The Business Behind the Grammys

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This episode memo was brought to you by DICE.

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For this week’s Trapital show, we broke down the business behind the Grammys. We broke down how Grammys are won, the CBS – Recording Academy relationship, the For Your Consideration business, the Grammys impact on music, and the future of this award show despite declining TV ratings.

I’m joined by friend of the pod, Zack O’Malley Greenburg, who has been to several Grammy shows over the years. Let’s dive in.

a show for music lovers? or industry insiders?

Like most award shows, The Grammys have often felt like a tug-of-war between TV networks and academies. The networks want an entertaining show that can reach the masses. The academies want a show that preserves its roots and celebrates the industry. The result often feels like a niche startup that just got a ton of funding to grow its target audience, and now tries to balance both.

On one hand, The Grammys are as entertaining as an award show can get. There are more performances than awards given out on the telecasts, and the performances often deliver. That’s a decision that CBS, the longtime broadcast partner of The Grammys, likely prefers.

But some category definitions, like Record of the Year vs. Song of the Year, can still confuse music fans who don’t know the difference between masters and publishing (and understandably so).

CBS and The Recording Academy are at the tail end of their ten-year agreement that concludes in 2026. When the current deal started in 2017, The Grammys pulled in 26.05 million viewers. The 2023 show had 12.55 million, which felt like a relative win in post-pandemic times.

If CBS and The Recording Academy continue, this next deal will have to be considerably cheaper than the reported $57 million that CBS pays annually for broadcast rights, especially if it can no longer generate the $66 million in ad revenue that it once did in January 2020.

To capture more viewers, I expect that the show will be simulcast on a video streaming service as well.

In the NFL, both Amazon Prime and Peacock proved that video streaming platforms can handle an exclusive event watched by tens of millions of people. In film, the SAG Awards have now moved to Netflix.

Every network wants to reach younger audiences, and many of them are on streaming. But both networks and academies need to be aligned on that.

You can listen to the episode here or continue for more highlights.

how Grammys get won

It’s earnest, but naive, to think that Grammy awards are won on pure merit. Great art often does get recognized, but these are subjective awards voted for by people who can be swayed. Not swayed in a nefarious way, but swayed in the way that anyone can be swayed to make a decision: through relationships, campaigns, and advertising.

The Recording Academy often recognizes artists who put in work with its membership body. These artists have participated in Grammy education performances, artist showcases, and private events. It’s an opportunity to meet voters, build connections, and create memories that can have a lasting impact.

Bruno Mars is living proof. In our episode, Zack spoke about a small private Grammys event he attended that Bruno sang at very early in his career. The Hawaiian singer also performed at the 2010 Grammys nomination show.

Several years later, Bruno’s album 24KMagic and his duo with Anderson .PaakSlik Sonic, swept the Grammys and won the major awards. It’s hard to itemize which specific early career event moved the needle for Bruno Mars, but it’s better to think about the collective influence. This was more like a decade-long enterprise sales initiative where the relationship is nurtured over time.

On the flip side, Kanye West has seen both sides. “The old Kanye” was a Grammys darling. West was the first solo artist to have his first three studio albums (College Dropout, Late Registration, Graduation) nominated for Album of the Year. But 2010’s My Beautiful Dark Twisted Fantasy, an album often considered to be the best album of the 2010s, did not get nominated for Album of the Year, and only won awards that weren’t televised on TV.

Was Ye ‘punished’ by voters for the 2009 Taylor Swift – MTV VMA incident? It’s hard to prove, but hard to ignore its potential impact.

Also, some record labels are much better than others at The Grammys. In recent years, Verve Records’ artists like Jon Batiste and Samara Joy have won Album of the YearBest New Artist, and Best Folk Album, and continue to get nominated in the major categories. The labels create the traditional music that Grammy voters love, and the label and artists invest in those relationships and events with the Academy.

And this is only part of what goes into a Grammy campaign! There’s also the multi-million dollar For Your Consideration ad businesses to promote artists. FYC is a cash cow for the industry trade publications and countless billboards throughout Los Angeles.

This episode was a lot of fun. Zack and I also covered:

– how The Recording Academy makes money outside of the broadcast
– how The Grammys helped legitimize music in the 1950s and 1960s
– improvements we would make to The Grammys

Plus, our Chartmetric stat of the week was a fun one.

2024 Record of the Year nominee, SZA’s “Kill Bill,” is currently on 103 editorial playlists on Spotify, 107 on Amazon, 64 on Apple Music, and 12 on Deezer! This song has been everywhere this past year, and the playlist counts show.

Dan Runcie

Dan Runcie

Founder of Trapital

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