Product Led Growth

In music, web3 hype may have cooled over the last year but there are still builders in the space making moves, like trac’s founder, Cardin Campbell. Trac is one of our sponsors for Trapital, and it was great to have Cardin on to discuss how music tech startups see the big picture and are approaching this. trac is a music distribution service, but it wants to bridge web2 and web3 together in a way most distribution services aren’t.

Cardin sees an opportunity to digitize how royalty payments are made without disrupting the Web2 experiences on Apple Music and Spotify. That can remain, while blockchain technology adds a layer to bring an artist’s superfans around for the journey.

In this episode, we discussed web3 music — what was overhyped, what has lasting value, and where things go from here. Here’s what you can expect: 

[2:57] Finding a wedge in web3 music 

[5:17] What people get wrong about web3 and ownership

[9:25] SEC challenges with NFT royalties  

[12:04] Most music fans don’t want to invest in artists

[15:31] Where web3 and web2 meet in music

[19:13] Building trac’s platform 

[21:37] Benefit of artists “windowing” music releases

[25:59] How trac sets itself apart

[32:15] Artists “moving on” after reaching success 

[34:54] What’s most exciting in web3 right now

[36:22] Biggest friction points to web3

[41:05] Projecting trac’s revenue mix between web2 and web3

[44:38] How to follow trac’s process

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guests: Cardin Campbell, @iamcardin

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Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.

TRANSCRIPT

[00:00:00] Cardin Campbell: Success means, you know, you as an artist can make a living doing your art, and whatever the national average is in terms of salary per year, we want every artist on track at that level to get to that level of freedom and beyond.

[00:00:17] yeah, we're building for that success story. and then some that's like the bare minimum for us. But yeah, we hope to create, you know, the next superstar. Not create, but we hope to help support the next superstar by giving them the tools to make the business side and, you know, management side of their catalog super easy.

[00:00:35] Dan Runcie Intro: 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. 

[00:01:03] Dan Runcie Guest Intro: Today's episode is all about where Web two and Web three meet each other in the music industry. It has been a rollercoaster past couple of years in terms of NFTs Web three Crypto and how all of it makes sense for artists, musicians, record labels, and more to help make sense of where we are and where things are going.

[00:01:21] I sat down with Cardin Campbell, who is the founder of Trac is on a mission to empower artists to reach their fans more closely than ever, whether that's by distributing their music directly to the digital streaming providers or through NFTs so that their most passionate fans can get early access and a small ownership stake in their music moving forward.

[00:01:42] Trac is also one of sponsors, so it was great to be able to talk with them about their solutions more deeply and how they're serving artists. In this conversation. We also talked about some of the other challenges that happened with music distribution, such as when you have those superstar artists, how do you keep them on board?

[00:02:02] We also talked about broader trends in web three, where things are going, what some companies are getting right, wrong, and more really great conversation. I like the way Cardin sees things. I hope you enjoy it as much as I did. Here's my chat with Cardin Campbell.

[00:02:17] Dan Runcie: 

[00:02:17] All right. Today we got a full conversation on deck. We're gonna talk about where Web two, when Web three, meet each other with someone that is living and breathing this every day, Cardin Campbell, founder of Trac. Welcome.

[00:02:29] Cardin Campbell: Thank you, thank you, thank you. Good to 

[00:02:30] be here.

[00:02:31] Dan Runcie: Yeah, definitely. I feel like you and I have had a few conversations about this, and the industry's been in such a fascinating place right now. You look at the past year and a half with Web three, crypto NFTs. It's been a rollercoaster in terms of where the industry is, where people stand, where companies stand, and where they're focusing on.

[00:02:51] How do you feel like we are right now? What's your macro take on where the industry is right now with regards to web three?

[00:02:57] Cardin Campbell: I think the industry's in an interesting place. I think we're still trying to find that wedge of where web three or this concept of Web three, you know, aids music in any way. You know, I think a lot of people, are trying to think of it like this separate space and you know, this place where you can sell more of stuff and generate more revenue for the industry.

[00:03:19] And I think that can happen, but I don't think it's going to happen in a way that we've been approaching it to date, you know, but yeah, I think we're still trying to find out which ultimately is where we currently are.

[00:03:30] Dan Runcie: Yeah, I think one of the challenges was that there were so many cool and nifty ideas that people had about what something could look like, but at the end of the day, you needed to have a real functional aspect that would add value in a way that you are either making something easier for the consumer or you are making it more unique in a way.

[00:03:49] And I feel like a lot of the things that are being pushed, were more focused on, oh, here's this cool, almost wonky idea of what something could look like as opposed to, boom, here's a fundamental shift change into how things were and how things could be moving forward.

[00:04:04] Cardin Campbell: Yeah. 

[00:04:05] Yeah. It's really like, you know, the classic case of entrepreneurship and startup, right? It's like you try to find a problem to solve and then solve that problem, whereas with web three, there's so many cool things you could do. And people were just like building cool things and then trying to find a problem, you know, later.

[00:04:24] Right. So I think that's why we're still trying to find our wedge in the whole space, but because it's just been a case of, "Oh, we can do this and do that and like, wouldn't this be nice?" You know, but not really centralizing, you know, the focus on problems to solve, right? And then solving them.

[00:04:39] Yeah.

[00:04:40] Dan Runcie: And as you look back on it yourself, as someone that's been following the industry to to a deep extent yourself, do you feel like there are parts where you yourself are like, huh, maybe I had overstated where I thought this was gonna go? Because I think that each of us probably bought into some of the height and potential to at least some extent.

[00:04:57] Cardin Campbell: Yeah, 

[00:04:57] so I still feel like we have, we've got it right to a degree, and I'll explain, right, so a lot of people approach Web three music in this like way of thinking of it like it's another medium, you know, for people to consume music, to buy it, like it's a collectible and I think that's the wrong approach.

[00:05:17] That's just my personal feeling. I've always thought that, and probably will always think that until I'm convinced otherwise, right? Because you can't really treat it like a new medium. When Spotify and Apple, you know, has the fan experience, you know, being the best it's ever been, like I feel like discovery has been solved, do you know what I mean? Like the algorithms and all the things that they provide to help you discover new music and just have access to all the songs, right? There is the best it's ever been. So companies that's been approaching it where they're thinking, oh, web three, we can generate NFTs out of songs and sell them.

[00:05:56] I don't know that that's it. like, I hope I'm wrong cause it feels like an opportunity, right? To generate more revenue for the industry but I don't think that that's it because we've seen iTunes come and go, right? they were selling a digital file that was the MP3 for a dollar and that was cool for its time.

[00:06:12] But then we shipped to streaming, they bought beats and turned into Apple Music and, right? Like it shifted. So I don't think that that's it. And I think that's where a lot, you know, the focus has been, and I think that's where people are getting it wrong. Because it's not, another, you know, medium, so to speak.

[00:06:29] Dan Runcie: That's a good point because I do think that part of the reason that streaming took off, and a lot of this was in conflict of what Steve Jobs himself thought. He of course, is one of the big proponents of iTunes, and I think for its time, iTunes especially, when did it launch 2003? I believe that was the answer at the time.

[00:06:48] You could buy your favorite song for 99 cents or a $1.29, whatever it was at the time. But after a while, consumers really didn't wanna do that. And I feel like one of the reasons why Spotify worked, granted, I know that the company has had its own ups and downs over the years, but one of the reasons why I think Spotify works is because it met consumers where they were at. People wanted to have access that at the time mattered more than ownership. So some of these things that are going back more to ownership, like whether it's companies or models that you're referencing, it brings us back to that. And it's not that people don't wanna own things.

[00:07:22] They clearly do. You see the boom of vinyls and other things. It's just not ownership in the way that we may have thought, or that some of these companies may have.

[00:07:31] Cardin Campbell: Yeah. And when you think about it from an ownership standpoint, like you don't technically own the MP3 when you bought it from iTunes, and when you're selling a .wav file or an MP3 as an NFT, which is the same thing, you don't technically own it, you're own like access to it. Like

[00:07:47] Dan Runcie: Your copy of it.

[00:07:48] Cardin Campbell: Yeah. Your copy of it. Exactly. Exactly. So, you know, I just don't think that's the right approach. Now, I think the mistake people are making in Web three in particular is trying to mirror what we've seen happen with PFP NFTs, right? Like they, you know, collect them and it has this, you know, extreme high value from the doodles, you know, crypto punks and bored apes and all that, they're trying to mirror that. But fine art or the representation of art as NFTs in web three is a different thing than collecting music, right? Like you can't collect the mp3 like you, I mean, I guess you can, like we did with CDs and vinyl, but I think that's dead.

[00:08:30] and I think that's where we're trying to like force something to be what It's not, right? Music is valuable when millions of people listen to it and love it, whereas fine art, it's like a one of one thing and that's where the value comes from, you know, I think the more apples to apples comparison with music and fine art is the actual royalty now that's the product of music and then we have two of them.

[00:08:53] So music is just way more nuanced and more dynamic than fine art is. And I think, you know, those companies that are approaching it from the, let's collect the mp3 or the .wav file or sell it as this thing, you know, to consume it like another medium. I think that's all wrong. And like I said, I hope I'm wrong because I support anybody in the space trying to build a better tomorrow for music creators and the artists right, to make more money.

[00:09:18] but I just don't think that's necessary. I do think the royalty side is it, but the SEC makes it complicated.

[00:09:25] Dan Runcie: Let's talk more about this because when I think of the whole one of one thing, of course the physical example, you think about that Wutang album, the Once Upon a Time in Shaolin, that was essentially a one of one, and I know that that's traded hands a few different times more recently as last year, but I guess if we're thinking about it from your lens, you're saying that that isn't necessarily the product since obviously it can be copied and replicated in the same way that you and I could have a replica of the Mona Lisa, in our house, the real value is the actual recording itself, so you feel like the royalty, or at least that piece is the piece to focus on.

[00:10:02] Cardin Campbell: Yeah. That's where the value is. Like when we see all these companies buying catalog, you know, they're buying the royalties, right? Whether the publishing side or the masters, right? Like that's where the money is, that's where the value is, that's the asset, right? sure you can replicate that thing in the, you know, the Wutang example, and I think Nipsey Hussle mighta did something too at one point in time, selling his album for a thousand bucks.

[00:10:25] But that to me is a, a marketing thing. That's like a part of an album rollout. And if you have the cache like Wutang had and Nipsey had, you can do those things, right? But when you think about doing this at scale. Where every artist can, you know, benefit and, embrace this new model or approach, that's when it starts to break down.

[00:10:45] And that's when you know, it's like, that's not it, that's not the answer.

[00:10:48] Dan Runcie: You mentioned SEC part of it before. And I think we've seen a few different challenges from some companies that have tried to do creative things where fans could either buy a NFT or that could get them some fractional ownership of the music moving forward. And that what that actually looks like.

[00:11:05] There are companies such as SongVest and others that have gone through the securitization process. How do you view that aspect and how do you feel like that aspect of the ownership or what you may see on royalty exchange or one of those types of platforms. 

[00:11:20] Cardin Campbell: So, I think of it, in two ways. So I love it because fractionalizing, the actual asset is a beautiful thing, right? the SEC though, I think, I could be wrong, but I think from what I've been hearing and reading, the SEC thinks of it as a security. The minute it's fractionalized and then you have to go through the whole regulatory process and it just kills the flexibility you can have, it kills the scalability you can have with it If it's on the blockchain and it doesn't have to go to this regulatory, you can like BS. So that's one side, on the other side, you know, we now have a different audience that we're like selling these things too, because, the casual fan is not the audience as much as we think it is.

[00:12:04] Like there's a Venn diagram that exists, right? That says, yep, we have some fans that are investors, but truly who we're targeting our, we're talking about investors of music, people who value catalog and wants to own it. And yeah, that's just a different beast.

[00:12:18] And that's why we haven't seen it like really take off. Like we would think, in my opinion, because we haven't like really targeted the fans just yet. And find something that they would value just as much as the consumption of the music,

[00:12:32] Dan Runcie: So two questions for you on that. Let's start with the actual fans themselves and some of the misreading that I think people had on whether or not the average fan would wanna invest in or own a piece of a stake in the fan, the artist's music. Why do you think that there was an overstate or an over assumption of how much the fan would be interested in there?

[00:12:56] Cuz that was a pretty popular point for sometime

[00:12:59] Cardin Campbell: right. 

[00:13:00] I don't know. I think, you know, it sounds cool. It sounds like, oh wow. Like if you know, we have billions of people in the world that love music. I think the last time I checked, I think six plus billion people listen to music every day. So when you think about like the total accessible market, you're like, oh shit, that's a huge market.

[00:13:18] Cardin Campbell: And if we can fractionize this one asset and sell it to a bunch of people, And then they can sell it to amongst themselves. Your head explodes right at the the potential scale of this thing. but with the regulatory, you know, stuff and then the fact that fans aren't really investors, it's kind of like "womp womp", right?

[00:13:36] It's like that's when you realize it's like not as sexy as it sounds, in theory, on paper.

[00:13:41] Yeah, the analogy that I've always used with it is, I think if you look at the popularity of something like, Apple and the iPhone and all their products. So many people have the Apple phones themselves, but that doesn't mean that all those people necessarily have Apple stock in that way. There's a person that's gonna be the retail investor in Apple stock than the person that is still going to buy a MacBook, a iPhone, an iPad, and everything else that they have, AirPods, you name I think there was an overestimation there. And then I think additionally just with the psychology of how a fan thinks it interacts with music. I think sometimes this is part of the challenge with confusing things with sports because I think that people looked at the popularity of fantasy football and just gambling and how gambling has exploded.

[00:14:28] The monetization in sports in general, and I know that several music executives have asked me like, what could this look like? And I know that there's startups that have tried to do more of the fantasy sports for music, but. It's a different fan base and it's a different type of experience and product. And what a lot of these fans are into, at least from if they wanna have something beyond just the $9.99 per month that they pay for Spotify, they don't wanna collect a vinyl, they wanna have some piece of merch, they wanna go to a concert.

[00:14:58] They want things that don't necessarily always lead to actual like cash value that they could trade in, in the long term, but they want something that means something to them.

[00:15:09] Yeah, they want something that shows how much of a fan they are of that particular band or artist. And yeah, like, you know, in a nutshell, fans aren't investors, and investors and fans aren't gamers. Like, in the fantasy football example, like three different customer base right there, three different audience, three different personas. T here's a Venn diagram, like I said, but by and large, they're three different people.

[00:15:31] Dan Runcie: Definitely. And I think one of the other things too that you touched on earlier was just where web two and where web three meet each other because I think that a lot of the early web three excitement was around. People pointing out some of the challenges that exist for the digital streaming providers and the payouts that they give to artists, and seeing Web three as a solution to that to put more inherent value on music.

[00:15:54] Cardin Campbell: And I think a lot of those things sound good. But I do think that the more actual reality, as you've said both here and even in past conversations you've had is where the two of these meet each other. And from your perspective, what do you think the best approach is, or some of the best things you've seen look like where you do see Web two and Web three meet each other in music to actually provide value for fans?

[00:16:18] Right. So I guess let's define what Web three means by starting with Web one, right? So, the definition that I've used, you know, with people is web, one is read, web two is read, write, web three is read, write and own, right? And what I encourage people to do is not think of them as three separate spaces.

[00:16:40] They're actually a stack, a capability stack, let's call it, right? That, you know, you had one capability in web one. We can read things like a magazine, which is why it's called a webpage, cuz it's like a page of a magazine we read, right? As you know, the error we're in now where you can post things on social and leave comments and write all kinds of things on the web.

[00:17:02] and web three is read, write, own. I think it's just another capability that we now have, and I think stacking it in that way is where the value is. You still want to give people the experience and the, you know, the UX of web two, but the invisible, immutable experience that the blockchain also has and provides.

[00:17:24] Cardin Campbell: So I think when you think about web three music, the way we're approaching it is, yeah, let's give them user experience in web two, but let's also write their royalties and their ownership on the blockchain. So it's immutable, it's saved forever. No one, can take it away from them, which solves a problem that exists in the industry today. Because a lot of the industry still on pen and paper, it's not very digitized just yet. So I think Web Three gives us an opportunity to digitize the music industry in ways that we've never been able to do it before beyond just a PDF or whatever, right? It's like, yes, these are real assets. We can put them on the blockchain and keep them there.

[00:17:59] And I think, you know, if we think about it from that perspective, the blockchain and Web three music is more of a B2B play between the creators and the rights holders themselves. And it makes it really scalable to send, exchange and trade these royalties, in a space that is immutable and no one can change it.

[00:18:19] No one can, take it away. Cause we've heard Snoop say, you know, man, the first couple of albums at death row, I wrote, what's the publishing check? I never saw a publishing. I wrote 70% of the Chronic and I wrote, that would never happen in this new era with the way we're approaching web three music, it's like, hey, let's publish your work and write itinto the blockchain. You own it, it's in your wallet. No one can take it away, Right? And if, we can streamline that and make that a standard, I think we would solve a lot of problems. and then once everybody has their stuff in their wallet. Yeah, there can be a space where we, in web two, give them the ability to trade it with each other, sell it amongst each other, sell it to a hypnosis or whomever.

[00:19:04] But it's all immutable. that's my thoughts.

[00:19:07] Dan Runcie: And then with that, where are you right now at Trac with making that a reality for artists?

[00:19:13] Cardin Campbell: So, it's a reality already for us. Like we built the tech, right? It's now about getting the artists that have valuable assets to use it in a way that's meaningful, right? And the challenge is at what point do you make that right to the block chain? Is it in the studio at the creation process?

[00:19:34] I don't think so. Is it at the point of distribution, which is why we launched distribution, right? Because I believe that's where the cutoff is from the creative process to the business of music. So we're betting on that being the right space and right place for it. So yeah, we built the Tech Stack, we built the product.

[00:19:51] We're now going after the artist that can, you know, evangelize the solutions and, make it meaningful, basical.

[00:19:57] Dan Runcie: And then are there any artists that you can share or any examples from, oh yeah, this is an artist that's doing what we're envision 

[00:20:03] Cardin Campbell: Yeah, we have some, you know, up and coming artists that's like really, really growing. Like one artist on our platform, his name is MRG, he is like killing it. He started with us from the very beginning with barely no, you know, monthly Spotify listeners to now he has over 400 thousands. And we're, you know, we're in talks with, you know, major label artists that, that are no longer on major label deals that we want to use the platform and, you know, like, make this thing a reality. So it's really about like putting it together. Bringing it together, in a meaningful way. It would be nice if we can like, make this thing scale to all distributors, Right? 

[00:20:40] But the problem is, you know, it's also attached to payments, right? So we have to like really showcase this and make it, you know, big first. I think before we can like, yeah, like scale it to everybody else, but ultimately we would love to do that and be the central solution for it all.

[00:20:58] Dan Runcie: Yeah, I feel like with these things, especially in a space like distribution, one or two success stories with those normally help get the eyeballs and they see, oh, okay, this person did it. No different than any the headlines we see, you see what, whether it's the Chainsmokers or you see what BL or some of these other artists have done, and then that generates the attention there.

[00:21:17] Cardin Campbell: for sure. For sure.

[00:21:18] Dan Runcie: Yeah. And then thinking about that specifically, I know something else that you've touched on with this is just the idea of how artists can use windowing, specifically astatic, to be able to use both web two and web three, and being able to meet and serve their audience where they're at. How do you see that factoring in.

[00:21:37] Cardin Campbell: Yeah, so the reason why we thought of like doing it this way is, another problem to solve in the industry besides, you know, getting assets written to the blockchain so that they're immutable and people own their stuff and no one can take it from them. That's one thing.

[00:21:51] Another problem in the industry is that artists typically don't know who their fans are. they just don't, They're consumed so much by all the DSPs and even social platforms, but they don't really know who their fans are. and, and we've seen, you know, platforms like community and, you know, come, come up and, try to give, you know, artists, that ownership of their fan base.

[00:22:12] But so I think the way we're approaching it is if we can give an artist the opportunity to, give away an NFT to their fan base, like it's an early listen to an album or a single, so long as they pre-shave the song on Spotify and that pre save will unlock the NFT and give them access to listen to it early.

[00:22:33] That then gives us an opportunity to share that fan to the artist and build a community for them. And what I also do another benefit. It trains the Spotify algorithm to say, oh, we have a bunch of pre-safe, that means this song must be good, or this album must be good. It automatically gets added to the algorithm, the algorithmic playlist on Spotify.

[00:22:54] So it's like this nice, you know, recursive flywheel effect if we can, you know, apply that using NFTs. Right. you know, and you technically can do it without NFTs, but we feel like the NFT can then now have another lifebeyond that, so if the artist is doing a show somewhere and that person who did the precinct just show happened to be there and bought a ticket in that entity could be a backstage pass or something.

[00:23:18] So it just unlocks the opportunity, multiple different opportunities. the way we think about it, way we're gonna approach it. But yeah, windowing, is I think a necessary thing. we've seen the platforms try it without success. I think the success can be realized at the aggregator level because we're not dependent on any of them.

[00:23:37] Right? And the artists can, you know, own the fan and give them an experience that none of the individual DSPs can, you know? So that's kinda how we're thinking about, and.

[00:23:48] Dan Runcie: Speaking of windowing, you may have just saw the news that Snoop Dogg is re-releasing Death Row Records, but he's giving TikTok a one week exclusivity through their sound on service before putting it on streaming. And that was interesting because at least to my knowledge, I had yet to see an artist or at least you know, a former major label artist do anything like that.

[00:24:08] So 

[00:24:09] Cardin Campbell: Yeah, we've seen, you know, the Carters do it right with title, but I don't think it's been successful. Just, windowing at the platform level that is. but yeah, I've I haven't heard that, but that's interesting to see him do it.

[00:24:20] Dan Runcie: So with this, you're saying that, of course, this isn't at the platform level, but they're saying whatever digital student provider that you used, you can pre-shave this song. You get exclusive access to listen to it on the provider of your choice, whichever one that you're already subscribed to.

[00:24:35] Cardin Campbell: We're gonna give them a space to listen to it. At the artist level on Trac, on our platform. Like we spin up a page for them to listen outside of the platforms early. That's what the NFT gives you. It's like a token into that listening experience. And then once the release date hits, you get that notification from your stream platform of choice that, Hey, the release is here and you can go listen, you know, as much as you want.

[00:24:59] Dan Runcie: Got it. And as you all were thinking through it, even just, channeling back to the earlier part of this conversation when you were thinking through, okay, a lot of the NFT things didn't exactly work out in the same way. There seems to be some type of consumer disconnect in terms of what they may have valued and what they didn't.

[00:25:15] What was the value add for this one, this idea that was like, "yeah, you know what? I think a consumer would be interested in this particular type of NFT that we'd be offering here.

[00:25:25] Cardin Campbell: Yeah, the benefit is you know, for both the artists and the fan for the family, get to listen to the song or the album early and for the artist, they get that pre say, which trains the algorithm to, you know, add it to playlists in the future. so that's the benefit for both personas in this case.

[00:25:43] Dan Runcie: Got it. That makes sense. And then for you all specifically, I know I mentioned sound on earlier, there's a number of music distribution services out there, and you talked to different artists and I think a lot of them can sometimes feel like they can be a bit commoditized in terms of the roles that they have.

[00:25:59] Cardin Campbell: But how do you feel like Trac stands out in that regard? And what are some of the things you've done to help Trac stand out so it isn't seen as just another.

[00:26:07] Another. Yeah. So when we thought about the space music tech, we thought web three first, but we're like, we want to be in a position to help artists maximize their earning potential, so monetizationwas the central thing for us. And with that in mind, we thought another problem in the industry is, you know, the, payments and speed of payments.

[00:26:30] So when we launched the platform, we lost distribution. We said, why wait two, three months to get your money? We're gonna pay you out weekly. We saw it went viral for us. It was like, holy shit. Who would've thought that this would happen. But you know, when you think about entrepreneurship, like I said, when you're solving a problem, you know, it tends to go viral.

[00:26:49] So that's our differentiator. we want to be known as the platform that gets you your money fast. And with distribution, we unlock a bunch of other value around like, to where it feels like. we don't wanna be known as just a distributor, necessarily. So even though that's where we started, but yeah, we get you your money fast and we unlock value at the point of distribution is what we say.

[00:27:13] So the minute you, you know, release your music, we also take your cover art and put it on merch. We get you syncs, like it just unlocks value around without you having to do anything else. It's literally one action. Value creation

[00:27:27] is our value prop.

[00:27:29] Dan Runcie: and this is the value prop you're pushing to artists, artist managers specifically. He's definitely the target that you're trying to reach there. And how would you say that's been on the customer acquisition side? What does that look like for you and what are the most effective ways that Trac

 is used to be able to get artists and their managers on board?

[00:27:47] Cardin Campbell: So product-led growth is interesting, right? Because it's like it scales and you don't need a bunch of people to acquire people, just do some digital ads. People come the products, you know, converts them. Oh, happy day. While that's great. You don't typically, you know, at a high clip that is, find your target audience and you definitely have to then shift to more of a sales led approach to acquire that target audience. So we are building out, you know, a team of Biz dev folks there are as to go after our target audience with, you know, the value propositions we just talked about earlier to bring on, you know, folks we feel like is our core managers and artists at a certain caliber.

[00:28:32] Dan Runcie: Okay. And what is that caliber? How would you define that?

[00:28:35] Cardin Campbell: We define it as an artist with 250,000 monthly Spotify listeners. That's our core.

[00:28:40] Dan Runcie: Okay, nice. And then with that, is it also, I guess a vision in the artist's mind of, okay, if I'm at 250K now this is where I wanna get to, or this is where I can get to, like with Trac’s help.

[00:28:54] Cardin Campbell: Yeah. that's how we want to, you know, position the brand. It's like, Hey, when you're at this point, we want to get you to that next level, that next level being success for us. Well, firstly, I guess I gotta define what success means for us. Success means, you know, you as an artist can make a living doing your art, and whatever the national average is in terms of salary per year, we want every artist on Trac at that level to get to that level of freedom and beyond.

[00:29:25] yeah, we're building for that success story. and then some that's like the bare minimum for us. But yeah, we hope to create, you know, the next superstar. Not create, but we hope to help support the next superstar by giving them the tools to make the business side and, you know, management side of their catalog super easy.

[00:29:43] Dan Runcie: Yeah, and one of the benefits that I think I often see with distribution services that stand out is that there's so much discussion right now about independence, ownership, and artists wanting to have more rights that they can stay the course, and they can do that with the service that can grow with them.

[00:29:57] And I do think that after a while, The power laws do tend to take over to some extent where, of course I understand the goal is to make sure that everyone can reach at least some minimum viable level. But inevitably there will be a handful of stars that do end up having the outsize returns, hopefully, on a lot of these platforms.

[00:30:17] But then it also becomes the flip side of that challenge, which is keeping those people happy because they start getting offers from elsewhere about other things. How has that piece fit?

[00:30:27] Cardin Campbell: Yeah. So on one side, you know, people say, don't worry about it. Right? Like, there's nothing wrong with helping an artist, grow and then graduate, let's say, right? I don't want to think of that as like the standard or the norm. because I think, yeah, like, that feels like failure to me, right?

[00:30:49] Like if you support an artist and they get to a certain level and they go take a big check that feels like we didn't do our job well, of educating them on. why that may not be the best move. Right. like getting a big check doesn't really mean it's a success, right. So yeah.

[00:31:07] We're, we're, we're trying to find the right medium. is really me, like trying to find acceptance in, saying, yeah, you know what, it's okay if they move on to a label or, or, or somewhere else and take a big check. Yeah, I don't wanna accept that right now.

[00:31:20] I feel like we need to get them to a certain level and, and make sure that they are educated enough to stay there, you know, and that, that's not only education, but maybe helping them build a team that can support them, you know, as much as they need, you know, as they grow.

[00:31:35] Because that's really where I think the drop off is, it's like they feel like, oh, the label will do everything for me, but they don't realize your team outside the label is just as important, if not more important than the label themselves. You know? Cause we've seen a time and time again where you're forgotten, you know, even though you're a signed artist, like Frank Ocean is a perfect example, Right? So yeah, I think the market share is also shifting. So much so that, the role of the label will eventually change. That's my prediction and we're betting that we can establish a relationship with the labels that is different from the one that exists today.

[00:32:13] At least that's what I'm imagining will happen.

[00:32:15] Dan Runcie: Yeah, this is an interesting topic because I feel that on one hand, there is something to be said for, as you mentioned it yourself, artists moving on from one thing to the other. People are always switching things or sometimes people are trying things differently. They may go to something else like we've seen that a few with how artists may do deals with empire or label like that they do on album and then they choose to do something else on their own.

[00:32:39] And it's interesting because I do think that on a lot of the music distribution services, you do technically have the ability to earn as much as you want and continue to maintain ownership and move forward with all the things which is great. The other side, some of the checks that artists do get, and I'm not even saying I advocate for this, some of those checks, it's different when there's $50 million in front of you and that's what the label's giving you. It changes the conversation. 

[00:33:07] Cardin Campbell: sure, for sure. Yeah, yeah, yeah, for sure. being, you know, a web three company like, and that that's possible in web three. We're hoping to do some things in defi that can challenge that, like, challenge that like greatly, you So yeah, like can't really talk about too much because it's not baked yet.

[00:33:24] But yeah, like we're planning to, you know, combat that somehow, you Um, yeah, I, cause I don't feel like graduating them to a, you know, a state or a place where the problem exists is, is the right thing, even though the check is, you know, is lovely, right? It's like, is, is it really lovely?

[00:33:42] You know? Yeah. I don't 

[00:33:44] Dan Runcie: And I guess with this, and of course I think we're talking qualitatively, but on a quantitative side, how does this impact churn or any of the more specific benchmarks that you may be evaluating things.

[00:33:56] Cardin Campbell: we, yeah, we, we we're not there in our maturity yet to really. Factor that Um, but it's an interesting question. Interesting mental model to, to, to play with for yeah, I mean it's, it's, it could be a good acquisition strategy to say, Hey, look, Trac got all these artists signed to all these major label labels.

[00:34:17] So we have like a big funnel of people coming in, but then a smaller funnel of people going out like, yeah, I don't know if that's, that's not the definition of success. . So I, I try not to like, embrace it too much, you know? Yeah. I, I, I, I really hope to solve the problems in the, in the music in, in, in, in every way.

[00:34:40] It's a, it's a tough, tall order, but I'm an entrepreneur. I can't help it.

[00:34:46] Dan Runcie: What excites you most about this space right now? I know we've talked about a number of things, but what excites you most? Right.

[00:34:54] Cardin Campbell: what excites me most is the digitization of the, the business of Um, the immutability of the, the, the assets and making payments,um, work at scale, right? Like, I think waiting two, three months is BS to me. Like it doesn't need to um, that long. I think with the blockchain and with money now being uh, on the.

[00:35:20] And trust being like almost solved on the internet with, with web three. I think there's so many opportunities there. So that's where my heart is and that's where we're trying to build, but it's just tough with regulations and tough with user adoption and, you know, all these complicated technologies and whatnot.

[00:35:39] So that's why we, you know, we think of the capability stack as I, as I talked about it. It's, it's, it's just another layer. We shouldn't be inundating. artists and fans and people with wallets and all these weird and wonderful things, like it should just be seamless. So yeah, that's where my heart is. That's what keeps me up at night.

[00:35:57] That's what, you know, brings me joy in thinking um, yeah, I, I, I can't wait for five years to roll off and we're like, oh shit. Cardin was right. Like, look at, look at what we built. You know, like, yeah. That's, that's what excites me.

[00:36:10] Dan Runcie: you talked about wallets and maybe some of the confusion that fans may have with things, and from that I can pull out some of the friction that has existed with. Web three experiences more broadly. 

[00:36:22] Can you speak about that piece of it? Cuz we haven't touched on that, but I do feel like that's been part of the barrier for some of the web three adoption as well in that the people that are web three enthusiasts, that was no barrier for them.

[00:36:33] They were already native, but some of that Venn diagram of who is a hardcore fan versus who is a web three enthusiast. Those things didn't necessarily always interact in the same way. If they did, then great, that's your demo. But I think that at least historically up until this point, a lot of the companies and a lot of the things they've been launching attracted more of the enthusiasts than they did some of the super fans.

[00:36:57] And I think the friction of the wallets and meta masks and some of those things that you needed to be able to fully tap in. Played a factor.

[00:37:07] Cardin Campbell: big, it's a big barrier of entry for the masses. Um, and I think, you know, over time the more investments that go into the infrastructure side of web three to make it more seamless. and, and like I said, a part of the, the value stack the, capability we're seamlessly, I think that's where the beauty is, which is why we built all of our web three stuff on Um, not only were they an investor, we, we believe in how they wanna approach it because it's the same, you know? I, I, I think about it in, in the same way. Yeah. Like, no one wants to have to go get this other tool just to interact with the internet, right? We've already invented the browser.

[00:37:47] That's it, right? Like, that should be the standard thing and it should just be Um, So yeah, that's how, that's how we think about it.

[00:37:54] Dan Runcie: It's interesting because I agree with you. I think it should be seamless. I've also heard this ongoing debate from a few other folks within the Web three community about, they feel like there's pushback on this notion of things that are in web three need to seem like they're less crypto or seem like they're less web three.

[00:38:11] And then that's how you get people bought in because of some of that stigma, and I don't think that the stigma necessarily was as much about the actual function as much as it was people, you know, kind of pointing and laughing at a hype. It's almost brings me back to the.com bubble in a lot of ways because yeah, people, some people may have laughed at the internet at the time and there were laughable things that people were trying to do like, you know, delivering ice cream cones to people and pets.com and stuff like that. But what we are now in is this world where everything relies on it. And I think that is the most bullish perspective on web three more broadly. And I do think that still exists and will exist. I think that we just had to get past a lot of that.

[00:38:56] And if anything, this post pandemic wave of things coming back to reality and the 97% drop in NFT volume that you'd seen from that Bloomberg report. That's all a sign that, okay, there's no more million dollar pet rocks. That was the wave, and we are now unto hopefully bringing the real businesses to come to fruition.

[00:39:18] Cardin Campbell: Yeah, we, gotta solve problems. that's the bottom line. We gotta solve problems. It's technology at the end of the day that we can use to do that, solve a problem,and you know, just as we don't think of companies as not being a web company like, you know, I think that's just what we gotta think of it as.

[00:39:38] Like, you're a web company, whether it's web one, two, or three, doesn't matter, like you're just, you are a company that embraces the internet, whether that's web three or web two. Like, I think that the technicals shouldn't matter. Like no one, you know, says, oh, you know, I went to amazon.com and ordered something and, you know, it was written to a no SQL DB and like no one cares. Like what's underneath is like irrelevant, you know? So that's how seamless it has to be, to really like break through, solve problems and give people immutability and, and trust and native currencies on the internet to make it like truly, truly seamless. We'll get there, you know, we just need to get through, like you said, this Pet Rocks movement and soft start solving some problems, which is what we're doing and what we're working on. it's a marathon, not a race, you know, not a sprint. So, yeah.

[00:40:29] Dan Runcie: Agree. I think we'll get there too. And would you think maybe more than the short term, let's look at in the next year from now, if things with what you're building with Trac play out the way that you think it will. If you look at the business model you have, where on the distribution side you do take a cut of any of the revenue that comes in from the songs that you distribute.

[00:40:46] And then I assume on the web three side of things, you would also take a small percentage of any of the transactions that come through on that side. Where do you project that your revenue mix will most likely come from when you compare the web two side of things, when you compare the web three side of things.

[00:41:05] Cardin Campbell: Yeah. Music has always been a transactional business, right? it's always been , you know, we add value here and, you know, we take a percentage of whatever revenue is generated from that relationship, you know, experience. So I think that's gonna always be the case. Even like when you look at companies like Shopify, on the surface, you might think, oh, there, there's a subscription, you know, business model.

[00:41:31] Yes it is, but 70% of their revenue is transaction, less than 30% actually is subscription. So I think that's gonna be the typical mix with any company in our space. Whether there's a subscription at, you know, attached to, you know, an artist's plan or whatever. and if we take a percentage, we just approach it differently than most where we take a percentage where we add-value.

[00:41:54] So, you know, back to what I was saying earlier, when we launched with Speedy payouts and get your money, you know, week after the stream happened versus two months, that's when we take a percentage versus some companies say, we're gonna take 20% just to deliver your song to Spotify. That's bullshit to me.

[00:42:09] You know? So, yeah, it's gonna be a mix of, you know, different, you know, streams of revenue, some subscription, because you need a pay wall just to make sure you're, dealing with serious people. That's the subscription side, but I think the majority of it's gonna be from the revenues generated from that relationship being established, and if we can add, you know, a little bit more service to our mix, to help an artist even grow even more, that's another example of adding value to why aren't you taking a percentage?

[00:42:38] But yeah, I think the transactional revenue's gonna be the lion share of where the revenue comes from.

[00:42:42] That's what I was 

[00:42:43] Dan Runcie: gonna ask about next because I know that if we take that Shopify example further, they have their white club or their white glove enterprise offering for the clients that they hope that they can keep, that don't go create their own website or create their own stack, right? And tie back to what we said earlier, that would be.

[00:43:00] I assume how you all would try to make sure you keep those superstar potential artists on Trac opposed to doing their thing.

[00:43:08] Yeah. Yeah. we we're building out a concierge team as we speak. we just hired a sales guide that, that can help those clients, those artists and artists teams, you know, achieve goals that they might have and really have a more intimate relationship with them. So one might say, oh, that's a label.

[00:43:25] Like we think of it like any other business that, you know, sells a software license that gives you an account manager. that's how we think of it. So it's like Salesforce, you pay them a million dollars for software, guess what? They're gonna make sure you have a success manager to make sure that you achieve your goals, that you can renew every year, every year.

[00:43:45] So that's kind of how we're approaching the business for that top tier in hopes that they don't go graduate as they say to some label. But if money is the carrot that pulls them away, like I said, we're hoping to solve some of that problem, with some defi Web three shit too, you know?

[00:44:00] And I think if that's what things come to, then those are good problems to have, as I always say.

[00:44:05] Yeah, absolutely. Good problems to have. Yeah. Definitely. Well Cardin, this is great. Appreciate the breakdown on everything related to Trac where things are moving forward, and just good to hear where you see things moving with the industry.

[00:44:17] I think a lot of companies are trying to see where things sit and what you're building as a reminder that you don't have to pick between one, find a way to integrate it into your business model and potentially do both of them. So before we let you go, what's the best way for whether it's an artist, manager, or for anyone else that's listening that's in the space to follow along with what Trac is doing?

[00:44:38] Cardin Campbell: They can go to Trac.co or go to our social, Trac.co I think everywhere. and follow along, you know, all the things we're talking about. You know, we're, gonna be doing a lot more on the content side as well to just to educate the artist and, you know, talk about the problems that exist and how we are the wedge or the solution for those problems.

[00:44:55] So yeah, I think our website and our socials. Would be a great place to start. and then yeah, we can take it from there.

[00:45:02] Dan Runcie: Good stuff. Cardin, thanks again, and it's always great to have a fellow Jamaican on too, so appreciate you

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