The Importance of Album Equivalent Units

The media commentary on hip-hop’s decline is stronger than ever. Especially since it took six months for a rap album to top the Billboard 200 in 2023, and no rap song has topped the Hot 100 yet..

Is hip-hop slipping? Or is there more to this story? is slipping or others are merely catching up?

To break it all down, I’m joined by The Wall Street Journal’s Neil Shah, who has written about this extensively. 

0:40 Our take on hip-hop’s “decline”

4:51 Upcoming albums that may top the charts

8:48 How Billboard charts work

17:40 Hip-hop over indexed when streaming took off

18:30 Was hip-hop held back in the past?

20:26 Implications of chart performance

22:55 Gaming the system with album bundles 

32:49 Are album equivalent units the best way to measure success?

35:13 Hip Hop’s market share in 5 years

45:16 Music recycling IP vs. developing new one

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Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Neil Shah, @NeilShahWSJ

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TRANSCRIPT

[00:00:00] Neil Shah: While it looks like hip hop is suffering a little bit right now, or in this cooling period, maybe it's tentacles have stretched out So much, it's influences so total that it's actually become the bedrock of a lot of pop music.

[00:00:12] Dan Runcie Intro Audio: Hey, welcome to the Trapital Podcast. I'm your host and the founder of Trapital, Dan Runcie. This podcast is your place to gain insights from the executives in music, media, entertainment, and more who are taking hip hop culture to the next level.

[00:00:40] Dan Runcie Guest Intro: This episode is about the state of hip hop, which has been quite the topic over the past year. So it was right around this time in 2022, when we started to see articles and stories and reports pop up about hip hop's decline in market share. This is specifically looking at the US listening consumption over time for hip hop artists that were producing tracks.

And after a record number of years of growth in hip hop is eventually becoming the most listened to genre of music in the 2010s. We started to see that growth slow down relative to other genres. And there's a number of reasons for this, a number of reasons that are unfair, a number of reasons that require a little bit more digging into and to break it all down.

I was joined by Neil Shah from the wall street journal. He's written about this himself. Him and I've talked about this both on and offline, and we decided to bring it together to talk about all the various factors. What does this mean for the music industry? What does it mean for the artist in the industry in terms of the budgets that they get?

And is this even fair when we think about all of the factors in place with regards to streaming, where audiences grow, whether hip hop artists and their fans are more likely to be early adopters versus other genres, some of the rules that Billboard and other entities make that influence how these charts get factored in vinyl and a whole lot more. So let's dive into the state of hip hop.

[00:02:05] Dan Runcie: All right. We're back for another episode this time. Neil Shah from the wall street journal makes his return. Welcome back.

[00:02:11] Neil Shah: Thanks for having me.

[00:02:12] Dan Runcie: And today we're going to talk about a topic. Both you and I have written about, thought about and has come to a head this past year. And that's the state of hip hop and where it lies relative to other genres right now.

I'm sure many of you have seen the stats dating back as early as last year. When many outlets really started to talk more about hip hop's market share of its overall listening relative to other genres, which genres are growing at faster rates than others, which are declining. And now we're in this place in 2023.

We're still as of the end of June, almost six months through the year, not one rap album has topped the Billboard top 200. And I'm pretty sure that no rap song has topped the Billboard hot 100 either. So Neil, what do you make of all of this?

[00:03:04] Neil Shah: It's pretty striking that rap has not topped either of these charts, the Hot 100 or the Billboard 200. To put it into some context, in 2019, 17 rap albums Hit number one on the Billboard 200. 17. In 2020, another 17 did. basically last year, we started to see a slowdown on this front where there were fewer number one hits on these two charts in rap and hip hop and R& and then now this year, we have this striking reality that rap has been absent in this way, which I believe it, we haven't seen something like this. Since about 1993. So yeah, think it's generating lots of discussion and varied opinions. Hip hop has long had ups and downs, you know, in the 21st century, there are plenty of lulls, there are plenty of hot periods, and we could be in another lull. But my gut sense at the end of the day is that this does constitute a fairly significant slowing compared to how hot this genre was running, I mean, just a few years ago. I think it's a marked slowdown. And while one can quibble with the fact of not having a number one, because that can easily change, you know what I mean?

Like as soon as Travis Scott puts out Utopia, as soon as Drake puts out For All the Dogs, the picture can change slightly. But even all that quibbling aside, I do feel like it's pretty striking that there is a slowdown.

[00:04:51] Dan Runcie: Right, and that's a good point, because we could look at the more specific pieces of it. And yeah, if J. Cole, if Travis Scott dropped Utopia, if any of these things happen in the spring, we may not be having the same conversation from a top headline. Oh, let's react to this thing. But even like you said, you named 17 albums from a couple of years ago.

So we're talking one every three weeks, essentially that hit that target, if not more, and we're now 24 weeks into the year and we haven't had any. So there's still a pretty big shift, even if you account for the superstar releases. And if we're looking at the artists that are planning to release albums this year, I was looking through at some of the artists that have.

Big albums coming out, and these are the only ones that I thought are certified locks to hit number 1 on the billboard. You have Drake's new album, as you mentioned, Travis Scott's Utopia, J. Cole's The Fall Off, if he drops it this year, Lil Wayne, I think there's another Carter coming, Lil Uzi Vert, who I believe is dropping pretty soon, so he could potentially be the 1st, and then after that, And I hate to say this, but maybe Cardi B.

I still think that she's pretty strong, but we'll see it. I say maybe more. So we'll see if she drops an album. And I say maybe to Nicki Minaj too, while I have a bit more confidence in her dropping an album, her last album went number two, second to Travis Scott back in 2018, but it's also been a long time.

And some of the other artists who are a few more fan favorites, like Pusha T or A$AP Rocky Rick Ross, even Chance the rapper. Great artist. But it's been a while since any of those artists, if ever have topped the billboard. 200 for album charts. I know Ross and others have in the past, but, so there's a lot of fragmentation.

There were, there's still are artists have a shot, beloved albums, but they're not reaching this particular milestone of how people view mainstream success.

Yeah, the

[00:06:46] Neil Shah: question of who's a lock for number one in the rap community has gotten a little bit more complicated than maybe a few years ago. Some of these people may not be a lock.

[00:06:58] Dan Runcie: Do you think anyone I named isn't a lock.

[00:07:00] Neil Shah: Drake is obviously a lock. Travis, I would think would be a lock. Vert comes out on Friday, that's a pretty large artist and a highly anticipated album, but I'm not entirely sure. I'm not entirely sure that that would be number one. I'm not sure about Nikki. I would think Cardi, who I believe has been having 2023 in the frame, I would think that Cardi B would be number one.

It's just a little bit more complicated than especially with projects from the likes of Pusha T and whatnot. Yeah, there's definitely not a guarantee that even these stars and superstars will perform the way they did. Of course, that's up to the vicissitudes of do they have a hot single or not?

How much mindshare are they capturing, you know, these things change from year to year. All things considered, it does feel like, you know, things. I'd be worried about the downside of people being a little bit weaker. We just had Gunna, for example. Gunna, you know, came out with an album. It's been doing pretty well.

his mentor Young Thug actually also just released an album. There's a new Metro Boomin version of it that I think came out today or yesterday. But look Gunna back in 2022, last year, hit number one.

[00:08:19] Dan Runcie: Outsold the Weeknd

[00:08:20] Neil Shah: and what happened this year with this album they're gonna just put out, it hit number three. And even more than that, just the EAU unit figure, the equivalent album units, 85K, 85, 000 is decent, but not the strongest showing. So, I think there is a question about when these stars come back, just how well will they do as the surrounding environment for them is, creating what we're talking about,

[00:08:48] Dan Runcie: Yeah, I think there's a few factors here, and I do want to call them out. Billboard, who does reflect the charts, they released a article, 5 Reasons Why a rap album has yet to top the charts and there are 5 reasons are I'll read them here. The 1st is a lack of stars essentially in a fragments in a fragmented landscape.

There's so many artists that don't necessarily need mainstream success that billboard relied on. And I think that could be true to an extent. You have their 2nd, 1 here, which is growth for hip hop itself is only up 6. 3% compared to country and Latin, which are growing much faster. I have some thoughts on that, but that was their 2nd point.

They made the 3rd, which is related to Gunna here. They talked about guns, violence, drug abuse and courtroom legal battles as well that have slowed down or halted the production of many promising stars. Whether you look at XXXTentacion, Juice WRLD, Pop Smoke, and then you look at Gunna and Thug and others that have been battling legal challenges as well.

The fourth one they mentioned is just stagnation. At the charts, which I think may be a bigger thing where if you look at the charts this year, at least for the billboard 200, it's been SZA, it's been Morgan Wallen and a little bit of Miley Cyrus. And that's pretty much been it for most of the year. So it's not even the way that it was in the pre pandemic years where every week there was a new album that seemed to have its glory moment.

It's the same artists that are staying at the top. And in some ways, it almost feels a little bit like a throwback to days before streaming when we saw a little bit more stagnation there. And then their 5th reason is not enough dance music because they talked about albums like Renaissance or Drake's Honestly, Nevermind, Dua Lipa and Future Nostalgia and how they feel like post pandemic people want to get out there and how a lot of hip hop music has been a much more slow chill, especially in the streaming era.

And I think that each of those are valid points, but I think there's a few other things that weren't mentioned in billboards article that they themselves as the entity that decides these things has a big influence. We mentioned several of those Pre pandemic years. 1 of the biggest things is how billboard itself.

 Change the rules and album bundles is a big thing. Ironically, they're actually going to be coming back with album bundles in a few months, but this was their way to be able to help preserve the sale of the album and have artists combine their album with a merch item, whether it's a T shirt or some other type of item.

But like anything, people started to game the system and people felt like it wasn't necessarily about album sales. It was more about people trying to sell these items. And I think we saw that most to extreme degree with what Travis Scott did with Astroworld, where he literally had an e commerce machine that was running, in perpetuity to help make sure that album almost doubled in its expectations of what people thought we just hadn't seen that much of a outpaced growth, but he saw the way the system was and we'd into it.

So I think that's one thing. That's a big factor, a second thing that I look at is just what we consider hip hop on these charts, because of course, billboard itself is it's reporting things based on us listenership. But we know that Latin music is very popular as well. Just considering how well bad bunny did on the charts.

But as you and I've talked about, bad bunny is labeled as Latin. He's not labeled as the actual genre that he performs. He's more categorized based on the region he's from. And for all intents and purposes, he considers himself a rapper. He considers himself a hip hop artist. So if hip hop was given some of that region agnostic glory that pop music or others get, maybe we would see, maybe we would even be having this conversation and we think about the global aspect of it.

So those are two things. There's a few more, but I wanted to get your thoughts on those.

[00:12:44] Neil Shah: Yeah. So let's start with that last one, what if hip hop is suffering from its own success, hip hop has had booms. For decades now, but what we saw in this back half of the 2010s was something fairly special and now we're at this juncture right now and so it just raises the question of like it looks like we're in a cooling period for hip hop, but hip hop is It's tentacles are reaching into, I mean, almost all of the other genres that are capturing the imagination of music fans right now.

I mean, often Morgan Wall in the country star sings with rap like cadences. one reason why

[00:13:25] Dan Runcie: Hip hop sounding beats too.

[00:13:27] Neil Shah: Yeah, even the tracks hip hop. Some of the bedrock, some of the sonic structures of Morgan Wallen's music are inherently, deeply hip hop. One reason why BTS and a new crop of Kpop stars have thrived so much, especially in the U.S., is their hip hop fluid. You can go down the list. I mean, the regional Mexican music craze that's going on right now. there's a ton of hip hop there, reggaeton, Afro beats. and then of course, Latin music and figures like Bad Bunny, Who's rapping and due to billboard nomenclature is categorized as a Latin artist, so one could look at the phenomenon differently and think, actually, while it looks like hip hop is suffering a little bit right now, or in this cooling period, maybe it's tentacles have stretched out So much, it's influences so total that it's actually become the bedrock of a lot of pop music. And then while rap stars are not thriving the way they did, say, between 2016 and 2019, in particular, because that's the period we're coming down off of, one could argue that it's. In all of these other places.

And in fact, in this age of, hip hopping everywhere, of everyone sing rapping, essentially the boundaries between quote unquote core hip hop, what Billboard would categorize as hip hop for the purpose of the charts, and a lot of these other genres is getting very fuzzy. So, one party could look at the phenomenon before us and think, weakness, in hip hop, another way of looking at it would be an increased fuzziness between hip hop and these neighboring genres. And so that that could be, that could be a major factor here. and yet at the same time, you know, something I think about a lot. what is the right way to think about this? And I'm really of 2 minds, like, I'm kind of in a conflicted space where on 1 hand, I don't know whether hip hop's influence is what we're watching is this kind of dominance on a new level, hip hop being a victim of its own success and essentially being everywhere or whether, you know, there really is some kind of transitional period afoot, you know, 1 thing to keep in mind is just how hot the 2010s and it particularly the back half was just think about how much era defining music was made in this period, incorporating R&B to Beyonce, Rihanna, Kanye West. The hubbub over Life of pablo, Drake views, you know, Frank Ocean, Kendrick Lamar.

I'm just talking about the top level. We're not even talking about the medium tier of excellent rappers and R&B stars beneath that Childish Gambino. There was a lot going on during this period. And so, despite, some of the other factors that we're talking about and that we'll talk about, I feel like that's what you gotta compare it to.

And so, to my mind, and I'm getting to actually a 2nd point in the billboard article. it does feel like we're help where we've come from a unipolar hip hop dominated universe using the strictest definition of hip hop to something. That's more multipolar and really. That can be a function of time and development, i.e. hip hop's success. Another good point that I think the Billboard article raised was just, you know, as a genre becomes so dominant, how much room is left? Once you're king of the mountain, how much growth is there left in the shoe? I mean, mathematically, your growth is going to, slow down. I come across this when I think about vinyl sales, you know, for years now, vinyl has been hot, but naturally, mathematically, as your base gets bigger, and we're talking about lots and lots of sales, your growth rates slow down.

So, like, this is just kind of an analogy, but as hip hop gets so dominant, there's something natural about not just a genre having slower periods in a cyclical fashion, which is a slightly separate thing, but there's also something natural about the genre at this point actually just I'm losing some steam for purely mathematical reasons.

[00:17:40] Dan Runcie: I'm glad you mentioned the back half of the last decade as being a high point for hip hop, because here's some important stats that influence this. Right in the middle of the 2010s is when we saw this shift is when streaming started to take off. Apple Music launches Spotify really kicks into gear. Of course, they launched in the US in 2011, but things really came into focus in 2014 and then in November, 2014.

That's when the billboard 200 starts counting streams and they've altered the formula a little bit, but it's roughly been the same where it's been anywhere from around 1, 250 to 1, 500 or even more if it's a free ad supported stream. But that's when they started counting streams at that particular point, Spotify had 15 million paid users and 60 million overall.

And then, four years later by 2018, they have 96 million paid users. And so if we go back to that point, so this is obviously when Travis Scott was releasing Astroworld, when Drake released God's Plan, as you mentioned, all these hip hop albums are doing extremely well, but there was a large. Index on hip hop fans.

And as we've seen when technology and time again, hip hop fans as a genre do tend to over index and their early adopters with new technology. We saw that with Spotify and the various streaming services, especially where their user base was. And you also saw that as well with social media with Twitter and places like that.

Where were the genres that people were talking about most on these platforms? It was hip hop. So there was this run of hip hop getting this lead. That other genres didn't have him because it over indexed early. You saw this outsized performance, especially as record sales, traditional, pure album sales started to dip a bit, but since then, you're now looking in this post quarantine phase and Spotify's growth is, paid subscriber amount is more than doubled since 2018, it's now over 200 million paid subscribers. And most of that growth came less from hip hop fans, but more from everyone else. So as we look and see the growth of whether it's Latin music, music in Africa, music in Asia, even country music within the US, you're looking at the growth of Spotify and the growth of all these streaming services and how that impacts charts and performance.

So even though hip hop listening is still growing. In the way that we've seen it record labels in the industry often do report things as a zero sum game in a lot of ways. So because of that, even though the growth is slowing down, it's still growing. It's just not growing as fast as these other genres that are now having their late 2000 late 2010s hip hop moment

[00:20:26] Neil Shah: Totally would. so yeah, when I looked into this topic last fall. Basically, fall was upon us in 2022, and it looked like hip hop's chart performance was relatively weak, so I wanted to look into this topic at that point. One of the interviews I did was actually with the head of the data tracker, Luminate, and this is definitely one thing that they noted, which is hip hop fans.

This is an important point, hip hop fans, were early adopters for streaming. So they over indexed and kind of led the way during an earlier stage of streaming adoption in precisely in the middle of the 2010s. And so, yes, you're right that you're, seeing, a shift here as the base of the streaming universe essentially becomes more varied. And especially during the pandemic, we saw these significant jumps with country and Latin music, partly that's a Morgan Wall in effect. Partly the Latin music numbers are juiced by Bad Bunny, these gargantuan artists in terms of their numbers, but it's a broader phenomenon of these genres. And their fans being a bigger part of the streaming pie and as a result, partly because of that hip hop share of streaming, not overall music consumption, but hip hop market share of us streaming is yes, like period after period, year after year is dipping as we now have a, actually a fuller picture. A more varied streaming audience.

so that's definitely a major factor and it's you know, part of why country and Latin music in particular have gotten the lifted that they've got of late. One thing to keep in mind throughout all of this is that while we're talking about, hip hop slowing, at least according to these chart metrics and streaming market shares and whatnot, it's always worth mentioning or noting that it's market share still outstrips these other genres by a wide margin, not just Latin and country, which, you know, Latin's numbers in the billboard math are, have always been weirdly low, frankly. They seem lower than they should be, but they're fairly low. I mean, we're talking like, right? Six, seven, eight percent, just neighborhood ballpark in terms of market share of U. S. consumption compared to hip hop, which is still outpacing.

[00:22:46] Dan Runcie: In the high 20s, Yeah.

[00:22:48] Neil Shah: Right. So it's just worth keeping in mind how much of a distance there still is between hip hop and some of these other genres.

[00:22:56] Dan Runcie: And this dynamic as well made me think about other times, even before streaming where distribution and means have impacted which genres were more popular. And in a lot of ways, I've often thought that streaming's ability to lower the entry barriers and to eliminate the gatekeepers, not completely eliminate, but to lessen their power is what enabled hip hop artists and artists from other genres to realize their power.

And it made me think back to times in the CD era. And I remember growing up when we think about the peak of the CD era, this is something I still remember to this day. Cause I was in school at the time. I think about three albums that came out right around the same time. You have two hip hop albums. So you have DMX is, and then there was X this December, 1999.

And then a couple months later you have NSYNC. They have their no strings attached album, which was still up until Adele's album was the highest first week sale. I think it was just under 3 million. I used to the US and then a couple months after that, you have Eminem drops, Marshall Mathers LP, and roughly from a high level, I believe that NSYNC, as I mentioned to just under 3 million in its first week.

Marshall Mathers LP did just under 2 and DMX did a few hundred thousand under 1 million. And just calling those 3, 2, 1 from that perspective, all those artists are pretty big. I don't know if I buy that Eminem was that much less popular than NSYNC at the time, but I think part of the reason was, A, you had these parental advisory stickers on them, which essentially acted like a rated R thing where, okay, it's making you pause when you go to the register.

And too, because I was in school. I remember parents of NSYNC fans that were taking their kids out of school to go line up on Tuesday to go to Sam Goody or Strawberries, wherever, buy the album, and then come back in time for C period to start, right? That didn't happen with the parents of Eminem fans, and that did not happen with the parents of DMX fans.

So all of these things that may seem like natural commerce are structural things in play when we think back about that, and even to just how the nineties were in general with. Time Warner and all these big companies and the government and the Clinton administration trying to come down on hip hop. We finally now saw it reach its potential.

And now when things are starting to dip, everyone now wants to pull it back.

[00:25:17] Neil Shah: Totally. So, like, even as late as the late 90s and the early 2000s, there's this cultural penalty on hip hop music that is kind of artificially suppressing sales. I mean, you still see this in the live music industry to this day, whether it's festivals like Rolling Loud or New York City music venues where rappers often have a tougher time.

 It's a little harder to put on an arena rap show. It's unfortunate, but partly it's because the insurance rates are higher and it's more costly to put on the show. Why is that? So even to this day, whether on the business side or culturally, there are things that can affect sales, and in streams and whatnot, you're mentioning kind of the, you know, the late 90s, I think back to the early 90s, in a way, the way in which hip hop over indexed, or kind of was buoyed by technology in the form of streaming in the middle of the 2010s, it was like a revenge for 1991 and what obtained in the prior years when rap albums were very popular and were actually selling briskly, but they were underreported along with country also too, they were actually underreported in the pre digitized sound scan era. So there again, you moved from a period when for these cultural or business factors, one genre was kind of artificially held lower, and other genres look like they were, dominating the mindshare of the country.

But then lo and behold, we entered the period of SoundScan and suddenly the whole country is listening to NWA, who knew? And so it's always seemed to me like while hip hop may have over indexed in like, you know, 2015 and 2018, it was kind of like almost like payback for 1989 or whatever, but yeah, so like these shifts, you got to take with a grain of salt because, you know, they're constructed a billboard and the industry does the best it can.

And it's constantly retooling, how it approaches things. You noted earlier the shifting position on album bundles. It's interesting that they're allowing it back this summer, but now with safeguards, so you don't pull a Travis Scott, presumably. So, you know, it's a work in progress, always, all of these metrics.

So you, when you're thinking about these debates or discussions, you do need to take it with a grain of salt. The average person on the street, maybe a rap fan, maybe a rock fan, maybe a post genre music fan. They may not care about the ins and outs of genres going up and down. Journalists may care about it and obviously people in the music industry do. but you know. It is relevant to the business, because it does affect how the business operates and what I mean by that is, you know, at record labels, your job is basically to, sign acts and pursue the hot thing and make money and some, so some of these cultural discussions about how genres are doing definitely have an impact on how the business operates and at the end of the day, the way, you know, the way the music that we hear now, I think of, you know, in earlier periods when hip hop experienced a lull, I don't think this will happen this time, but in earlier periods when hip hop experienced a lull, you know, the boy band era that you mentioned, I think, like around NSYNC and around Britney Spears time, you did see the slight lull in urban music have an impact on A&R budgets. There was a very much a shifting wind in terms of like, you know, money in some cases withdrawn from, like urban A&R budgets and, diverted elsewhere. you know, much like any business does, like diverting resources to where things feel like they're hotter. So my point being, some of these discussions, while the average music fan, may not care as much, they have real world implications.

[00:29:16] Dan Runcie: That's the part that frustrates me because a lot of this, as you mentioned, it's chatter for us, we're in this space. We talk to the people, or if you're someone that's a super fan on Twitter, you're Reddit as well. They're probably active, but they have huge. Implications I can't help, but to think about how many of the decisions that are being made about.

Which artists to give a particular budget to how much to spend on their music videos, how much to do on all these things. A&R, as you mentioned, they may see some type of cutbacks, some type of impact there. And the other piece of this, that's a bit frustrating is that in lieu of album bundles and bundling with merchandise, which is something that a hip hop, a lot of hip hop artists lead into what we saw on the flip side was artists then combining it with or not even combining, but selling physical albums like vinyl and all the boom that we've seen there. The challenge with vinyl though, is that there has been a limited supply, given the supplies train, the supply chain constraints and some of the materials there. So the record labels do have discretion over who gets allocation for the limited vinyl supply they have and who doesn't and that then creates much more decision making and much more King making essentially on who gets to have the full allotment.

And when we see artists, whether it's Harry Styles or Taylor Swift, get all of the. Allotment that's there and you see other artists, whether it's a title, the creator, even a Beyonce that are waiting several weeks, sometimes even months to get theirs. And these are superstar artists in their own right.

That are still waiting for it. And when you think deeper about it, half of the people that buy vinyl don't even listen to it. So what is it really? Is it a merch item or is it actually an album

[00:31:07] Neil Shah: totally. It's a great example of a Intra business, real world implication of some of these discussions, a record label having to determine. Okay, we got relationships with X, Y, and Z plants in Nashville and in the Czech Republic and, this is the space we got, which artists are we going to prioritize?

It matters, I mean, they're making these decisions and it can help certain artists and hurt others. And then if they don't have their physical ready while they're putting out their album, effectively, whoever doesn't have their physical ducks in a row is effectively penalized in terms of their chart placement.

So it's very real. one thing that's been going on, You know, we may get on Travis Scott and, his ilk's case for gaming the system with these bundles in that. Earlier micro era, but, you know, 1 thing that's been going on with the pop stars and especially with the K pop stars are all these collectible, collectible CDs and whatnot, which definitely are giving placement to these artists, especially in K pop that they wouldn't otherwise have.

So, in this era, when billboard got rid of those bundles, you're seeing, you know, something different going on with Kpop. It basically dominating the charts, or at least the top 10, using all these collectible CDs that then basically drop off. If you look carefully at the streaming numbers for a lot of the K pop artists that hit number 2, number 3, or number 1, the streaming numbers are not very strong.

I mean, The lion's share, almost the entire consumption is these collectible CDs, which are, actually de facto merch. So, you got another phenomenon, very similar to rap's phenomenon, where de facto merch is just gaming the charts.

[00:32:49] Dan Runcie: We're going to continue to see this, but I am very interested to see how this year's changes will impact things because even if you look at. I don't even think it was Travis Scott's thing that brought it to a head. I'm sure that was in the back of people's minds, but I think it was right after DJ Khaled dropped his album the same day as Tyler the Creator dropped, the album that had earthquake on it, Igor, that's the name of it. We started to see more of it there because obviously Khaled got penalized for energy drinks or whatever he had tried to bundle his albums with, but at the end of the day, they want to bundle it with things that aren't restricted in the same way that others did. So even though in the moment, it was definitely an eye roll type of thing.

Now, I'm like, okay, at least there was some type of control and autonomy there that the artists did have. But so much of this preservation of figuring out and having the powers that be tweak and determine the right Metric for album equivalent units, and then even the whole thought about how you have to listen to a song 1250 times on a paid streaming service for that to count as 1 full album sale. You can't even listen to a full album at once a day to then count as that. If you were to do the math there.

Right.

It really makes you think about the real dynamics at play, because we know for years that the major record labels themselves have wanted to preserve the aspect of an album. And a lot of it does seem like it's this another aspect of this underlying tug of war between them and the DSPs, the streaming services that do want to report on streams and do use that as the primary benchmark of success.

And now we're backing into this album equivalent unit metric that has now become normalized that we would never do in any other industry where it's not like Netflix is trying to show DVD equivalent units as a metric of success.

[00:34:42] Neil Shah: Yeah, totally. Yeah, I mean, Billboard is continually trying to get these things right. But, you know, it is, that is precisely what the pop stars and the Kpop stars are taking advantage of the fact that the physical albums, have much greater weight than the streams, which right there just, privileges certain genres then hurts, others, you know, like physical sales are not what in hip hop or not, but they are another genre. So, I'm sure they see it as a work in progress to kind of get these things right.

[00:35:13] Dan Runcie: Right, and I do acknowledge the work there in many ways. It is a very difficult task. You have a number of competing factors. You're trying to make essentially an advanced metric become the industry standard. And it is going to be an evolving conversation and likely will look different as streaming services continue to gain traction as you mentioned, if we do see a vinyl slowdown at some point, how that may shift things and there will be this continual movement here.

Where do you think things are in five years from now, specifically with hip hop? Do you think that the market share continues to slide? Do you think that another genre does become number one?

[00:35:50] Neil Shah: That's a great question, it feels like we're in a transitional period right now where lots of genres are thriving at the same time. People talk about music being post genre so much that it's almost become a cliché to, you know, for publicity materials to describe an artist as being genre less, kind of elicits eye rolls at this point.

Every artist is post genre at that point. It actually would be more striking if artists stuck to genres, ala Beyonce with her dance music album, which I thought took the opposite road of, focusing on the genre, which was actually refreshing. but so we're in a transitional moment. and so, I mean, the short answer to your question is that it's hard to see where this goes in five years.

But, you know, I would imagine that some of the cooling off of hip hop does level off and then maybe we're in a period for a while where, what currently obtains kind of sticks around. I mean, it's entirely possible that the 2000, the rest of the 2000. Twenties could be kind of a transitional, confusing period, barring some, culture shifting huge superstar in one of the genres that somehow changes everything, even in our highly fragmented music landscape. Typically some of the engines for different types of musics going up or down have relied on huge stars changing the game. Whether it's hip hop, you know, hip hop had certain weaknesses in the early 2000s. And, for example, Kanye West, helped revive rap also broadened its audience, broadened rap's audience in a very significant way.

 Something that Drake then, continued effectively soccer mom-izing hip hop, you know, like anyone can listen to one dance. I mean, it's not even rap, as an example, and increasingly rappers were singing. So, in the past, when genres have had lulls and then come back to life, it's usually been on the back of these pivotal stars.

Well, the reason why it's so hard to really project, like, what we're going to do and what things are going to look like in five years is because music, as you know, like, we're losing the ability for such stars. Even if they're very big to really shift the culture, Morgan Wallen is a massively big star right now and yet much of the country, you know, doesn't listen to Morgan Wallen, you know, doesn't like him for various reasons, et cetera, you know, NBA Young Boy is a massively big artist, especially on YouTube.

And yet, most people are not familiar with him. I mean, to give you a better example, even when an artist like Cardi B or Ice Spice has huge hits that, you know, hit the top 10 of the Billboard Hot 100, much of the country does not know that song the way they may have known, You know, a Cyndi Lauper song in another era or an Adele song.

So we're in an environment where increasingly, it's so fragmented that it's hard for stars to really dominate in the way that they used to. And so that may also affect whether we see Kurt Cobain like shifts where, you know, where everything changes and then we recognize, Oh, the landscape is different.

There's plenty going on in hip hop, whether commercially, you know, an act like Suicide Boys is doing great on the live music circuit. They get almost no media attention, but, in terms of the live music circuit, they can sell concert tickets. there's plenty going on also from a, critically acclaimed point of view, you know, artists like DoJi, you know, are making waves.

 It's not that like, you know, Youngboy's doing this thing. We've had work from like Lil Durk. I mean, Metro Boomin is having a great year. Ice Spice has been an exception in terms of being a big breakout star, there's plenty of stuff happening, but it's really rare for that stuff to really dominate, you saw, you know, these two examples are kind of related, but two moments that have been kind of monocultural with the capacity to shift things is obviously like Taylor Swift in this Era's tour, which is something that a lot of people talk about.

And then, of course, her getting a platform to ice spice, which was just very interesting and exciting because, wow, this is the biggest platform and it's being given to ice spice. What will happen? Will Ice Spice be able to develop into the kind of star that could, carry on Poppa Smoke's legacy in a different way and indeed populize Drill or will Drill and a lot of these, you know, vibrant rap stars that are on kind of a lower level, will they kind of stay there in this more, in this fragmented kind of multicolored, universe? I think that's like a key question, you know, even Taylor Swift, not to go into Taylor Swift tangent, but, you know, there's been debate, there's been discussion of like, oh, we do have monoculture.

There's Taylor Swift, even Taylor Swift only captures a certain part of the American audience. I mean, if you go to a Taylor Swift show, you know, it's not that racially diverse. I'm just putting it like that. not a Wwift hater. I'm just pointing out the fact, you know, so, it's tough to have the monocultural forces that one used to have to create these ships.

[00:41:01] Dan Runcie: Right, because I know you mentioned the points earlier about whether or not most people are really hearing Morgan Wallen or they're really hearing NBA Young Boy. And part of that probably applies to these generational superstars to even just with where they are now. You compare a song like Taylor Swift for the antihero compared to Cyndi Lauper time after time or any of these other songs that they did, it probably is less mind share there, but the other point you mentioned, there still are these little moments and these other things that happen that are still noteworthy, even if they're not the big thing.

I think that the big thing, whether that's having this huge album that sells 1, 000, 000 in its 1st week or 500, 000 units in its 1st week, given the way that media is going, I still think that is something that does become more and more subject to this power law dynamic, to some extent, where I do think it's still even five years from now will probably be very difficult for an artist not named Drake to be able to bet money and say, yes, oh yeah. That artist will could sell over 500, 000 in the first week. Even Drake hasn't necessarily a hundred percent done that. I mean, he did it with certified lover boy most recently, but, the other two albums he had before this, the joint one with 21 Savage or the honestly, nevermind he did it. So, but he still was able to at least top the charts there.

So I do think that. We'll still see success. We'll still see these moments, but almost in the same way that in Hollywood, where I think it's probably pretty unlikely at this point that there's going to be a billion dollar grossing movie. And it's like, Oh, wow, Huh, that's an original story or original concept.

Never heard of that one. It's almost always sequel or based on some type of existing IP. And in many ways, Taylor, Drake, Beyonce, Adele are the closest thing you have to existing contemporary IP and music. These are the biggest bets you have, and you do have a few acts here or there that have definitely come into their own SZA's SOS album has clearly done extremely well. It's been great to see her continue to break. Strides and do, and I think there's plenty of stats that show just with the performance of control over the years that there's a lot that is indicating there, but still, even with where SZA is now, there's still a gap between the other artists I mentioned.

So, there's levels to this for sure. We'll see growth there, but I still think that we're going to see the most continued bets and the more the budgets as well go towards the Drake's and the Taylor's because that's where the safest bet is for the money spent.

[00:43:32] Neil Shah: So it would be fascinating if this period remains more confusing than it usually would and more transitional, partly because ala Hollywood. We, as a culture, rely on this safe, riskless IP instead of, doing the artist development to really help some artists, you know, achieve, get to that next level, you know, it's striking, these artists you're mentioning, Taylor, Drake, they come from a different era. They come from an era that was of the fulcrum, not even the fulcrum, they proceed the streaming era. and they benefited from the branding power of an industry that has changed, dramatically and they remain right now are, you know, some of our biggest stars and it doesn't feel like a hangover yet.

These artists are still doing respected work. Drake's numbers are weakening substantially album by album, but, yeah, it will be interesting if, as you're noting, we kind of rely on these folks IP, like, you know, maybe Drake should rerecord all of it. Maybe I wouldn't mind it if Drake rerecorded Take Care For No Reason.

Maybe it's so hard to make another Take Care, another masterpiece. Maybe he should just re record it. The point being, some of these stars could linger with us longer than they would because of this effect where, in such an industry that's so fragmented, these are the riskless parties to do business with, whether you're a record label, whether you're a concert promoter, this is where the safety and money is at.

And so they could have a longer, you know, there's a perennial question about when Drake will fall off, but maybe some of these artists won't fall off, in this next stretch, but stay in this weaker state as, you know, this other stuff continues to bubble,

[00:45:16] Dan Runcie: Yeah, it's almost in the same way where Tom Cruise is now in his 60s. I don't see him stopping Mission Impossible anytime soon. As serious as he's been doing since he was in his early 30s. Denzel's about to drop the Equalizer 3. The man turned 70 next year.

[00:45:31] Neil Shah: Indiana Jones, Harrison Ford.

[00:45:33] Dan Runcie: Yeah, he's 80.

[00:45:35] Neil Shah: So, this can be bemoaned. people bemoan this in the Hollywood context, the recycling of IP instead of the development of new stuff. but it's an open question. You just, you never know, you know, there's plenty of vibrant rap being made.

There's an entire rage movement that Playboi Carti and other artists have helped inspire, you know, there's just like Ice Spice to my mind follows a little bit. Sonically in the heels of pop spoken certain ways. There are inheritors of the SoundCloud rap era that sadly waned with the passing of, you know, stars like X and Juice WRLD and whatnot.

There's stuff going on. You just, you never know, like, music business is a hard one to predict. You can't even predict that confusion will reign because, you know, it's a topsy turvy business and things change.

[00:46:26] Dan Runcie: Yeah, definitely. Well, Neil, this was fun. before we close things out, anything you want to plug or let the audience know that you're working on?

[00:46:34] Neil Shah: No, I don't think so. Anything you suggest, I don't think there's anything I'd want to plug.

[00:46:38] Dan Runcie: Okay. Well, we'll make sure that we link to your most recent Taylor Swift piece in this one, just with the breakdown of the economics. They're not related to this conversation, but a fascinating book in deep dive, obviously considering all the conversations needed to happen to give people a breakdown, not just into that top line number, but the profit margin of a tour of this scale.

[00:46:59] Neil Shah: yeah, with the Taylor piece, I'm happy with it. And I was basically trying to do something that's just hard to do. Artists don't talk about their costs and what their deals involved with promoters and booking agents. So very hard to actually ascertain profit.

And so what I was trying to do there was just. and it talked to a lot of people about what's reasonable for a superstar and then what's reasonable to assume about the breakdown when it comes to an unusual superstar. So that was kind of, that story, I guess, you know, related to this topic is just, you know, yeah, my attempt to kind of get my head around. It wasn't that article. I did, I think, in October of last year. and so, yeah, this is like an important discussion. and when you want to have in a measured way, you know, like, it's like, another not colleague, but a good guy at Billboard Elias did also a piece, following on Kyle's piece, right?

Kind of actually talking to executives about how worried, you know, they are about this stuff. So, yeah, this stuff is hard to predict. So, but yeah, if anything, you could, flag that old piece if you want.

[00:48:01] Dan Runcie: Okay, great. No, we'll do Neilm Thanks again. It's been a pleasure.

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