Mobile payment service Cash App launched Cash App Studios, an initiative designed to help independent creatives, including artists, musicians, directors, and designers, fund their projects. Any artist working with Cash App will retain ownership of their work and won’t have to pay back the cash. It all sounds great, but there's a back side of this story, explained by Trapital's Dan Runcie who sees the initiative largely as a marketing play—an extension of Cash App's hip-hop influencer strategy—while taking note of the Tidal/JAY-Z connection, as Matty Karas points out.

You have been googled!
September 21, 2021

Dan Runcie: Why Genius sold for less money than it raised?

"Last week, Genius was sold for $80 million in a fire sale to MediaLab.AI, which is less than it raised! It's a disappointing exit for a company once valued near $1 billion, but it's a reminder of the importance of platform dependency" - Trapital's Dan Runcie looks back on the business model of the lyrics site, and gives reasons why it didn't work out.

"Folks like Diddy, Jay Z, and Master P are in their 50s, healthy, and wealthy. Music was their gateway to other businesses... Kendrick is rarely mentioned among hip-hop's highest earners. Forbes once wrote an article about how Kendrick is not a cash king!... For years, Kendrick looked past most business partnerships and stayed focused on music. His love for hip-hop is admirable, but it's hard to ignore trends of older artists who focused on business early on and are still living well" - Trapital's Dan Runcie writes about the announcement that Kendrick Lamar is leaving the TDE label after his new album is released.

August 17, 2021

Trapital: LVMH is now a hip-hop company

"Luxury world leader LVMH has acquired a stake in Virgil Abloh's Off-White LLC. It bought 50% of Jay-Z's Ace of Spades. A few months ago, Travis Scott collaborated with LVMH's Dior on its 2022 Men's collection. LVMH backed Fenty Beauty and launched the unsuccessful Fenty Maison. Beyonce and Jay Z were named brand ambassadors for Tiffany & Co. LVMH is a hip-hop company. LVMH may not position itself that way, but now it's too reliant on the culture not to be. European fashion houses looked down on the early 2000s hip-hop fashion brands like Enyce. Now hip-hop is the driving force behind European brands" - Trapital's Dan Runcie makes a relevant point about the European fashion powerhouse.

"Last week, Kanye West hosted a 'Donda' album listening party for 40,000+ fans at the Mercedez-Benz Stadium in Atlanta. Kanye sold 40,000+ tickets for this event on three days' notice. Tickets were $20 or $50. He gave away around 5,000 seats, but still, he likely made at least $1 million from paid tickets. Plus merch sales. Plus the record-breaking Apple Music livestream. And all he did was press play and walk around the stadium. Only a handful of artists can pull this off" - Dan Runcie looks back at the release party of the album that wasn't released.

Songfinch is a music tech startup where fans can order personalized songs for $199. Users select the style of their song and share stories to shape the lyrics. Songfinch then matches users with an artist who writes and records the song for the user. Customers get a personal use license in perpetuity, but they can't monetize the song. Songfinch users can't choose specific artists and prices are fixed at $199. The platform has just had a $2 million seed round - investors included The Weeknd, XO Records CEO Sal Slaiby, and Atlantic Records CEO Craig Kallman. Trapital's Dan Runcie compares it to audio Cameo, and predicts where it might go from here.

The strategies of the Big Three record labels - Universal Music Group (UMG), Warner Music Group (WMG), and Sony Music Entertainment (SME) - dictate the future, even for companies outside of the major label system. They are investing billions of dollars to keep your attention for as long as possible. Their moves signal the best opportunities, and the areas getting slept on - Trapital's Dan Runcie goes behind the moves of the labels which hold 69% of the recorded music revenue.

Boomer rock acts such as Bob Dylan, Neil Young, Fleetwood Mac and Paul Simon have made the biggest splash selling their music catalogs for 9-figure sums. Synchtank explores the possibility of catalogs of hip-hop artists reaching those levels. Trapital's Dan Runcie believes hip-hop catalogs are indeed undervalued and that the "music that came out from the mid-90s to mid-2010s will be especially popular with the Gen X, millennials, and Gen Z. Some investors may undervalue hip-hop because they identify more with Paul Simon than Paul Wall. Another group of investors will recognize the opportunity".

"Three weeks ago everyone talked about J. Cole’s 'The Off-Season', but the moment has now passed even though the album and rollout were praised. The people who still have 'The Off-Season' in regular rotation are Cole’s day-ones and diehard fans" - Trapital goes into the longevity of today's music, adding - "some believe that this is a quality issue, but it’s less about quality, and more about control".

The number of artists making $25,000 on Twitch has grown 16x since the pandemic started. For those making $50,000 or more, the median viewership is 183 fans, which makes for $274 per fan - Twitch’s VP Head of Music, Tracy Chan, said on the Trapital podcast. He also talked about how artists make money on the platform, finding 100 True Fans, and the creator economy. Chan also worked at Spotify and YouTube to build their creator platforms.

Land of the vaccinated, the home of the gigs
May 18, 2021

Live music is back - in the US

New concerts are being added on a daily basis to the touring schedule in the US, mostly by American artists, thanks to the high vaccination rate. Trapital's Dan Runcie asks, rightfully so, "will you have the energy (and money) to still attend all their shows in the post-pandemic boom?". Live Nation's CEO Michael Rapino sits down with Recode’s Peter Kafka to talk about the industry’s comeback and how he’s figured out new tricks.

Early bird changed feathers
April 27, 2021

The history of H.E.R.: From child star to R'n'B Oscar winner

Gabi Wilson / H.E.R.

Trapital appreciates how H.E.R. went from a 9-year-old star to a 23-year-old Oscar winner, completely changing her identity on the way: "At nine she was on Nickelodeon’s 'School Gyrls'. When she was 10, she performed on The Today Show and covered Alicia Keys. At 12, she was a finalist on Disney’s Next Big Thing and performed at the BET Awards. She was first signed by Sony when she was 14. She released music under her real name Gabi Wilson. In 2016, she emerged under the new persona, 'H.E.R.'. There was no public connection to Gabi Wilson. H.E.R. added to the allure by wearing sunglasses at all times. This wasn’t like Puff Daddy or Christina Aguilera developing alter ego-type names. This was a brand new artist".

Streaming had the biggest impact on recorded music revenue growth last year - 62% came from streaming. Trapital emphasizes three few less discussed but interesting findings from IFPI reports. Vinyl sales grew 23.5% last year - vinyl are collectibles. It's a callback to a time when fans valued owning art. Synchronization - the use of music in media like games, TV, film, ads, podcasts, etc. - declined 9.4%, but that dip came from pandemic-related production delays. Now that vaccinations are up and production is back on, this will bounce back. South Korea's music revenue grew 44.8% last year. It's now the sixth-largest music market (behind the US, Japan, UK, Germany, and France). It's driven by K-Pop, which is driven by the world's biggest musical act of 2020, BTS.

Five things first
March 23, 2021

5 lessons from Lady Gaga's former manager

  1. Find your first 50 fans - “For us, it’s about, ‘How do we build an authentic audience and grow it very, very organically?’ It’s slow bake versus the microwave”
  2. Create inflection points - “It wasn’t one explosive thing that just happened. It was us planting seeds in every place”
  3. Form a personal board of directors - the key is finding people who aren’t intimately invested in your journey and can give rational, level-headed advice
  4. Remember that there is no shortcut to success - "whatever it is you do, you actually have to do the work. You can’t just talk about it. You can’t be philosophical about it. You have to get the physical work in”
  5. Use failure to propel yourself forward - “Failure breeds fear, and fear paralyzes people, which makes you go into a downward spiral. But how can you use that same exact energy to propel your forward?”

When Lady Gaga fired him, Troy Carter turned to Silicon Valley where he invested in Uber, Lyft, Dropbox, Warby Parker, Spotify, Gimlet, and Slack, Trapital reminds.

Rap from the crypto
February 23, 2021

NFT's potential in hip-hop - ahead of most genres

Trapital believes there is great potential for Non-fungible tokens in hip-hop: "The late MF DOOM had just held an auction for augmented reality NFTs for his signature masks. Soulja Boy recently minted his own NFT. Hip-Hop Legends NFT is also selling several collectibles on its marketplace". An NFT is a unique and not interchangeable digital asset that relies on blockchain technology, which makes it easier to verify authenticity. Cherie Hu said in Water & Music on NFTs that hip-hop is ahead of most genres.

"Hip-hop has always spoken out on police brutality. But more businesses have partnered with hip-hop in recent years. Those companies have felt the pressure to contribute to the same culture that’s making them rich. It’s one of many factors that accelerated the shift in response to this crisis" - Trapital argues about the power hip-hop has come to possess now. The two main reasons why hip-hop became the dominant culture, Trapital says -empowerment and social media.

An interesting and easily read article in the Trapital about partnership between Adidad and Beyonce. It goes back to the 2000s and Adidas' misfortunate start with Reebok, to their change of luck with Kanye West, which makes for a promising deal with Beyonce.

Run the world, how?
January 13, 2020

The hip-hop touring business looking for a new model

Nicki Minaj’s NICKIHNDRXX Tour was canceled in North America, Chance the Rapper’s Big Day Tour was canceled everywhere, and T-Pain’s 1UP DLC Tour canceled as well. Of the top 10 global tours of 2019, none of them were hip-hop. In 2018, just one (Beyonce and Jay-Z’s On The Run II). The industry needs to adapt.