art, this is what they mean.

I hope you enjoy your weekend! I’m excited for Saturday’s Verzuz battle between Ludacris and Nelly. We had a short chat in the Trapital Slack on who we think will win. Sunday is also my wife’s birthday, so we’ll be celebrating in the most socially-distant way possible. Talk to you on Monday.

How Artists Can Maximize Music Leaks

Hey! I hope you enjoyed your weekend. It’s sad that we lost Little Richard, Andre Harrell, and Betty Wright. My thoughts are with their families and loved ones.

This morning I saw that only 40% of Americans plan to return to live events if a coronavirus vaccine is not available and only 5% would attend a live event right now. This supports what I wrote on Friday about the return of live music. I bet that those 40% and 5% numbers trend closely along with certain genres of music too.

Today’s update covers why leaks still happen today, how to best maximize leaks, and a reflection on RapCaviar’s influence in 2020.

Why Music Leaks Still Happen

In my recent update on Drake’s 2020 strategy, I failed to mention how his leaked music impacted his plans. Last week, the Toronto rapper chopped it up with Lil’ Wayne on Young Money Radio. He discussed how leaks impacted his decision to drop Dark Lane Demo Tapes:

“It was just a lot of joints that sort of were floating around. And then there was a couple of leak situations that happened a little early in the year. For a second the shit felt like ‘09 or 2010 or some shit. I couldn’t believe how much music was leaking. Not just from me, from every artist. It was like they were just back out here on some—you remember back in the day it was inevitable.”

It might seem shocking that leaks still happen in the digital streaming era. But when there’s a will, there’s a way.

In the 90s, 2000s, and early 2010s, music leaks were easy because physical copies were the main way that music was sold. Albums went to retailers early. All it took was one person at a warehouse to steal a copy and upload it to Limewire. (As someone who sold bootleg CDs at the time, I’m embarrassed to admit this, but I lived for moments like this).

In Lil’ Wayne’s case, all it took was one valet attendant to take his car for a minute, hear the music playing through the speakers, and take it before the car goes back to Wayne.

But in the digital era, leaks have evolved. Genius recently covered this in a short 4-minute video:

Cybersecurity makes a difference. It’s no surprise that Kanye, who revealed his iPhone password ‘000000’, had Yandhi leaked. He scrapped the project. It’s sad to say, but anyone without 1Password or similar password protection service is just asking to get hacked.

So how do artists respond? Drake tries to maximize the moment. His leaked tracks became music videos. His collection of leaked tracks became a mixtape. It might be easier for him to make lemonade out of lemons since he’s already a superstar. Other artists may continue to struggle though.

Can Leaks Become User-Generated Content?

In January, The Guardian wrote about one of Playboi Carti’s recent leaks:

“Last year, a tune called Minute Maid appeared on YouTube and quickly racked up several million views, many fans hailing it as an instant classic. However, Playboi Carti had almost nothing to do with the song…Minute Maid is an example of a bizarre and engrossing new phenomenon in hip-hop: a work made not by the artist, but by one of their fans, and indistinguishable from the genuine article. Elements of tracks will leak from a studio session, usually via engineers or hangers-on, and these “snippets” of unfinished material make their way to listeners.”

The Atlanta rapper was frustrated, and rightfully so. It’s messed up, ruins the creative process, and costs him money.

But there’s a glass-half-full lens too. “Minute Maid” is a form of fan fiction. Carti’s fans cared enough to turn his unreleased music into a popular song. It’s user-generated content (UGC) that took off.

There’s a world where Playboi Carti empowers fans to lay his vocals on the best beat possible. The best song gets chosen for the album. It’s crowdsourcing 101. He could also remove the competition element and let fans have fun with it. Aspiring producers would love the opportunity to test their chops. Others would just have fun with it. Remember the “Coronavirus” Cardi B song? That was done by a DJ known for creating new songs from artist sound bites.

This is one of the reasons why gaming is so popular. In the Metaverse, players can create their own worlds. Those worlds are never as perfect as the professionally developed ones, but that doesn’t matter. It’s all about personalization and flexibility. It attracts hobbyists, amateurs, and budding professionals. It’s the same reason why fan fiction, homemade brewing, and other DIY activities are popular. Technology makes it easier than ever.

Today’s biggest artists have brands that are just as powerful as established companies. Their business ventures span as wide as a conglomerate. The next step is to become a “platform” that fans can build experiences on. TikTok, Vine, and other social media networks have opened the doors to what’s possible from a UGC perspective. The next level is to expand opportunities within music itself. it requires more work than a TikTok meme, but the rewards can be even greater.

A similar example is the NBA and its relationship with UGC. The league has embraced the social media era. Bleacher Report, House of Highlights, and other outlets run their highlight clips regularly. Those clips get turned into memes with graphics. Bleacher Report’s Instagram clips that put Russell Westbrook in the middle of a Game of Thrones battle is a form of fan fiction.

Artists don’t need to do this with every song. But the leaks are a great place to start. The track’s already out there, so what’s there to lose?

Is RapCaviar As Powerful As it Once Was?

Spotify’s flagship hip-hop playlist is five years old. By 2017, it was dubbed the new Hot 97. I’ve written favorable pieces on the playlist both here and here. But a lot has changed since then.

Here’s a Google Trends map that shows “rap caviar” over the past five years:

That ‘peak’ lines up with when hip-hop officially surpassed rock as the most consumed genre of music. There were tons of celebration and commentary that pegged that to the streaming era, Spotify, and its flagship playlist. It also lined up with the media coverage that RapCaviar and its playlist curator Tuma Basa had received. From 2017 until his departure in 2018, the flagship playlist received tremendous exposure, which fueled growth.

But the playlist growth has declined. In took less than 18 months to grow from 5 to 10 million. But in the 18 months since then, it has grown less than 3 million. As Spotify’s U.S. market saturates, growth has shifted to music and podcasting. There’s less of a need to invest heavily in the playlist.

In 2018 Goldman Sachs interview, media mogul Peter Chernin spoke about the challenge of algorithms with regards to Netflix:

“I’d be curious how many people have ever watched something because Netflix recommended it algorithmically. I don’t think it happens that often… It’s mostly word of mouth or your friends have told you, but there’s gotta be a better way to give consumers information and curation to what they want to watch at any given time. And I think it’s a big chokepoint in the entire industry.”

That chokepoint is stronger with video content, but a less-pronounced version still exists in music. People don’t listen to albums because of algorithms. Even Drake, who has been over-indexed on streaming services, would still get the same number of streams even if his new music wasn’t heavily pushed by Spotify.

RapCaviar is still a solid form of discovery. It’s better than any alternatives, but it can’t compete against an influential celebrity posting a video of themselves listening to an album. It can’t compete against an album becoming a trending topic on Twitter. There’s an “organic-ness” that’s hard for any Spotify playlist to replicate, especially in 2020.

Have a good week! Congrats to Doja Cat, Megan Thee Stallion, Beyonce, and Nicki Minaj for topping the Billboard Top 100. First time that four black women have topped the charts. History in the making.

How Re-Opening the Economy Impacts Hip-Hop

Hey! Hope your Friday is going well. I’m saddened and angered by the murder of Ahmaud Arbery and everything surrounding it. It’s been top of mind. I can only imagine how his family and loved ones feel.

Quick reminder: I’m doing another Trapital Mailbag podcast. Any questions on your mind on the business of hip-hop? Reply to this email, let’s hear it!

Today’s update is on Live Nation, re-opening the economy, and how the politics of that decision impacts hip-hop. It’s a shorter update on one topic. If you prefer updates like these, reply to this email and let me know!

Yesterday, Live Nation reported its quarterly earnings. Revenues are down 21% year-over-year and 9,000 shows have been impacted by COVID-19. The future is still uncertain. CEO Michael Rapino is optimistic though. He wants to instill confidence and has some data to back it up.

Here are some quotes from Rapino in the earnings call:

“In a survey we just posted, we talked to 10,000 casual and ongoing ticketbuyers and the data is pretty compelling: 90% of fans are saying ‘I can’t wait to get back to the show,’ and I think our refund rate says everything — we’re running somewhere between a 5-10 refund rate right now on a global basis.”


“Whether it’s in Arkansas or a state that is safe, secure and politically is fine to proceed in, we’re going to dabble in fanless concerts with broadcasts, we’re going to go and do reduced capacity shows because we can make the math work. There are a lot of great artists that can sell out an arena, but they’ll do 10 higher end smaller theaters or clubs. We’re seeing lots of artists chomping to get back out once it’s safe.”


it’s important for us to keep doing drive-in concerts, which we’re going to test and roll out, which we’re having some success with, fanless concerts which have great broadcasting opportunities, reduced capacity festival concerts, which could be outdoors, could be in a theater, could be in a large stadium floor where there’s enough room to be safe.”

Yes, I believe that 90% of fans can’t wait to get back to the show. But does that mean that only 10% of those who bought tickets want refunds? Since the outbreak, Live Nation changed its refund policy twice after fan complaints. Refunds can be time-consuming and fans may not want to deal with it. The 5-10% who got refunds were willing to go through the steps. If refunds were as easy as one-click purchases on Amazon, more would be processed.

Also, “90% of fans can’t wait” doesn’t mean they all “can’t wait” for socially-distant alternatives, or would attend if concerts resumed today. That may depend on the genre of music.

Live Nation’s socially-distant events will strike a big divide, especially in the U.S. According to an ABC poll, 65% of Republicans want to reopen the country now to salvage the economy, compared to just 6% of Democrats. It’s easy to view this solely as an urban/rural divide. But the protesters in densely-populated conservative regions like Orange County, California beg to differ.

Hip-hop leans liberal, while country music leans conservative. If Live Nation meets its adjusted 2020 expectations, it will be on the backs of those who want to open up the world ASAP. Drive-in concerts are now a thing, but again, those are much more common in rural areas.

This divide may play out in a few ways. First, this viral outbreak has accelerated shifts that were underway in entertainment. In music, consumption patterns differ tremendously based on genre. Drake’s Dark Lanes Demo Tapes is on track to sell a similar amount of album-equivalent units as Kenny Chesney’s latest album. Drake’s sales are almost entirely streaming, while the country star’s sales are driven by bundles for an upcoming concert. We can assume that Chesney’s fans are more willing to attend his concert sooner, while Drake fans might be fine waiting until 2021, or later.

Second, and related, those country artists will likely get first dibs on venues. Now that the NFL schedules are out, Live Nation can start scheduling its bankable stadium-level acts. A concert promoter’s job is to limit risk and book safe bets who can guarantee sellouts. If a promoter is choosing between a country star and hip-hop star, who do you think gets booked first?

Additionally, Live Nation is experimenting with fanless concerts for broadcast opportunities. But hip-hop doesn’t need Live Nation for this. Rappers have spent the past few months experimenting with livestream platforms. But other genres of music may take Live Nation up on that offer.

We’re heading for a dangerous loop. There’s been tons of speculation on the future of live events. They are the fifth and final stage of reopening for most states. But reopening the economy is the politically-charged debate that won’t end anytime soon. The lines are drawn, and the entertainment dollars that follows those lines will surely be impacted.

Have a great weekend! Reply to this email or jump in the Slack group. Would love to hear your thoughts.

Indie Artists Will Need Help to Bounce Back

Hey! Hope you enjoyed your weekend. Today’s update covers the uncertainty for indie acts, key findings from the Global Music Report, and SoundCloud and Twitch’s new live programming.

Indie Artists Will Need Help to Bounce Back

It’s a grim time for many musicians. On Friday, the Freelancers Union shared some troubling stats:

Over the last week, 2,767 Freelancers Union members answered a survey to tell us about their struggles with these broken systems. The results are shocking: 84% of freelancers who had applied for government relief had not yet received any money.


Two-thirds (66%) of our respondents had already lost more than $5,000 in income, and almost all of them (86%) had applied for at least one from the list of PUA, PPP, EIDL, or the Self-Employment Assistance Program…


One-quarter (25%) of our respondents had spent more than 20 hours researching and filling out applications for relief funding. More than half of them (58%) received confusing or incorrect instructions on what to do, while dealing with broken web systems (56%) and unresponsive phone lines (45%).

Unfortunately, many of the resources to help have dried up. MusiCares reported that its $14 million COVID-19 Relief Fund has depleted. The first round of PPP loans went to a lot of big organizations like the Los Angeles Lakers and Shake Shack while smaller businesses were left out. And the EIDL only went to 9% of businesses that applied.

The outlook is dim, and the next few months might be devastating. From CNBC:

Sole proprietorships that represent 81% of all small businesses in America is a group particularly hard hit in this credit crunch… According to the survey, 31% can operate only a few months or less, 7% less than a month and 6% less than a week under the current economic lockdown conditions.

Many musicians are sole proprietors, so it’s tough. Their ecosystem has suffered too. Small venues, promoters, and ticketing companies have faced similar struggles. It’s a chain reaction that will take time to recover. Missouri is the first state to give concerts the green light, but I don’t expect many musicians or their fans to jump at the opportunity.

These smaller indie acts face the most uncertainty. As I’ve said before, I’m not concerned about Taylor Swift canceling Lover Fest or Drake not touring after his album drops. I’m concerned for the acts who can’t last a few months (or year) without income. They’ll be forced into alternative forms of work or remain underemployed until the virus passes.

Several of the big stars and companies have donated their money to great causes to help. Post Malone’s Nirvana livestream raised more than $4 million for WHO. Rihanna donated to a foundation supporting WHO and other organizations. Cardi B teamed up with Fashion Nova to give money directly to those impacted. Cash App has been active as ever. SoundCloud and Pharrell came together to support Sweet Relief and Help Musician charities.

There’s a long list of companies and artists helping in a position to do so, which is great. But I’m still uncertain. Sadly, the roots of this industry may look a lot different in twelve months.

IFPI’s Global Music Report shows growth in Asia

After a brief delay, IFPI’s annual Global Music Report is out. Here are some of its headline stats:

For the full year 2019, total revenues for the global recorded music market grew by 8.2% to US$20.2 billion.


Streaming revenue grew by 22.9% to US$11.4 billion and for the first time accounted for more than half (56.1%) of global recorded music revenue…


This growth was driven by a 24.1% increase in paid subscription streaming with nearly all markets reporting growth in this area. There were 341 million users of paid streaming services at the end of 2019 (+33.5%), with paid streaming accounting for 42% of total recorded music revenue.

There are several interesting regional trends too:

For the fifth consecutive year, Latin America was the fastest-growing region (+18.9%) with its three largest markets growing strongly: Brazil (+13.1%); Mexico (+17.1%); and Argentina (+40.9%).


Asia saw overall growth of 3.4%, a slower rate of growth than 2018, but this was largely due to Japan (-0.9%), which saw a decline in physical sales (-4.8%), its dominant format. Elsewhere in the region, South Korea, China and India all experienced strong growth, (8.2% 16.0% and 18.7% respectively).


US & Canada grew by 10.4%, remaining the largest region for recorded music revenues, accounting for 39.1% of the global market.

Here are my biggest takeaways:

  • No data from Africa. Growth is understated. IFPI did not include recorded music data from Africa. It previously cited challenges in gathering data from the region. But with recent growth from its homegrown talent and increased investment from the Western music industry, the growth is inevitable. I expect that Africa’s growth will look a lot like Latin America, China, and India soon enough. Maybe even stronger. Nigeria alone is one of the fastest-growing economies in the world. It will be the third-most populated country in the world by 2050.
  • Fast growth in China and India. The two largest countries in the world continue to grow at a rapid pace. The digital streaming providers have priced their service low to capture more of the market. As I wrote last week about Spotify, they are banking on the long game. It makes sense, but these DSPs will need to achieve massive scale to realize that. Luckily, there are over a billion people in each country.
  • Streaming revenue growth slowing down. It’s no surprise that streaming revenue now accounts for 50% of recorded revenue. But revenue increased $2.2 billion in 2019, compared to a $2.7 billion increase the year before. This is because streaming subscriptions have saturated in established markets where streaming revenue per user is high. Most people in the market for a paid streaming service already have one. In these markets, revenue growth will likely come from increased prices (as we’ve already seen in Scandanavia). Revenue growth will likely pick up from subscriptions in the emerging markets, but it will take time.

IFPI was already bracing for next year’s results which will be impacted by COVID-19. Recorded music growth will likely decelerate given the outbreak. But there could also be an accelerated shift toward streaming music, especially if artists continue to drop music. If massive artists like Drake, Rihanna, and Beyonce deliver music this year (as many expect) it would draw in listeners and influence other musicians to do the same.

Note – MIDIA released its global music report a few months ago with similar results to IFPI.


SoundCloud Launches Live Programming on Twitch

In March, SoundCloud and Twitch made one of the first business development moves to make it easier for artists to monetize during the pandemic. Today, the two companies have come together again for original content.

From Techcrunch:

Music streaming service Soundcloud is capitalizing on consumer demand for live entertainment amid the COVID-19 quarantine with the launch of its own slate of originally produced live programming. The company today announced its plans for a new Twitch channel where it will air live chat series and other panel conversations plus music sets, and shows focused on music discovery. The programming will feature artists, producers and other industry experts in an effort appeal to both music creators and fans alike.


While the company has offered other music discovery and creator resources in the past, this is the first time it’s offered live video and a way to interact with the music community in real-time, as it will by way of Twitch’s built-in chat.

This move makes sense, but I’m surprised SoundCloud didn’t do this years ago. The platform has always been a hub for creators to push their content. The rising acts on SoundCloud often got featured on playlists, creator lounges, and other events that the DSP put on. A series with these acts was the next logical step. But like many things, COVID-19 has accelerated the timeline for items that were already on the roadmap.

If these two shows work well, there’s a path for future programming. SoundCloud has a strong bench of “alumni” artists who could come back from different types of virtual events. Artists like Kehlani, Chance the Rapper, and Lil’ Uzi Vert would be a huge draw. The infrastructure is there to make it happen.

A Record-Setting Quarter for Streaming

Hey, happy Friday! It’s Friday, right? These days are starting to blend…

It’s been a busy week in hip-hop. We got a collab with Megan Thee Stallion and Beyonce Thee Rapper. There’s a new Drake project. A new Doja Cat and Nicki Minaj collab. As a movie fan, I’m closely following the AMC-Universal showdown. And as someone who doesn’t own Tesla but knows plenty of people who do, I can only imagine what y’all are thinking today.

Today’s update covers Drake’s strategy for 2020, a record-setting quarters for streaming, and Facebook’s new paid livestreams.

Drake’s Strategy with Dark Lane Demo Tapes

From @champagnepapi:

My brothers @oliverelkhatib @ovonoel put together alot of the songs people have been asking for (some leaks and some joints from SoundCloud and some new vibes) DARK LANE DEMO TAPES out everywhere at midnight…also my 6th STUDIO ALBUM DROPPING SUMMER 2020!!! Lucky number 6 😈 soon fwd

Drake’s new “tape” is now available everywhere. The previously released songs include, “When to Say When,” “Chicago Freestyle,” “Toosie Slide,” “War,” “Demons,” and “Pain 1993.” Nearly half the project is previously released music.

It’s easier than ever to repackage existing content and get rewarded for it. The 33-year-old rapper proved that last year with Cake Package and So Far Gone. Here’s what I wrote in March when “Chicago Freestyle” and “When to Say When” first dropped:

The biggest hit from these two-packs will make the next album, which helps ensure commercial success. This most recent pack dropped exclusively on SoundCloud and YouTube which proves two things.


First, Drake can generate buzz and build demand outside the other DSPs…


Second, he builds more anticipation for the album. Remember, last year’s Care Package topped the Billboard charts, and those songs weren’t new songs!… When the next Drake album drops Spotify, Apple Music, Amazon Music, Tidal, and elsewhere, the song(s) selected from this two-pack will give it an additional boost.


In 2018, his Scary Hours two-pack brought us “God’s Plan,” which made its way to Scorpion and is his first single to go Diamond. In 2019, his Best in the World Pack brought us “Money in the Grave,” which got heavy radio play and will surely make the next album. He understands how the game works.

Dark Lane Demo Tapes isn’t an album, but the Billboard charts don’t care. It will still top the charts, just like Drake wanted.

Last year, he hinted that his next album won’t be another high-volume album like Scorpion. This mixtape and upcoming album should work out better for a few reasons. First, the projects will be treated separately and get more attention from fans. For instance, if the double-disc Scorpion was released as one mixtape and one album three months apart, Drake would have topped the Billboard charts twice, and likely sold more records.

Second, a lower volume studio album gives Drake a better shot at that “classic” certification. I’ve written in the past that he no longer cares about that. But in December’s Rap Radar interview, he alluded to it a few times. He talked about how Scorpion could have had more critical acclaim if it was shorter. He acknowledged the tightness of Nothing Was The Same’s 13 tracks but held back from committing to that again.

Regardless of how many songs make the final cut, Drake will break all sorts of charting and streaming records with two drops in the same calendar year. Unless Beyonce or Taylor Swift drop two albums in 2020, those records are his.

Record-setting quarters, but will it last?

Q1 was big for digital streaming and media apps. TikTok had the best quarter for any app ever with 315 million downloads and 2 billion overall. YouTube generated over $4 billion in ad revenue, up 33% from Q1’19. Spotify grew 31%, its fastest year-over-year growth with 130 million subscribers. Netflix gained a record-setting 15 million subscribers last quarter. Apple Music set an all-time revenue record and had double-digit growth.

No surprises here. The COVID-19 quarantine has boosted streaming and other socially-distant activities. But is this growth sustainable? Is it legitimate? And will these pandemic-driven consumers maintain active usage over time?

There are a few ways to look at this. The first is the most favorable perspective. This virus will accelerate several transitions that were largely underway. Those transitions include streaming video on demand (SVOD), remote work, digital distribution, and livestreaming. There’s heightened interest now, but it’s still too early to know what will sustain. For instance, music livestreams will likely look different next year than they do today.

The second perspective is more skeptical. We can also assume that these record-breaking quarters are more a reflection of our ephemeral response to the virus. On the supply side, many of these services have offered more free trials and looser restrictions. Some of these promotional offers won’t exist when the virus passes. How will that impact growth and customer acquisition tactics? On the consumer side, folks were more willing to accept lucrative sign-up offers, especially at steep discounts. But what will those look like upon renewal? And will they be impacted when social distancing measures are relaxed?

Some services will fare better than others. TikTok will still be strong. Netflix will fare well too since it’s ubiquitous with digital media. But digital music streaming providers should be cautious. They’re the only options with “free” alternatives to consume the same content. And music streaming has still been down in the pandemic.

In Music Business Worldwide, Tim Ingham called the key difference in subscriber growth and revenue growth:

Spotify’s ARPU – the average revenue paid each month by its Premium subscribers around the world – fell by 7% at constant currency, year-on-year, to €4.42m in Q1 2020…


Q1 2019, SPOT posted €1.385bn in Premium revenues – representing year-on-year growth of €348m.


In Q1 2020, however, it posted €1.700bn in Premium revenues – up by the smaller amount of €315m.

Some of this is inevitable since Spotify has expanded in markets where $9.99 / month would never fly. CEO Daniel Ek’s response to this has been pretty consistent. He believes we should be evaluating the company on subscriber growth:

“No, again, our primary strategy is growth,” said Ek. “As we said before, rather than maximizing revenue [we are focused on] this amazing opportunity of moving [people] from radio to on-demand audio; that’s the trend line that we’re trying to capture and that’s what you’re seeing us go after.”

I’m not against companies prioritizing lifetime value / customer acquisition costs over profits. I get it. But in Spotify’s case, its Q1 success is significantly influenced by free trials, timely Q1 promotional offers, and COVID-19 friendly initiatives. The actual numbers might not be sustainable once the pandemic is over.

Post-pandemic retention will be interesting to track. We won’t get that level of granularity from these companies. But there should be enough public data to make estimations for next quarter or next year.

Paid Livestreams on Facebook

In a company press release, Facebook announced some new features:

To support creators and small businesses, we plan to add the ability for Pages to charge for access to events with Live videos on Facebook – anything from online performances to classes to professional conferences…


To help you support some of your favorite creators, we’re expanding Stars to more Pages and more countries. Once you buy Stars you can send them to creators while they’re streaming, and they’ll earn 1 cent for every Star.


This falls in line with the tweet on April 8 from @thisisneer, which caught the attention of Instagram’s senior leaders:

@thisisneer’s ideas were 1) shop for artists merch while watching them perform, 2) virtual meet & greets to “go live with” fans for a fee, 3) send artists virtual gifts, 4) VIP access: pinned comments on livestream, bonus content.


Instagram’s VP of Product Vishal Shah said “I appreciate the level of thought put into this thread. We are investing a lot into Instagram Live and have been thinking about many of the areas you’ve highlighted. Stay tuned for more details in the weeks to come!” and Head of Instagram Adam Mosseri said “We have some plans in the works to support creators and artists using Live. Stay tuned.”

How much did this thread influences the upcoming changes? I know that some of these plans were underway, but it’s hard Instagram or Facebook to ignore the groundswell and attention that tweet received.

The ability for creators to charge is great. Facebook is still the largest social network, and these options will extend to Instagram too. But given the capacity restraints from the Verzuz battles, it is better served for the rising creators or those with smaller audiences. Anyone with the capacity to attract millions is better partnering with others and moving to a platform they have more flexibility in.

The elephant-in-the-room is how much Facebook will charge for its commission. Twitch’s revenue split is 50/50, while YouTube’s is 70/30 for membership pages. I expect Facebook will be somewhere in that range. Facebook could also charge less commission today to draw in creators, but raise commission over time.

Enjoy your weekend! Stay safe.

Kanye West’s Billionaire Status?

Hey! Hope you had a good weekend. A few quick things:

  1. In Friday’s update, I didn’t explain why Spotify didn’t allow tipping in the first place. None of you complained or asked why, but it bothered me that I didn’t offer that.Here was Spotify’s reason in 2012:

    “Spotify pays out straight back to rightsholders, the record labels and collecting societies who in turn pay money to the artists, musicians, lyricists and composers that they represent. So we do not pay straight to artists…labels do that. For this reason and since all our music is based in the agreements with labels we can’t do anything about this… we think your idea of creating an app is very cool or maybe it is also easier to add this button in their actual artists page where they can manage their own money!”

    Spotify likely kept this reasoning until now, when the virus hit and forced folks to change their reasoning.

  2. Thanks to everyone who filled out this form for Trapital’s consulting and advisory services. I’ll get back to you shortly.
  3. On a lighter note, who else watched The Last Dance documentary last night? Wild. I’ve always been a Bad Boy Pistons apologist, but walking off the court was indefensible. I also haven’t thought about the name Carmen Electra in years. She’s a true product of how fame was created in the 90s. It’s crazy how much has changed in a short amount of time.

Today’s Trapital Update is on Kanye West’s billionaire recognition, reasons to doubt it, and Tidal’s new freemium tier.

Kanye is a Billionaire (According to Forbes)

On Friday afternoon, Forbes announced that Kanye West is a billionaire. He joins his idol turned rival Jay Z and sister-in-law Kylie Jenner on the Forbes list. The 42-year-old artist felt disrespected because his ten-figure net worth wasn’t declared in last July’s Forbes feature. But last week, he sent Forbes confirming documents about Yeezy Inc. The article was written by Forbes’ Senior Editor and former Trapital Podcast guest Zack O’Malley Greenburg.

Before I dive in, I give Zack and the Forbes’ team tremendous credit. This work isn’t easy, especially with Kanye. In public, West dragged Forbes for its “failure” to acknowledge him. To no surprise, there was strong shade in Kanye’s direction throughout the article. The story broke late on Friday afternoon, which is generally one of the worst times of the week break a story like this. It felt like an intentional yet subtle, “take that, Kanye.”

Here’s the TL;DR on how Forbes determined Kanye’s $1.3 million net worth:


  • Yeezy: $1.26 B
    • 2019 revenue = $1.3 B
    • Kanye’s cut (after expenses) = $140 M
    • 10x multiple minus 10%’ = $1.26 B
  • G.O.O.D. Music: $45 M ($90M * 50% haircut for illiquidity)
  • Buildings and improvements: $40.5 M ($81 M * 50%”)
  • Stocks: $17.5 M ($35 M * 50%)
  • Land: $10.5 M ($21 M * 50%)
  • Cash: $8.5 M ($17 M * 50%)
  • Vehicles: $1.9 M ($3.8 M * 50%)
  • Livestock $149K ($297K * 50%)


  • Mortgages, advances, other: $100 M


  • ASSETS – LIABILITIES = $1.4 B – $100M = $1.3 B

‘10% rule-of-thumb haircut for private asset illiquidity

”50% haircut for illiquidity and lack of independent backup”

As a reminder, here’s what I wrote in June when Jay Z was declared a billionaire:

These numbers can be overstated:


-Data is often self-reported. Public figures have lied to Forbes and other outlets to boost their status, gain publicity, which leads to future business opportunities (e.g. Wilbur RossDonald Trump)


-Liabilities aren’t always captured. Forbes applies conservative discounts to estimate, but there’s a tendency to lead with assets and revenue, and look less heavily at liabilities and cost(e.g. In 2016, Kanye West claimed to be $53 million in personal debt. A) Was that verifiable beyond hearsay? B) If so, was that ever accounted for?)


-Numbers rely heavily on public knowledge. Anyone who’s generated enough wealth to be considered a billionaire likely has business interests the public doesn’t know about.


Meanwhile, these numbers can also be understated:


-Some folks don’t report all their assets or financial interests for various reasons (offshore accounts, businesses with moral/ethical conflicts, desire for anonymity)


-Numbers rely heavily on public knowledge. Anyone who’s generated enough wealth to be considered a billionaire likely has business interests the public doesn’t know about.

In Kanye’s case, the risk is that he overstates his net worth because his data is self-reported. Adidas, who manufactures and distributes Yeezy, didn’t reply or verify any of these reports. It relies solely on Kanye’s documents.

Are We Sure Though?

Yeezy is the biggest chunk of Kanye’s net worth, but it’s a difficult asset to nail down. Here’s Forbes:

Yeezy is a complicated asset. West owns 100% of it. But it’s functionally tied—at least for five-plus years based on the documents we saw—to Adidas, which produces, markets and distributes the shoes. There’s also a separate apparel division that we don’t believe makes money. Last year, our sources projected the shoes would finish 2019 with revenue north of $1.5 billion (Adidas would not comment then, or now). Per recent conversations and internal documents, we believe the final revenue number ended up closer to $1.3 billion.


Our sources told us last year that West’s agreement calls for him to receive a royalty around 15% of Yeezy revenue from Adidas.

Similar numbers were confirmed last month by the Wall Street Journal in its interview with West:

An Adidas representative declined to confirm West’s estimate, citing a confidentiality agreement. West, who says it bothers him that people don’t think of him as a successful businessman, repeated the estimate to me in February when he explained how he could afford to support so many endeavors. “The fact that Yeezy does $1.5 billion in revenue per year and the valuation is $2.9 billion means that money does not have to enter into the equation.” I later reviewed documents that reflected those numbers.

But this conflicts with what the New York Times reported last June:

In the case of Mr. West, Adidas positioned his Yeezy brand as its own category inside the company. Mr. West earns 5 percent royalties on net sales of his shoes and apparel, according to a person inside the company with knowledge of the relationship. Yeezy sales are expected to top $1.3 billion this year. A spokeswoman for Mr. West declined to comment.

For argument’s sake, let’s assume that the New York Times report of 5% royalties is accurate. (For the record, they are the only outlet on record with any verification from Adidas!) That would knock Kanye down from his billionaire status. He would be worth less than $500 million.

The other challenge is the 10x multiplier that Forbes used to estimate Yeezy’s standalone valuation. Forbes made the right call by not using the $2.9 billion valuation that the Wall Street Journal verified. That number was derived from estimates from music royalties. But music royalties don’t have operating expenses. Yeezy does! Music royalties are more comparable to EBITDA multiples, which are much higher than revenue multiples.

For context, according to research group Moss Adams, Adidas’ enterprise valuation multiple trailing twelve months is 2.77x revenue, but 18.3x EBITDA. Huge difference.

Kanye has done more interviews than usual in the past month (Wall Street Journal, GQ, Forbes) because he wanted recognition even if Forbes didn’t give it to him. Last month’s Wall Street Journal interview was an opportunity to show that $2.9 million valuation from a trusted business publication. The GQ interview was further validation.

He may very well be worth a billion, but there’s so much grey area. There’s a conservative case to make that his net worth is just north of $400 million. There’s a generous case to make that it’s just shy of $4 billion.

To be clear, net worth measurements would be a challenge for any publication, not just Forbes. And the people who get defensive about these things aren’t just big personalities like Kanye West or Donald Trump. The same thing happens outside of entertainment.

In a prior job, our organization released state rankings on broadband connectivity. Governor’s offices and state technology offices took strong measures to validate their positions. Their efforts made Kanye West look tame. There were claims that our organization lacked credibility, alternative sources were used to discredit our work, and more.

Was our work 100% perfect? No. Like Forbes, we made generalizations and conservative haircuts. But we pushed ahead because it was directionally accurate.

Similarly, the Forbes Hip-Hop Cash Lists is not precise but it’s correlated enough to drive discussion. Forbes rarely caves to public pressure, which I appreciate. But even in the long-fought battle with Kanye West, and the conservative measures that are taken, there’s still plenty of margin for error.

Tidal’s New Freemium Tier?

From Billboard:

“Tidal today (April 27) has said it will be unveiling a new free membership tier, where users can sign up with an email address and get ad-free access to Tidal’s various video content without having to pay…


The tier does not include music streaming, which is available at its $9.99/month and $19.99/month premium and hi-fi tiers, respectively.”

It’s a unique move. Tidal has invested more in video content with its #CRWN series with Elliot Wilson. By moving this top-of-funnel, it can attract a broader audience. Tidal users are more passionate brand than most other DSPs do. When people watch #CRWN, praise often goes to Tidal (even though #CWRN existed well before Tidal).

But why didn’t Tidal include music streaming in this freemium offering? An ad-supported entry-level option would make a lot of sense. Tidal has a passionate following. That means it should have an easier time attracting users and converting them into paid subscribers.

Spotify has reported a 46% conversion rate from free to paid customers, which is extremely high. The company claims that its podcast content has helped boost that.

From Music Ally:

“We have seen early indications that our investments in podcasts are having a positive impact on conversion of free to paid users… We have seen benefits to retention on the order of several hundred basis points, which is a material change on a retention curve, for users that engage with spoken word content relative to those that haven’t, and early data indicates that these users are more likely to convert to Premium over time.”

This could work well for Tidal too. Tidal, like Spotify and SoundCloud, is a standalone digital streaming provider. Apple Music does not have a freemium tier, but it already has a customer base through iOS devices. Apple also had enough cash and other business units to not rely solely on Apple Music for profitability. Standalone DSPs don’t have that luxury.

Tidal isn’t profitable yet. According to Billboard, it had 2018 revenues of $148 million and a net loss of $36.9 million. 98% of its revenue came from subscriptions. If we assume the average sub pays $5 per month (using Spotify’s past numbers), then that’s just under 2.5 million subscribers, which is right in the middle of Forbes’ estimate of 1 – 5 million. They can attract a whole lot more with a freemium tier.

The only challenge though is that most of Tidal’s strong markets are already saturated with DSPs. The best time to launch a freemium tier would have been in 2015 when Tidal launched. But the next best time is now.

Spotify (Finally) Lets Users Tip Artists

Hey! Happy Friday. Two quick things:

  1. I need to clarify yesterday’s email on Trapital’s consulting and advisory services. In yesterday’s email I said it was “1-1” offering. To clarify clients will mostly be companies, not solely individuals. If you are interested and have questions, please fill out this form.
  2. I’ll write about Travis Scott’s Fortnite concert next week. I know it’s the hot topic, but there’s a lot to cover. Stay tuned!

Today’s update is on Spotify new tipping option, EMPIRE’s new content on Instagram, and what Facebook’s investment in India’s Jio Platforms means for music streaming service JioSaavn.

Spotify (Finally) Lets Users Tip Artists

From Spotify for Artists:

That’s why, today, Spotify for Artists is launching a new feature: the Artist Fundraising Pick. Just like artists can select any piece of music to highlight on their profile as an Artist’s Pick, they can now highlight a fundraising destination (in addition to their Artist’s Pick).


First and foremost, this feature enables artists who are interested in raising money to support themselves, their bands, or their crews, to get the word out to their fans on their Spotify artist profiles. We have a strong group of initial fundraising partners: Artists can choose to add a link to Cash App, GoFundMe, and PayPal.me.

It’s about time. All it took was a pandemic!

The way it’s currently structured, Spotify will not take a cut of the donations. Funds go directly to the artist and their causes.

The global streaming community has wondered whether Spotify would ever do this. It was mentioned often because Tencent earns 70% of its revenue from “social entertainment services” including tipping, virtual gifts, karaoke, and merchandise. Many critics have said, “well if Tencent can do this, why can’t Spotify?”

I have made this comparison myself, but I still had issues with it for a few reasons.

First, Tencent is heavily supported by the Chinese government. The conglomerate doesn’t face true competition. Its business decisions are less consequential than a company operating in a capitalist society.

Second, Tencent can earn 70% of its revenue from tipping-related services because it takes… wait for it… a whopping 70% cut from tips! That would never fly in the United States. Gratuity is seen as a direct payment. If people think that the App Store’s 30% cut is heinous, they might riot if Spotify tried this.

That said, there’s nuance. Spotify could have adopted this 2-3 years ago when everyone was pushing for it. It didn’t need to take a steep revenue cut. The ability to tip on Spotify would keep users engaged on that platform.

It also could have teamed up with Cash App much sooner. Three years ago, artists weren’t giving away money on Cash App like they are today. But now, Cash App is its own wave in hip-hop. There’s less need for Spotify to bridge the payment gap between artists and fans.

But better late than never, right? It’s great to see the platform used for good. I recommend you read the rest of Spotify’s blog post for more info on Spotify’s contribution to MusiCares, CDC, WHO, and other organizations.

Instagram and EMPIRE team up for new IGTV shows

Instagram Live has gotten all the attention lately, but IG has other hip-hop plans underway.

From Billboard:

“Indie record label, distributor and publishing company EMPIRE has paired with Instagram to debut two new shows of original content on IGTV, the company announced today (April 21). The shows have been developed by the company’s in-house creative team, EMPIRE Studios, with the first series kicking off today…


The first of the two shows is called Canvas Conversations, described as an interview series between “a musician, a visual artist and a comedian” — this is not the start of a joke set in a bar — who will have an “illustrated conversation about life and music,” according to a press release…


The second show, Cover Story, will go in-depth with artists who have designed some of music’s most memorable cover art for albums and singles, including showcasing rough drafts and alternate versions. The show is currently in pre-production.

Last fall, EMPIRE’s VP of Digital Moody Jones was a guest on the Trapital Podcast. He spoke about consistency in an artist’s social media presence and their music. These shows can highlight that consistency on a platform that EMPIRE has succeeded on.

The other benefit is the size of Instagram Live’s audience. As I wrote in last week’s Instagram Live article, the app has hundreds of millions of daily active users. The friction is incredibly low, so it’s easier than ever to consume content.

But the Verzuz challenge sheds light on Instagram’s shortcoming: its performance. I already acknowledged that other platforms are better equipped to handle millions on a livestream. That’s given. But I didn’t expect IG Live to crash on Monday for Babyface and Teddy Riley’s battle. It can’t take more than 500,000 viewers? Really? Previous IG Lives with Justin Bieber, Tory Lanez, and Taylor Swift were close enough to that threshold. IG is more reactive when it should have been proactive. EMPIRE’s shows aren’t on IG Live, but it’s still Instagram.

For context, here’s episode 1 of Canvas Conversations featuring D Smoke:

The 11-minute episode is in that Quibi, Facebook Watch, YouTube web series time frame. IG may make the most sense today, but there are other networks if technical issues persist.

What Facebook’s investment means for JioSaavn

Earlier this week, Facebook made a $5.7 million investment in Indian telecom operator Jio Platforms. I recommend you read the analyses from Stratechery (paywall) and The Verge on the deal. I am covering it here because the conglomerate is the parent company of JioSaavn— India’s second-largest digital streaming provider with over 100 million active users.

This investment may cover some of the challenges I mentioned last fall in The Globalization of Hip-Hop, Part II:

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.

Each DSP — Ganaa, JioSaavn, Spotify, Apple Music, and YouTube— is playing the same game. They’re spending upfront to acquire customers now. Per-user monetization is low, but economies of scale (and scope) should work in the winner’s favor. As Jio’s mobile footprint expands, the streaming service should follow.

The interesting opportunity is in ecommerce. JioMart had already collaborated with WhatsApp on digital transactions for small Indian shops. This can also help JioSaavn. More artists are relying on ecommerce, especially since live performances won’t be back for a while.

Adjustments will need to be made in India though. Adoption is already low. Just 1% of users pay for a music subscription that costs less than $2 per month. I doubt that most of these listeners are willing to drop $70 on a Beyonce Homecoming t-shirt. The strategy will need to be adjusted. To attract the masses, artists can sell less expensive items, virtual gifts, or something similar. Or, JioSaavn can focus on the small subset of folks who can afford these luxuries and focus there. The integration opportunity is there.

Hope you have a great weekend! One of my favorite podcasts, Dissect, just started its newest season which is dedicated to Beyonce’s Lemonade. I’ll check it out this weekend!

Teddy Riley Gave “Verzuz” its Viral Moment

Hey Trapitalists. Hope you had a safe and fun weekend. Yesterday, the first two episodes of ESPN’s The Last Dance documentary came through to keep us entertained. But on Saturday, the Verzuz series between Teddy Riley and Babyface kept us entertained for a very different reason!

This update covers the Verzuz battle technical difficulties, why it’s a blessing in disguise, and the success of Drake’s “Toosie Slide.”

Verzuz Battle Postponed Due to Technical Difficulties

From TMZ:

Teddy Riley and Babyface‘s battle was the talk of social media Saturday night, but for all the wrong reasons … and Teddy Riley’s audio equipment is to blame.


The two music legends were supposed to square off as part Swizz Beatz and Timbaland‘s Instagram battle series … and nearly 400k people were tuned in to watch it go down. Babyface was solo, set up in what looked like his home studio, and Teddy had something more elaborate … with a microphone and crew around him.


The audio issues were immediate, Teddy’s sound was muffled, ruining the timing and quality, while Babyface’s sounded perfectly clear.


Teddy — who had what appeared to be an audio crew with him — took several pauses, trying to fix the tech issues … but the sound never improved and the competition ultimately got canceled.

Here’s a clip from Saturday night.

For those keeping track, this was the second postponement. The original battle was slated for April 5. Babyface had contracted COVID-19 and needed to recover. But that wasn’t the ONLY reason for the initial delay. Teddy had grander plans up his sleeve.


If you’ve watched any of the other live battles, you would’ve noticed that after an hour, the live will automatically end. Both artists then have to go live with each other again. Riley wants to make sure that doesn’t happen during his battle.


“We pulled back because we really want this done right,” he continued. “We don’t want the [feed to stop after an hour on]…Instagram. That’s the main reason why.”


The super producer also hinted that the battle will now happen on “a new system” where fans will be able to “swipe up” to watch it live.


“The company that I’m a partner of, I thought that this is something that would be great for them to take this to another level,” he added.


Riley also said that he wants there to be celebrity mediators during his head-to-head face-off with Babyface.

Here’s a clip from Teddy’s website. The audio is crystal clear:

Teddy’s priorities were out of sync. Verzuz founder Swizz Beatz had to remind folks that less is more. He also introduced the acronym DTM: doing too much.

In last week’s article, I acknowledged the limitations of IG Live:

Instagram’s weaker areas are its performance and range of functions. Swizz Beatz Verzuz series is fine in its current form. The Ruff Ryders producer has not monetized it and doesn’t plan to anytime soon. But when he does, there are other platforms built to make it possible. Caffeine is already a livestream hub with experience in emcee battles. A partnership with Swizz could go a long way. The same is true with Twitch and other livestreaming services.

In fairness, Teddy Riley was ten-steps ahead. But he should have let Swizz Beatz handle that and not take it into his own hands. He put the cart before the horse.

A Blessing in Disguise?

Before Saturday, Verzuz had been relatively tame. There were a few noteworthy moments, but nothing went viral. That changed Saturday night. Teddy Riley’s screw-up was a peak moment for Black Twitter. Comedians like Spice Adams had their own viral moments with spoofs on Teddy Riley. The failed battle got mainstream coverage. It was by far the most earned media that Verzuz has had.

These moments now feel like a rite of passage. Several, popular shows can date back to viral moments that boosted their audience.

By the mid-2010s, The Breakfast Club had hit its stride. It was a mandatory stop for the biggest hip-hop stars in the world. But that hip-hop radio show went to another level in April 2016 when they interviewed Birdman. The Cash Money exec wanted respeck on his name because Charlamagne Tha God had repeatedly called him out (rightfully so) for not paying artists. Birdman’s antics became a legendary meme. It was an inflection point for the already popular show.

A similar thing happened for Hot 97’s The Morning Show. In 2012, the show was actually in danger of getting canceled. Power 105.1 had a big lead with The Breakfast Club, and showed no signs of letting up. But at Summer Jam 2012, Hot 97’s Peter Rosenberg dissed performer Nicki Minaj ahead of her scheduled performance. She abruptly canceled. They took that drama to an even more memorable interview. It gave the radio show new life and it’s been strong ever since.

These moments always involve a mishap, which gives fans something to laugh at. We made fun of Birdman. We argued about who was right or wrong—Nicki or Rosenberg. But those programs have reaped the rewards.

Swizz Beatz may be understandably annoyed about what happened on Saturday. He puts in work to run these battles. The last thing he wants is an avoidable issue, especially with a record audience in attendance. But I’m confident that this will help, not hurt, these series in the long run.

Toosie Slide is the #1 Song in the U.S.

Here’s what I wrote two weeks ago:

“Toosie Slide” has gotten all the earned media and attention it dreamed of in the past 72 hours. But media coverage is not the same as virality. We won’t know the true impact of this unless we see organic memes explode on TikTok and Instagram in the next few weeks.


I’m clearly skeptical, but I also acknowledge that Drake is in his own class. But if Drake, the biggest rapper in the world, can take all the smart steps and pivots to make a dance take off and it STILL doesn’t happen, then there are probably better ways for most artists to spend their time.

I got his one wrong. “Toosie Slide” is now the #1 song on the Billboard Hot 100. It’s done quite well on TikTok too.

From TMZ:

Drake has everyone, almost literally, doing the “Toosie Slide” — his latest single just hit a 10-figure benchmark on TikTok, breaking Kylie Jenner‘s record.


Sources at the video creation app tell us the hashtag #ToosieSlide hit a billion views in just 2 days … giving Drake the fastest music trend to reach a billion views on the platform.

I was skeptical of “Toosie Slide” because it broke an unwritten rule of social media. Few artists have succeeded in forcing virality. In the past two years, we’ve seen Beyonce, Lil Wayne, and Chance the Rapper all push “challenges” with lackluster response. I believed that Drake would have a similar fate.

But let’s say LeBron James tweeted, “Yea this Michael Jordan doc is good but that doesn’t make him the GOAT.” Social media would explode. If Cardi B tweeted, “I hope Nicki and I can move past our beef and make some music together,” it would go viral. If the person is popular enough, and the topic is charged enough, it will gain attention.

Similarly, if an artist is popular enough, and the “challenge” or dance is easy enough, it will gain steam.

The difference between Beyonce’s challenge and Drake’s dance is the ease. The Lemonade singer’s “Before I Let Go” challenge required some level of appreciation for Frankie Beverly and Maze to truly make the most of it. Gen Z–the most active audience for TikTok memes–doesn’t know anything about Frankie Beverly and Maze. There was an understandable disconnect. Meanwhile, Drake is literally telling listeners the instructions to the song. And it’s easy to do.

There’s no learning curve or prior cultural knowledge that will make someone better at the “Toosie Slide.” The same was true with the “Black Beatles” mannequin challenge. All we had to do was stand still.

Drake knew what he was doing and it worked. Don’t be surprised if he delivers another TikTok-inspired hit before the quarantine is over.

Eventbrite’s Plan to Weather the Pandemic

Hey Trapitalists! Happy Friday. This week, my wife and I started watching the Miss America series on Hulu. I also watched a ridiculous amount of Quarantine Radio to prepare for yesterday’s article. At this point I have Tory Lanez’ ad libs down. I could be a stand-in if he needs one.

Today’s update is a breakdown on how Eventbrite plans to weather the pandemic, and the much-hyped ESPN documentary The Last Dance. I attempted to write a brief recap on Kanye West’s GQ interview but I chose not too (I briefly explained why at the end of the update).

Why Eventbrite may shift to do-it-yourself model

Last week, the event ticketing company laid off 45% of its employees, including 90% of its music team. In a recent interview, CEO Julia Hartz and Chairman Kevin Hartz discussed how this will impact the business.

From Billboard:

“We are not planning to exit music and we’re committed to serving independent creators,” says Julia Hartz.


As difficult as the quarantine has been on both Eventbrite and its clients, it did grant the company more time to figure out its next move, with Julia hinting that Eventbrite could be pivoting back to a self-service ticketing product…


The company doesn’t have the personnel for a full service ticketing model with hundreds of sales reps, customers service pros and event specialists. And after cutting $100 million in costs, it’s likely that company execs are losing their appetite for the large upfront fees and advances promoters expect to be paid. Moving to a low cost do-it-yourself model, with promoters using the same tools as event organizers and party planners, seems increasingly likely.


“Eventbrite has always had a self-service ethos,” says Julia Hartz. “We’re taking this time of dislocation to double down on making our platform better.


Kevin Hartz adds that DIY merchant technologies like Shopify and Etsy have dramatically dropped costs for vendors and improved ease of use.


“But it does require some change in behavior, which can be difficult,” he says.

That “change in behavior” is a disruption to the three tiers of service that Eventbrite currently offers:

A pivot to full DIY would eliminate that Premium tier. The key difference between tiers is the customer support offered. Customer support ain’t cheap. In my Trapital podcast interview with Stem CEO Milana Lewis, we discussed how customer support costs led to its change in business model.

Similarly, Eventbrite justified the expense by charging more for it and only offering it to higher-end clients. This focus likely helped acquire and retain customers they wouldn’t have otherwise. But with ‘Premium’ type events not happening until 2021, those customers will be treated like Essentials or Professionals.

It’s an understandable transition, especially given Shopify’s business model. But the ecommerce company isn’t much different. Shopify larger retailers use Shopify Plus. Less than 2% of Shopify users are Plus, but they accounted for 27% of monthly recurring revenue in Q4’19.

The challenge is that Eventbrite and Shopify’s top customers don’t want to become DIY experts, even if it’s easy. They pay for the luxury of not needing to master the platform. I’ve used both Eventbrite and Shopify for business purposes. They’re relatively easy to use, but there is a learning curve for both. There’s a market for those who want these services without wanting to roll up their sleeves, myself included!

But DIY or not, those live in-person events aren’t happening right now. There’s an opportunity for Eventbrite in ticketed virtual events, but the marketplace is still developing. I still feel confident that when society returns to the “new normal,” Eventbrite and Shopify will still be best positioned to offer high-touch services to its top clients, who then subsidize the rest of their operations.

Why society loves the 1990s Chicago Bulls

This is a different topic than I normally cover, but I know that many of you plan to watch this. I also think there’s an interesting insight here for some projects you may be working on.

ESPN’s The Last Dance is the most-hyped documentary I can remember. Not even O.J. Made in America, had this much anticipation. Sure, the coverage is heightened in the absence of live sports. But the hype would be strong regardless. This is one of the most beloved teams in the history of American professional sports.

Society has been fascinated with the 1990s Chicago Bulls for decades. If you ask people why, the answers are basic: “Michael Jordan was so good.” But this is deeper than greatness. Fox’s Colin Cowherd talked about this recently. He had a few more reasons on why:

To summarize, his reasons were:

  1. The Bulls are based in Chicago, in the heartland of the U.S. They faced less stigma than the teams on the coasts or the South.
  2. Played to cultural norms. The northeast is “tough” and the Bulls physical style of play resonated with those viewers (even if they rooted for the Boston Celtics or Philadelphia 76ers). The west coast is about building what’s sexy. It values big names and starsr. The Bulls had the most popular players and headline-worthy celebs like Dennis Rodman. The team catered to both.
  3. They could win in so many ways. Great offense, defense, and coaching.

Those factors are legit, but those three aspects can still be achieved by one of today’s teams. But that hypothetical team would never be as beloved as Michael Jordan’s Bulls.

The key difference is timing. The Bulls are a lasting relic of monoculture. The late 90s were twilight years for mainstream media’s uniformity in coverage. There was one dominant team without a consistent threat. One dominant superstar without a true rival. The space for Clyde Drexler or New York Knicks arguments had little room to breathe.

In today’s era, those arguments would get plenty of air time. This started with the Foxification of news. That dynamic expanded in the internet era. There’s now a voice for every corner. There would be talking heads who made living tearing down Jordan and elevating Karl Malone.

Think about the “media economy” created by LeBron James. His biggest stans got rich from their praise-worthy commentary (Nick Wright, Brian Windhorst), but so did his biggest haters (Skip Bayless). Today’s fragmented landscape would diminish the Bulls’ pristine images.

One of the most telling quotes came from Michael Jordan himself. Here’s what he told The Athletic a few days ago:

When people see this footage I’m not sure they’re going to be able to understand why I was so intense, why I did the things I did, why I acted the way I acted, and why I said the things I said. When you see the footage of [me riding with Scott Burrell], you’re going to think that I’m a horrible guy.”

This is a perfect reflection of 90s media. Academy Award-winning producer Matthew A. Cherry tweeted that “MJ being perceived as a nice guy by mainstream media for a majority of his career is one of the top 5 PR spins of all time.” That’s facts.

The documentary is a strong nostalgia play. But more importantly, it’s the last of a dying breed. The success of this Bulls team will likely lead to expensive content created on other topics. Some of those may hit, but most of them won’t.

This team was a true cultural phenomenon. Another team may come and surpass their wins and championship, but their legacy will be hard to top. It was a lightning in a bottle moment.

Kanye West’s GQ interview

I intended to write a recap of insights from Kanye’s GQ interview. This was now his second feature with a major publication in the past few weeks. His Wall Street Journal interview captured headlines too.

I sat down. I read it. But honestly, I got nothing remarkable to share about it! It was fine. I respect the level of reporting that went in it, but there was nothing out of the ordinary to report back on. Instead of trying to force a narrative for the sake of an update, I’ll just share the link here:

Inside Kanye West’s Vision for the Future – Will Welch / GQ, April 16, 2020

I’ll also share the Wall Street Journal interview in case you didn’t read it. I found this one to be much more interesting:

The Creation and the Myth of Kanye West – Christina Binkley / Wall Street Journal, March 25, 2020

Hope you enjoy your weekend! Like many of you, I’ll be watching The Last Dance on Sunday night.

When Will Live Events Realistically Come Back?

Hey! This update covers whether live events will be back in the next 18 months, Live Nation’s cost-cutting measures, and Sony’s investment in Bilibili.

Live events may not come back until 2021

On Friday, The New York Times Magazine published an article on when the United States can realistically “restart.” This paragraph from University of Pennsylvania bioethicist Zeke Emanuel has caused quite the fervor:

Yes, restarting the economy has to be done in stages, and it does have to start with more physical distancing at a work site that allows people who are at lower risk to come back. Certain kinds of construction, or manufacturing or offices, in which you can maintain six-foot distances are more reasonable to start sooner.


Larger gatherings — conferences, concerts, sporting events — when people say they’re going to reschedule this conference or graduation event for October 2020, I have no idea how they think that’s a plausible possibility. I think those things will be the last to return. Realistically we’re talking fall 2021 at the earliest.

Fall 2021?! The reasoning is understandable. Safety first. But the impact will be devastating. We’ve already seen major layoffs and threats to the future of SXSW and other festivals. We’ve also seen layoffs on the tech side with Eventbrite and Yelp doing massive layoffs. If we’re still 18 months away from large gatherings (or smaller gatherings in close quarters), then there’s a large number of conferences, concerts, and events that might not make it back. And the people who work there will be unemployed as a result.

But sporting events have the luxury of TV contracts. Even if the NBA playoffs are played in practice facilities with no fans, at least the TV contracts will be in place. If anything, the ratings may be higher since the playoffs have less competition for attention. Unfortunately, concerts and conferences don’t have that luxury. Ticketed revenue, sponsorship, and concession make up a substantially higher portion of revenue.

The smaller venues will get rocked the worst. Eventbrite just laid off 45% of its staff, which should be a leading indicator of the long tail event space. Live Nation is slightly better shape, but that’s still temporary.

In a few months though, the COVID-19 cases will trickle down and the government—especially here in the U.S. President Trump will be eager to open America back up and restart the economy. But by then, a vaccine still won’t come, and there’s a chance the virus can come back just like it did in with the Spanish flu in 1919. This friction between the economy and public health is inevitable. Many events organizers may be willing to follow the government’s economy-first advice, especially when it directly supports their livelihood (but puts the public at further risk).

It’s a sad and inevitable reality.

Live Nation’s Cost-Cutting Measures

Speaking of Live Nation, CEO Michael Rapino has taken several steep measures to try and save $500 million by the end of 2020.

From Billboard:

Live Nation will cut salaries for senior executives by up to 50%. Rapino’s pay will go from $3 million to zero, president Joe Berchtold‘s from $1.3 million to $650,000; chief accounting officer Brian Capo‘s from $363,500 to $272,625; general counsel Michael Rowles‘ from $800,000 to $400,000; and CFO Kathy Willard‘s from $950,000 to $475,000, according to the company’s 8K filing with the Securities and Exchange Commission today (April 13).


The concerts giant will also reduce its use of contractors and implement hiring freezes, rent re-negotiations, furloughs, and reduce or eliminate other discretionary spending on things like travel, entertainment, repairs and maintenance and marketing. Finally, it will reduce advances in both its ticketing and concert businesses, and re-assess all capital expenditure projects.

It’s impressive that the company can save half a billion dollars without any layoffs. But it also highlights how much money is spent on these other costs.

If the earlier predictions are correct and these large public gatherings can’t restart until fall 2021, then Live Nation will be in deeper trouble. The challenge will come on the demand size. There’s two sides to demand—the talent that uses the venues, and the consumers who purchase tickets.

If talent is forced to transition to alternative revenue streams, they may have a harder time bouncing back to these venues. There’s a forseeable reality where some of the necessary measures taken now become the “new normal.” For instance, Hurricane Katrina forced the New Orleans Hornets to temporarily move to Oklahoma City. It worked so well that when the team moved back to New Orleans, the Seattle SuperSonics moved to Oklahoma City. It’s been over a decade and Seattle, the 14th biggest media market in the country, doesn’t have an NBA team. It’s a specific example, but it show how temporary adjustments can have lasting impacts.

On the consumer side, unemployment is rising fast. A recession is looming. Consumers will be less likely to demand for ticketed events in 2021. It will be tough for Live Nation to bounce back from that.

A less direct, but equally impactful, indicator is the secondary market. For years, it’s been the bane of existence for Live Nation. It’s an $8 billion industry that relies on Live Nation for its scalping, price gouging, bots, and other tools used to drive up the prices. Yet StubHub has already furloughed up to two-thirds of its staff, and laid off others. If these events aren’t happening, then scalpers will be forced to move on as well. Ironically, scalpers drive demand for tickets further since they reduce the supply and drive up the price. The impact is yet to unfold.

Hats off to Live Nation for minimizing the immediate burden with its contingency plan. But all indicators show that it will likely have to make tougher decisions in the coming months, or years.

Why Sony invested in Bilibili, a Chinese streaming service

If live events continue to be in peril, attention will continue to shift towards streaming-enabled services that provide entertainment at home. That’s a big reason why Sony has invested heavily in Bilibili.

From Reuters:

Chinese video site Bilibili (BILI.O) will receive $400 million equity investment from Sony Corp America, Bilibili said Thursday, as the two companies seek to further collaborate in entertainment to attract China’s Gen Z…

Starting out as an animation site popular among teenagers, Bilibili is expanding into other areas such as documentary, esports, and music videos, attracting more than 130 million monthly active users.

This is a smart investment for Sony, since Bilibili has a strong, active audience, in a region that the company wants to grow in. It has also performed well despite the COVID-19 outbreak.

Here’s a breakdown of it’s strengths from Motley Fool:

Bilibili is still burning a lot of cash, but it remains one of the few coronavirus-resistant growth stocks in this volatile market, for four simple reasons.

1. A sticky audience filled with hardcore users

…Bilibili promotes its basic users to “official” members with exclusive perks if they pass a 100-question “entrance exam” on ACG content within two hours. It ended the quarter with 68 million official members, up 50% from a year ago. It’s generally easier to convert these official members into paid ones.”

2. Strong growth across all four businesses

Bilibili splits its business into four segments: mobile games (43% of its revenue), live broadcasting and value added services (28%), online advertising (14%), and e-commerce and others (14%).

3. A limited impact from COVID-19

Bilibili expects its revenue in the first quarter of 2020, which bore the full impact of the coronavirus outbreak in China, to rise 57%-60% annually…

4. Improving gross margins

…Gross margin, which hit 19.8% in the fourth quarter, still expanded over the past three quarters.

The investment is similar to Universal Music Group-Tencent. The American record labels want a stronger foothold in the east Asian market and the dedicated users who use their streaming services. It’s hard to be bullish about much of anything in the industry right now, but this is an area that will continue to grow well into 2021.

‘The Chronic’ Might be Leaving Money on the Table

Hey! Today’s update covers The Chronic making it to all streaming platforms, a plan to monetize Instagram Livestreams, and why Architectural Digest may bring back its version of MTV Cribs.

The Chronic Might Be Leaving Money on the Table

Last month, Dr. Dre’s The Chronic was inducted in the Library of Congress. It was included in a group of 25 “aural treasures worthy of preservation because of their cultural, historical and aesthetic importance.” When that news reported, my first thought was, “So Congress can get The Chronic but Spotify can’t??”

This album has one of the more dramatic backstories in the history of hip-hop, which makes its arrival on 4/20—the marijuana holiday— more important.

From Pitchfork:

Dr. Dre’s 1992 classic The Chronic is finally coming to all digital service providers. The album will be available to stream starting April 20 (via Entertainment One). In a press release, Chris Taylor, eOne’s Global President, Music & Live, said, “These historic artifacts should be heard by all music lovers, and we are so happy Dr. Dre has opened this door so everyone can experience the brilliance of this seminal work.”

The Chronic has been famously unavailable digitally, and Dr. Dre’s decision to keep the record offline was upheld in a 2011 lawsuit that Dre won against Death Row Records. The legal victory gave Dre 100 percent of the proceeds of any possible online sales of his music, as well as the right to decide the formats for The Chronic’s distribution.

Artists have taken a wide range of approaches when releasing (or re-releasing) their legacy album and mixtapes to streaming services. Some have merely pushed it like a press release and let the fans control the narrative. Others have taken my advice and treated it like an anniversary and made it into an event.

But Dr. Dre has never been one for fanfare. Remember, he never wanted to rap on The Chronic or 2001, he had to be convinced. Ever since the Apple-Beats by Dre deal and Straight Outta Compton, he’s been relatively quiet. He cares about his legacy, but not for vanity reasons. He would never do a sit-down interview with Zane Lowe to tell folks that The Chronic is the best rap album ever. That’s not his style.

April 20 will come and go, especially since weed smokers can’t congregate in public during this crisis. But there are plenty of ways that this could be maximized—even during this quarantine:

  • Livestream: An Instagram Live session between Dr. Dre, Jimmy Iovine, and Snoop Dogg. Even if they discuss topics already covered in past interviews an documentaries, fans would eat it up.
  • Ecommerce: There’s a clear opportunity for Chronic-related apparel, but think bigger. Now that weed is legalized throughout the U.S., Dre could easily sell a brand (or strand) of marijuana or marijuana-related accessories. Snoop Dogg is already an active investor in this space.
  • Video content: Release raw footage from The Chronic recording sessions: They have this footage. The raw footage from “Nuthin’ But a G Thang” is better quality than the music video. That footage alone could be a three-part series on Netflix or HBO. It would dominate the culture’s attention for a minute.

The opportunities are endless. None of these would ever happen, but there are plenty of future albums that will hopefully be brought to streaming platforms. De La Soul’s 3 Feet High and Rising is also in the Library of Congress but nowhere to be found on streaming. Aaliyah’s catalog isn’t on streaming. Hopefully it happens soon, but for the sake of those artists (and their estates), hopefully it’s done the right way.

Time to Monetize on Instagram Live?

Yesterday I was tagged in this Twitter post that caught the attention of Instagram’s senior leadership:

@thisisneer’s ideas were 1) shop for artists merch while watching them perform, 2) virtual meet & greets to “go live with” fans for a fee, 3) send artists virtual gifts, 4) VIP access: pinned comments on livestream, bonus content.

Instagram’s VP of Product Vishal Shah said “I appreciate the level of thought put into this thread. We are investing a lot into Instagram Live and have been thinking about many of the areas you’ve highlighted. Stay tuned for more details in the weeks to come!” and Head of Instagram Adam Mosseri said “We have some plans in the works to support creators and artists using Live. Stay tuned.”

See, sometimes Twitter isn’t that bad! Neer’s ideas are heading in the right direction, but they have their unique challenges.

Live’s strength is its massive audience of 500 million daily active users. Tory Lanez—who is having a moment but nowhere near a superstar—can command an audience of over 200,000. Sure, some of that audience is there for his “Tip Drill”-inspired X-rated content (that honestly belongs on OnlyFans). But 200K is 200K. The Canadian hip-hop artist can’t command that audience on Twitch.

Amazon’s livestreaming platform is much better built for this moment though, especially with its SoundCloud integration. The challenge, still, is its niche positioning. Twitch has 15 million DAUs and its gaming-focused brand are still an uphill battle for creators to climb. Twitch may have a superior product, but it’s more important to have the “good enough” product and strong distribution. Live is better positioned than anyone to get there.

Neer’s suggestions on merch integration and virtual gifts are the most likely to be executed. Ecommerce integration is already native on Instagram. I bet many of you have bought items directly from Instagram ads. The functionality can easily be added to the Live experience. YouTube has done something similar with its artists. Virtual gifts are also native to Facebook. It’s a smart idea to show appreciation and can easily be set up through existing tools and services.

I’m skeptical of the meet & greets and VIP access though. Meet & greets take artists away from the livestream session. There might be an opportunity for pre-show or after-show engagement, but it’s still less than ideal. The VIP access makes sense in theory, but pinned or “stronger” comments will essentially become advertisements or self-promotion. It may be intended for fans, but the real consumers will take advantage of the opportunity to “own” a block of text in a livestream that will hit hundreds of thousands of hip-hop fans. It would ruin the fun.

I’ll be keeping track of how this develops. I also recommend reading Cherie Hu’s post on The legal underbelly of livestreaming concerts.

Architectural Digest’s Timely Attempt at MTV Cribs

This past week, Architectural Digest put out a feature on Drake’s mansion in Toronto. There’s nothing subtle about Drake, including his home. Here are a few shots:


It created tons of follow-on content from other media sites. It felt like a throwback to MTV Cribs, where rappers showed off their homes like it was a rite of passage.

Architectural Digest started its Drake feature with a not-so-subtle jab at the seminal show:

Remember the chintzy, pimped-out McMansions that were a staple of the long-running MTV series Cribs? The Toronto home of mega recording artist Aubrey Drake Graham is something else altogether. Measuring 50,000 square feet, with amenities such as an NBA regulation-size indoor basketball court crowned by a 21-square-foot pyramidal skylight, Drake’s astonishing domicile certainly qualifies as extravagant. But instead of vast expanses of cheap drywall and mountains of ungainly furniture upholstered with a hot glue gun, stately Drake Manor, as envisioned by Canadian architectural and interior designer Ferris Rafauli, is a marvel of old-world craftsmanship, constructed of limestone, bronze, exotic woods, and other noble materials. Every detail of the sprawling property has been meticulously conceived and executed. And there isn’t a Scarface poster in sight.

Damn. Why did they have to come at Jermaine Dupri’s neck like that?!

That heavy shade is noteworthy. It highlights the transition in hip-hop’s perception. In the early 2000s, Architectural Digest probably scoffed at Cribs. It likely assumed that the “new money” of a rapper’s home was beneath them. But now that hip-hop has gotten stronger mainstream approval, it’s now in the 100-year-old’s publication to make its move. The underlying notions behind that shift may be frustrating, but Architectural Digest is hardly alone on this front.

The interior decor magazine will likely double-down on hip-hop. Its second-most-watched episode of ‘Open Door’ is a six-minute clip of Wiz Khalifa’s house. It has 43 million views. Take a look:

It’s not THAT much different than an episode of Cribs. But given the success of this video, the Drake feature, and this Q&A at Kanye West and Kim Kardashian’s home, expect more rappers to be featured on Architectural Design.

The publication is also competing against other celebrity lifestyle shows on the internet. Vogue’s 73 Questions has only featured a few rappers (Cardi B and Diddy) but the right artist could help set that off.

Architectural Digest’s move can be loosely labeled as “nostalgia,” but it’s broader than that. The late 90s and early 2000s era of hip-hop was full of ideas that were ahead of their time. Roc-a-Fella’s leveraged its brand into several relatable industries. Mike Jones gave out his phone number well before SuperPhone or Community. Jay Z had The Black Phone long before Sprint bought part of Tidal. The thought was there but the technology and culture weren’t ready to scale them.

It’s very similar to the dot-com bubble. We laughed at companies like Pets.com with their ridiculous business models (or lack thereof). But many of those failed concepts have thrived in this era now that the technology and culture are there.

And now, a millennial favorite MTV show is about to get a second life with a longstanding interior design publication. What else would you expect?

Why Swizz Beatz’ Keeps the DJ Battles Free

Hey! It’s been great to see all the philanthropic from hip-hop and the music industry to help fight this pandemic. There’s too many to tag here, but all those efforts are recognized. Thank you!

Today’s update covers Swizz Beatz DJ Battles, the (potential) future of film festivals, and streaming cuts during a recession.

Why Swizz Beatz Keeps Money out of the DJ Battles

Swizz Beatz’ Verzuz battles have been a temporary relief for quarantined hip-hop fans. The former Ruff Ryders producer and Timbaland had cooked up this plan a few years back, but this was the perfect time to dust it off and put it in motion.

The original concept had a business plan to monetize these sessions, but they’ve held off. Here’s Swizzy in a recent VIBE interview:

And of course me and him had a plan, we had to plan for three years for it to be done with businesses and partners and things like that, but right now this is not the time for that. We would look crazy…The minute you see a logo running across that screen, it’s just gonna feel crazy.


These people are putting this on for free, ain’t nobody got a dime yet. And all the corporations and everything are all to the table, but right now we just enjoying it like this. It’s 6 million people unemployed, what type of business are we talking about right now?

He read the room—the hundreds of thousands attending on IG Live—and held off on monetization. It’s an earnest move that will generate goodwill.

Verzuz’s free status also increases its pricing power. The producers can use this time to build an audience, focus on the product, and tweak the plan over time. These livestreams were perfect for March and April 2020, but the producers don’t know what the world climate will be like in a few months. It’s wise to wait this out. Both producers have financial security and don’t need to rush it, which makes it easier.

Right now, Verzuz faces two challenges. The first is securing producers and matchups they deem worthy of battle.

Here’s another interview quote from Swizz:

But these are people that got [20 hit records], certified. So a lot of people don’t wanna come outside that do have the 20, and a lot of people that do wanna come outside that don’t have the 20. So we gotta keep this thing curated because once it gets silly, it just gets silly…


lot of people are like “I need JD and Puff,” and I’m like well if it were that easy, it would have been already. … But nobody is gonna be mad, nobody is gonna be mad. At the end of the day, they just gotta trust the curation.

The second challenge is that some participants aren’t down with the “free” strategy. The next battle up was Teddy Riley vs. Babyface. According to the rumor mill, it was postponed because Riley wanted to charge viewers $10 to attend and get sponsors involved. It makes the New Jack Swing pioneer look selfish.

To be clear, it’s not irresponsible to charge money for livestreams. Fans loved Erykah Badu $1 livestream concert. But she did it on her terms, not someone else’s. Teddy entered a format where famed DJs had done this for free. But now he wants to switch it up and collect his bread? No buddy, that ain’t how it works!

As the saying goes, either charge a lot or charge nothing. Verzuz succeeds because it charges nothing. It will also succeed in the future when it charges sponsors a lot. Folks like Teddy Riley are better off launching their own.

Amazon’s Ready to Disrupt Festivals

From Deadline:

Amazon Prime Video and SXSW have teamed to launch Prime Video Presents the SXSW 2020 Film Festival Collection. Eyed to go live later this month, the initiative was hatched as a way to give exposure to films slated to premiere at the Austin-based festival before their red carpet hopes were dashed when the festival got canceled because of the coronavirus pandemic.


Filmmakers are being invited to opt-in and have their work premier exclusively for 10 days in the U.S. on Prime Video. A fee of an undisclosed amount will be paid to the makers of each film. It’s up to the filmmakers whether or not they want to show their work this way. Those who need to monetize their projects with theatrical or other VOD deals will likely demur.

It’s a nice concession to filmmakers who would have otherwise lost out completely. According to Amazon Studios head Jennifer Salke, this is a completely earnest effort:

“Not as a business opportunity, but an effort to be supportive of filmmakers and talent in this trying time. We saw this festival being canceled and I’ve been there many times and we had a huge financial and emotional investment, and we wanted to find a way for the community to be able to come together and celebrate that work. This was about wanting to create a doorway for filmmakers to platform their work.”

I mean, sure. Amazon Studios is doing a good deed thing here. But we can all see the writing on the wall.

Video streaming services—Netflix, Hulu, HBO, Amazon—have low key waited for this direct-to-streaming moment. For years, the brick-and-mortar theaters and institutions owned distribution. Digital streaming services had to wait until exclusivity was over. But during this pandemic, movies have accelerated the timelines and have hit streaming directly. It’s no surprise that festival filmmakers are partnering with Amazon to distribute content.

We are approaching a reality where famed film festivals may become virtual events. Netflix is already testing out event-based viewing with its School Daze watch party. If Amazon Studios develops strong connections with these SXSW filmmakers, it’s only a matter of time before they do the same with other film festivals.

If filmmakers and content creators enjoy direct-to-streaming as an alternative, it may be a hard sell to get them to come back to the traditional institutions that once owned this process.

Will Streaming Get Cut in a Recession?

From Digital Music News:

“Research firm Kagan has conducted an S&P survey of how the COVID-19 pandemic is changing the media landscape. It’s not exactly a glowing report.

Over 1,000 participants shared their new viewing and listening habits during the past few weeks. Sports fans were also asked what they prefer to do now that no live games are airing.


The S&P survey found that most people felt streaming video and cable TV were expendable. When asked which service they would cut first – 37% said streaming, while 28% of respondents said cable TV would be next. The survey also found that cord-cutters aren’t heading back to cable during the crisis, either. Unclear is exactly how music streaming fits into this mix, though so far, usage has been declining during the crisis.”

These survey results may be true, but I strongly disagree with the underlying implication.

Let’s step back. The services most likely to get cut first are those that have zero utility in quarantined life. Those include gym memberships, transportation, exclusive in-person access places, and clothing memberships, and so on. If folks can’t travel outside, then there’s no use for most of these services (maybe Stitch Fix, but unless you need another “WFH fit” for your Zoom meetings, that’s a stretch). Personally, I’ve already canceled coworking memberships and transportation benefits, but have yet to cut back on digital content.

Now, music streaming is clearly on the decline since commuting and outside travel are down. But the utility isn’t zero. People can still stream music from their homes if they choose. I would argue that many of the folks who earn enough money to have multiple digital media subscription services are more financially stable than the average person. Additionally, I bet that any services with marginal utility that will get canceled were already on the verge. COVID-19 just accelerated the inevitable.

Doja Cat’s Rise

Hey! Happy Friday. Today’s update covers the rise of Doja Cat, Drake’s attempt to dominate TikTok during quarantine, and Quibi’s upcoming launch.

The Rise of Doja Cat

Doja Cat’s rise defies the traditional rules of music stardom and pop culture. The 24-year-old artist’s hit song “Say So” has entered the top ten of the Billboard Hot 100. It’s her biggest hit yet. Her come up is both unprecedented and ironically fitting.

From Business Insider:

Even if you’re not a TikTok user, you’ve probably heard the catchy, R&B-influenced track “Say So.” Not unlike “Old Town Road,” the hit Doja Cat song got its fame after it went insanely viral on the short-form video app.

It makes sense that the artist’s career would get a mainstream boost from a TikTok dance. Everything about Doja Cat is primed for the internet, from her e-girl aesthetics to the viral YouTube video “Mooo!” that propelled her from a small LA-based artist into the mainstream.

It was hard to tell whether her 2018 song “Mooo!” was legitimate, clout-chasing, or a smart mix of both. The song became an overnight sensation, but the rapper fell victim to the infamous Milkshake Duck. It’s when society falls in love with a previously unknown person, but then digs up history about their problematic past and boom—the person’s canceled. The interwebs resurfaced Doja’s tweets using homophobic slurs about Tyler, The Creator and others. The singer proudly defended herself, which led to further backlash. She eventually apologized.

Cancel culture infers that we would have never heard of Doja Cat again, but that’s obviously not the case. The incident has largely become an afterthought. The reality of cancel culture is that there are levels to this. Violent crimes are treated much differently than problematic statements. And people are more forgiving if the “milkshake ducking” occurs when the person is still relatively unknown. It would be much more damaging if those tweets were surfaced now as she’s rising up the ranks.

But Doja Cat’s ascension is also driven by internet fame itself. “Say So” is popular because it’s a viral TikTok sensation. Here’s the original video from TikTok that started it off:

Like Lil’ Nas X’s “Old Town Road,” the dance caught fire from users themselves, which led to its rise on the digital streaming providers. And like Drake’s “In My Feelings,” Doja Cat released a video using those dance moves and brought the original dance creator on in the music video.

The goal should not be to create content to try and go viral. Instead, the goal should be to know how to capitalize if and when it does go viral. Doja Cat lucked out with “Mooo!” but when the opportunity arose with “Say So,” she knew how to take it to the next level.

Drake Wants to Make “Toosie Slide” a Thing

Speaking of artists trying to force virality on TikTok, here’s Drake’s “Toosie Slide.” It comes with line dance instructions and shameless attempt to capture the quarantined audience’s attention:

As I literally, JUST mentioned with Doja Cat, this isn’t how it works! Beyonce tried to make the #BeforeILetGoChallenge a thing and it didn’t take off. And she’s Beyonce!

Most artists struggle, but I’ll admit—Drake is a bit of an anomaly. “Hotline Bling” was a successful meme, as was the Views album cover. He has a track record of setting these into motion.

For Toosie Roll, he did his homework and hit up some well-known dancers and artists for support.

From Rolling Stone:

…four 20-years-olds premiered a new TikTok-ready dance in a sparse living room with a stationary ceiling fan. The voice instructing them to dance was immediately recognizable as Drake’s, and he was giving simple instructions: right foot up, left foot slide, right foot slide. The song, though, hadn’t been released yet.

“I’mma a spill a little bit of tea, not a lot,” Teo, one of the dancers from the original video, says. “See, the coronavirus messed up the dropping schedule. He was gon’ have us in the music video and junk, but the coronavirus messed it up. So it took us two extra weeks to drop the video we made for it.”

“Drake hit me up and was like, ‘Yo, I need your help,’” Toosie says. “So he sends the record. It was just an idea at the time. It was just the hook and a verse. I came up with this dance. [Drake said,] ‘What you think? You think you can come up with a dance for this song that I made?’ So I sit down, listen to it. Luckily, I’m at Ayo and Teo’s house with Hii Key and all of us. We all chilling. We came up with it pretty fast. We just all pieced it together. We all contributed.”

Here’s the Instagram clip they sent Drake:

“Toosie Slide” has gotten all the earned media and attention it dreamed of in the past 72 hours. But media coverage is not the same as virality. We won’t know the true impact of this unless we see organic memes explode on TikTok and Instagram in the next few weeks.

I’m clearly skeptical, but I also acknowledge that Drake is in his own class. But if Drake, the biggest rapper in the world, can take all the smart steps and pivots to make a dance take off and it STILL doesn’t happen, then there are probably better ways for most artists to spend their time.

Quibi Skepticism

In three days, Quibi will make its grand debut. For those less familiar with the service, here’s an explanation from CNET:

Quibi, a mobile-only subscription video service set to launch Monday in the US and Canda, has been pumping up the hype for months. It has the backing of all the major Hollywood studios. A seemingly endless litany of film, TV, music and sports stars are making shows. And Quibi has raised $1.75 billion to fund its ultra-expensive short-form videos and to pay for splashy marketing like a Super Bowl ad. It’s also brought T-Mobile on board to offer free subscriptions to some wireless customers.

Last week I wrote about Drake’s production work on Quibi’s upcoming 48 Laws of Power. Several other hip-hop stars have teamed up with Quibi too. It will also feature Chance the Rapper in Punk’d, Offset in Skkrt With Offset, Usher in The Sauce, YG in & Music, 50 Cent in Trill League, and Nicole Riche (who’s apparently now a rapper??) in Nikki Fre$h.

From a talent perspective, Quibi has all the big names it could hope for. But from a business model perspective, it will face some challenges.

First, video streaming has become a fierce competition for IP. Quibi has no longstanding IP and likely won’t acquire any either. One of the reasons that Netflix has succeeded is because shows like Friends and The Office were in its catalog. Those rewatchable shows gave Netflix a strong base to expand its original content production. This is a gap for Quibi since it is clearly after the masses. As Hollywood has proven time and time again, it’s incredibly hard for viewers to tune into original programming, even if popular celebrities are involved.

Most networks can solve this by acquiring content, but Quibi’s short-form, mobile-friendly content format only exists on YouTube (more on this later). Starting from the ground-up is a timely and expensive gamble. Disney+, the newest major streaming service has started off strong, but its most popular show, The Mandalorian, is derived from Star Wars—one of the most valuable pieces of IP in American culture.

Second, Quibi is taking a big gamble with its venture capital-style approach to content. It’s launching 50 shows on Monday. If five of them are homeruns and the rest flop, that’s a victory. But the definition of a homerun and a flop are still subjective. Can a few popular hits support this entire operation and its growth plans?

Third, Quibi positions itself as a premium version of content that’s largely available on YouTube. Verizon tried this with Go90 and failed. It’s also similar to Luminary, which positions itself as the HBO for podcasts. The problem with “HBO for X” is that the quality gap that drove HBO’s success 20 years ago is less apparent in video streaming today. The Sopranos was leaps and bounds ahead of most other shows. Luminary was not. That’s less of a knock on Luminary, and more of an acknowledgment of how well-produced (and widely accessible) great podcasting content is.

For instance, will Quibi’s culture-focused content be leaps and bounds ahead of what Complex has done with Sneaker Shopping, or Hot Ones? I doubt it.

The one saving grace for Quibi is that the world is in quarantine and video streaming is up. The folks who have the privilege to be bored will be searching for new content. It will surely help its launch, but I’m skeptical of its long-term success.

Why Patreon’s Growing During COVID-19

Hey! Hope you had a good weekend. Tomorrow you’ll get to listen to my latest Trapital Podcast with… Hannibal Buress! I’m excited for you to listen to it. He manages his businesses a lot like the biggest rappers do. Tons of relatable insights, and, of course, he’s funny as hell. Make sure you subscribe wherever you listen to podcasts!

Today’s update covers Patreon’s boom during COVID-19, Issa Rae’s expansion into gaming, and why XXL’s Freshman Class is still relevant.

Patreon’s growth is a silver lining

Patreon, the membership platform, had some impressive growth in March. From Patreon’s blog:

Here are the main trends we’ve seen:

A large number of creators are launching on Patreon. More than 30,000 creators launched in the first 3 weeks of March 2020 alone, and these new creators are acquiring patrons faster than usual.

Creators have expanded their earnings on Patreon during this time period. This is driven by two factors:

-Patron acquisition: An unusually large number of fans are subscribing to creators on Patreon.

-Patron retention: We’ve seen slightly more pledge deletion, but not nearly enough to offset the increasing numbers of new pledges.

We began to see platform-wide behavior change on Friday, March 13th. Average new patron growth across the US, UK, Canada, Germany, Australia, and Italy is up 36.2% compared to February – an indication that fans are turning to Patreon to support creators during this tough time.

These stats are refreshing! From a consumer behavior perspective though, this will spark two trends.

First, creators with big audiences will add most of the new patrons. At the end of January, rapper M.I.A. launched on Patreon. She didn’t launch with COVID-19 in mind, but the timing was perfect. She’s now one of the biggest musicians on the platform. The Sri Lankan artist has four times as many Instagram followers as Amanda Palmer, who is Patreon’s most well-known musician with over 15,000 patrons.

Now, social media following is a highly imperfect measure of success on Patreon, especially since Palmer became more famous as a crowdfunded musician (and M.I.A.’s patron count isn’t public), but it’s a helpful proxy.

Cherie Hu, who uses Patreon for Water & Music, wrote about the impact of large audience size in a recent post:

Can you grow a Patreon page without already having a large audience elsewhere? Based on my experience, the answer is no.

To be fair, Patreon’s 30K increase in creators is not reflective of audience size or potential revenue. But the real impact will be measured by revenue, and most of Patreon’s creator revenue comes from the top creators who earn much, much more than the rest. According to TechCrunch, 3.2% of creators (who all earn $1,000+ per month) account for 70% of revenue.

Second, consumers with the ability to pay are more willing to do so during these times. There’s been heightened awareness and sympathy for COVID-19’s impact on live performance revenue. Those who were on the cusp of giving may be much more willing to do so now.

That may not last forever though, for two reasons. First, many of these musicians will go back to their traditional business models after this virus passes. At that point, the livestreams and other virtual-friendly content on Patreon may diminish. Second, the fans who were willing to support during a tough time may cut back on giving once those funds have dried up.

These stats are promising and can hopefully help cover lost revenue during this uncertain time. But I’m skeptical of the long term impact post-COVID-19. I do think that we are entering a new normal and that virtual-first business models will be more popular once the virus is over. But not enough to offset the regained revenue once live entertainment comes back.

Issa Rae’s Insecure Mobile Game Fills a Void

Speaking of Patreon, one of the most famous creators on the platform is Issa Rae. She still uses her Patreon page, which was started to promote her YouTube series Awkward Black Girl, which has since elevated her to Hollywood status. Last year I wrote an update on her upcoming HBO Max show Rap Shit and Issa’s new record label, Raedio:

If we connect the logical dots here, the rap group in Rap Shit will get signed to Raedio at some point in the show. The songs they release during the show will be featured as standalone singles available to stream everywhere. It reminds me of Gimlet Media’s StartUp—the company’s first podcast, which focused on the process of starting Gimlet Media. Very meta, but effective when done right.


If we connect the logical dots here, the rap group in Rap Shit will get signed to Raedio at some point in the show. The songs they release during the show will be featured as standalone singles available to stream everywhere. It reminds me of Gimlet Media’s StartUp—the company’s first podcast, which focused on the process of starting Gimlet Media. Very meta, but effective when done right.

She’s following a similar playbook with the upcoming Insecure: The Come Up Game.


If Issa Rae’s Insecure character, Issa Dee, were to have a favorite phone pastime, it would probably be The Come Up Game. Developed by indie firm Glow Up Games, it lets players rap, create their personal style, and interact with the kind of friends Issa would have. Actually, they’re the exact friends Issa has—they were created to reflect her experience, something very few games have ever done before.


That’s exactly what Insecure: The Come Up Game was designed to do: be a game by, for, and about women of color… “The Come Up Game is a perfect, natural extension of Insecure,” Rae said in a statement. “It was such a rewarding experience to create this game alongside an all-women-of-color-led team.”

This game accomplishes several goals. The 35-year-old’s freestyle raps are a signature part of Insecure. She extends its popularity into gaming—a rapidly growing medium with a limited amount of diverse faces. As Insecure has proved, there’s an audience for her content on premium television. There’s likely an audience on mobile gaming.

Oddly, hip-hop and gaming joined forces on content IP in some time. Sure, NBA 2K and Fortnite have several hip-hop elements that enhance gameplay, but when was the last good game that directly converged the two? Grand Theft Auto: San Andreas? That was 15 years ago, but even that was more about life in 90s South Central Los Angeles. It was heavily aligned with hip-hop, but still not directly hip-hop.

I’m still skeptical of the massive stats reported on eSports specifically. But I am bullish the convergence between hip-hop and gaming more broadly.

Here’s what I wrote in January:

Imagine a 2020 version of Grand Theft Auto but with the IP and rights to a classic hip-hop story? The setting could be Queensbridge in the 80s, Miami during the 2 Live Crew era, or Atlanta in the early 2000s. We already have vivid pictures of those eras from all the great hip-hop albums, documentaries, and podcasts. The licensing and IP might be a nightmare to sort through, but if this type of experience was done well, it would make a ton of money.


We are past the days of games like Def Jam Vendetta. There’s a huge opportunity here. Gaming (as it relates to the business of hip-hop) is an area I will give more coverage to in 2020.

The opportunity is there. I bet that more will follow suit after Issa Rae’s lead.

XXL Freshman Class Campaign Begins!

Damn, it’s already time for another XXL Freshman Class? XXL’s annual tradition has remained a benchmark of who will matter in hip-hop. The memorable magazine covers are the closest thing hip-hop has to an iconic NBA Draft Class photo (minus the ridiculous choice in suits).

This year, several candidates released a pitch video to make their case to get fans to vote for them for the 10th spot. Here’s the video from NLE Choppa:

XXL deserves credit here. The freshman classes started in the 2000s and are still relevant in 2020. That’s rare. Most things that mattered in the 2000s, like the MTV VMAs or music countdown shows, don’t mean as much as they once did. But XXL Freshman still draws attention no matter what.

For fans, the “quality” of the list is a perceived measure of popularity. Last year’s class was as strong as the 1996 NBA Draft. It had Megan Thee Stallion, DaBaby, Roddy Ricch, YBN Cordae, Tierra Whack, and Gunna. That lineup is one of XXL’s best since 2010, which included J. Cole, Big Sean, Wiz Khalifa, Nipsey Hussle, Freddie Gibbs, and Jay Rock. This year, we can almost guarantee that Lil’ Tecca, NLE Choppa, D Smoke, and Jack Harlow have a spot reserved on the list.

XXL’s class thrives in this era since artists can truly become stars in a short, short amount of time. Someone that the masses don’t know today will likely be an obvious choice and get widespread acclaim before next year’s 2021 list. Additionally, the segmented nature of today’s culture makes it easier for rising artists to have strong followings by the time they are up for consideration. This was much harder to pull off when mainstream media controlled distribution. The lowered barriers to entry allowed those with star potential to reach it much sooner.

The fan voting also increases engagement. And the partnership with SoundCloud makes perfect sense since it’s a primary platform to gain traction on. UnitedMasters may make sense down the road given the large number of hip-hop artists who use the platform, and the growing number of partnerships with the distribution service.

I’m sure that many of you follow these artists, so here’s a link if you wanna cast your vote.

Why Erykah Badu’s $1 Concert May Open Doors

Hey! Happy Friday. Hope everyone’s staying safe. Two announcements for you.

  1. 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:
  2. 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.

#ClubQuarantine For The Win

Hey! I hope you enjoyed your socially distant weekend! Here’s a sneak peek at one of the Trapital data resources I’m working on… The Rap Investor List!

As a heads up, I plan to limit access to annual Trapital members. A lot of work goes into these, and I need more commitment to justify the value and time put in.

Today’s update covers why D-Nice’s Club Quarantine DJ set was inevitable, opportunities during the crisis, and Bandcamp’s big win from Friday.

D-Nice’s Club Quarantine was Memorable and Inevitable

This past weekend, The Bronx’s own DJ D-Nice gave the world a breath of fresh air.

Here’s a quick recap from Jelani Cobb at The New Yorker:

For nine hours on Saturday night, D-Nice oversaw a spectacle that was part dance party, part social-media therapy, and a health-policy initiative cleverer than anything the government has put together… On the first night of Club Quarantine, on Wednesday, he had about two hundred listeners. By 7 p.m. Eastern Time on Saturday, the crowd was hovering around nineteen thousand…At the peak, around 10:30 p.m. Eastern Time, he hit a hundred and five thousand listeners.


The set at Club Quarantine followed the arc of all good things that become a little too popular: first, a small number of people intimately connected to the cause and familiar with the references, people who know exactly why he’d play Meli’sa Morgan’s “Fool’s Paradise” early on and Frankie Beverly’s “Before I Let Go” late in the game. Then a bigger, more diverse set of folk show up, drawn by word of mouth—the scroll of A-listers popping into the room tends to have that effect.

Yesterday, the 49-year-old’s live stream topped out at 150,000 people. Other well-known DJ’s like Questlove and DJ Premier launched their own streams, but no one topped the Boogie Down Productions DJ.

Pop culture events like this are few and far between. But this moment was bound to happen. All it needed was a well-known and respected first-mover to put the gears in motion during this lockdown. Similar hip-hop live streams have captured our attention when the world wasn’t quarantined.

Three years ago, producers Swizz Beatz and Just Blaze went on Instagram Live and gave fans an epic beat battle. It was fun and somewhat impromptu. Swizzy even dropped an unreleased track by Jay Z and DMX. Both producers acknowledged that they could have earned money from the event, but it was pure fun. The Ruff Ryders beatmaker tagged Timbaland and Pharrell as two producers who were up next. Fans got excited. Articles were written about the hypothetical battle between the Virginia DJs, but unfortunately it never happened. The closest we got was this fun conversation of the two of them comparing each other’s beats and saying, “Nah man I was trying to get like you.”

A short 1-minute video recap from Swizz and Just Blaze’s competition.

If Timbo and Pharrell announced they were doing a battle this coming weekend, people would lose their damn minds. No one would shame them if they sponsored the event. Pharrell likely took a financial hit when his Something in the Water festival got canceled for 2020. It would be an easy way to still show out, especially for the nostalgic folks who live for the late 90s and early 2000s music (like me). It wouldn’t pull in D-Nice numbers—a producer battle is more for true hip-hop fans—but those fans who wanna see it will be all in.

Club Quarantine is yet another reminder of the power of social media during this crisis. Podcasting and music streaming are down since they lose listenership from those who aren’t commuting. But video streaming is up. It will only get higher as more regions strengthen their lockdown measures to reduce the spread of COVID-19. Even if no one tops DJ-Nice’s 150,000 attendees, there’s plenty of bread to go around.

Opportunities in a crisis

As D-Nice proved, there’s a silver lining in all the madness. He didn’t directly monetize Club Quarantine, but his audience highlights the business opportunity. The same is happening in other industries.

From The New York Times:

While the rest of the economy is tanking from the crippling impact of the coronavirus, business at the biggest technology companies is holding steady — even thriving.


Amazon said it was hiring 100,000 warehouse workers to meet surging demand. Mark Zuckerberg, Facebook’s chief executive, said traffic for video calling and messaging had exploded. Microsoft said the numbers using its software for online collaboration had climbed nearly 40 percent in a week…


Now, as movie theaters close under government orders, Netflix and YouTube are gaining a new audience…Even Apple, which once appeared to be among the American companies most at risk from the coronavirus because of its dependence on Chinese factories and consumers, appears to be on good footing…


Communication tools like the videoconferencing service Zoom are now essential, but ride-hailing firms like Uber and Lyft and property-rental sites like Airbnb are seeing customers vanish.

It’s no coincidence that FAANG companies and Microsoft have succeeded. They can all meet customers where they’re at with products that demand their full attention, like video streaming, or those that demand partial attention, like audio streaming. Even if one side of the house has taken a hit in the past three weeks, the others will rise and offset the loss.

The same is true with COVID-19’s impact on hip-hop. The superstars will be fine. They have enough revenue streams to weather the storm. Drake might consider pushing back his album release and forgo live performance revenue, but it’s a great time for his partnerships with live-streaming apps like Caffeine or his ownership in the 100 Thieves esports gaming company.

The next-tier artists though (e.g. hip-hop’s comparables to Uber, Lyft, and Airbnb) is where the struggle starts. There’s a petition for Spotify to triple the amount it pays artists per stream during this crisis. Merchandise sales won’t make up that difference either. If I can’t leave the house, I’m less likely to get the shirt I need to finalize my fit for a day party.

Like the FAANG companies, there are areas in music that are experiencing upticks. That’s where the attention should be. For instance, despite music streaming being down 9%, streaming for kid’s music is up 4%. Who’s ready to hit their in-home studio and give “Baby Shark” the hip-hop remix it deserves?!

On a more serious note, the best digital opportunities exist on the technology platforms that have thrived in crisis. I bet that plenty of rappers are in talks or currently producing content with HBO, Netflix, Amazon, or others. Now’s the time to rethink the grand rollout and release it sooner rather than later.

That content doesn’t need the same level of perfection and polish it had two months ago. It won’t be streamed in the highest quality anyway! It’s time to drop the mixtape version. Fans want engagement and entertainment, even if it’s not perfect. Artists build up followings on all these platforms anyway. Instead of using it to draw folks away from the platform to Spotify, merch websites, or elsewhere, now’s the time to monetize those fans exactly where they’re at.

On the streaming side, SoundCloud and Twitch have already made efforts on this front. From SoundCloud:

It’s an unsettling time for everyone right now, and we know COVID-19 has been especially hard on musicians who were scheduled to play live shows over the next few months. Many creators are turning to live video streaming platforms to connect with their fans.


To help you keep your career on track, we’re partnering with Twitch so all SoundCloud Pro, SoundCloud Premier and Repost by SoundCloud creators can start earning money from their Twitch streams by fast-tracking Affiliate status. Now, wherever you’re social distancing, you can still connect to millions of fans IRL and get paid for your work.

SoundCloud streams are likely down, and Twitch has been up. Now SoundCloud’s artists, and SoundCloud itself, can benefit. This is one of the many examples of how it’s done.

Bandcamp’s Big Friday

The companies that help artists during this tough time will be remembered. Bandcamp, an online music company that lets fans directly support musicians, waived it’s revenue share on Friday to give that money directly to the musicians. The results were inspiring.

From Bandcamp:

The numbers tell a remarkable story: on a typical Friday, fans buy about 47,000 items on Bandcamp, but this past Friday, fans bought nearly 800,000, or $4.3 million worth of music and merch. That’s more than 15 times our normal Friday, and at the peak, fans were buying 11 items per second.

Bandcamp is a bit less popular in hip-hop circles, but it’s still impressive. Two factors made this successful:

  1. Bandcamp didn’t take a cut.
    Consumers are more likely to pay up if they know “The Man” won’t get a cut. In recessions, people are concerned about people. They are much more concerned about small businesses because they are directly tied to individual people. There’s far less sympathy for the Fortune 500. Even though Bandcamp is much smaller than the digital streaming providers, that same mentality still exists.Similarly, if Uber ever had a day where Uber waived its rideshare cut for 24 hours, demand would increase.
  1. A limited time offer.
    Scarcity drives demand, especially when coupled with something consumers already want to do.

If Spotify did this—even for 24 hours—it would instill tremendous goodwill with the artists and consumers who believe that musicians aren’t getting a fair share. If any other company that’s an intermediary between artists and consumers did this, it would have a profound impact.

It’s derivative of the successful Cash App giveaways. The same sentiment holds. A company that’s already stretched for funds and considering layoffs can’t do this. But for those that can, it’s not a bad idea to consider.

When the curve has flattened and COVID-19 runs its course, these are the companies that will be remembered. It’s not too late for others to do the same.