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.