Global tools for local use
May 27, 2023

The rize of “glocalization”

Graph: Will Page

In the latest Trapital podcast, Dan Runcie talks to Will Page, the author, and economist, about "glocalization", the phenomenon which means creating products for global markets that bring local cultures together. Runcie and Page argue that "glocalization makes it harder for mega superstars to emerge, especially from established markets... The major record labels must sign and develop talent in each region to maintain market share. With increased costs (without the promise of increased revenue), glocalization will shift everything from KPIs, value props to new artists, and future expansion plans".

Use it, don't abuse it
April 18, 2023

Dan Runcie: How the music industry can embrace A.I.

After a few A.I.-generated songs that sound like Drake, The Deeknd, and Ice Spice appeared online, the music industry reacted with demands for these songs to be blocked on streaming services. "This feels like Napster in 1999. New technology is here and the industry’s protocol is to resist" - Dan Runcie points out in his memo, suggesting the labels shouldn't fight back, but rather embrace it. "It’s in the superstar artist and record label’s best interest to enable experimentation—as long as there’s a fair way to compensate the artist and rights holder. Their work would be the most-accessed music for generative songs anyway, so why not lean in?".

Deserter's song
April 14, 2023

Dan Runcie: The business behind Coachella

"Unlike other trends and even other festivals, Coachella developed a brand that can sell itself. This festival could sell out tickets before announcing a lineup if it wanted to. Fans want the vibes. The influencers, fashion, and activations will be there regardless of who performs on stage. In the early 2010s, the festival became a who’s who for celebrity attendance. Attending was a flex, like sitting courtside at a Lakers game" - Trapital's Dan Runcie looks into Coachella in his latest podcast. He is joined by Tati Cirisano from MIDiA Research. They also talk about untapped opportunities for Coachella, how the rise of concert ticket prices impacts it, and how festival lineups are becoming homogenous.

"Private gigs is an underreported yet booming business that has had great breakdowns. The more I look at the trends though, the more I believe that these gigs say a lot about where music is heading" - Trapital's Dan Runcie points out in his latest memo. While he does approve of the idea, Runcie believes that "for musicians, there’s less correlation than ever between 'who pays me the most' and 'who loves me the most'".

In the latest Trapital podcast, Dan Runcie talks to MIDiA Research’s Tati Cirisano about short form video and the three-sided battleground being fought between TikTok, YouTube Shorts, and Instagram Reels. Questions asked were which company added the most value - to artists and creators, to the music industry, and to its parent company. The conclusions: TikTok is the most valuable to artists and creators given its massive reach and cultural cache. YouTube Shorts is the one that’s most valuable to music since strong agreements are in place, and YouTube is proud of the billions it pays to the industry. Reels is the most valuable for its parent company.

"A lot of the discussion on music being under-monetized has focused on streaming rates, Spotify’s pricing, and equity stakes in streaming services. It’s all valid, but it’s one piece of the broader opportunity" - Trapital's Dan Runcie points out in his latest memo, adding that artists "have more opportunities to buy and sell products at every level of the demand curve. An artist can release music on Spotify, promote their tour with AEG Presents, sell tickets on Ticketmaster, perform at Rolling Loud, sell an NFT on OpenSea, sell VIP access on Patreon, and host members-only live streams on Twitch. For most artists, each part of their demand curve is supported by a different company". Runcie sees opportunities in gamified features and collectibles, user-generated content, A.I. as a service, and in-app purchases in digital environments.

"Now that gaming is bigger than ever, it feels like it’s only a matter of time until a video game can turn a decades-old hit into a viral cultural moment" - Dan Runcie points out introducing his latest podcast about the future of music and gaming. His guest Vickie Nauman, specialist in music and technology, believes that there's a big opportunity, and that it's going to be different: "What I love about gaming is that you hear music differently when you’re gaming. There’s so much potential we haven’t tapped into. Sync license is the best way to do things in gaming. You want something specific".

"Music is one of the most valuable forms of self-expression out there" - Trapital's Dan Runcie insists in his latest memo. He also shares his thoughts on what the music industry can learn from gaming and monetize its popularity:

  • Do-it-yourself music sampling - make it easier for fans to remix their own versions of songs, separate the stems, upload their versions to the streaming or short-form video platform of their choice, and ensure that the original artists get paid for the underlying work

  • A.I. as a service - I can see software like ChatGPT packaged up as a $10.99 monthly subscription service for songwriters and musicians. Users pay a monthly fee to access their royalty-free music for commercial use

  • In-app purchases in digital environments - 23% of Gen Z gamers (and 16% of all gamers) wish they could purchase music they hear in a game or be able to add it to a playlist

On a spaceship
March 03, 2023

Dan Runcie: The rise of Burna Boy

Nigerian afrobeats megastar Burna Boy was Spotify's most-streamed African artist globally in 2022. He sold out Madison Square Garden in 2022, and has also performed at halftime at the NBA All-Star Game. The Burna Boy will also become the first African artist to headline a show at London Stadium, and is about to perform at Coachella. Trapital's Dan Runcie looks back at Burna Boy's decade-long career and his path to stardom.

Out of the pandemic and the shutdown, Trapital's Dan Runcie looks back at the ideas and trends that have started back at the height of the isolation age. He believes that some are destined to never achieve substantial success, such as Clubhouse, Bored Ape Yacht Club, artists immersed in digital environments, Community... A few might have a future - DEI initiatives that lead to real change, Verzuz, NFTs, while some are certain to stay - music rights sales and acquisitions, TikTok and short-form video, high prices for live entertainment...

"When Beyonce and Adidas teamed up on Ivy Park in 2019, it seemed like the sky was the limit. Beyonce wanted a partner that offered creative control. Adidas wanted to replicate Yeezy’s massive success... But the recent Wall Street Journal report of a 50% sales decline and a $200 million drop in Adidas’ sales projections brought a series of challenges to light" - Trapital's Dan Runcie points out in his latest memo. "There were uninspired drops, less enthused customers, and creative tension... It’s very difficult to push a celebrity-influenced direct-to-consumer product in the social media era without that celebrity promoting the brand in an accessible way... It’s a reminder that even the most powerful celebrities still need product-market fit and alignment with business partners to succeed. “the next Yeezy” never happened."

"The labels are in a constant tug of war with digital streaming providers, who would rather their users listen to tracks that are cheaper to license, or podcasts with zero marginal costs. Artists feel like they can’t break through. Everyone feels squeezed" - Trapital's Dan Runcie points out in his latest memo as he's thinking about the music industry’s business model. "Music is always the first tech medium to be disrupted, but its companies are often the last to adapt to the changes. It could be time to flip that narrative, and it’s better late than never... Any significant change starts with the record labels" - Runcie believes, and offers a few ideas.

Trapital Dan Runcie's latest podcast is about the Super Bowl Halftime Show, how it evolved since Jay-Z got involved, and why artists agree to play for free: "In 95% of situations, companies asking talent to do things free 'for exposure' is bullshit. But the Super Bowl halftime show is one of those 5% exceptions. It’s the rare event that the talent can reap the long-term rewards for the exposure." This year, Rihanna will perform and she has prepared her business for the "after". Listen/watch the podcast below.

"In the age of social media and algorithms, success is more specialized. There are 'festival artists,' and then there are “tour artists.' There are 'streaming artists,' and there are 'album sales artists.' Similarly, there are 'actors,' and there are 'podcasters.' It has always been hard to succeed at all of them, and that’s especially true in a world with more specialists" - Trapital's Dan Runcie shares in his latest memo, underlining that "with social media, platforms, and algorithms, celebrity power has shifted to specialization".

The low barriers to entry for podcasting made it harder for exclusive premium podcasts to stand out over free alternatives that are ad-supported and widely distributed" - Dan Runcie argues in his latest memo about why the exclusive audio strategies have struggled in the past. However, all is not lost - "as local language music continues to rise in the streaming era, we may see more wins from digital streaming providers that aren’t based in the western world. In podcasting, paid products have found value in the right circles. Ben Thompson’s Stratechery has evolved into a paid podcast network, which was tied to his subscription-based media business".

"Every digital streaming provider has a treasure trove of data on their deep catalogs and how their users interact with each song. This same data, along with their relentless A/B testing, has upped the effectiveness of personalized algorithms to keep users on the platform" - Trapital's Dan Runcie points out in his latest memo. He talked to Ari Herstand, an independent artist, course instructor, and author, who believes that algorithmic shift works in favor of independent artists who may not have the ear of the top playlist editors, but have a better chance to show up in one of your Spotify Mixes. It’s a numbers game, and numbers games benefit indies who are less reliant on gatekeepers.

"It’s great to see the artists who turn down deals because they have the means to maximize the asset on their own. They likely understand its full value... But keeping the asset just to 'keep it,' or shaming others who decide to sell, may be missing the forest from the trees. This isn’t about selling grandma’s house. This is about maximizing value for an asset that will inevitably lose its value 40 years from now. By then, those masters may be more valuable as family heirlooms than as consistent revenue-generating assets. But it all depends on the artist’s goals" - Trapital's Dan Runcie offers some views on (not) selling music catalogs. He gives some recent examples - Dr. Dre, Diddy, Justin Beber...

Trapital's Dan Runcie is looking into Diddy's businesses with tequila and cannabis, building upon a successful venture with Ciroc vodka. Some interesting thoughts by the entertainment/business analyst: "Tequila is a less mature liquor than vodka, but U.S. tequila sales may soon outpace vodka as the #1 spirits category. Tequila has different drinking occasions, which shifts the marketing and messaging... Cannabis is a more complex industry. Many Black business leaders want in to help reset the narrative. Historically, the criminalization of weed affects Black people disproportionately, but the legalization of weed has benefitted white business owners the most".

Trapital's Dan Runcie takes a closer look at SZA's latest release 'SOS', a very successful album commercially, which also ended up on several top albums lists. "Staying power should be a key performance indicator for any music release in 2023. In a world of nonstop releases, big marketing budgets, and streaming optimization tactics, the 'perfect rollout' is now table stakes for most major record labels and their top artists. But lasting endurance is harder to master. That’s what sets great music and great artists apart" - Runcie points out.

The price of prices
November 22, 2022

Dan Runcie: How concert demand has skyrocketed

Trapital's Dan Runcie looks into the Taylor Swift - Ticketmaster situation in his latest memo, and points out to the decision that most artists need to make:

  • "If artists keep ticket prices lower, then more of their superfans who aren’t as rich can attend. The drawbacks are that lower revenue will put pressure on the artist to keep production costs low. That means that the artist’s show may not keep up with peer artists who still have lavish productions and may make more revenue as a result and capture more headlines.

  • Alternatively, if artists keep prices higher to match demand, then the artist can maximize their profit per show, spend less time on the road, earn more money to put toward other interests. But this creates a concert experience for the fans most willing to pay, not necessarily the most passionate fans".

Bigger and not bigger
November 02, 2022

Trapital: Where does hip-hop go from here?

In 2018, hip-hop became the U.S. most popular genre of music. In 2022, hip-hop is still on top, and its revenues
are still growing, but after nearly a decade of market share growth, hip-hop’s share of total revenue has declined. Trapital’s first-ever culture report found three key drivers behind the trend:

1. Streaming’s continued growth

2. Early-mover advantages don’t last

3. The end of bundles and the limited vinyl supply

Dan Runcie talks to New York Times music reporter Joe Coscarelli about his new book, 'Rap Capital', in the latest Trapital's podcast. The key, Coscarelli believes, is Atlanta rappers' adoption of modern tech: “I love to see when art lines up with the technology of the moment. These Atlanta rappers were in the perfect place at the perfect time to take advantage of that explosion". Also, the reporter sees broader liberties: “Artists have found freedom…your audience is going to find you. You can still have as much of a footprint but not in the same everybody-knows-the-same-10-people way. It’s almost healthier for some of these artists to say ‘I’ve seen what happens on the fame side and I don’t want that part. I just want to make my music and play for my fans.’ That’s become more and more of a possibility without having to play the game with the gatekeepers”.

Trapital's founder Dan Runcie stopped to think about this Talib Kweli's quote: “I was touring before the pandemic. I was doing 200 shows a year… how was I doing that? That’s not sustainable. I was on some superhuman shit… I got a lot of shows coming up, but I can’t let it get back to 200 a year… 20 years straight, I did that for 20 years”. Runcie concludes "artists really have to love living on the road to do it for that many nights per year. It’s ironic to think about the touring grind given the remote work vs in-office debates in Corporate America. Many 9 – 5 workers will never go back to a job that requires them to commute 200+ days per year again. Imagine doing that in a different city every night?! Artists’ travel is on another level".

"Harry Styles’s new album 'Harry’s House' generated 62% of its first-week revenue from vinyl sales. Its vinyl sales generated more than three times its revenue from streaming, which accounted for just 18%. - Trapital's Dan Runcie starts his latest newsletter. "Vinyls shift puts more power in the hands of record labels, who have to determine inventory for each artist given the supply chain constraints. Will they treat vinyls like a hype-driven collectible item? Or will it be subject to the same industry patterns that hold certain genres back?".

Trapitals's Dan Runcie looks into the lockdown past and thinks about metaverse future in his latest post: "As exciting as the metaverse, NFTs, and web3 are, it heightens the desire for artists to be on every medium and platform possible. As entertainment becomes more and more fragmented, it takes more effort for artists to be everywhere, even the superstars... Two of the biggest opportunities for music in the metaverse are letting artists and fans create their own worlds, and getting more women artists and fans involved".

Trapital's Dan Runcie looks into the recent poor performance of Coi Leray's latest album, compared to his social media presence: "On most social media networks, it’s impossible to segment your followers into different categories. Are your fans there because they love your music? Or because they like you as a person? Or do they find your posts entertaining? Do they follow because they find you attractive? Or do they love the Shade Room-worthy posts you share and don’t want to miss the tea? For some artists, it’s all of those combined, but most of the time it’s not".

"Clearly, we need more tailored solutions for creators. The billions of dollars poured into the creator economy might suggest that the space is oversaturated, but that’s far from the truth. There are tons of burgeoning hobbyists who need help with marketing. For rising multi-hyphenates... the opportunities are there. But the tools are not keeping up" - Dan Runcie said in his call to the tech industry to offer creators technology they need.

A reminder to Dan Runcie's earlier essay: "Jay-Z, Rihanna, Kanye West are on the top shelf of rap’s new-money class. They became world-famous millionaires through the music industry, but realized they would have to sell more than music to become billionaires. The 'Run This Town' trio used music as the gateway, then capitalized on their influence at the height of their fame. Jay-Z made bank from selling Ace of Spades champagne and investing in startups. Rihanna built her Fenty empire into multiple brands. And Ye has sold so many Yeezys he’s probably lost count. The bottom line? Star power gets you in the door, but to maximize your platform, you need to sell something authentic that customers want to keep buying".

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