Why Caffeine Needs More Than a Partnership with Drake

Hey! Two quick things:

1. There will be no Trapital Update on Monday, February 17. It's President's Day here in the U.S. and one of Trapital's Holidays.
2. Make sure you check out my latest Trapital podcast with Jesse Kirshbaum, CEO of Nue Agency. We talked about his partnerships with Tidal, Sour Patch Kids, the value in artist-brand partnerships, and much more. I apologize in advance for the sound quality on this one! I also encourage you to sign up for his Beats and Bytes newsletter.

Today's update is on Caffeine's new partnership with Drake and why I'm skeptical, and a collection of articles on J. Cole's deal with Puma, The Life of Pablo, 'Travisbott,' and TikTok's growth in India.

From Yahoo Finance:

Sportswear brand Puma (PUMSY) has signed a multi-year footwear and apparel deal with Grammy-winning artist J.Cole.

Adam Petrick, Puma’s global director of brand and marketing, says that the partnership with Cole is “deep-rooted” given the North Carolina–raised rapper’s connection to basketball, fashion, and music culture, he said.

“He is going to be a key player in many of the things we do at Puma moving forward, and we’re excited to work with him not only on a product level but even more importantly as one of our athletes. Cole sits at the intersection of music and sport and represents everything that Puma stands for as a brand.”

'The Life of Pablo' Reinvented the Album As We Know It. Why Has No One Followed Suit? (Cherie Hu / Pigeons & Planes)

‍"Four years ago, Kanye West rewrote the definition of an “album” in the streaming era. Or so we thought... West was the first celebrity to take advantage of this new, fluid technological landscape with The Life of Pablo, which first came out on Valentine’s Day in 2016, but ultimately had multiple versions released to the public... By the time TLOP was made available on Spotify, Apple Music, and other streaming services nearly two months later, there were yet more changes, most notably some new celebrity features on “Wolves” (which were leaked a few weeks prior anyway).

Yet, despite this media chatter and fan frenzy, virtually no artists have followed suit in creating a truly dynamic album with content updated over time on streaming platforms...

This isn’t an issue of technology; it’s an issue of culture."

‍This Travis Scott-Type Song Was Created by Artificial Intelligence (Tara Mahadevan / Complex)

‍"Is there room in the world for two Travis Scotts?

Digital agency Space150 recently created a completely AI-generated song with lyrics and melodies designed with Scott’s music in mind, purely for his unique style, Adweek reports. After fueling a text generator model with lyrics for two weeks, the company ended up with a track titled “Jack Park Canny Dope Man." It also came with a strange video rapped by a deepfake of Scott named Travisbott."

‍TikTok Is The Most Downloaded App Worldwide, And India Is Leading The Charge (Rebecca Bellan / Forbes)

‍Since January 2019, TikTok has been installed more than 104.7 million times, which is an increase of 46% in the span of a year, making it the most downloaded non-gaming app worldwide, according to Sensor Tower, a mobile app store data analytics firm. India is responsible for a third of all downloads of the Chinese-owned short-form video app, followed closely by Brazil at 10.4%.

TikTok is the only app that’s not owned by Facebook to grace the top five downloads in the rankings.

Why Caffeine Needs More Than a Partnership with Drake

The live streaming platform Caffeine made waves this week by signing the one and only 6 God to an exclusive partnership. Caffeine is backed by Ben Horowitz, Greylock Partners Lachlan Murdoch via 21st Century Fox, Ashton Kutcher, Kevin Durant, and several others.

Here's more from The Verge:

"Drake is one of the biggest rappers in the world, and, as of today, he’s decided to throw his considerable weight behind Caffeine in the live-streaming wars: he’s signed a “multiyear” agreement with the platform, though Caffeine declined to confirm an exact length for the partnership. He’ll have his own channel on the platform, but his first act will be to bring the Ultimate Rap League (URL) to Caffeine. Caffeine says that the rapper might stream on his own channel, but it doesn’t know when or how often, presumably because the deal doesn’t cover that...

The logic seems to be: if Drake can draw that many people into one stream at one time, then he can bring in a whole new audience to Caffeine’s platform — as much for his presence as for the things he chooses to support. “Caffeine is the perfect strategic partner for URL and the only one who can, with the press a single button, help us get this content to new audiences around the world for free,” said [URL co-founder Troy 'Smack White' Mitchell.]"

Caffeine success rests on two factors that I'm skeptical of.

1. Drake's co-sign isn't nearly as powerful as it's made out to seem.

I've covered this extensively in Why Drake's Stimulus Package Can't Save Everyone:

But there’s a big difference between a marketing tactic and a stimulus package. Tactics, like Drake’s guest verses, have a distinct shelf life. They are most effective when tied in with a broader marketing strategy and are backed by a strong product. Meanwhile, a stimulus package should provide a sustainable boost and foundation for an artist who would struggle without said support.

The focus was on fellow artists, but it applies to companies too. Drake's partnership with Apple Music is often viewed as an example of what can blossom, but that was different. Apple Music had a broader strategy around a product (music streaming) that the mass public held in high regard. Apple already had an audience through devices that consumers already owned (iPhones, iPads, MacBooks) that were ready to go with Apple Music, and had made timely acquisitions to accelerate the process. It also entered the market at the perfect time. Apple's hip-hop exclusivity with Drake, Frank Ocean, and Chance the Rapper was dessert, not the main course.

Caffeine has now signed Drake, Offset, Doja Cat, JuJu Smith-Schuster, Kyle Kuzma, and others to exclusive deals. First, Tidal's turbulent performance over the past five years shows that superstar exclusivity cannot be the backbone of a streaming service's value-add. It can only be an aspect. Second, what do any of these people have in common? Does this roster say anything about the type of customer that should check out Caffeine? There's a case to be made that they're part of "the culture," but that's far too vague.

‍2. The non-Twitch audience still needs a focus.

‍The company wants to distance itself from Twitch—which is more known for hardcore gaming. It makes sense, but what will Caffeine's focus be then? Here's a quote from founder Ben Keighran's interview in Forbes:

“I think of teenagers wanting to watch Fortnite but also wanting to watch Coachella or wanting to watch sneaker drops and wanting to watch the X-Games,” say Keighran, 37, a former Apple executive and entrepreneur. “There’s a lot of people out there that would love to stream, but a sort of hardcore gaming platform like Twitch doesn’t feel right.”

He's right, but there's still a strategic benefit to focus in one area before expanding elsewhere. Rappers like YBN Nahmir and Danny Brown leveraged Twitch's niche audience to build their followings. Caffeine may spread itself too thin and try to be a catch-all for everything.

And for the record, most of the events to date have still been video game-related! Offset plays Call of Duty. JuJu Smith Schuster hosted a video game event on Super Bowl weekend.

If Caffeine is building for the long-term, there are more focused ways to do this. These celebrity partnerships are all over the place from a branding perspective. The company is heavily venture-backed, and these moves seem like a company gearing up to become an acquisition target. Amazon bought Twitch for $970 million. Keighran and his team might be thinking similarly. Caffeine was last valued at $500 million, and it's backers likely want a billion-dollar exit. The founder is a former Apple executive. Who knows, maybe Apple will buy Caffeine.

Before that happens though, the company will need to gain more traction than its 1.6 million downloads last year. Can it do so without a defined focus? I'm skeptical, but I guess we'll find out.