I had a great chat about the future of streaming and more with Ari Herstand, who isan independent artist who also runs Ari’s Take, an education business to teach others artists about the industry. He just released the third edition of his book, How To Make It In the New Music Business.Ari joined me to discuss how artists are navigating new music releases. It's increasingly getting out of the artist’s hands in favor of the uncontrollable algorithms powering the likes of Spotify and TikTok. Ari says it’s like, “playing the lottery.” While algorithms are taking the human element out of music discovery, that human touch has found itself into new artist monetization tools like NFTs. It has inverted what Ari calls an artist’s “pyramid of investment” for an artist growing their fanbase.Ari and I covered a lot of ground on this episode. Here’s what you can expect to hear from us:[3:10] Waterfall release method infiltrating Spotify[8:15] Music discovery power shifting away from human, toward algorithms [11:40] DSP’s purposely pulling power away from playlist editors[19:21] TikTok isn’t for every artist[21:26] Evolving team structure of an indie artist [27:55] Role of music NFTs[31:44] How Sammy Arriaga sold $250k of NFTs to non-fans[40:02] The Pyramid of investment [49:10] Ari the musician vs. Ari the educator [50:05] Updated version of How To Make It In New Music Business bookListen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSSHost: Dan Runcie, @RuncieDan, trapital.coGuest: Ari Herstand, @ariherstandLearn more about Ari's book, How to Make It in the New Music Business here: https://book.aristake.comLearn more about Ari's Take here: https://aristake.com/This week’s sponsor is Laylo. Join artists like Kodak Black, Sam Smith, and others who notify their fans instantly when they drop merch, tickets, and more. Create your own drop page for free in seconds at laylo.comEnjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapitalTrapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.TRANSCRIPTION[00:00:00] ARI HERSTANDI'm not a good recording engineer and I'm not a producer. So that's another team member that I'm going to hire when I make a record. Like I'm not Finneas. I'm not going to make a record in my bedroom. Like I can't do that. And that's not what I want to do. Like honestly, that doesn't inspire me. What inspires me is to make music with other people.[00:00:26] DAN RUNCIE INTROHey, 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 executives in music, media, entertainment, and more who are taking hip-hop culture to the next level.[00:01:36] DAN RUNCIEToday's episode is a playbook for all the indie artists out there. I had a great conversation with Ari Herstand, who is a musician himself, and he's also the founder of Ari's Take, which is his education business that focuses on how artists can make it today, especially indie artists. How indie artists can make it today in the new music business. And that's actually the title of the third edition of this upcoming book. Ari and I talked a lot about some of the new and updated insights that he has in this edition of the book, specifically around streaming, and how artists are starting to favor and prefer focusing on algorithms and how that can get them more listeners and where playlists currently sit with artists prioritizing them. And we also talk about NFTs, TikTok, and Ari's concept in the book called the Pyramid of Investment. This is a great conversation for anyone that wants to better understand the music industry, especially for the growing segment of independent artists that are carving their lanes out for themselves. Here's the episode. Hope you enjoy it.[00:01:48] DAN RUNCIEAll right, today we are joined by Ari Herstand, who is the author of his new book that's coming out, how to make it in the new music business. He's an artist himself, and I was lucky enough to be a guest on his podcast a couple months back. So Ari, it's great to have you on. And congrats on the book coming up.[00:02:06] ARI HERSTANDYeah, thanks, Dan. Thank you. Thank you. Very exciting. The third edition and get ramped up for that. But it's great to be here with you today. Thanks for having me.[00:02:17] DAN RUNCIEYeah, definitely. And I know for you, one of the big topics of the book is just how artists continue to evolve with how they're releasing music, how they're paying attention to what's going on with streaming right now. I feel like you have a good vantage point for this because you're doing so much of this yourself with your own releases. What are some of the big changes? Because I know that everything post-pandemic has been a little different, and now we're heading into this new phase right now with the new year. What's the big thing for you that you're seeing with the evolution?[00:09:07] ARI HERSTANDRight. So every artist needs to ask themselves what their intentions are with their release. And so, you know, the beautiful thing about the new music business and the scary and daunting thing about the new music business is there really isn't a right or a wrong way to do anything. There is the right and wrong way for you. And that could be the wrong way for me. So everyone, you know, it's based on your intentions and what your goals are for the release. If we just go, you know, more in the mainstream realm or let's just say your intention is to be successful on Spotify. Because that's a metric that most artists these days are kind of using to gauge the success of their release. And they want to have the best chance of, you know, grabbing that Spotify, being being blessed by the Spotify God, I guess. So to do that, there is a very specific release strategy that has been studied and now tested and now used by everyone from Lizzo and Krungman to Maggie Rogers to Robert Glassberg. And that's the waterfall release method. And Indie artists, you know, that are just releasing their first few singles are using this as well. I mean, this is the waterfall release method. And I'll break this down a little bit on what this means. This has started to get used a few years ago, but it really picked up last year in 2022. And now 2023 is I think going to be the year of the waterfall. But basically what it is is that, you know, you release singles leading up to the album. That has been happening for years now. However, here's what gets a little bit more where where it gets a nuance on how those singles are released. It's you don't just release a single song anymore as a single. You release your first single one song. That's just the one song released one second now your second single is that the new song is track number one. And the previous single that you released is track number two. So it's technically your second single, but it's kind of like a two song album. If you really go that way, if you're tuning it up, if you're an artist is to the artist asking this all the time. Well, how do I do this in my district? back end or whatever, like doing it's a two song album. And the way that the streams maintain for the previous single and that you don't lose your playlist inclusion, all that stuff is you use the same highest or C number. And so it's if you use the same highest or C number that used when you released that track, a month prior, it will be identical stream counts. And then a month later, you release your third single, but that's now a three track album. You know track number one is the new single track number two is the single you release a month ago and track number three is the is the single you release two months ago. And as long again, use the same highest or C numbers, it'll be included in the same playlist. They will be identical tracks, wherever they're included on people's algorithm, personal playlists, all that stuff. You can do this. People are doing five or six singles that way. And then the album and this release method, you know, this could take eight months, essentially, if you want to do one single every four to six weeks, and then the album. How you can kind of look at it, is you're building the album. And so it doesn't have to go on order, you can pick whatever order you want based on your singles. And then the final album is the album order, no correlation doesn't have to be the single order, you can pick whatever order you want each time. The track art can be different each time. I've seen it, people do different single art for each release. I've seen people just use the album cover for every release. So you know, at the end, you might have like six singles released that each have a few different songs on them. And then the full album, some people pull those previous singles down. So if they want to get a clean discography going up there, you just have a final album at the end of the day. And the previous singles with like the two song album, a three-song album, the four-song album before they pull those down. But you're not going to lose any playlists, you're not going to lose any stream counts because you're using same iris to scene numbers each time. So that is a release method, and the reason people are doing it this way is for the Spotify algorithm because Spotify likes to have regular releases. And if you send somebody say, hey, here's my new song and you send them the link, they're going to listen to that song. Now, if there's nothing, no other songs following that song to listen to, after your song finishes, Spotify is going to recommend them something to listen to or they're going to jump off and listen to something else. Now, if you give them the songs to listen to that after your previous releases, they'll stick around and keep listening to it. So the reason people are doing this is for the Spotify algorithm, but also to keep their fans engaged. So like say, here's your single number four and they listen to it and like, oh, cool. What now? I'm going to go back to listening to my favorite artist. Unless you have singles three, two, and one also there. And like, oh, I'll just keep listening to the other songs on this essential playlist. You think of it, whatever you want, a four-song album, a four-song single, a playlist of your new singles. However, you want to think of it, the user is just thinking, oh, I'm clicking on this link or new music Friday, or I'm in my release radar. I see this new single come out by this new artist I like. And then Spotify is going to start to recommend those songs through the algorithm. And the best thing about continuing to release the and the waterfall method is like those previous singles stay included in release radar. So this is like what has been figured out by labels and managers and artists over the last few years. And based on what Spotify wants to see and basically what they're being rewarded for with the algorithm from Spotify. And you know, I think a few years ago, everybody was chasing the playlist editors and like, oh my gosh, if I can just get included in the rap caviar, then like I'm set forever. Whatever the playlist inclusion, the editorial playlists are not as powerful right now as the algorithmic playlists are. That is a big change. Is like three, four years ago, people were like, oh, it's all about the official editorial. Now you want to trigger that algorithm because that is now personalizing every single user's playlist based on what Spotify thinks that user likes to hear. And you want to get your songs included in that. And people are just letting Spotify feed them now based on the algorithm versus seeking out playlist[00:09:27] DAN RUNCIEAnd why do you think that that shift happened from the playlist prioritization to the algorithm? Was it something internal with Spotify or is it just a natural decline in the power of playlist?{00:11:40] ARI HERSTANDYeah, I mean, the main thing is is let's think about what Spotify's intentions and goals are. Their goals are to keep users on their platform as long as possible. And they've discovered that if you feed users songs that they want to hear and have a higher success rate of them continuing to listen and stay on Spotify, then they're going to follow that. Then Spotify is going to do more of that. So they've been AB in this for years. They're like, OK, do people stick on our platform on Spotify longer by listening to our editorial playlists that human beings employed by Spotify are creating? Or do they stick on our platform longer by the algorithmic playlists that are internal robots are curating for them, the algorithm is curating for them. And what they found is that people are sticking around longer with the algorithmic playlists. So they're now doing more of that and realizing that this is what it is engaging users to stay on Spotify longer, because that's what users prefer. The algorithm has gotten a lot better at learning people's tastes, music tastes, than any singular playlist editor. And the other thing is, when we're talking about indie artists, is that why indie artists need to refocus their efforts into more of the algorithmic lane versus the editor lane, is that playlist editors, I mean, it's like playing the lottery to try to get an official Spotify editorial playlist. For one, with 100,000 songs being uploaded every day, you have a very, very hard chance of getting selected being one of those songs that is going to get included on. The very select few Spotify editorial playlist spots. But the algorithm, there's billions, literally billions of playlists that theoretically that they can put you on, or the algorithm will insert you into various people's radios or discover weekly or whatever. You have a much better chance of getting there. And then if users respond, well, do your song there. I mean, you pop up on someone's discover weekly, and they click save. I like this song. I want to hear more of it, and they don't skip it. That sends signals back to the Spotify algorithm, like, oh, this song is performing well. Let's try it in more algorithmic labels. Let's try it in more radio. Let's try it in more of these. And then theoretically, you'll just get included more and more, and then it'll just kind of snowball onto itself.[00:12:46] DAN RUNCIEYeah, I think the algorithm getting better, that what you mentioned, is likely one of the big drivers of this, because if I think back to the days of, let's say, like the mid 2010s, the algorithm still felt a bit similar to those old Pandora algorithms where after the seventh song, you start hearing the same thing over and over. And if you're comparing that to, let's say, what Tuma Basa was doing at Rap Caviar at the time that, of course, yeah, I think Tuma is going to be the better curator of what you have. But if you're shifting things to now, where these algorithms just get better and better and better, then, and I think as well, over time, a lot of the playlist also had that alert. There was a bit of the, oh, this is the new radio. This is this, but then, yeah, when the playlist is better and better, even as a Spotify user over time, you can see that, okay, they do have a better sense for where things are. So naturally, it did shift the behavior. And I think you kind of saw this more broadly with, you know, outside of music as well, with movies or TV shows and other things. I think the algorithms do get better over time.[00:16:02] ARI HERSTANDOh, absolutely. Yes, we're seeing that, you know, absolutely across the board with Netflix and Hulu and Prime and all that stuff. But, I mean, you bring up a good point about, you know, the human and the human playlist editors and what, you know, the power has shifted away from these playlist editors in part because Spotify is pulling the power from that. Because, you know, they're not giving the playlist editors free reign. It's kind of like if we can compare it to, you know, radio stations back on the day that the DJs had the power and they could play whatever they wanted. And that was like, you know, when the 70s and the 80s and maybe even a little bit into the 90s, you know, the DJs could play whatever they wanted. And they were all powerful because that's how people discovered music. Then Clear Channel took over and bought up all the radio stations and was like, oh, guess what? These are the only songs that you're allowed to play now. Here's the list. And then every week Clear Channel would update that list and send the list to all the DJs and say, you can choose, but you have to play these songs. So then the DJs became less powerful because that power was removed away from them by the overlords, which was the owners of the station, which was Clear Channel. The same thing has started to happen on Spotify. The editors used to be the all powerful DJs. They used to be all powerful playlist editors. Now they're overlords, they're owners, Spotify has come to them and be like, well, guess what? Your playlist is not keeping people on this, on Spotify and on the playlist long enough anymore. So you're only allowed to do three new songs a week. And in those three songs don't really perform well, then you're either gonna lose your job or you're not going to have the liberty to choose the song anymore. And of those three songs, they actually have to be from this list, which is the song that have already been pre-tested on the algorithmic side. So it's kind of like we see the same thing as it's like, instead of clear channel dictating the list based on their private marketing rooms and studies with surveys of listeners like they used to do when they would test songs with radio with market groups, now Spotify's testing songs with the algorithm and then they send those songs to the editors and be like, okay, these songs are proven. So when Tua was selecting the song for Rap Caviar, he was at the start of it. But as it got later on and on and what's happening with today's topics with Rap Caviar and all of them, he's just not one person anymore that's shooting. I mean, when Troy Carter was at Spotify and kind of in charge of all this, he said this and this was mind you four or five years ago, this was happening to them. It's like with those big, big playlists, he's like, it's no one person that is deciding this. These songs are tested and then we decide that it was going to go into those big playlists. But now that's happening on every playlist top to bottom.[00:16:25] DAN RUNCIERight. And circling back to what you had said at the beginning that this, of course, is shifting artists to that focus on how they're releasing music, the waterfall strategy, but tweaking that specifically for what they're doing with singles leading up to the album. But I also have to assume that to a certain extent, some of this does become table stakes in that everyone, as you mentioned, is doing it that knows what they're doing right, whether it's you or it's Lizzo or others. So once that's kind of the lay of the land, are there additional things that, you know, artists that you're at least suggesting that artists should or shouldn't be doing or at that point does become more and more dependent on things that are independent of the release, whether it's the artists fandom, the quality of the music and so on.[00:19:21] ARI HERSTANDAbsolutely. And this goes back to the intentions. And so, you know, it's no secret that in 2020, 2021, if even a bit last year in 2022, the Tiktok was, you know, a massive driver of streams. And so it's like, for some artists, that was where they found success. But, you know, and this is where we get into what are your intentions and who is your fan base? If you're making kind of straight ahead rock and roll, that's going to appeal to like 35 year old plus or you're making like throwback traditional R&B, that's similarly going to appeal to a 35 - 40 year old audience and up. Your marketing methods should not be Tiktok. So like if somebody's like, oh, you got to do a Tiktok, well, like, no, you don't have to do it. You know, you have to understand who your audience is, if your audience is on Tiktok, then maybe. And if your music that you make could be tiktokified, it's like, you know, it's like it's funny, you know, and all that and with Lizzo's song About Damn Time. You know, the thing that went viral on Tiktok was like the seven seconds of the first line of the second verse. It's like the most random shit that catches on Tiktok that you just like don't even know and oftentimes it's just like, you just never know what's going to catch or not. And it's like, so yes, Tiktok that can be a strategy. Absolutely. And it's like buying lottery tickets. So like the more you post, the more, you know, tickets that you're buying the higher profitability you have of something catching and then people using that bit, of course, there's deeper strategies that you can implore if you really want to study this. If you're like Tiktok is the method and the way that I want to go, totally like you can, you can work influencer marketing. That means, you know, get hundreds of influencers with varying audience sizes, micro influencers, macro, whatever kind of budget you have, pay them a little bit of money to use your song or your snippet of your song, your 15 seconds of your song in their video. Have everybody do it in the same week. And hopefully that gives you a chance that inspires more people to use that same 15 seconds in their videos. Sometimes it works. Sometimes it doesn't. It's kind of like back in the day, you know, when labels would work a radio campaign and spend $300,000 on promoting a single at radio. Sometimes it worked. Sometimes you lost $300,000. And that's what we're seeing right now with influencer marketing campaigns because Tiktok is so fickle and random that you don't know if it's going to work. And if you spend $100,000 on an influencer market, so that is one way.[00:19:38] DAN RUNCIEYeah, I think the Lizzo point is key with that because I know that she spent and her team spent a lot of time focused on trying to make that whole album special pop on Tiktok. So to your point, the fact that they probably thought it would have been the bad bitch of clock live but then ends up being a completely different line that ends up going completely viral because don't know how exactly it's gonna go but the fact that the team put in work means that something was able to pop there.[00:21:26] ARI HERSTANDThe beauty of TikTok is that you can test and test and test and test and test for free, especially like indie artists are doing this all the time. So like yes, Lizzo has millions of dollars behind her and a full team of people that can do this. I'm seeing this with indie artists doing this all the time where they're just testing on their own, you know, they'll post a few videos a day or a week or whatever with different snippets of their line, of their songs rather, and seeing which ones respond best. And then like, oh, okay, it's this part of the song. Like, you know, if they were Lizzo, they were like, oh, it's the first line of the second verse responded better than the other previous 15 snippets that I posted over the last three weeks. So let me do 10 more videos of just that first line of the second verse and see if it was a fluke or if this is actually about a pattern that I'm on to something and they're like, oh, that is what's connecting. And like, oh my gosh, 20 people just posted videos using that the first line of the second verse and they're like, all right, let's keep doing that. And then you kind of, you know, this is how you discover what work is just trial and error, whether you have a label of, you know, 20 social media experts doing this and a million dollars behind it to like, throw gasoline on the fire by hiring influencers to do this. Or if you yourself and your best friend in your bedroom figuring this out, it's the same strategy.[00:21:46] DAN RUNCIEYeah, that makes sense. And especially with the fact that Indie artists can tweak it, it is free to essentially tweak on TikTok. But I'm curious to hear your opinion on just how the Indie artists specifically can have the ideal team structure. Cause like we said, on one end, you have Lizzo's million dollars behind you on the other end, you have, yeah, it's you and maybe your friend can help you do this. But somewhere in the middle is that successful Indie artists that doesn't have the, you know, major record label resources, but it's still tweaking things. So even if we think a bit more broader than social media, what does that team look like? Like maybe even for yourself, like what does that team structure look like to make sure you have all the pieces in place to run a successful Indie business?[00:27:12] ARI HERSTANDTotally. I mean, it's a great question. And I talk about this in the book. I've updated the new team. I call it the new team. Because there's been the traditional team that's been around for decades. And that's what everybody understands. Like your art manager, your personal manager, your record label, your booking agent, your publicist, your attorney, you know, a publisher like this. That's the traditional team that, you know, you'll read about in the other music business both written by lawyers that were written 30 years ago. Most in the industry on that level, they haven't really updated that team. But when it really comes down to what we're looking about in the new music business with Indie artists, especially before you get those big players on your team, you still have to run your own business yourself. And sometimes we've seen a lot of NDRs that don't ever want a record label. And that's totally fine. So, you don't need that scene, remember necessarily. But what you do need is to be putting out regular content that's representative of who you are as an artist. And so what does that require? Well, it requires video content. Okay, you need someone on your team that can make really good video content. If that's you, cool. But sometimes it's not the artist. And so having someone on the team that's good at video, videographer, whatever, an editor, that is a key number of the new team that is extremely necessary. Say with a photographer, you know, it's really important to kind of have regular, new high quality photos or any kind of photos, whether it's your, you know, candid photos when you're around, when you're on tour, photos from the stage, from behind you with the audience there showing what you're about, promo photos, press photos. So like a photographer. It doesn't need to be a full time member on the team, but I think doing regular photoshoots and having people that are regularly pumping out photos. Again, it doesn't need to be as formal as like a record label or a team member like that. It's like, oh, you're my best friend. You have a new iPhone and you're really good at taking photos. Let's like take a lot of photos all the time and continue to post them. And that counts too, you know, and same with like a designer, like a graphic designer, you know, there's so many used cases where graphic design is gonna be necessary, whether it's designing your album cover or it's merch items or it's show posters or, you know, any other cases where you need something design. Again, it doesn't need to be a full time member of the team. It could be someone you enlist over Upwork that you hire to do that or it could be a friend of yours. That wants to help out. And then there's this role that I call the digital specialist. And, you know, managers and labels of column, it's like, are they calling digital? They're a digital person and it's like, oh, you know, we're going to send it over to digital. Basically, what that is, is like they specialize in social media advertising. This is something that is is really crucial when it comes to the release strategy that we're talking about previously. Virtually every single record label, it be label up to the majors down to individual artists that are releasing music on their own on that have a little bit of a budget are now running social media ads. It takes a lot of time to learn all this and it's a specialty for sure whether you're running ads on, you know, via the meta ads manager with Instagram and Facebook or Tiktok ads manager, YouTube, Google ads, all that stuff. That's what a digital specialist can do and then they kind of monitor everything and then they gather all the assets and then they help kind of guide the strategy. And so all this being said is like these are team members that are important to every indie artists career right now. They don't need to be individual people that handle these roles. I've seen indie artists that do all these roles themselves and they're their own team right now and that's cool. If they can figure that out for me personally like I know that I'm not a good recording engineer and I'm not a producer. So that's another team member that I'm going to hire when I make a record like I'm not Finneas. I'm not going to make a record in my bedroom. Like I can't do that. That's not what I want to do. Like honestly that doesn't inspire me. What inspires me is to make music with other people. So like I'm the type of artist that I'll get into a studio with eight other musicians and we'll track something live, you know, and like that's what I like doing them inspires me. But I need a producer. I need an engineer. I need a mixing engineer. I need a mastering engineer. These are all team members that I might enlist for that one recording. You know, but other people like Finneas was Billie Eilish's first team member. And he was her recording engineer and producer and like she had that built-in team where they could be pumping out music to Soundcloud regularly early on. Whereas like a lot of artists don't have that but some do. It's like again, what are your intentions? What inspires you? What kind of music do you want to make? But there are certain roles that can be filled by either your brother in down the hall, in the bedroom or by someone halfway around the world and Upwork. But these are the roles that can be filled and the jobs that need to get done.[00:27:55] DAN RUNCIEThat makes sense. I know another thing for these teams is someone that is always keeping their eye on the new big thing or the new small thing to be able to test out just being able to figure out what's there. And the past couple of years, Web 3 and NFT specifically have guy and even more traction and I think maybe in the most recent year got a little bit less traction to just a more overall transaction level. But as we're heading into 2023 now, how do you look at NFTs as part of your strategy and how do you look at Web 3 more broadly for what artists are doing and any examples that you may have of like yes, this person that is an indie artist that wasn't just a mature artist like did it and they've done it really well.[00:31:44] ARI HERSTANDAbsolutely. I don't see Web 3 slowing down anytime soon. I still see that this is as a digital society is heading. It's evolving for sure. Bitcoin isn't kind of what is all encompassing anymore like it was five - six years ago. It's not even just the mouth crypto currencies and it's not even just about NFTs like NFTs. The reason that it's lost a lot of its initial luster and sheen is because when it first kind of caught on, you know, early 2021 or so. It was like that was the sexy new thing that nobody quite understood but once you got it you're like well, this is crazy at the digital collectible.Cool I collected playing cards when I was growing up, I get it, sweet, that's what this is the digital collectible one of one okay cool I understand it so that was like. And people are trying to find used cases like you know we initially heard about Kings of Leon was like one of the first that did like an NFT album and they tied you know physical experiences to their NFTs like you get front row tickets that you were one of the NFT holders for life and you could redeem the NFT for proper tickets. So that was like the first way by say now we're seeing is more used cases and people that are creating them independently so like I had on the podcast on my podcast the name is Business Podcast. Sammy Arriaga, he's a Latin country artist and he's a really great, really cool crossover artist. He is a country musician but it's kind of with Latin infused country music it's really cool. He had a deal with Sony, he was signed to Sony as an artist and any of the publishing deal for a while they you got dropped up. It wasn't up to the major label success standards that they were hoping for. I got dropped. Then he actually had a little bit of success on TikTok in like 2020 and then he pivoted to NFT's in 2022 actually, I believe. And just cut to the headline, he made over $250,000 on his NFT of his album or actually of his song. Just one song to be honest. And how he did it, what was really interesting, it wasn't because of his fan base because the vast majority of music fans right now still have not come around to NFTs. They're not really in the metaverse. They're not in the crypto web 3 community yet. But the web 3 community is still very, very strong. It is thriving and kicking. If you can tap into that, then you can actually have a lot of success there right now, currently today. Now in five years, I do believe that most music fans, there will be used cases and every artist will have something to do with NFTs and Web 3 and micro and bastine which I'll get to in a second. But what Sammy did was he went to that Web 3 community and where do they primarily? Just at the time and still really is on Twitter and specifically Twitter spaces. What he did is he went into these Twitter spaces rooms. These are like the audio, Twitter spaces, the audio, new version of clubhouse and any space that was talking about NFTs and Web 3, he'd pop in, he'd listen for a little bit and then he'd raise his hand and I asked to come up and speak. They'd invite him to speak and he's like, hey, guys, you've been talking about NFTs for the last hour. I play you a song that I wrote, actually about an NFTs and it's called Metagirl and it's a META Metaverse Metagirl and they're like, oh, okay. So essentially, then he played the song. He's like, you can actually get that song right now as an NFT, the links in my, you know, pin the link right here and they were like pin the link in the Twitter space and that's how we did it. And he made $250,000 just from doing essentially by busking on Twitter spaces.[00:32:18] DAN RUNCIEHow many Twitter spaces did he do to make that happen? [00:35:05] ARI HERSTANDIt was a lot, you know, because some of the 100 people, some of the 1000 people, but you did it for a while and like, that's a way, you know, that's not a scalable method necessarily that I'm encouraging people to like go busking on Twitter spaces and make an NFT. But he was able to do that and by finding that community, now, you know, Baratay is another indie artist. She was one of the first to kind of start experimenting on NFT platforms and selling NFTs. What she also did early on that we're now starting to see more widely adopted was she not only would release NFTs tied to her songs, but she would tie royalties to the NFTs, meaning you don't just buy an NFT as a digital collectible that you're hoping to resell and make a little money on. You're actually buying a percentage of ownership of the song or like a royalties as I should say of the song. So like she had one time, you know, auctioned off, I guess, you know, and it was through a blockchain platform. I believe she used royal at the time, which is NAS's platform. She like gave away 40% or sold 40% of one of her songs to people. So you could buy whatever percentage you wanted and it was valued at a certain level. And then you can buy that. Now, those platforms are starting to pop up like I'm on the advisory board of label coin and they're a new platform that, you know, started by a booking agent, Mark Miller, who I've known for years. And he approached me and he's like, Hey, here's what we're doing. And it's essentially it is the same concept. Using blockchain technology, but essentially being able to sell a percentage of royalties for your song. So you could theoretically like say, I'm going to sell 50% of the royalties of my song. And it's like, I'm going to sell it to a thousand people. So you could buy like, you know, a half a percent or a quarter of a percent or a small percentage. It's like buying stocks, essentially. It's like, you know, like the Robin Hood from music. So we're starting to see that and the blockchain technology that the whole infrastructure is built on because it's just more streamlined that way. And so like, we're moving to in the future when these platforms likely, book, coin and royal and the others like really start to break into mainstream is the fans are going to think, Oh, I have to learn cryptocurrency and I have to get a wallet and, you know, buy some of Ether, you know, from the Ethereum and buy some ether and like. You know, that is the heavy lift that why it prevented so many people from getting the NFTs. Like I want to learn how to do this and pay gas fees and blah, but like all the shit that it takes hours and hours and hours and hours just for one person to buy like one NFTs. It's like we're getting a little away from that and it's gonna be like a fan is like, oh, I'm gonna get 10% of royalties of Ari's new song and it's done in 10 seconds. And like they don't even know[00:36:33] DAN RUNCIEYeah, it needs to be as easy as like buying something called the Amazon, right? Like it needs to be instant. And I think that I agree there. I think that was probably one of the biggest gaps for a while. There was all these things. And some of it I think is natural with any new technology. There is an adoption curve. It's always gonna track the enthusiast which at least in this recent era congregated mostly on Web 3 corners of Twitter and we're discussing things. So I think it's really smart, you know, for artists to, you know, jump in on Twitter spaces the way that they did. It was really interesting to hear that in a lot of ways yeah, they weren't even reaching, they're like die hard fans. They were just reaching people that were interested. But that said, I think so much of this rings true with something else that's a concept in your book, the purement of investment. And I think I look at this a lot of ways, almost like a inverted sales fund if you will, address in terms of building awareness, the decision intended and actually getting people to act on it and knowing that you can obviously generate revenue at each level of those streams. But NFTs, especially if they're used the way that they could is something that does sit at the tip of that pyramid. It's not gonna be everyone, but it is something to monetize the die hard fans that you have. But even there you could adjust where it sits based on what you price it, how many drops you have and so many other things.[00:40:02] ARI HERSTANDAbsolutely, yes, the pyramid of investment on this concept that I have in the book, I'll just kind of break it down a little bit so people understand. It's like, you think about it, you know, this is financial investment. I also have a pyramid of engagement, which I'll get into a second, but what just investment at the bottom of that pyramid, we have the people that don't really spend any money on you directly, they might stream your song, they might stream your music, you might make a little bit of money from what their actions that they're taking like the stream of your music, but they're not like spending money on you directly. So that's the bottom of the pyramid and that's where the vast majority of the music of fans, audience, listenership lives just across the industry. But as we go up the pyramid, you know, then there's like, those that might attend your live stream and like tip you over that or they might just like tip you here and there and you know, in the digital realm, sure, it's a live stream, it's on Twitch, or whatever, or like, you know, they can tip you in real life or something, they're going to your shows and they'll tip you. So it's like the tippers essentially, then you go up a little bit higher, that people are actually buying tickets to your shows. Now they are actually directing money directly to you and they're coming to your concerts, they're your ticket buyers, your concert goers, then you look a level higher, they're the merch buyers. They're the ones that buy merch at those shows or buy merch online, but you know, your store or from your Spotify profile or whenever they're buying merch directly from you, they're like, I'm a real fan, I want to buy merch. Then we go higher and then we're into that category of fan clubs, crowdfunding campaigns, you know, investment, NFT, three point, you know, with that whole realm of like, I'm like such a big fan that if they're on Patreon, I'm going to be their patron. If they're running a Kickstarter, I'm going to back their Kickstarter. If they're selling a percentage of their royalties of the new song, I want to buy that. And then at the very tippy tippy top of that, it's kind of a little bit of out too, but it's like those that are buying the VIP packages. So it's kind of like a combination of it all. It's like that, am I going to, you know, go to the show and I spend the $250, you know, do a 10 sound check and get the merch package and do that whole thing. So it's like that's all at the top. And so you think about this as the pyramid of investment, you're going to have fans at every level of that and you want to make sure that you cater to all of them and that you don't exclude some. So it's like, you know, I think people can kind of have understood this concept when, like, I first got this like six, seven years ago when Patreon kind started to hit after Kickstarter. And I saw some of my friends that were running Patreon campaigns and Kickstarter campaigns, I know simultaneously. And to me, that seemed counterintuitive. I was like, wait a minute, your fans are only going to do one or the other. It's like, they're going to either back your crowd and bring you an album or they're going to be your patrons, right? No, I was wrong. What it was, was really like Kickstarter was below on that pyramid. There were more people that are willing to drop a hundred bucks this one time, this one year to back your Kickstarter, but then there's fewer people a little bit higher up on that pyramid that are going to pay you $10 a month on Patreon or Substack or whatever it's going to be, Band Camp, any subscriber service that are a level higher that will be your subscribers and then it just kind of keeps going up from there.[00:40:28] DAN RUNCIEYeah, I think that makes sense. And the thing that I've often thought about the model too is that of course the revenue that you get per fan does increase as you go further up that period. But if you were to multiply that by the number of fans in each of those tiers, do you think that the tiers do start to equal out roughly or what does that look like for you?[00:41:39] ARI HERSTANDThat's a really great question. I don't really need data to back that up, but that's a really great experiment and something that should be studied, I think like an artist that kind of, yeah, I'm going to work on putting those numbers together. That's a great idea. It's kind of like along the lines of the Thousand True Fans Concept, where this concept is, you know, they say that if you can get a thousand people to pay you $100 a year every year for the rest of your life, rest of your career, now you have a career and that's all you really need is a thousand people to pay you $100. However, if you break that down a little bit differently on the government of investment, you don't need the thousand people to pay you $100. You could get a hundred people to pay you $400, you could get 200 people to pay you $200. You could get, you know, 400 people to pay $50, you could get 700 people to pay you $20 a year, you know, and you could really break that down a little bit differently. And so it's like, how are you going to get to that $100,000 a year mark if that's your goal or a million dollars a year, if that's your goal. And it all these fans are going to fall somewhere. All this money is going to fall somewhere on that pyramid of investment.[00:43:12] DAN RUNCIEYeah. I think about it this way too, maybe from like an example perspective. Let's look at someone at the top. Look at someone like Beyonce. I could see her. I would need to do the math. But let's just say ballpark speaking, she gets $30 million a year revenue from her music, right? Purely from streaming. I could also see her getting $30 million a year from, let's say she does a few concerts that year or a few special one offs. She could also get $30 million a year from doing two private shows of performing at a wedding or something like that or performing at an Uber private event. So each of those things can equal that amount. But yeah, I think that way to break down the thousand true fans, I think is important too. Because I think when that theory came out, Kevin Kelly's, I think it's back in 2018, but it made a bunch of sense. But I think for most people putting things out, yeah, even that requires a bit of segmentation there. So it's fascinating. And I'm sure so much of this is fascinating for you as well. Because I feel like you kind of have two examples of this with the businesses that you're running. You have Ari Herstand, the artist and you have your own, pure, mid of investment. You also have your visit of this podcast, the courses and the book as well. And for you, I'm sure I know you have a team that helps with each of these things, but do you look at it any differently between the two, you know, yourself as an educator that is sharing this information combined with yourself as the musician?[00:49:10] ARI HERSTANDYeah, I mean, absolutely. Like, I think, you know, why people have responded to the artist take business and my book and the artist take account of me and the music, the podcast and all the stuff that like, I do on the music business education front is because I am a musician. I have that musician's empathy. I've, you know, lived it and living it and it's like, I understand how hard everything is. It's like, you know, I'm not just saying it to say it like NN because I read it somewhere. Like, I'm living it. I'm interviewing people that are living it. You know, I put on two different hats like I look at myself almost now as like part journalists and like kind of, you know, in the lane that you're in where by interviewing more people, we learn more and that's great. Like, I know my perspective and everyone's perspective can be limited to their own experiences. So I try to widen my experiences by widening my information base by talking to more people. So the whole point of the podcast honestly was just to talk to more people, smarter people than me that are doing bigger things and more successfully than I was doing. So I could learn from them and then share that information. Like I've always interviewed people from like artist take and writing for other publications and I then made the podcast basically public. With my own music career, you know, the intentions have shifted. But when I started Ari's take as a blog 10 years ago, I made 100% of my money from my music. I was like a full-time artist, touring artist releasing music, all that stuff like touring most of my year, going on plenty of national tours. The intentions have shifted when I realized where I can be most useful and necessary. So like I don't tour anymore. You know, I'll do one-offs here in there. Like when I'm with my new funk project, Rasmentisdrake, it's like I do in a kind of an immersive funk experience. And I want to keep that in one place like we did in L.A. in like last summer, we did, you know, a 16-show run in L.A.. That's like my creative outlet. Like I do in the intentions of that, I want to top the Spotify charts and like go on tour. So like why I keep going back to like what are the intentions for every artist is like they're different. So my intention for that was like I wanted to sell out all those 16 shows and like that was my own function for the off thing. Or I wanted to at least, you know, get people a good experience and have a good time doing these things. Like I released a solo album last year under my own name. And the intention of that was honestly not I want to go on tour or I want to, you know, and get millions of streams. It was just like I went through a break out and I needed to write these songs and release them for my own mental health and just like honestly just for my own well-being and like get these songs out there. And people connected with them. And that was wonderful. And like I heard from tons of people that really resonated with the songs. Like that was something that you know gave me some perspective to is like, my focus right now is not making a living just for my soul of singer songwriter project like it used to be. That being said, there's a place for everything. And so, you know, I covered this concept of like the multi-hyphenate. Everyone's a multi-hyphenate. Everyone from Beyonce down to me and any other indie artist that is working at a day job or whatever, everyone's a multi-hyphenate. Like, your job title can start with musician and then it can be, you know, what else? Like, some people are musician, lift drivers. Some people are, you know, musician, entrepreneur, CEOs like, you know, Dre as Beaks, headphones is like, oh, he's an entrepreneur and a business person. And so it's like, I don't think the artists need to feel like shameful or insecure about their other hyphenates, their other job titles. You know, at the end of the day, you want to do what inspires you. And so for me, you know, my idea of success is making a living, supporting the kind of lifestyle that I'd like to live doing what I love and offering value and meanings to people. And so I've kind of structured my own life in a way where I go to where I feel like I'm needed and then where I can bring value to people. And that I've found, you know, most useful in kind of the artist take blame and the music business lane of everything I'm doing. But at the same time, like, I'm an artist. Like, I'm never not going to be an artist. Like, that's just like who I am. That's like what my soul is. And so it's like, I can't ever stop doing that. Like if I don't want to force myself to ring out as much money from that, there's no shame in that. Like that's, you know, sure, you know, I always say it was all the time to be, it was like, if you're happy making music from home and putting it online and you're making like 50 grand a year by doing that. And that's like what you figured out how to do. You've got some same theory, you're on some ads, you got some streaming, whatever. And like you're doing that and you're happy. Wonderful. Could you make a hundred, 200, 300,000 dollars more if you like one on tour or up your merch operation or like, you know, started a Patreon or launch an NFT or something like that? Maybe. But do you have to? But no, of course not. Like do what makes you happy. Like if that's going to make you unhappy because you're chasing more money and like why? Like you don't need to do that. Like do what makes you happy. And that's the big thing. And so it's like, you know, I'm constantly figuring that out for myself and I encourage other artists that figure it out for themselves.[00:49:30] DAN RUNCIEYeah. And I think that's a good way to put it, right? There's so much action now. You know, there's so many opportunities in everywhere. It isn't multi-high fit. It is really up to you how many hyphens you have behind that name and how heavily you want to push all of them. And I think the other one for you is author. And of course you have this book coming out in a couple of weeks. So yeah, before we let you go, let me just do one more close to let people know the updates with the book and when to expect.[00:50:05] ARI HERSTANDYeah. So It is out January 17th, 2023. You can get it wherever you find books with its Amazon or Barnes and Noble or your local bookstore. And I don't know when this is airing or gonna go live, but if you're in L.A. on January 17th, join me at Barnes and Noble up at Grove and we're doing a book signing and a live podcast recording there. But yeah, I've added a hundred new pages to it. I've updated stuff in every section. I've rewritten chapters, but scratch, of course. A lot of stuff we talked about today is in the book like NFTs and Web 3 and TikTok and live streaming. A lot of stuff that didn't exist three years ago. So I've completely rewritten the majority of the book. So you know, if you have the first or second edition of the book, I encourage you to check out this third edition. It's very, very different and updated.[00:50:46] DAN RUNCIEGood stuff, man. Excited for you. Thanks for coming on. This is great. {00:50:50] ARI HERSTANDThank you. {00:50:54] DAN RUNCIE OUTROIf you enjoyed this podcast, go ahead and share it with a friend. Copy the link, text it to a friend, post it in your group chat, post it in your Slack groups, wherever you and your people talk, spread the word. That's how Trapital continues to grow and continues to reach the right people. And while you're at it, if you use Apple Podcast, go ahead, rate the podcast, give it a high rating and give a review. Tell people why you like the podcast. That helps more people discover the show. Thank you in advance. Talk to you next week.

Sean “Diddy” Combs is one of hip-hop’s most serial entrepreneurs. His business track record stretches 30 years with successes in completely-different industries — music (Bad Boys Records), clothing (Sean John), spirits (Ciroc and DeLeon), media (Revolt), among many other ventures. To take a closer look at Combs' empire, I brought on Tarik Brooks, who is the president of Combs Enterprises. Many chalk up Diddy’s entrepreneurial success to his influence and brand alone. While Tarik doesn’t deny Diddy’s star power, he also argues that line of thinking understates Diddy’s business acumen — his ability to spot trends, attract talent, raise capital, and so forth. Not only that, but the broadness of Combs Enterprises is a unique competitive advantage. Diddy’s different businesses across sectors give them unique data points that can drive decision-making. The group announced a new foray into cannabis in late 2022. However, they won’t enter the space completely void of knowledge. Using insights from Revolt or Ciroc, they can glean how customers think about cannabis already.  Tarik and I dove deep into Diddy’s sprawling business empire this episode — the “why” not the “how” behind Puff’s success. Here’s what you can expect to hear: [0:00] Combs Enterprises’ focus in 2023[2:22] Synergies between Diddy’s different businesses [4:40] Using Revolt Summit as a testing ground [6:29] Origins of the “Ciroc playbook”  [9:32] How much strategic overlap is there between Ciroc and DeLeon marketing? [15:41] Entering the cannabis space[18:00] Regulatory challenges in the cannabis industry[26:01] Why Diddy is not just another celebrity entrepreneur [30:03] How Combs Enterprises invests in startups[34:21] Did Diddy really back Elon Musk’s purchase of Twitter?[36:45] No rush to sell Bad Boy Records catalog [41:32] Sean John comeback [47:05] Diddy’s attempt to buy the Carolina Panthers in 2018Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSSHost: Dan Runcie, @RuncieDan, trapital.coGuest: Tarik A. Brooks, @tarikamin  Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.TRANSCRIPTION[00:00:00] Tarik Brooks: Twitter's impact in society is certainly bigger than how it shows up from a profit and loss and from a market cap perspective. And when you look at, you know, where Twitter is trading today is trading at a fraction of like Facebook or like Snapchat is the question from an investment perspective with some you could create meaningful.[00:00:33] Dan Runcie: Hey, welcome to the podcast. I'm your host and the founder of 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. [00:00:53] Dan Runcie: All right, today we got my guy, Tarik Brooks, the president of Combs Enterprises. Second time on the podcast. Great to have you back, man.[00:01:01] Tarik Brooks: Happy New Year my brother. Great to be back. [00:01:03] Dan Runcie: So what's the latest from the House of Combs?[00:01:08] Tarik Brooks: Things are wonderful enterprises, man. Tremendous 2022, where we did a lot of investing in our existing platforms and in new platforms. And so, you know, the big push in 23. Is to operationalized and grow a lot of those new platforms. You know, a lot of people are familiar with the cannabis deal, which we announced late last year. We're gonna close that deal and get that operational. We've also been working on an e-commerce platform with Salesforce, called it Power Global, that will launch this year, you know, released music last year. That did great. I mean, he and a sub-Christian. You know, with the first father and son duo to be number one. At the same time, there'll be more projects from Love Records coming in this year. So a lot of new things are in 23, so I wanna accustom a lot of exciting developments. [00:01:56] Dan Runcie: And I feel like one of the strengths for him whenever he is launching a new brand is being able to find some type of synergy between something that he's done that's already worked and finding some way to tie it all together. And for you, I know you've been there for a couple years. Is there like one company or one tie in that really stands out about, oh yeah, what Puff is able to do here? Tweak the formula a little bit, brought it over to this company and then it helped that one too.[00:02:22] Tarik Brooks: Yeah. It is interesting, man, like, because you know, with the ecosystem we have that there are synergies all over the place that we work hard to exploit everyday. What I'll tell you bigger thing is that underneath our ecosystem sits the core premise, a core belief that our culture drives culture, that our people drive what's cool and what's next and what's hot in a meaningful way. So, you know, you go back to blues and jazz and rock and roll to hip hop, TikTok, viral dances, like our people drive that. And so if you look at all of the different elements in our ecosystem. What you see are different sectors that we drive through our cultural presence. And so when you look at our platform through that lens, you see how they all fit together. So then synergies just become finding places where, you know, we can work together to make one plus one equal three or four. Right? And so like, you know, easy examples when you think about how you know our brands will show up at the Revolt Summit. So Revolt hosts this amazing event every year in Atlanta. 10,000 people come. It gives us an opportunity to kinda have revolt, touch to people, but also have ourown touch to people for us to do research for new companies that we're developing the test concepts. These are ways that we don't place there with our ecosystem. I mean, I look at a great example. Deleon tequila. Used Druski in an ad, you know, super funny guy. Did a tremendous job with the ad. We then, you know, connected in with the team in Revolt and he did something with Revolt. It ended up being a great, great opportunity there. So like throughout our ecosystem, you see all these opportunities that exist with our portfolio companies and with the companies that we invest in. We think about how we invest and part of it is all the stuff you expect from any traditional investment vehicle. You know, do you have great leadership? Do you have a strong destructive concept? But what we also know about there two or three ways that this thing could be utilized is our ecosystem for the company. So it's an everyday activity, you know, finding, exploiting, and developing those things [00:04:31] Dan Runcie:  You mentioned earlier about the Revolt Summit and how that can be a test space for whether it's new products or new things. Can you talk more about that? Cause I think that's really interesting. [00:04:40] Tarik Brooks: Yeah, so I mean this past Revolt Summit, the team at Empowered Global, which is the eCommerce platform that I just mentioned, had a space set up where they could introduce the concept to the participants at the Revolt Summit. And more than that, we actually had, and it was, I gotta find you a picture of this. A digital vending machine that was filled with black-owned products. So, and kinda like what you would see at the airport where you have vending machines, where they kinda have, you know, non typical vending machine products, headphones, and different things like that. Our vending machine that we had set up in the Revolt Summit was all filled with products that were owned by black that came from black owned companies. And so that was like just a real example. In that moment, we were able to introduce people to the concept of the platform, try out some new tech and get real time feedback from people who we believe will be a part of that target. [00:05:34] Dan Runcie: That makes sense. Yeah. Because you wanna have people that are first bought in, you get the people there and I think the people that are gonna attend Revolt Summit likely end up being culture shapers or mavens within their particular area themselves. They start saying something's good, and then they can, you know, go back and that's how you're able to spread things.[00:05:52] Tarik Brooks: 100%. It's the way, you know, everybody talks about it in terms of synergies, but we like to talk about it in terms of not planting there, right? Like we have these resources, we have these brands that mean something to people. You know that the most impactful thing we can do is find out how putting those brands together at different times in different ways produces more information, produces more insight, produces more, you know, revenue generating opportunity than any of those entities in silos. So for me, like the silo is the enemy, right? Like the key is to have all of our leaders and all of our team members continuously engaging in a very fluid way.[00:06:29] Dan Runcie: Yeah, the one that always stuck out to me too was Ciroc and the on the ground promotion for that, because there are so many through lines going back to The Bad Boy Days, the Bad Boy Street team, and then the Ciroc Boys. It's very similar playbook and being able to help push that. [00:06:45] Tarik Brooks: Yeah, I mean, look, and again, the playbook is the same. It's the same. You know, when you look at what the spirits industry looked at at the time, it was very different from today. You know, a lot of folks don't realize at that time the only people really trying to market, know black people in the hip was more liquor. Right? Cause I know I wasn't on the team back then, but what I can tell you is he looked at how nightlife worked and how the culture was working and evolving and saw a huge opportunity for an aspirational luxury product. And then was able to apply a lot of the same tools that were driving his success in the music business in spirits. And so that's how you end up with us showing up better than most people in the nightlife, us being able to have the DJs, you know, be a part of our experience. Cause Puff knew back then, in which he knows now how powerful DJs are in the culture and in the communities he lives in. If you look at even now, like a lot of, you know what he's posted socially as, you know, the efforts around love, records, respect. Like, we get what algorithms can do, but understand like DJ is culturally important. Like they mean something to their communities and they mean something to our culture. And in that way they have outside influence, that I think people still underestimate. [00:08:00] Dan Runcie: Yeah, I think as much as things have been movement streaming or NFTs or whatever it is, people still wanna go to the club and people still want to be in the hands of a DJ that knows what they're doing and can introduce them.[00:08:12] Tarik Brooks: Absolutely. There is power and curation. Right. And look, theoretically A.I. will be able to kind of take that input and lead curations that are solid. But you know it's tough to replicate, you know, instinct. And natural art, you know? Exactly. That's the thing, right? Like to be able to think you can do it with just an algorithm means it's all science. And I think, you know, most entertainment industries, particularly when you talk about the power of a DJ, are art and science together. That art is that intuitive thing that, like you, some folks just have, they know when to play the right record. You know, not just cause it's a similar bpm, but they know, cause they know that crowd, they know that venue. They know that audience better than most other people do.[00:09:00] Dan Runcie: Definitely. And I think too, a lot of that we definitely saw with the Ciroc Playbook, but I wanna spend some time in this conversation talking a bit more about Deleon because, I think that that is relatively newer business for other portfolio, but I think there's a lot that's similar, but the lot that's different too in terms of how you've all rolled it out, what you've done, how you've done things differently. So love to start there and maybe start first specifically, how much of the Ciroc Playbook was used with what you've all done so far with Deleon?[00:09:32] Tarik Brooks: Yeah, so I think the core premise stays the same, right? What Puff has been amazing at throughout his career is being able to spot and help develop trends very early. And he saw back in 2013, 2014, that the next wave in spirits was gonna be, you know, brown spirits, in particular tequila. And so when he formed the joint venture with Diageo, that he built that knowing that a tequila wave was coming. Now from the perspective of how industries developed, tequila and vodka are two very different places, right? It is very big, very mature right now, trying to fight off the growth of some of the spirits that are taking customers away, whereas tequila is smaller but fast growing. And it's also very nuanced. So like when you think about what we've been able to do driving Deleon's growth, and Deleon right now is the fastest growing tequila in the country, right?It's on fire right now and just, you know, small plug, you are new to tequila. Deleon are absolutely amazing. I will put them against any tequila that's out there, you know, so smooth ice cube, orange slice. You're good.[00:10:41] Dan Runcie: But any numbers to share in terms of like, cases sold or anything like that?[00:10:45] Tarik Brooks: So look, I'm not gonna go into the details on cases, but again, this is Nielsen’s data,this is not coming right? So right now, you look, it is triple digits right now, you know, comfortable cause to disclose. But what I would say is, you know, part of the Deleon story is making sure Deleon is relevant in culture. And when you hear Deleon Lemonade in the young Miami, I'm not sure when, when you see Deleon on, when you see Deleon sharp in these things, it's a part of ensuring Deleon is relevant in the culture and shows up the right way, but there's also a big part of the future of Deleon that will grow. Talking about the liquid itself, you know how we get to such a high quality. It is the fact that Deleon is aged in both American whiskey and French red wine barrels to get the distinctive taste that, like, that's just part of the story that we're still just beginning to tell and roll out as we build it. And from our view, we are building, you know, iconic, long lasting brands. We want Deleon to be thought of the same way you think about Johnny Walker or Hennessy or any other great brands that are out there. So our view is like you don't rush that thing, you develop that story over time. You feed people in, you bring people into the brand and then you culture that and as soon you cultivate that audience, you know, as it grows. And so, you know, a lot of the kinda principles that we've applied in growing, we're applying to Deleon, but we're also being very aware that, you know, vodka and very different liquids develop differently, Exactly The same. And you think about that as you start to position the brand. [00:12:24] Dan Runcie: Yeah, cuz I think that was a good point that you mentioned just in terms of how vodka has been the market leader just from a type of liquor for so long. So you didn't necessarily have to do that piece of it, but it was more so Yeah. How do you bring this brand that I think some people may have forgotten about, but bring it to the same level as your great gooses in your others. [00:12:44] Tarik Brooks: Yeah. People know people, I mean, look, the way Ciroc hadn't been positioned in a way that was creating a lot of noise, a lot of impact, and I think, you know, part Puff's genius was figuring out that it was amazing juice. It was amazing liquid, with beautiful bottles. So if you positioned it the right way in culture, you could create a wave. And that wave has been historic. This was a brand that was doing, you know, cases annually and now this is a case brand globally. Huge brand in the spirits industry in a sector that was big, vodka's a very, very big sector. Tequila we're growing Deleon as the sector's growing as well. So it's just, again, from a marketing perspective, a different set of challenges, but the same principles apply to how we think about leveraging culture. Leveraging, you know, our ability to kinda set trends to help drive a career meaningful brand, but it all also starts with a great quality liquid that we stand by. I mean, one of the things, right? Yeah. I think one of the things has always been super consistent about is the authenticity around, like, standing behind the products he brings to market. There's not a variant of Deleon or flavor that gets released without Puff. Personally, we stamped that saying, you know, this is okay to go to market with our income.[00:14:03] Dan Runcie: Right. Yeah, cuz I think the distinction too on the flip side with tequila is like, not even that it's so much education cuz I think a lot of people know tequila, but just getting the consumer a bit of a visual of yes, this is the setting where not just our brand but this broader aspect. And I know there's 1800 and there's like others too. Yeah. But like you all be able to be like, hey, This is where, so some of that, what I think worked so well for sag, just in terms of thinking back to those like Vegas promo shots where they had all the people there being able to, you know, have whatever the tequila and Deleon equivalent is of that.[00:14:39] Tarik Brooks:  Yeah. I mean, look, I think a part of the tequila growth story is helping people understand that, you know, while they may have been introduced to tequila, you know, with shots on spring break or something like that, you know, once you learn more, you learn a much more complex liquid that can be enjoyed a lot of different ways mixed drinks, neat, you know, over on the rocks, you know, and all the other kinds of occasions. So I think part of our experience is helping people understand that it's versatility is part of why it's growing as fast as grown. [00:15:11] Dan Runcie: Yeah, and I think too, just thinking more broadly about spirits and things that people enjoy you all now going into cannabis, I think that there are definitely some similarities there. People wanna be able to relax and enjoy what they choose, but so different in terms of not just regulation, but the culture. How has it been, just, I know, even thinking about the origins of that deal, how some of that playbook and mentality can be leveraged for what you all have now with this massive opportunity in cannabis?[00:15:41] Tarik Brooks: Yeah, I mean, look, there are certainly two categories that are at very different stages, but you know, you could argue they've been on similar journeys, right? Like there was a point in time when alcohol was prohibited. When you look at the history of cannabis, you know, you start to realize a lot of the way this product category was treated was less around the specific impact of the product and more around the specific influence. The culture that was around, you know, before that was hip hop, cannabis was huge in the jazz community. And the jazz community was something that black people were bringing and spreading throughout the United States in a meaningful way and, you know, real impact culturally, and there were folks that didn't wanna see that happen. And so a part of the criminalization of cannabis was connected to slowing down the influence of that jazz, that black culture. And so you've seen over the past years been that cannabis has been illegal, you know, the disproportionate criminalization of black people as it relates to cannabis, more than white people. And so this opportunity is an opportunity that gives us a chance to basically through doing good sound business, you know, rights and historical wrongs. When you look at the last 10 years of legal cannabis, Despite, you know, the overcriminalization of black people, it is dominated by white men. You know, 85, 86% owned by white men. Black people only own 2% of the space, and so for us, particularly coming in this way, it gives us an opportunity to kind of make change and enter the business at scale to be able to come in with a three state footprint and be able to use that as a platform to help change the cannabis ecosystem to make sure to use our platform to enable black and brown people to participate in the industry in a number of different ways. To be able to use our voice, to be able to help shape the way regulators and lawmakers think about how cannabis needs to be developed going forward, and continue to do what we do at our core, which is bring our audience, great quality product for them to enjoy.[00:17:46] Dan Runcie: That makes sense. And I do think that those stats you mentioned are just around the 2% of the business, that is only being, again, like I said, at this point, currently run and administered by black people. And that's in America, right? [00:18:00] Tarik Brooks: In America in the US. It is gonna continue to be a leader in global cannabis. So a lot of countries look to see, you know, what the US is doing and how they're thinking about deregulation and how they shape their rules. And, for us it's a big part of what we do is helping people to see how the way things are set up negatively impacts our community. So when you look at, you know, the cannabis industry broadly working to change the way cannabis is scheduled by the federal government and how it's treated by the federal government and how banks are able to interact with cannabis companies. All of those things make it hard for the industry broadly, but it makes it extra hard for us because when you look at industries without those, We don't get the same access to capital, we don't get the same access to opportunities. So it's one of those things where, you know, once again, we're starting from behind the eight ball, but what our, you know, perspective allows us to do is start from a different vantage point, right? Like it is an extremely difficult time to raise money in cannabis. And so for us to be able to pull off something, this big speech. You know, the success and track record that Puff has had building quality grants, building quality companies, and being able to find the kinda talent you need to come in and create value. And so we're excited man. We think this is gonna be a huge event for the cannabis industry. We think it's gonna be a huge event for us to help our community create meaningful wealth. Cause ultimately, you know, as business people, we wanna use our skills and resources create wealth for our community.[00:19:36] Dan Runcie: Yeah. And like you said, definitely, you know, huge undertaking and make this happen. Can you talk a little bit more about some of the steps to get from the first idea, maybe it's you and Puff talking about, Hey, you know, we should do this, we should get into this business. Then boom, the announcement comes. Like, what were some of the steps to help make this happen? [00:19:53] Tarik Brooks:  So we have been exploring the cannabis industry, you know, with different levels of intensity since looking at opportunities. Starting to understand how the industry works, getting closer and closer to the space, you know, building relationships with entrepreneurs and companies in the space to kinda understand how things develop. I joined the board of Cresco Labs, you know, one cause I wanted to learn more about the industry. I thought they were a great company. But two, from that vantage point, you were able to see how the industry works and how things develop. And so when this opportunity came along, which was really driven by Acquisition of Columbia Care by Cresco. They, by regulation, have to divest assets. This opportunity to look at a portfolio of assets that are good, you know, good, strong businesses. Generating revenue, generating cash flow today to be able to come, bring those into our portfolio and then do what we do to create meaningful brands around those assets seem like a phenomenal opportunity. And so, look, these things take time to develop and it's a long process of, you know, doing the due diligence, raising the capital, going through all the steps you have to do to actually close a deal. But we believe it's gonna be a phenomenal historic deal once it's closed and wherever operated. And we think, like, look, when you look at pub's track record of building brands in music, in fashion, in spirits, you know, should extend, we believe it's gonna extend itself to cannabis and meaningful given how influential and impactful cannabis is in culture.[00:21:28] Dan Runcie: And we definitely know that there are a lot of regulatory challenges in this space for sure. And I also know that there are several other celebrity investors, even some in hip hop that have started businesses in this space and haven't necessarily been able to help take them to the next level. Do you have thoughts about some of those, I guess how business now moving forward can help address and overcome some of those hurdles that maybe some others weren't quite able to get past.[00:21:58] Tarik Brooks: Yeah, so I take those in pieces. What I would say is, you know, we believe over the long term, the federal view on cannabis will change. We believe cannabis will ultimately, eventually be legal, you know, throughout the United States and in all 50 States. But we don't know when that's gonna happen. And so none of our investment thesis, none of our modeling, none of our business case was built on imminent regulatory relief. And so while, you know, we hope for it and we wanna help shape how lawmakers think about it the same way the rest of the issue does. Nothing in our core premise for doing this deal was built on the expectation of regulatory relief this year, next year, five years from now. Right. So that's the one thing I would do. That said, we wanna be immediately a part of the conversation cause cannabis is so connected to our community. And so we're gonna jump into that conversation at the state level. We're gonna jump into that conversation at the national level. Now going to the second part of your question. You know, one of the things I think is the biggest, you know, misnomer when people think about, you know, Sean comes entering cannabis, is thinking about this as a celebrity cannabis deal, right?When I think about this and when Puff and I have always talked about it. What we think about. A guy with an amazing track record of building culturally relevant brands. Is that relevant in cannabis? Yes. Check, right. You know, does he have resources and the platform to be able to raise the capital to do a deal like this. Check. Does he have the ability to attract the kind of talent you need? Check right. Now. You also then say, is this celebrity extremely valuable in getting the word out? Brilliant. Absolutely. But that's not the core premise of what we're trying to do, right? Like we will get as much value through all the things we can learn throughout our ecosystem and how our customers and all of our other businesses think about. As we'll get from Sean Holmes, the celebrity. Right? And so from that perspective, you know, we don't expect to have our business be a celebrity driven brand per se. It's gonna be built on the back of great brand building, great marketing, and very strategic and efficient operations.[00:24:07] Dan Runcie: And I think that ties into something you had said in a recent interview about how insights from Revolt, for instance, can inform some of the decisions that you make with the cannabis business.[00:24:18] Tarik Brooks: Yeah. I mean, look, when you think about an ecosystem like ours that spans from spirits, music, media, fashion, with every interaction with our audience, you create. So every time posts go up from their social media, you know, there's data that comes back. Every Ciroc transaction generates data when Revolt has shows on all the different platforms that has shows on cable, YouTube, In app, all those different platforms generate data. As you compile that data, you're able to kinda look at it with a different lens and pull insights from that. What we're then able to do is take the data that we get from the cannabis industry that everybody else in cannabis is getting. But when you start putting those things together in unique ways, that's how you start to generate interesting insights that everybody's just not gonna have access to 'em. So that's where we think, again, we have a real competitive advantage in how we think about what we do in the space. That'll impact everything from, you know, how our stores look and feel, and what that experience will be what products we lead with how we think about price points, how we change things from state to state. A lot of that will be driven by insights that not only come from the cannabis industry, but that are informed by the other businesses in our portfolio as well. [00:25:32] Dan Runcie: And this steps into, I think, a broader conversation of some of the categorization of someone like Puff and the work that he does in that the media can often put him alongside other people who have happened to be a recording artist on a track and compare their business ventures in the same way. And what you're essentially saying is, You can't compare us all the same way. Did they build a revolt?[00:26:01] Tarik Brooks: It's so hard cause it's like, I don't wanna deny how impactful he is as an entertainer. Epic performances. When you think about, and not just performances in music, performances in movies, performances on Broadway. Like the guy is quintessential, entertaining. You know, by all means, like you can't argue that. But I think when you try to look at him narrowly as just that you are really missing the picture. Cause I think that underestimates or understates, how difficult, it’s to build a bad boy into a success, to build a success, build a revolt, to build us rock, to build a Deleon, to build three schools, like that, that's not just on the back of him. An amazing entertainer, right? Like that speaks to his business instincts, his ability to spot trends, his ability to kinda find and cultivate talent, like those are all things that are universal in business. Leave aside what he's been able to do as an entertainer, I would argue, had he never got on the mic or touched the stage, he would've been just that successful business person just on the back. His business, you know, acumen and abilities. And so that's where, when we're in these conversations and people think about, you know, in cannabis this came up recently, people say like, well, you know, celebrity brands haven't really worked. And I'm like, lemme take a second to help you understand why this is different from a celebrity brand opportunity. The other thing that's different that I think is important for people to understand is when we take control of these assets, we'll be fully vertically integrated in the States that we operate, which, we are gonna cultivate, we are a process. We are gonna manufacture, we're gonna distribute, we're gonna sell. So these are all pieces of the business value chain that we'll operate. Again, not so relevant from the celebrity space. This is all around how do you build and run high quality businesses? And that's where I think you have to look at our business portfolio to understand how impactful Puff is throughout his career. And you just don't see those things that the only lens you're looking at is through him as the celebrity. [00:28:10] Dan Runcie: I could see this topic also coming up in some ways, potentially from an investment perspective, where you all have companies that are trying to either get you to invest or you're evaluating them and at some point someone on the other side of the table may come to you and be like, Hey, well if you invest in us, can we get a shout out in a song? Can we get an Instagram post? Can we do this? Like these things that view Puff as the influencer as opposed to the business leader that has all of these things.[00:28:39] Tarik Brooks: Yeah. What I found just in my experience and I've been working with Puff almost six years now. Most of it typically comes with how people were introduced to them and the depth or lack thereof of their understanding of what he's been able to do throughout his career. There's a lot of stuff, you know, people just don't necessarily, you know, attribute to him in the way they should. So usually that journey is one where it's about informing people to say things like, let's make sure you have all the perspective and then think about kinda how this can make sense. Cause again, there's no denying his impact and influence as a celebrity. He's huge. Like, he's a big name, he's an iconic person in culture. But I think to only think about him that way now, I think when people start to understand, you know, what working with Combs Enterprises means more broadly, you start to understand the power of the platform that we really have. And that's where I think it gets really exciting for the people. [00:29:35] Dan Runcie: Yeah, I agree. That makes sense. From an investment perspective specifically though, do you feel like, is that something that often needs to be addressed with startups or with founders or others that may be whether deep down they may be looking for something and I'm more so asking that in a way because I've seen it happen to others and given this conversation, I can see that especially being somewhat frustrating where it's like, Hey, I hope you're not just interested in this to think you're gonna get a shout out.[00:30:03] Tarik Brooks: Yeah. I mean, so look, I'll tell you when we are evaluating investment opportunities and people are looking at ideals, I don't think that is a thing that people are using as their primary driver. Do I think there are people who will be like nice to have, do they hope to get to meet them? Do they hope to get all those? Sure. Right. Like, again, all 'em, all those kinds of things. But I think when we get, you know, evaluating real deals. I think one thing that surprises people is the rigor with which we do our due diligence and our analysis, right? And so that's the first thing you see to say like, well this is not just, you know, high level celebrity thing. This is being looked at with real deep due diligence and real deep analysis. And I think from there it starts to shake away that kinda filter of, oh, oh, I'm gonna try to just get a celebrity deal done. Cause it's just not the way we do business. And I think people get that. [00:31:02] Dan Runcie: Right. Yeah. Leslie. Yeah. Especially if there's a due diligence process that they're seeing on their side. And maybe we could talk a little bit more about that, like from a high level, for a lot of the investments you do, maybe less like the cannabis deals, but more on the venture side, do you have a particular sweet spot in terms of, you know, this is normally the dollar amount range, or this is normally what we put in, or this is normally what we are looking for?[00:31:26] Tarik Brooks: So, we have, you know, flexibility, right? We're not a fund that has to, you know, stick to a certain sector or a certain stage of growth the way, you know, funds are typically mandated to do so. We do have flexibility, but that said, going back to the earlier comment I was making, we tend to look at businesses where we see some application. At places within our current portfolio. Right? So like, I don't know that you'll ever see us do like, you know, some like heavy machinery deals or you know, enterprise software, things like that. Cause that's not natural, when you look at interface with the businesses we operate in, it becomes a lot more interesting for us. And so while we apply, you know, the very standard kinda ways of assessing, you know, the quality of the leadership team, the uniqueness of the opportunity, how opportunity is the total addressable market opportunity. Ultimately, we look at all those things just like every other, you know, person who investigates an opportunity. I think where it gets unique is for us, once we've gone through all that, we then sit back and say, okay, you know, how many of our businesses could actually utilize this offering? You know, how many different places do we think we can use this throughout our portfolio? And then it starts to become even more interesting. So, that's kinda how we get there. Now, to be clear, like we don't have a hard mandate or a set of funds. We have to put the work in the way the fund does, and so we tend to be very, very opportunistic. We pick what we do very carefully to be investing. So as we see economic conditions change as we see market conditions. We're able to just say like, all right, let's take a step back. Let's wait and see how things play out. And I think that helped. I mean, it helped us avoid, you know, some of the frustrations some folks are seeing in the web and cryptocurrency world. Cause we weren't forced to go aggressively and do something too fast. We saw the market was evolving and so we were able to take a step back, and continue to evaluate it. So from that perspective, there's a lot of flex. [00:33:35] Dan Runcie: Yeah, that makes sense, especially given that, yeah, there's no fun mandates though. It's not like you're burned because there's a winter or something like that.[00:33:44] Tarik Brooks: Absolutely, and the reality is we're always investing in our core portfolio as well, right? So we think about whether we wanna put millions into, you know, a startup passively. Part of the kinda analysis is to know where we could deploy in our current portfolio and does that make more sense? Right? And so there's that kinda flow of how we think about deals as well.[00:34:07] Dan Runcie:  Yeah, that makes sense. A couple months ago, there were headlines that Puff had apparently done an investment in Twitter around the time that Elon Musk had. Was that actually a thing, or did that come through or?[00:34:21] Tarik Brooks: Look, so like Puff and Elon like have a relationship.You know, Twitter is a very interesting situation in that when you look at, you know, the side like Twitter's impact in society is certainly bigger than how it shows up from. You know, profit and loss and from a market cap perspective, and when you look at, you know, where Twitter is trading today is trading at a fraction of where like a Facebook or even like a Snapchat is I think, at this point. And so the question becomes, you know, from an investment perspective, like do you think, you know, with some changes you could create meaningful value in Twitter, that platform. And so I think while you know, the kind of, the kind of statements in the press were overstated. There was a small investment in Twitter, but it's nothing. People get pieces of information and run, so we just, you know, we gotta sit back.[00:35:17] Dan Runcie: Yeah. And I think the way you framed it is correct. Right? I think it's definitely one of the 40 billion companies that creates more headlines than most other 44 billion companies we could probably even think of.[00:35:29] Tarik Brooks: Absolutely. Absolutely. So, like with some decisions to be a much more viable company than today and the verdict's still out, like those changes happen in real time and cause of how, you know, big the platform is in society. You know, you're seeing those things play out in the press and, you know, I'm sure Elon's campus is trying to work as methodically as they can through those changes. As they figure out what is the right, you know, kind end state for, for that platform. [00:36:00] Dan Runcie: Yeah, definitely. The other side of the investment piece, of course, I think we talked a lot about Combs Enterprises point Capital, but on the other side of it too, thinking specifically about everything happening in music catalogs over the past couple of years, everyone wants these valuable catalogs with this timeless music. Combs has one of the most valuable hip hop, r&b black music catalogs of the past 30 years with Bad Boy Records. There hasn't been any public news about any sales, but I am sure that people must have been calling nonstop trying to at least see what they could get in there. What were those conversations like? I'm sure at some point it must have come up of Rick, whether it's running the bum numbers or even thinking through like, what would this look like? [00:36:45] Tarik Brooks: Yeah. Well look, I think as you know, like part of the interest in these catalogs is driven by the fact that, you know, the returns they generate aren't really correlated to the market, right? Like they’re like if you have, you know, a high quality performing catalog, it's gonna generate returns and generate cash flow irrespective of the ups and downs of the markets. And so that's attractive to investors. That said, for those same reasons, it's attractive to us, right? Like it is a great quality, high performing catalog. And for us, part of how, you know, we think about things, we think about like Puff's long-term vision, right? Like we're getting back into how he's getting back into music now with Love Records. You know, he's gonna build that platform in the way that makes sense as you think about the way culture and the music industry continues to evolve. And for us, we're in no rush to get rid of a portfolio that could be a part of that. Like who knows how you think about those assets in the future. And so for us, we're spending a lot of time thinking about what the future of music is gonna look like. And you know how Puff is gonna participate in that, what that looks like. And so for us, you know, again, you don't have, you know, some of the time constraints that you get from being they're public company or you know, money at a certain time. So we had the benefit of being able to go slow and kinda take our time and basically run experiments at our own pace to figure out what we wanna do. And so from that perspective, people have, you know, continually come through with offers and with opportunities and things. And we've purposely taken our time as we've about what, you know, Puff's experience of music is gonna be over the next, you know, next years as he climbs when he talks about it's his second, right? Like he's at the point of his career where he's accomplished and he's thinking about what that second looks like. Music has always been a very important part of his life, and so music is gonna be a part of that. Second, we're shaping what that looks like. And so from our perspective, there was no reason to move. [00:38:46] Dan Runcie:  That makes a lot of sense and I think for you, there's two things that are different with you all compared to some of the others. Two of them you touched on, but one of them is that you already have the infrastructure in place on how to do things that can help maximize the asset of the Bad Boy Records catalog. It isn't like one of these situations like where the Whitney Houston catalog, like it was dormant before Primary Wave came in and obviously they've like, you know, forseed it since they acquired it three years ago. And it isn't like one of these other legacy artists that, you know, the estate may be in shambles and things just aren't lined up. And yeah, for them it probably makes sense to just get a lump sum of money and be able to distribute that instead of hoping that your relatives who may not be trained in managing this type of asset can't continue doing it forward. Like you all have that. And I think that's part of it.[00:39:37] Tarik Brooks: Yeah. And I think there's a couple ways to think about it too, right? Like, cause these artists work so hard to create these assets. You know, why sell 'em? Why get rid of them? But I think there's a couple ways you can think about. You can say one, alright, we may be at peak pricing. And so it's like, you know what, lemme sell while things are hot. You know, take the cash, be able to take the money off the table and invest other ways. You also, particularly with younger artists to say, all right, I'll sell this catalog, but if I'm still creating, I can continue to create and you know, build new works that will create value as well. And so I think there's different logic for different artists in terms of, you know, why they think about selling and why they sell when they do that, you know, in some respect make, particularly if you're looking at it from a purely financial perspective. But again, we were unique in the way that we have an ecosystem that helps continue to keep catalog relevant. We're back in music now, and so again, that also helps to create the halo effect across all of our ecosystems. And so for us, there just really isn't a rush to move too quickly, like where we can think about what is the kinda value maximizing way to utilize the catalog and whatever else we're doing to create the best outcomes. [00:40:54] Dan Runcie: Right. I think that's a good way to put it too, like you said, numbers are there and if you wanna sell, there are sound financial reasons that someone may choose to do so for you all, and given Puff's current goals in music, it just may not make the most sense, but with that though, shifting gears a bit, one business we haven't talked a lot about is Sean John and I know this is a business that the team had sold a couple years back. The company that bought it. Things didn't quite work out there. You all then bought it back recently. So where are things right now with Sean John?[00:41:32] Tarik Brooks: Yeah, Sean John is super exciting, right? So you first start with an iconic, you know, street brand, right? You know, this is again another example. Being able to see where fashion was going, seeing how, you know, folks in our community were wearing other brands to get particular silhouettes and have it, you know, look a certain way and feel a certain way, and then be able to build a brand. That became a real like a foundational piece of, you know, hip hop culture. And through that process, Puff was the first African American man to win the CFDA award, which is the biggest award you can win in fashion, right? So truly iconic sold the brand. The buyers at the time weren't able to figure out how to maximize it, so they created the opportunity for us to buy back. And so what we're excited to do now, and we're in this process with Puff of really reimagining what can and should be for this generation, right? Like as much as you know, we all love the iconic valore sweatsuits and all rest it like, maybe that's a part of the future. Maybe it's a different brand position, different way, but like spending time. Actually really ideate on that and get to the right concept to bring it back again. We have the benefit cause, you know, we operate this portfolio, we don't have the pressure to rush. Like we don't have to, you know, do something right away to be able to, you know, capture that value overnight. You know, we have the luxury of being able to take our time and what I found with Puff is he likes to be able to, one, work with the quality people he possibly can and really run ideas through the ringer in terms of, you know, having people question his logic, test the thinking. Really, really pressure test to see if it's the right way before we do something. So what I can say is, right now in the lab, like, you know, there's creative folks that are thinking through, you know, what Sean John could be and should be and isn't engaged in that process. And so it's exciting I think when we do hit on the market, we're gonna come back in a way that one pays homage to the legacy of John, but then isn't just caught in what to be, is really thinking about what the brand could mean and should mean to, you know, new generations.[00:43:41] Dan Runcie: Yeah, that makes sense. And I feel like when it happened too, it definitely generated some excitement. So I feel like there's some good momentum. [00:43:47] Tarik Brooks: Yeah, I think a lot of the folks who are dominating the fashion world now, were inspired, you know, by, you know, fans. So the fact that it's a brand is still, you know, relevant to people in different ways, gives us a great building. Like, I would rather be trying to kinda help people connect to this brand with so much history and legacy than trying to build a brand from scratch. You know? I think it provides a good foundation. Like's aspiration is to build iconic, long-lasting brands. So when you think about iconic brands that have been around for 55, you know, longer periods of time, that's what the goal is. And so, and those brands have gone through research, you know, any iconic brands gone off, of kinda laws and growth. And so for us, this is just really, you know, the second chapter of something that's gonna, you know, be a part of our community and our culture for years ago. [00:44:45] Dan Runcie: Yeah, for sure. And for you specifically, if we zoom out a bit, looking at the past six years since you've been there, we definitely talked a lot about wins, a lot of the successes. But are there any setbacks or are there any missed opportunities that you look back on, especially the past six years since you've been there being like, oh, I wonder if we did this differently with this brand. I wonder if we did that differently? [00:45:07] Tarik Brooks: Yeah, I think for us, one of the things I appreciate about Puff and it's a value that we both share, which you know, you look at everything as like a learning opportunity to say like maybe the outcome didn't go your way, but there was plenty of stuff you could learn from if you embrace the opportunity the right way. So like I look at the fact that it was back in was announced as an opportunity. We saw the value of the team and the value of the assets all around. You thought it was a great opportunity, pursued it. You know, the group that we were part of didn't win, but through that process, learned a ton about that space. You know, I met great people, you know, business partners and relationships that we still engaged with in different things today all came from that opportunity. So like, you know, while, look, I would've loved to be able to win that deal or bring that home, you know, I think there's a lot that comes from it. It sets us up for the things we do, you know, when I think about, David, we talked about the Revolt Summit earlier, right? Like, you know, as we were building the Revolt Summit, you know, we bring it back after, I think a year off. And then in 2020 the pandemic hit. So we gotta basically shut it down and go virtual. But like coming outta those were things we learned about how we're gonna in the future. So this year, you know, the biggest Revolt Summit ever, how's Metaverse versus online? Like all those things coming around. Again, learnings that you utilize going forward. And so, you know, whether it's you thinking through every single flavor in the portfolio or every single bab in the artist roster, even the ones that don't work out the way, you know, you want them to work out their stuff. You can learn from that help, impact and help you to be better as you move forward. That's the way we think. You know, and I talk all the time about just, you know, transparently looking at the things that go right and go wrong and making sure we're learning.[00:47:05] Dan Runcie: Can we actually talk a little bit about the Carolina Panthers one specifically? Because I know you all said that you didn't win the bid, but was it an aspect of being outbid or the owners or someone just choosing someone different? Like how did that all go down? Cause I remember the headlines about it. I remember that there were a few other prominent black public figures that were in that ownership group too.[00:47:27] Tarik Brooks: Yeah, I mean, look, what I would say is, you know, the person that you know ended up winning the bid, I believe, if I remember correctly, had, you know, the highest bid relationship. I think from that perspective, he kinda knew the league, well, and, and was prepared in a number of different ways to be able to take it down. And I would just say the group that we were part of kinda fell short in that way. But what's interesting is, you know, the number, and I just can't remember real time, the exact number he ended up paying for. When you look at the number that people think that the Washington Commanders are gonna command, and the number that the Denver Barcos commanded. You know, while that number he paid was high at the time, you know, it's not even half what somebody might pay for the Washington Commanders. And so perspective, you're willing to pay for something. You gotta live with the fact that there's just maybe willing to pay more for it than you. Right. And so, you know, we ended up being a part of a really sharp group that, you know, had thought really hard about, you know, what was in this case. You know, we rounded. So, you know, again, it's one of those things you learn from, right? Like, you know, sports, entertainment, and business is very unique. You know, assets, you know, come available at different points in time. It's all about thinking about, you know, what do you think the asset is worth? What do you think you can do with it, you know, to translate to what you think it should be worth. And somewhere in that analysis you get to what you think you should pay for, right? And that's where you kinda make your move. And in that case, you know that there were just folks willing to pay for. [00:49:12] Dan Runcie: Yeah, no, I think that's a good point too. Cause I feel like I might be misquoting, but I feel like the Panther's bid was somewhere, I think it was under 3 billion at least.[00:49:20] Tarik Brooks: Yeah, I believe you're right. I wanna be careful. I just don't remember exactly. But yeah, I remember it being less than 3 billion and I think the number they're saying for Washington Commanders now, like 7 billion and so I imagine, you know, like when you think about where the value of that Panthers is going, probably going. They probably did really well. So I mean, again, and we believed it was gonna do well and continue to do well. I mean, when you look at the size of the deal, I guess Google or YouTube just did it with the NFL. The NFL is a platform, right? When you look at, at least for the last couple years, I haven't seen 2022. When you look at the list of the top 50 watched things on television every year, 40 plus of them are football games. Right? Right. It's just that powerful of an entertainment platform, so therefore commands the prices of command. [00:50:12] Dan Runcie: Yeah. Well, hopefully. Whether it's this group or some combination of others that we know we're interested in. Hopefully we see something happen soon in the sports ownership space. But this was great. I know we covered a bunch of topics in this one, and before we let you go though, is there anything that you didn't cover that the audience should stay looking out for or that we should be thinking about moving forward?[00:50:34] Tarik Brooks: Yeah, I think 23 is a year that the audience should look out for a lot from, from the Combs organization. You know, music out of Love Records, including album and power, global e-commerce platform. Kinda reimagining how, you know, black people circulate dollars in our community. You know, the cannabis venture closing and beginning to build brands and establish meaningful footprints in the markets that it's in. There's just a lot of new things in 23, so there will be a lot coming outta our camp that we're super excited about, and so it's gonna be big. [00:51:08] Dan Runcie: We'll keep our lookout for that, man. All right. Appreciate you spending the time, man.[00:51:12] Tarik Brooks: Thanks so much, man.Take care.[00:51:14] Dan Runcie: If you enjoyed this podcast, go ahead and share it with a friend. Copy the link, text it to a friend, post it in your group chat. Post it in your Slack groups. Wherever you and your people talk, spread the word. That's how capital continues to grow and continues to reach the right people. And while you're at it, if you use Apple Podcast, go ahead. Rate the podcast, give it a high rating, and leave a review. Tell people why you like the podcast. That helps more people. Discover the show. Thank you in advance. Talk to you next week.

I had the pleasure of being the keynote speaker at New York University’s Annual Alumni Event for its music business department. Big thanks to Larry Miller, a professor and director of the program, for inviting me. It was a free-flowing conversation focused on how technology is reshaping the music industry from top-to-bottom. We’re well into the streaming era now, but some of the second-order effects are barely starting to ripple — particularly the oversaturation of content. It’s easier and cheaper than ever to release music, which explains how tens of thousands of new songs are uploaded to Spotify on a daily basis.On one hand, this has ushered in a golden era of independent artists making a career without the backing of a label. On the other hand, value is increasingly accruing to the superstar artists. Most of these superstars were “grandfathered” into this new era as they were already household names before streaming took off. Reaching that same superstar status is harder and harder for new artists due to the industry’s oversaturation. Larry and I dove deeper into the issue during our conversation. Students also hit me with Q&A about burning topics such as ChatGPT, botted streaming numbers, and much more. Here’s what you can expect to hear on this episode: [2:02] Introduction from Larry Miller [5:09] Superstar artists like Taylor Swift and Drake shining brighter than ever[10:22] Too many hits, not enough superstars[17:23] How Curren$y “niched down” to break through[24:18] Tradeoffs of going independent or the major label route[26:47] Industry takeaways from Spotify and YouTube’s billions playlists[30:32] YouTube’s competitive advantage over Spotify[34:09] Evolving Trapital’s own business model[39:43] Music’s bot problem in streaming and ticketing[42:07] Is the music superstar dead?[44:19] Picking a platform(s) as a new artist[46:24] How oversaturated music landscape impacts listeners[49:03] Is New York drill music the next wave?[50:48] Pros and cons of AI musicTrapital’s first-ever Cultural Report for 2022: https://trapital.co/culture-report/Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSSHost: Dan Runcie, @RuncieDan, trapital.co  Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.TRANSCRIPTION[00:00:00] Dan Runcie: Both Spotify and YouTube generated a tremendous amount of revenue for the music industry. I believe Spotify had last shared that they generated 7 billion for the industry. YouTube generates six or seven, I think it's 6 billion. The last thing that I had seen them put in. So that is a sign. Okay, great. You know, you tie that back into the numbers you shared before. You can do a little bit of backwards math to see how much of that is responsible for the overall industry with where it is now. So you see that, and then you also know that like anything else, the most popular songs drive most of that revenue. So you can kind of get a good idea to be like, okay, what are the songs that are driving? The music industry right now. [00:00:46] Dan Runcie: Hey, welcome to the podcast. I'm your host and the founder of Dan Ruey. 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. [00:01:04] (Intro) Dan Runcie: This episode is a fun one. We're sharing the audio from a talk that I recently gave at NYU. I was the keynote speaker at an event there for several hundred alumni and students. For the music business program, it starts off with a 10 minute talk by me where I'm giving an overview on the lay of the land with where things lay right now with streaming and music and social media, and how artists are doing their best to navigate all of the noise that's happening right now. And then it pivots into a conversation. Which is a fireside chat with me and Larry Miller, who's the head of the music program at N Y U, and we talk even more about what certain artists are doing, right? We talked about Currensy, who I recently had on the podcast a couple months ago. We also talk a little bit about me and Trapital and building this and where I see things going in the future. Really fun conversation. I really enjoyed doing this event and I hope you enjoyed this. Here it goes. [00:02:02] Larry Miller: Dan Runcie is the founder of Trapital. Trapital has become an amazing media platform and the quality and amount of content, really insightful content that Dan cranks out as remarkable. It's just remarkable. What it's about is the people who are taking hip hop and culture to the next level. That includes the artists who are becoming moguls, leaders who are reaching new heights and fans inspired by hip hop's growing influence. Dan, when he'd school, and I suppose even, you know, business school. This media company Trapital, because he wanted to see a change. The hip hop execs that he looked up to were becoming really successful business leaders, but he felt that they rarely got the coverage that they deserved. And he wanted to do something about it. So he launched Trapital in March of 2018, and the business has grown ever since. Tens of thousands of influential people read Trapital's weekly memos and listen to the Trapital Podcast every week to stay ahead of the latest trends. Trapital's been featured pretty much everywhere. Places like The New York Times and the Wall Street Journal, and the BBC and N P R,  C N B C and lots of other places are turning to Dan for insights on the business of hip hop. Dan's recent coverage has focused on lots of things. He's focused on the surprising differences between Spotify's and YouTube's. Billion stream playlists. Just looking at the ones that have done a billion on each platform. There are actually some pretty interesting differences between those two platforms. He's done significant work on how a venture capital fund from a 16 Z, Andreas and Horowitz invest money that is raised exclusively from black leaders in entertainment, sports, and business. He's done a report on the so-called decline in the influence of hip hop culture. He's done work on the future of ticketing. He's done a lot on DIY careers in hip hop, and done some really insightful reporting around Joe Kelli's amazing new book, Rap Capital, the Rise and Reign of Atlanta's hip hop culture, which if you haven't read it, get it. Dan got his MBA from a school in the Midwest, I think it's called Michigan, and he lives in San Francisco with his wife, and small child, daughter. Please give a warm NYU music biz welcome to Dan Runcie.[00:05:09] Dan Runcie: Larry, thank you to the entire faculty, alumni for having me. It's an honor to be here. And I guess to start things off, because she's been brought up a few times, Taylor Swift has been a topic I know a lot of you thought about. So just outta curiosity, how many of you tried to buy Taylor Swift tickets this week? Okay, a few hands. Keep those hands up if you actually got Taylor Swift tickets this week. Okay? All right. Well, people will have to follow up with you all after to figure out exactly how you did that, but I think that's an interesting place to start with so much of what's happening right now in the music industry, because Ticketmaster, as most of you know, the whole entire app and the site crash because of the high demand. Ticketmaster put out this blog post and they said that they had five times the amount of hits compared to the Super Bowl, compared to other high days worth of events for this concert alone for Taylor Swift, and she's someone that's been on tour before. She's someone that has done plenty of things in music, but to see this kind of demand is pretty surprising. But she also broke a bunch of records with the album that she just put out a couple weeks ago, Midnights, and it's made me think about something we've talked a lot about recently, in Trapital. Something we've done a lot of research on. Right now there is so much music coming. I see, I think a few of you probably saw that music business Worldwide article, Spotify releases it. A hundred thousand songs a day get uploaded to that service. Most of those songs don't get listened to, to be clear, but a hundred thousand songs a day is still something else. And then as Larry had mentioned as well, Live Nation and a lot of these other event promoters and ticketing companies are having their biggest quarters and biggest years. And artists like Taylor are probably going to be having record years. And on the flip side, you also look at someone like Drake. Him and 21 Savage recently just put out their album, Her Loss. I think Drake gave one week's notice on this album, fourth highest streaming week that an album has ever had, which is pretty impressive. I know that Drake's a superstar, but still, even his past albums before this had plenty of buildup before where if you think about what he did with Scorpion or even the long buildup for an album like Certified Lover Boy. But the fact that Drake can announce on short notice is pretty surprising because if you think about where things are in music, you have more artists than ever that wanna tour. You have more artists than ever that are releasing music, but it's the superstar artists that are still the ones that people are gravitating more towards and they're the ones that are still getting most of the profits. But on the other side of the spectrum, things are getting a little bit tougher because Larry mentioned it a little bit earlier, but a lot of artists are struggling to make toward profitable, especially post pandemic the way that things are right now. Inflation costs are rising. It's costing so much more from freight costs to be able to travel with an entire production set from city to city, hotel airfare. So certain artists are selling out their tours or selling out their concert tickets, but they still aren't able to generate profit unless they increase the ticket prices. But even if you do that to a certain extent, the customers are going to push back. I'm sure a lot of people have seen all the complaints that people have had about how high the prices are, all these hidden fees. So there's a little bit of a squeeze there. And I think what we're seeing now is something that we've seen happen in the media, something that we've seen happen in music, but the fact that the barriers to entry have made music more easy to access, and now that we're in a post pandemic world, more people wanna be outside than ever. It's a lot of the artists at the top that are doing extremely well. But on the other side of the spectrum, while you do have some folks struggling, there are artists who are doing extremely well on the independent side of things. These are artists oftentimes that are owning their masters. These are artists that own their publishing rights as well. And because they've been able to keep a low cost and they've been able to essentially build from the ground up and continue to do it almost the way that a CEO in the music industry will be building up their business. They've been able to build pretty successful businesses too, in many ways. Leveraging the power of the internet because whether it's through SoundCloud or using YouTube or any of these other platforms, they can use their content or they can use their content to be able to drive awareness to their music. And then with that, they can then build up their audience and ultimately, Do that more successfully than they might have otherwise if they were to join one of the major record labels. So it's in this interesting piece because a lot of those artists feel like they have to make a decision, and Larry and I are gonna talk a little bit about one of them in a bit, but it's making artists, and I think many people in the music industry kind of pause because of the amount of content that's coming out, because of the amount of music that's coming out, it's a little bit harder to be able to pierce through. How many of you remember about a month ago, there was a billboard article that came out that said too many hits, not enough superstars, there was named something around that. Does that ring a bell? Okay. I've seen a few folks nod their heads there, and there were a few quotes in that article that stuck out to me because you had a lot of folks that are A & R or other executives in the industry that would say, we're doing all the things that they're telling us to do. We’re doing all the TikTok campaigns, we're doing the same press runs, we are creating the content, we're putting it out there. But even if we do all those things, We still can't guarantee that an artist that we think is going to be successful can get there, and that's because at the end of the day, the record labels and the artists themselves don't have control over the TikTok algorithms. They don't have control over the Instagram feeds to be able to tell what specifically is going to rise to the top and how you can break through another piece from that same article that stuck out to me. How many are you familiar with Steve? Okay. Pretty familiar. And it stuck out because there was a recent concert that he did and he was singing his song at the concert. The audience, the voices, got quiet once it got past that TikTok moment of the song. And if you're an artist, you're putting everything into your album. Of course you know that your fans are probably gonna sing harder to the hit songs under the singles. But because through the TikTok piece. I mean, it's just a reminder of how things are coming and where things are going. Even the concept of a one hit wonder I think has changed quite a bit because back when a lot of us probably were growing up, even if an artist was a one hit wonder, you still probably knew something about that artist. I mean, we can go back years ago, but even someone like Lou Bega who had that song, Mambo Number Five, or even someone like Trinidad James who had all gold everything, you still remember the videos, if you saw them walking down the street, you could probably recognize them. Or I've still been to, you know, a few events where I've seen some of these folks at. But now a one hit wonder could have just a song that you may hear a bit often, but you're recognizing it from some meme that someone else did on their TikTok video or someone else did. So you're engaging a bit more with the viral hit itself than the actual person that's making the music. So it's making things a lot tougher for a lot of artists who I think are the majority of them, wanna be successful, wanna be known and wanna get a few looks. But that middle ground of just wanting to be able to feel like you have that moderate place, you're kind of in the middle of the industry. It's getting a little bit harder to continue to have that being viable because now as I mentioned, you're starting to see a bit of this path where you have the superstars who are just getting more and more recognition as there's more and more options than ever. Or the independent artists who, even though the economics work in their favor, even though they may be able to do even better financially than some artists who may get more exposure than them, they may not be getting looked at the same, as some of their peers are. So it's a very interesting place for the industry. I think with that, it presents a ton of opportunity, but I also think that for certain artists, especially hip hop artists, there's a little bit of a mindset shift in terms of how am I releasing music? What is it that I wanna release? Because I think for a while it seemed like there was a blueprint that generally most people do. You put your music out, maybe you have a following on social media, you share that. You share a little bit of your personality. Hopefully a good manager can come to you if you find one or vice versa. If you do well, you're able to break through. Then maybe a major record label can find you. There was a bit of a general path, but now you're starting to see more and more of that split, and it's making artists in a lot of ways, think a bit sooner about what that decision is when you're still figuring out where it is and where you honestly wanna be. Do you wanna try to become the next Taylor Swift or the next Drake, or do you wanna try to do this a bit more yourself and have a bit more control over what you do? Because the thing is, even things like that, like becoming the next Drake or becoming the next Taylor Swift, have plenty of nuance part of other things that people have been talking about is how much harder it is for a newer artist to be able to hit the same levels. The fact that, you know, we're still referencing whether it's your Adele's or Beyonce's or Taylor Swifts, or Drake's, a lot of these artists have been famous years before TikTok was ever a thing. They still had a lot of that monocultural benefit of when they blew up, they were the thing, and they were able to benefit from that and have a lot of exposure. So now any of the platforms they had, it's all gravy. Now it's all added. They can use that to their advantage, but you are now trying to rise up and do that same thing, it's harder. Even someone like Olivia Rodrigo. Any fans of Olivia Rodrigo? So she is someone who I think Driver's License in a lot of ways for some people felt like the song blew up overnight and it did extremely successful, as did her album. But she was a Disney kid. She had been famous for years before leading up to that. So even that isn't quite at that same level. So it's a very interesting time in the industry. It's been a really great time to working the work we're doing at Trapital specifically to understand what this means. We're talking to a lot of different artists. We're talking to a lot of their managers, and really just making sure that we can share the best stories that we can about what's working, what's not, and highlighting those things. Cuz I think at the end of the day, you wanna find a way for artists to be successful. You wanna find a way for the people that are trying to build companies in the space to be successful, but it's very important to with the way things are trending right now, and a lot of people are saying, oh, it's oversaturated. Oh, we hope that we can eventually get back to a place that is less saturated. I don't think that's happening. The cat's out of the box at this point. If anything, there's gonna be more and more exposure more and more platforms. You look at how quickly TikTok grew to be a platform that has 1 billion monthly active users at this rate. There could be another platform that hasn't even grown yet that by 2026 could be that big. That's just how big things are from a connectivity perspective. So you never know what things could look like, but I think for where things are heading in the music industry there, it's a really fascinating time and even there's a lot of the established superstars that have done extremely well. There's still a ton of potential opportunity. I'll pause there cuz I know that Larry and I can talk a little bit more about that. But it is such a unique time and I think it's probably a good time for us to continue having the conversation because one of the people I do wanna talk to you about is Currency, who is an artist there. So we can do that in a moment, but yeah.[00:17:23] Larry Miller: A New Orleans hip hop artist who's got a lot going, you guys know Currensy. Woo woo. So what's the deal and what made this especially noteworthy for you?[00:17:36] Dan Runcie: So Currensy is someone who I had interviewed about a month ago and it was a pleasure to have him on as a guest on a podcast. I talked to him and his long-time business manager and partner Musa, and Currensy is someone who has been through each aspect of the music industry and I think in capsules a lot of what we've been talking about here. He first got exposure about 20 years ago. He was signed to Masterpiece No Limit label, and of course there's the whole New Orleans connection there. He ended up leaving New No Limit, and then he eventually signed on with Cash, Money and Young Money specifically under Lil Wayne. The thing is though, he actually ended up leaving cash money right around the 2007-2008 timeframe, which was a bit unique because that was the time that Drake and Nicki Minaj ended up joining them as well. And that label went on a pretty high trajectory after that. So some of the young money fans may often be like, oh, what could have happened? Right. But I actually think it was probably the best thing for Currensy because he realized that he was speaking to a slightly different audience, and specifically he knew that there were certain things that he was gonna be able to share with them that would resonate. That probably may not make sense trying to be on the next Lil Wayne mixtape or trying to be on the next Young Money collection or whatever it is. So he's been able to continue his career since, but he has a bit more of an interesting model where you see artists like him, NBA Young Boys, another one, but these artists are releasing albums every other month or releasing mixtapes every other month on streaming. And it's one of these things whenever people talk about that, it often becomes a bit of this question, where is this quality that's being put out? Or is this just quantity? And I think it's a very real thing. I mean, as someone that grew up enjoying a lot of music, even the artists that are successful now, from a personal fan perspective, you know? Yeah. It means something that, yes, you know, Beyonce drops Renaissance. We haven't heard her do a solo album since 2016, and she did one this summer. Okay. I'm listening. Same thing with Adele when she had hers, but I think that for Currensy, I'm not in, I may not be in that fan base demographic specifically, but the people that are following him on a regular basis love him. So he is focused on his true fans, he's found them. And by being able to do that, ultimately these people are gonna wanna hear from you on a more regular basis. Even if it isn't your best stuff, it's what they're gonna want to hear and it speaks to the flexibility that is offered now with streaming because before, just with how much it cost to release an album, yeah, it made perfect sense why you would wait and wanna save your best stuff for it. But if an artist wants to have the model where they wanna release frequency frequently and drop as often as they can, they can do that. And the platforms give them the flexibility. And someone like Currensy, the way he put it to me was, you know, there's certain artists that are gonna get 80 million streams a day. They're more popular than I am, but they don't drop as often as I do. And I'm gonna get my 80 million streams as well, even if I'm putting out much more music than they are. And for a lot of artists, they're still recording the same amount of music. They're just shit picking the best ones to pick for the album versus someone like Currensy's like, no, let me share most of it and share it with the fans. So it's very interesting to hear that. And then specifically since then, he's been able to take a lot of that money. He is solely focused, for the most part on tours. Really doesn't do too many festivals because he doesn't feel like that is where his true fans are. So leaning even more so into the true fan piece, been able to build up and create a few different nightclubs and places like that in New Orleans. He has an apparel company, Jet Life, so it's been a really interesting model for someone to leverage the tools that are available. And even though he may not speak to me or you specifically, he has his people. That to me shows the power of artists being able to focus on their niche and being able to build from there.[00:21:38] Larry Miller: How broad do you think this, you know, phenomenon is? I mean, you made a point a couple of minutes ago that it's only gonna get bigger. There's only going to be more of this. And I think that the inference for the incumbents for, you know, the majors in particular is that they need to, you know, continue to, you know, innovate and unbundle the thing that they do and be really good and, and competitive at it. You know, the leverage seems to be moving overwhelmingly toward the side of the individual music creator. You seeing more of that?[00:22:16] Dan Runcie: I think there's nuance there, and it's something I've thought a lot about because on one hand you do see the overall revenue share numbers, where the share of at least recorded music revenue from independent artists is continuing to grow, and I believe now it's over 30% and has continued to grow year over year, the past couple of years. On the other side of it though, if you're looking at the top artists on the Spotify charts or the top artists on any of these other charts, it's still mostly signed artists that are there. Those signed artists may not necessarily, let's see, be as many new names. Like it's gonna be harder for someone to dominate the entire list the way that Taylor or Drake do when they release an album. But most of the ones that are still there are still the signed folks. So I do feel like a lot of at least for the folks on the record label specifically and the people that are working there or the people that are working at publishing companies, they still are working with the majority of the most popular artists. I know there was a quote recently from Steven Cooper from Warner Music Group and he said, our record label is less dependent on superstars than it has been in the past. And I think there's a lot of truth to that just because you can see who's being signed to wear, you can see how many stars they've been able to develop ever since. And even though there may be less big names that they may have had. There's still a higher likelihood that a big name is gonna come from them than it would be from, you know, an independent group, from an independent artist. I would say, especially at the top level. Mm-hmm. I would say. Yeah.[00:23:51] Larry Miller: Right. And so for an individual artist, they may need to go through a, you know, calculation that evolves over a period of time about whether they have the ambition. and the drive to become Drake or Taylor Swift, or if they can make, you know, just as much or maybe more on a probability adjusted basis doing it for themselves. [00:24:18] Dan Runcie: Yeah, I do think that. If you're an artist and you wanna shoot for the stars, I think that even though there's a ton more platforms and there's many other tools out there that are making it easier for you to own your masters and own the rights to everything that you have, even the artists that have ended their deals, they're much more likely to resign with the major record labels or resign with the publishing companies, but having you know better terms than they did before. You've seen that with the weekend, and you've seen that with a few of the artists, specifically, a lot of the ones signed to Republic Records, they've, you know, de-risk themselves essentially as assets so they're able to get better terms. And they may have gotten on that first deal many years ago, but I do think that that means a few things, right? That means that those artists themselves that are already established, they're more likely to wanna stay there. But I do think for the newer artists, there's still plenty of opportunity because there are still a number of companies that wanna be able to partner with them and help them build. Right. You were just referencing Downtown and one of their key tenants of their mission is, let's help you become a superstar where you can continue to own the assets that you have. And there's a tremendous team there that has a tremendous amount of backing and tools to be able to make that happen. So I think things like that are really, really interesting. I think we'll have to continue to see how it plays out to see if we can see someone that can continue to go that route without ever having to given it up. Cuz I think right now you've seen a lot of folks were traded in at least, you know, some ownership for their rights early on. But then once they got enough leverage, they were able to get them back, which I think is powerful and in their own right. But have we seen it the other way where they started off owning everything and they've continued to own throughout their career? I think naturally there's any type of trade off you have to do when you have a business partnership. So part of that comes with the territory. But with so much flexibility and so many more options, it's gonna be interesting to watch. And that's one thing I'm interested in.[00:26:23] Larry Miller: You just mentioned the charts a minute ago, and I know that you just did a pretty deep dive on a comparison, of the billion stream or billion view charts that YouTube and Spotify separately came out with, that revealed some sort of interesting, you know, nuanced insights about what is similar but different about those platforms. What did you find? [00:26:47] Dan Runcie: Yeah, and I guess first for a little bit of context there, one of the drivers for this analysis was because, both Spotify and YouTube generated a tremendous amount of revenue for the music industry. I believe Spotify had last shared that they generated 7 billion for the industry. YouTube generates six or seven, I think it's 6 billion. The last thing that I had seen them put in, so, that is a sign. Okay, great. You know, you tie that back into the numbers you shared before. You can do a little bit of backwards math to see how much of that is responsible for the overall industry with where it is now. So you see that, and then you also know that like anything else, the most popular songs drive most of that revenue. So you can kind of get a good idea to be like, okay, what are the songs that are driving The music industry right now, and if you're looking at those two platforms specifically, a lot of similarities because I think some songs are hits regardless of the platform, but a lot of differences too. I think there are a few things that stuck out. Spotify specifically is a bit more leaned, at least as of right now. It's a bit more skewed towards English speaking music. I think that's just given where it's got a lot of exposure. In the earlier years, Spotify, a Swedish company, had a lot of exposure specifically in Western Europe, and then we're seeing it now with a bit more of a saturated market now in North America, but YouTube has been much more international. As a, you know, result. And in many ways, as a compliment, it was a free service and a lot of times it was able to reach and help and make sure that people could upload and reach people all across the world. And I think with that, we've seen a lot more artists from Latin America that have been able to excel quite far on spot on YouTube's list specifically. And we may not see them as high on Spotify's list. So that's something that was definitely a bit unique. With Spotify specifically, it aligns a bit more towards radio hits in general because you think about music itself, it is a very flexible type of thing that people wanna consume. You can listen to something on Spotify while you're at a friend's party. You can listen to it while you're, you know, on, on yourself, demand. You're hearing music on the radio, the grocery store. There's so many ways where the same song can resonate in a way that watching the music video, it's a little. Right, like it's a much more active thing. You're gonna probably wanna sit here and have this more visual engagement and experience with it. So with that, it highlights a few things. One, YouTube is probably gonna be a bit more aligned to what someone may actively choose to wanna listen to. So there's some insights there. But YouTube's also a bit specific because. The platform is a bit more driven by memes and things like that, that probably just don't get as much notoriety or become as relevant as they would be on Spotify. Like for instance, are you all familiar with the song?, Nelly and Kelly Rowland, Dilemma. So there's this iconic scene in that music video where Kelly is texting someone and she's using Microsoft Excel to text the person . And it's bizarre because it's something that probably didn't get that much, you know, attention at the time it came out. But now that people can rewind and look at stuff, it's fascinating. So things like that, you know, just don't translate the same way.[00:30:15] Larry Miller: What about the community building and just the community-esque  interaction that has been natively part of YouTube for really quite a long time now that is still kind of blacking at Spotify? Is that a factor?[00:30:32] Dan Runcie: I think so. And I'm glad you brought that up because I think YouTube's power in a lot of ways is, you can look at the comment section of a lot of these songs, and it's almost like a trip down memory lane, especially for some of these songs that you may not have visited in a little bit of time. And artists can see the name of their fan, they can interact with them, they can find a way to be able to try to build a bit of a community there. You can't necessarily do that on the same platform on Spotify. I think in a lot of ways, Spotify and maybe some of the other digital streaming providers from a strategic perspective didn't necessarily give artists the option to be able to see who their fans were, because I think in some ways that data has so much value, right? Spotify may share it as a flex every now and then through Spotify wrapped and things like that, where you can be like, oh, I'm in the 0.4% of Travis Scott fans. You know, I guess I listen to, you know, whatever song too often. But besides that, you don't really have that. But think about the power that an artist could have if they could do that themselves on YouTube. Even though you don't get that data, you can still see some familiar people. You can, you know, find some way to connect or go off platform if you can. And that creates the ability to build a niche. And I think in some ways it helps you have the algorithm just work in your favor, right? Like I think YouTube just being based in general off of, you know, it's the second biggest search engine, so you're leveraging everything from Google's power to be able to help power that. It just helps you as an artist be able to connect directly.So someone I mentioned earlier, NBA young boy. The way that he's used YouTube has been pretty fascinating because he releases his music first on that platform and he's someone that's releasing music every time. And the way that he's been so focused on it, it's almost similar to someone like, do you all know who Mr. Beast is? The YouTuber? Yeah. I heard a few laughs there, but it's almost a bit of a similar mentality to that where he understands that this is his audience. He sees what's working in the algorithm  may continue to serve them, and because of the success from YouTube, he's been able to translate that to other platforms. So I do think that that's a platform, and I think there's a few of them, but artists being able to find a platform that allows them to connect with fans, and especially if fans in their niche or in their base happen to be there. It can be really powerfu.[00:33:04] Larry Miller: I want to remind you that we're gonna have a couple of minutes for questions from you and you know, please figure out what you'd like to ask Dan. And I'm not sure exactly where we're gonna have a mic set up, but I know it's gonna be somewhere. It's walking around the back of the room right now. But first I have another question. When we were talking earlier, we had talked a little bit about the shift in capital business model and that where you had started out as a subscription based business and now that it is, you know, entirely sponsorship driven and that one of the things that that has afforded you is the ability to help build deal flow as the result of the subject matter and the segment of the business that you're in as an angel investor. And I wonder if you can say more about that, about what your experience has been and what your aspirations are. [00:34:09] Dan Runcie: Yeah. No, thanks for asking that for me. Going back a little bit. When I initially started Trapital, the thought was to have this as a paid subscription service model where I would have a free piece that went out every week, and then if you wanted to have additional pieces written, and it would be specifically for the people that were most interested, and it would be $10 a month or a hundred dollars a year, and I did that a little under a year and things were working and I mean, things were growing. I took a step back because I felt like what was most effective for me and what was most effective for the type of things I'm doing was I wanted as many people as possible to be able to be able to either read or listen to the stuff that we're sharing because I felt like this wasn't like I was writing about tech or finance where there were plenty of people that had been writing about this, but there was something that, you know, you were gonna get like a trade secret or some insights from me that you wouldn't necessarily get elsewhere like you had shared in the intro in the beginning. I largely wanted to start this to be able to elevate and hopefully change the discussion so that when people talk about whether it's the business leaders and the strategic moves that are happening, your names like your Rihannas and your Jay-Z's can be mentioned in, you know, in the same breaths as your Jack Dorsey's or your Jack Welch's or other people like that. There are successful people in this industry that are doing this, and being able to highlight that was effective. So the more that I could broaden who could have access to it and who could read it, the more that that would be possible. And I felt that there was opportunity from a sponsorship perspective, from other companies in this space, or even tangentially outside of the space that wanted to align with this type of content and the type of people that were reading it, that I knew that not only could it match the revenue that was coming in from the subscription, it could likely be even larger. And with that, the more people it reaches, the more that it helps everything else grow. And one of the things that it's afforded me is the ability to not just be able to, you know, write and share insights about the strategy of what's happening, not just from the artist level, but from the companies that are in the space and technology, where a lot of them started to reach out to me and wanted to get my advice on, hey, this is what we're building. What do you think of X, Y, and Z? But what that specifically offered then was leading to the next conversation where, hey, we're gonna be raising. And we would love to have you on as an investor specifically because we think you have the insights and we think that you could be a value add to what we're building. And you know, after I think, you know, a few of those conversations, that's where I say, you know, this is something that can be taken more seriously because the insights are here and the spaces here are obvious. And I think that it became more and more clear that I could use this as an opportunity to, you know, back and support a lot of the companies in the space, specifically the ones that were aligned with the way that I had seen clearly what was working and what wasn't. So it's afforded me the opportunity to make angel investments in several of these companies and something that I'll continue to do through the work that I do here. And I think having a podcast, having a newsletter has been a great way to do that. And ultimately just continuing to, not just me, but other folks on the team with their help as well, to make sure that the content and the insights that we're sharing is as helpful as possible. Cuz at the end of the day, this is research that we wanna be able to make it reach as many people as possible that are interested. And then with that, knowing that it's not just the content and the insights that are helpful, but actually being able to provide, you know, financial backing and support to the companies in this space that can help, you know, make it, you know, as strong as it can be, not just for them, but for the other companies. I mean, it's a space that has had so much innovation and I think one of the things that's been a bit frustrating to see at particular points is that a lot of the newer companies in this space have had a PR, and had a pattern of asking for forgiveness instead of permission from the music industry. Yeah. To be able to use the rights of a lot of the songs, to be able to have a lot of the partnerships that they should have in place. And it doesn't have to be that way. I think there are great people out there that are building companies the right way. They're having the conversations early on and being able to help be part of that movement has been really fascinating and inspiring to see as well.[00:38:44] Larry Miller: Great. Thanks for sharing that, Dan. Let's go to your questions. I know that some of you have questions for Dan. If you do have one, there's an open mic in the middle of the floor and we'll give you a moment. Step right up. There is a questioner.[00:39:00] Audience 1: Hey, how are you doing? I just have a quick question. I'm really curious on how you feel about just botting in the industry in general, because I feel like when you were talking about the YouTube charts compared to Spotify, there could be some discrepancies in the data just because it's a lot easier to bot on YouTube versus Spotify you can get flagged. So I'm just kind of curious to know what your thoughts are around those charts. You know how accurate the data is and also what you think about that in general. Because I feel like, especially in hip hop too, it's really prevalent and it's definitely a lot about getting the numbers and stuff like that. And a lot of my clients have, you know, similar thoughts about that. So I'm just curious to know what your thoughts are on the morality of that. Is it worth it? Is it not? All those things. So yeah. Thank you.[00:39:43] Dan Runcie: Yep. Great question. I think I'll take it in two parts cuz I think there's issues with bots on streaming sites that are issues with bots on the ticketing side too. As you know, a lot of people have probably experienced it, but on the streaming side of it, it's something that I've looked at and thought it's frustrating and it's wrong because a lot of people are just gaming the system because I think that the technology has improved where a lot of things like streaming farms and things like that have been able to, it's become a little bit easier to be able to figure out like what to ignore, what not to include from a data perspective, where I think a lot of that's been ignored. But I think a few people, I don't know if anyone saw, but there was this video going around about how I don't know if it's true a hundred percent or not, but like Travis Scott's team, like gaming the system to be able to, you know what I'm referring to? Like, to be able to help boost the sales for Astro World. And it's one of these things where, okay, you could, if I'm taking a step back, directionally speaking, do I still think that he would've been as popular as he is without that happening? I still do. I mean, I think that there were so many things treading in that direction, but did that help? I'm sure it did. You know, so I still do think that it is something that is directionally, it can still give you a pretty clear idea over what's accurate and what's not. I think it's really hard to pierce through the top and be there consistently if it's purely driven by bots. But I do think that more likely than those things come to the surface in some way. Whether it's an artist that is streaming or they have tons of  social media followers, but then when it becomes time to try to sell a concert ticket, The tickets can't sell, and then that artist then has to downgrade a venue or they have to cancel the show because of things like that. These things always find a way to come to head. So I do think that in some cases, some type of retribution does often happen for artists specifically with streaming, just to get other questions in. I won't go into the ticketing piece of it. I think we all know how, you know, you know, horrible that that can be, but yeah.[00:41:52] Larry Miller: Do we have another question? Oh, good. Hi. Welcome back.[00:41:57] Audience 2: Who decided this way of asking questions? This is really weird. Hi Dan. Is the superstar dead? And if so, is that necessarily a bad thing? [00:42:07] Dan Runcie: Good question. I don't think superstars are dead, but I do think the definition of what we describe them as has shifted and it continues to shift over time. Right, because. Let's say we go back to the sixties or even, let's take a step back. Even if you go back to the nineties and say, okay, our superstar's dead. No one is as big as Beatlemania was before people would say, you're right. No one's as big as Beatlemania, but Whitney Houston and Mariah Carey are still very popular as our Boys 2 Men are whoever else. And I think that's kind of shifted now to someone being like, okay, well our superstar's dead. Can someone be as big as Beyonce? They may not necessarily be as big as Beyonce in that same type of way, but I mean, Billie Eilish had a pretty good year. I think even though I think she came out in the late 2010s, she still had her, you know, big moment 2019. I think we're also seeing, I think if anything, the biggest superstar potential now, just given the way that things have expanded, is on the international side too. You look at what Bad Bunny’s doing. I mean, that is a superstar at every definition. The fact that a non-US album or a non-English speaking album has been on the top of the billboard list for almost the entire year is incredible and the billboard is really just capturing what's happening in the US. So imagine if that was a worldwide list. So, yeah, so I think it shifts in that way where I think, you know, 20 years from now, people will be saying, oh, is so-and-so, you know, or a superstar's dead because no one will be as Bad Bunny be as big as Bad Bunny. So I think it continues to evolve.[00:43:48] Larry Miller: Great. Hi, Max.[00:43:50] Audience 3: Hi. How's it going everybody? First off, I just want to say, I can't believe you started this speaking about Currensy. I'm a huge fan of his and he has a lot of unique ways of releasing music. And so my question is, if you're a burgeoning new artist who's trying to get as many listens as possible, would you suggest trying to move forward in platforms that are really big right now? Or finding platforms that are emerging, trying to develop a fan base there where there's less competition?[00:44:19] Dan Runcie: I think it's a mix, but I think, and maybe instead of the last piece of it in terms of finding platforms that are emerging, I think it's more so finding a platform that may seem less quote unquote sexy. But is that gonna be more so where your fans are where your folks like to be. Like for instance, I think a platform like Audio Mac has been doing pretty well over the past couple of years, and they may not get the same level of headlines that Spotify is, but if you are an artist that has a strong following in West Africa or in other parts of Africa, and you know that Audio Mac is one of the leading streaming platforms there. And then that's gonna work out tremendously in your advantage. And I don't know if I necessarily consider them like newer emerging, but I think it works out there. But on the other side of it too, still having exposure o on your Spotifys and your YouTubes and your Apple musics is still good as well because you want to, you don't know when that moment may be that you, for lack of a better word, like breakthrough and have that hit. And when you do, you wanna be able to still have something in those other places. Even if you had your home base on, you know, one of the platforms that may not get as much exposure but for the people you're trying to reach may be the best thing.[00:45:38] Larry Miller: What do you got?[00:45:40] Audience 4:  Hey. So, in a conversation of superstars, you know, you talked about the notion, the billboard, headline, you know, too many hits starting up superstars. The platformization of music where it is right now. Maybe it's a little bit harder for superstars to kind of come up and cut through the noise, but the potential, like you mentioned, to be a superstar is never any bigger in that sort of way. You mentioned the implications on, you know, from like the label side of things, from the other side of things a bit. In your opinion, what are the implications from a music consumption standpoint? You know, the average listener, people that listen to music in terms of the implications for music discovery, how music is in people's lifestyles and the way that it is now with platforms and just the superstar conversation as a whole?[00:46:24] Dan Runcie: Yeah, I thought about this a few ways because I think that one of the things that we're missing a bit because of the way things are now, is that someone can have a song that is topping the charts, but it's not the way that it was maybe like 10, 20 years ago where, oh, if the song is the number one song in the country, oh, like I heard it on the way to the grocery store and then I heard it on the radio and then my friend was probably playing it when I went over their house in the afternoon. No, it's more likely to be that the super fans of this song have been like, you know, streaming the hell out of it and they just have been going nonstop and I may not even know who that person is. So a bit of that water aspect isn't necessarily there as much from a fan perspective. I think the other piece of it is the algorithm of the streaming services double down on this more because at least when I log into Spotify or if I log into one of the streaming services, I'm more likely to see the songs that I've been listening to before. I'm more likely to get some type of daily mix that is based on what I've been listening to before. It's harder for me to be able to see. If I actually wanna see, okay, what are the new top hits? Like I have to search for that to some extent and go out of the algorithmic feed. That's already been tailored to me. So I think it makes it harder for me to go search for those things. And in some ways, the platforms kind of design it that way because they're like, okay, if they know that I am Rihanna fan. They're more likely to want to share with me more Rihanna songs I haven't listened to than assuming that I'm gonna like whoever may be the rising artist right now. So I think it makes it tougher from that perspective. And I think a bit of that shared community isn't, isn't there as much. So I think from a fan perspective, I've kind of had a bit of a double-edged sword because while I think part of what attracted me to so much music and memories is being able to have those shared experiences with people as opposed to now it's like, you may have like these super fandom experiences, but it's with these people that may not necessarily be in your direct area, but you're all connecting online in this way that you may not have.[00:48:33] Larry Miller: Okay, good. I think we have time for, well, let's ask this question and see how we're doing for time. Go ahead.[00:48:39] Dan Runcie: Maybe you could do like a rapid round, we could get through.[00:48:41] Audience 5:  Just really quick then, what are your thoughts on like NYC Drill? I know artists like Dio Sama are huge. Just on the data side like TikTok and YouTube, so what are your thoughts on it? Sort of, cuz I'm a little skeptical on it going really mass. Like, cuz we're really super focused on NYC. Just how big can Drill really get? [00:49:03] Dan Runcie: Well, I think we've seen, you know, the growth and exposure in the Midwest specifically. I think so you've definitely seen it there. I think you've seen artists kind of having their own moment, whether it's someone like Ice Spice, who I think has blown up pretty recently. But I also think that moments of it hurt, right? I think it really would've been cool to see someone like Pop Smoke be able to have the moment and the rise that I think he was going to have. But even that, I think it's kind of interesting the way you phrased the question, because I think even for something like Drill music, there's probably certain people that, like the concept of Drill music, don't like to reach them in the same way. But if you're in it, you probably already think that it's overexposed to some extent, which I think kind of speaks to this like broader dynamic that we're in, where if you're in something, it can feel like if you're in that niche and you're focus, and I know it may sound awkward to call Drill music niche in that way, but if you're in that group, then yeah, it can seem like, oh wow, this thing has been going on for a while, and now it feels like it's everywhere. But if you don't really tap into Drill like that, someone could be like, oh, what's this thing? So I think that's something I keep in mind with it as well. Like there's still so much more exposure out there. So I don't necessarily have those concerns for Drill music. If anything, I think we'll probably see other regions, especially in the US, continue to adopt it more the way that we've seen New York and the Midwest, specifically Chicago.[00:50:26] Larry Miller: Let's go to what I think is gonna be a final question. Go ahead.[00:50:30] Audience 6: Okay. I just had a question about your thoughts and involvement in like A.I involvement in the music industry. You know, just like in terms of the recording side.  perhaps may potentially be in the Live side of the music industry as well. I don't know if there's any applications for that? But just your thoughts on that.[00:50:48] Dan Runcie: I'll keep this quick. It's funny, I was talking to someone about this earlier today. A.I and anything based on like GPT Three in general is fascinating because I do think it can be addictive for artists, but I feel like I can already see the headaches that are there with so many things, right? Because if it's based off existing content, and of course those content owners are rightfully gonna have certain issues about who's basing these A.I lyrics or songs off of things. I do think, though, that for certain artists it can be fascinating. I don't think it'll get to the point where someone could have like a song that they actually wanna release at a top level that is created by A.I. At least not now. The technology isn't there, but could it help with an artist that is having writer's block about a particular thing? I think it was interesting. There's a conversation. Bruce Springsteen was on an Interview and he was saying how like for him with A.I. he's looking at it as something where, you know, he's like, I've had months where I just didn't write cuz I essentially had writer's block. I just couldn't think of something to be able to put out there. But could A.I. just help jog my memory and even as someone that I am not a songwriter or a musician, but as a writer, I've been seeing these tools and the things they can do, and just being able to plus, you know, sign and then them being able to generate some thoughts, or at least a potential outline of, okay, what could this topic look like? It does at least help jog the memory in the way that reading an article or something like that can be such a fascinating space. I know we're over time, but yeah. Fascinating space. [00:52:31] Larry Miller: Thank you. We're gonna have to leave this here for now, but you can hang out for a while and chat with everybody as we run through the rest of our program and maybe even a little bit afterward. And so let's thank Dan for a really thoughtful discussion.[00:52:50] Dan Runcie: If you enjoyed this podcast, go ahead and share it with a friend. Copy the link, text it to a friend, post it in your group chat. Post it in your Slack groups. Wherever you and your people talk, spread the word. That's how capital continues to grow and continues to reach the right people. And while you're at it, if you use Apple Podcast, go ahead. Rate the podcast, give it a high rating, and leave a review. Tell people why you like the podcast. That helps more people. Discover the show. Thank you in advance. Talk to you next week.

I’m digging into the mailbag for today’s episode. For the first time in over a year, I asked Trapital listeners and readers to send me their most burning questions about the music industry. I’ve pulled out nine questions from the bunch to cover on the show. We’re covering everything from NFTs to artificial-intelligence-assisted music creation to investing in music catalogs going forward and a whole lot more. I’m hitting you with my honest thoughts on each. Here’s a look at the topics:[0:54] State of music NFTs [4:40] Customer problems as a music startup[8:35] Lack of new music superstars [12:07] Future of AI-assisted music creation [17:00] Tradeoff for artists wanting ownership [22:11] Hasbro selling eOne[26:16] Music catalog investing in 2023[29:41] Globalization of hip-hop [33:21] Emerging artists as startup founders Trapital’s first-ever Cultural Report for 2022: https://trapital.co/culture-report/Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSSHost: Dan Runcie, @RuncieDan, trapital.co Sponsors: MoonPay is the leader in web3 infrastructure. They have partnered with Timbaland, Snoop Dogg, and many more. To learn more, visit moonpay.com/trapital Check out The Drop, REVOLT's weekly newsletter to stay ahead of the latest news in hip-hop and Black culture. To learn more, visit revolt.tv Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital Trapital is home for the business of music, media and culture. Learn more by reading Trapital’s free memo.TRANSCRIPTION[00:00:00] Dan Runcie: If you're an owner of I.P., often times that I.P. may be the most valuable thing that you have. But does it always make sense for you to then be the ones that produce it? Of course, there's unique examples of this, right? I think Disney is a company that clearly does both, but Disney is such a unicorn in what it does in so many ways, and we've all seen that flywheel of what they've done, and that flywheel is so relevant because it's hard to see another company that could really do that to that level. But it's more likely than not that if you are an I.P. owner or it's probably in your best financial interest to partner with a company that you can leverage their production because they are skilled at being a production company to do that thing.[00:00:46] Dan Runcie: Hey, welcome to the podcast. I'm your host and the founder of 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. [00:01:04] (Intro) Dan Runcie: From you, the listeners who make Trapital, exactly what it is. So this is a mailbag question where you all sent in your best questions. Some of you emailed them, some of you posted them on socials, but I looked at the questions and picked the best ones, and this is a mailbag episode. It's been a while since we did one of these, so it felt good to do one. I actually wanna do these more often just because I think the questions were really great and we're able to address a bunch of topics that we'll get into A.I, the future of music, globalization, ownership, and all the topics that we love to break down on capital and a few ones. So let's jump in.[00:01:41] (Pre Roll Ad Moonpay) [00:02:11] Dan Runcie: All right. Today we have our one and only Mailbag episode from Trapital. It's been a while since we did one of these. I feel, maybe at some point earlier this year we did a mailbag, so it was finally good to dig back in, hear from folks and be able to answer the questions that a lot of you have been thinking. This podcast has grown quite a bit this past year and was in the 1% for the most shared podcast according to Spotify wrap, so that was pretty good. Some applause for that. And I wanted to bring in some of the questions from some of the avid listeners and readers we have. So I posted in social media, posted in the newsletter, and this is a roundup of the best ones. Covered a bunch of topics. We're gonna talk about the future of A.I and music, the state of NFTs, globalization, ownership, and a whole lot more. So let's dive into the first question we have here. So, Ken Penn wants to know what is the current state of music NFTs and our major labels as interested in them as they were? So first for some clear context, a lot of people have been asking questions about this because the general trends of N F T discussions from last year to this year is not quite what you would expect. A lot of people saw that Bloomberg report that came out earlier in 2022, I think they said, N F T transactions were down 97% from the peak that they were at in 2021. And if you type in the word NFTs in Google Trends, you'll probably see a slope that looks quite downward. That is very true, and that's clearly where that is. But I think there's a big difference between that, which I think 97% of that was the hype and a lot of the crap that you likely would only see at the height of the pandemic when money was flowing like crazy. Think about the time when like Pet rocks were being sold and Logan Paul was buying his NFTs or trying to sell his NFTs for whatever. If that was the top of the market, then I think we're seeing things level off a bit more now because you are still seeing partnerships from the major labels and from a lot of artists. I look at Warner Music Group. Warner's been active, more active than any other major label, I think, when it comes to active investments and being forward-looking and being public about those investments. And it was just six, seven weeks ago that they had formed a partnership with Open Sea, which is one of the largest platforms out there to be able to trade in as a marketplace to be able to buy and sell NFTs. So you also have other deals that we've seen. Universal Music Group recently hired two SVPs that are focused on web three with a pretty strong focus on NFTs themselves. And more broadly, you have companies like Public Pressure that just raised $6 million to continue to build in this space. I have said this a few times in this podcast, but I think that Web three and NFT specifically, you had to get through the.com era. You had to get through that heads.com phase of people just starting shit because it sounded like it was something that was gonna resonate, but after a lot of that didn't work out. You obviously had the.com bubble burst. That era still gave us Google, it still gave us Amazon and all these other companies that have still continued to be successful and be some of the biggest companies in the world today. And I think there was a very strong chance that we will still have that with this current wave. It may look slightly different in music, but I still think that we're gonna see, and we have seen more of the true opportunities, whether it's on the artist side of artists that are selling actual NFTs that their fans would find valuable and that others will wanna buy into as well. And I think you'll see this on the major label side with more investment going into acts that can actually reap the rewards from it. One of the biggest deals of 2022 when it comes to N F T sales was Snoop. and what he was able to do, just capturing that momentum. After the Super Bowl. We wrote, or I covered a lot of this in the culture report that Trapital put out will include a link to it in the show notes if you haven't checked it out yet, but still a lot of upside on NFTs. I do not see it quite as much as the bubble that I think was clearly there in 2021. A lot of that quarantine rapid growth needed to calm back down a bit, and I think NFTs are one of the areas that were hit a lot harder than others, but I still think that there's plenty of upside for people that actually wanna build and don't just wanna do grifter, whatever the hell else people were trying to buy itself time. Another question here is from David from Santa Monica, and this was actually a reply to a newsletter that I recently put out where I was talking about some of the cost challenges that music startups and music tech companies will face as in regards to working with customers and customer service and working and dealing with unprofitable customers and wanting to move further up. Mark's question was whether or not I had any data on the customer service costs that these companies have. And I wanna answer that question in a slightly different way. It's less about customer service in the same way that you know, you or I may go call Comcast or may call Xfinity when we're having an issue with our cable or our internet, but it's more so you are a client or customer that is trying to use this particular service, whether it's free or you're relying on it to grow your own business, and you are now having some challenges, you're having some type of question. The thing is a lot of the companies, especially a lot of the distribution platforms, started off being available to everyone, but I think they realized how expensive it is to serve the clients and to serve the customers who are not driving the most business possible. It's no different than a lot of people see when they're working with client services. Overall, your $2 million clients in a lot of ways can be so much more enjoyable to deal with and work with than your $2,000 clients or $2,000 clients will chat a nickel and a dime. They have a bunch of questions about this, that, and the third, but your clients that have a bit more money, they normally come in a bit more clear and confident with what they're looking for, and it can lead to better business in the long run. And I think to a lot of extent, the same is true with a lot of the artists that you end up serving or a lot of the customers that a lot of these platforms end up serving because a lot of their time gets spent with customers that just don't justify the ROI of how much it costs to have that person on staff continue to work and continue to coach and work directly with someone who's just not generating enough revenue to be able to justify the spend. And if you think about how a lot of the companies focus on these things, especially if you're being built out like a tech customer success. This is a role where whether even at the high individual contributor, or the middle level manager role, you're talking, you know, $150, $200,000 plus for someone that can do that roll on annual basis. I mean, I'm thinking of myself, it was six years ago at this point, I was offered a customer success role from a startup that has, you know, now been acquired. I believe the offer was right around that $150, or maybe it was a little bit more than that K range. And that's how much you're paying to have one person that is dedicated to not just you, but to other clients.But if you were to fractionize my time, let's say that, you know, I was someone that was making $160k a year and I had 12 to 16 clients per year that I was serving, you have to justify, okay, is it worth $10k of the company's time to be able to continue to serve this person if that's what I'm spending my timeline, and we all know that it's less likely that it's gonna be an even split. So that's where these things I think, can often come into play, which is why I think you've seen a lot of the distribution services and a lot of the others start to be more selective over time. And they start to have cut-offs in terms of who they're willing to serve and who they're not willing to serve. And that's one of the reasons why I think we see that shift where, especially in music distribution, it ends up leaning itself towards just having a low cost option, like Distrokid or a tunecore where it essentially doesn't cost much at all to upload the services, but it's a bit more do it yourself or you get something that is a bit more boutique. But by being able to join the boutique offering, it's much more selective as a result. So the next question here is from Arthur from Twitter. He didn't specifically say his name, but it was a good question here. He asked, who gets more blame for the lack of consistent superstar X, labels or customers? The answer is neither. The answer is technology. If you're trying to blame anyone, I personally don't call it blame. I more so call it the driving factor, but this is more about technology. Technology was the driving force that lowered the barriers to entry for artists to be able to create more music than they've ever created, and to be able to release it the way that they've done it. And because they're releasing music the way that they've done it, it then becomes harder and much more noisier for new artists to be able to enter the scene and be able to hit the same heights that they did. And because of the increased number of options that are there, it makes it even easier for powers that be to continue to invest more in what they already see proven. Whether that is your superstar artist or ones who have already proven themselves that seem like they'd be most likely to be the next next bets, whether that's your Taylor Swift or your Adele, or your Beyonce on the proven side or on the artist coming up, whether it's someone like, Olivia Rodrigo, or like Blast, or Billie Eilish or someone like that. So these things that are, I think, a big factor just based on where things are and barriers continuing to be lower and lower. And there's been countless reports on just how difficult it is and how record labels are starting to feel like it's having a harder time to break new stars in the way that they once did. It's harder to have new superstars reach the levels that they did. I think you see this in some of the analysis that's been done on charts and stuff like that too. It's a lot of the same names that have been household names for over a decade that are continuing to stay there and it's harder for the new artists to really come through. So I guess if there's anyone to blame for that, we can blame the founders and the product managers from the companies that enabled the barriers actually to happen in the first place. I know a lot of people disagree. I do think it's a good thing that people have more options than ever just in terms of the artist's perspective, but just because I think that it brought a lot of flexibility. But with that, there's always trade-offs like any new technology brings. There's good with that. There's bad that comes with that. I do think that the pros and the cons outweigh them. I do think that the pros do outweigh the cons with that, but still very aware of the downsides of the current timing. This next question is from Joe Edwards and he asked, what is the ultimate potential of GPT-3? This is a hot topic right now, I think for a lot of folks, and it's a question that I think everyone from record labels to attorneys, to emerging artists are trying to figure out, but here's my perspective. I think that GPT-3 is a great tool that will be able to give songwriters an extra tool that they can have by their side. I think we recently heard Bruce Springsteen on a podcast talk about how he could use A.I., whether it's something like something that can help jog his memory or jog his thoughts, specifically if he's having a better writer's block and how difficult that can be for a songwriter. You just wanna be able to have a few things that can aid your process of bringing thoughts together. The pen that comes from that would ever truly replicate something that Bruce Springsteen would wanna put out himself. But just give it how advanced these tools get and how better and better they get. It's likely gonna provide someinspiration that can be helpful. That said, I think it would be more helpful to help existing artists, and I'm a bit less bullish right now on new artists coming up. I think we all saw what happened with Capitol Records and FN Meka and that whole mess, while I don't think that that's all A.I. driven, part of that's driven by the people that were running it. I do think that that is an inherent challenge that some people may be a bit weary of, at least for now. But one place that I do think A.I. and GPT-3 specifically could be unique for is for giving certain artists or certain people the ability to access a sound catalog or an ability to access a group of songs that they can use to then scour to figure out what they can then glean from that to be able to create the new songs that are able to create lyrics that they could use in the future. The reason I highlight this is because I'm sure if you're trying to use a song that is based on a song that is owned by a major record label, the record labels and their lawyers will come after you, and it is something that I know that is already top of mind for. But there's a lot of music out there, a lot of music that people would want to hear that isn't owned or controlled by the major record labels. And I think in the same way that you saw platforms like Epidemic Sound or Splice and others be able to create, whether it's monthly subscriptions or other types of opportunities to buy access to a right to use any of the songs in the catalog. I think you could see something very similar to that happening with A.I. and GPT-3 specifically, because yes, if GPT-3 tries to scour all of the songs available, that is a legal nightmare. But if you're an artist and you wanna be able to pay $10.99 a month or whatever it is, to be able to access this tool where you could type. Any prompt that could help spur your thought, that could be a very great use of $10.99, especially if that gives you the ability to make the next album from your bedroom that could be nominated and win a bunch of Grammys or sell, or, you know, do a bunch of commercial success or just have enough success for you to be a standalone successful musician in your own right. Because I do think a lot of those things are likely to appeal more so to independent artists. I also think that we'll see some potential with GPT-3 with an artist that breaks out on TikTok in general, I almost feel like it's inevitable that there's gonna be some artist in 2023 that has some song that goes viral on TikTok, and people are gonna be like, oh, where did the idea for the song come come from? And the artist is gonna say, oh, I just typed in a prompt. Write me a song about X, Y, Z. And here's what came up. Because we already started to see little hints of how artists would use name generation or using tools to come up with things, right? You've all heard the story about how Lil Nas X used insights from Reddit and insights from Twitter to create Old Town Road and how he essentially engineered that song to reach a type of success that it did grant. A lot of that was outside of his influence, just given things going viral after the whole country music controversy. But a lot of the things leading up to that point were influenced by him. And I think even on a more simpler side, artists like Childish Gambino and Post Malone, I'm pretty sure that both of them got their names from some random computer generators. So there's been things like that that we've seen and I think we'll continue to see more of that. And I think even the answer to this question is gonna continue to evolve. So you could ask me this question in a year. I think I could probably have this as an end of the year podcast question for some time now. And their law used to be something new to glean. The next question here is from Mercedes G. She wants to know why don't artists prioritize ownership even though artists have been pushing ownership for decades? So this question is a bit nuanced because I do think that there are a lot of artists out there that do push ownership, and they are clear that they wanna be able to own their masters and own their publishing and understand the value. I think the challenge comes though, when it becomes a trade off and that trade off is likely offering the artist something that they couldn't have otherwise had because owning your masters and owning all those things sounds great and it sounds great if we assume that the artist could have reached the same heights that they could without giving up something in exchange.The thing is, when an artist is starting to pop and they are already experiencing what some of the challenges are, being able to really hit that next level and whether that is something that they want to do because of some of the things I answered with earlier questions. With more and more music coming out, it's harder for everyone to break out. It's especially harder for artists that are already signed to two record labels to break through. That means it's gonna be even hard for an artist that doesn't have the major label resources behind them to break out as well, which could make them even more likely to wanna then sign with the major record label, especially if they are cutting you a check. I'll look at a few examples of younger artists as well. Look at an artist like Lil Dirk or even NBA Young Boy, I'm pretty sure little Dirk. Posted that he had gotten a 40 million deal recently this year. And I think Dirk is someone that has been popular. I mean, it's several years ago at this point that he was on double XLS freshman list, but even as an independent artist, it could have taken him quite a bit of time to ever hit that amount of money, especially if he's trying to cash it in on the moment that he has. So it's one thing to push ownership and it's another thing to still be able to say, you know what, no, I'm good. I don't want that check. Let me continue to do what I'm doing. When someone offers you an eight figure check that's right in front of you. And I think there's a bit of that human element that can sometimes get a bit lost cuz it's easy for the people in the pita gallery playing Monday morning quarterback to go say, oh, why would you do that deal? Or us to focus on some of the survivorship stories of Master P turning down a million dollar record label deal. Different people that may have offered it to him. Because for every success story like Master P, there are other people that turned those same type of deals down but it didn't take off the way it did for P and then they go back to the record label and being like, oh, hey, could I still get that deal? And the record label's like, no, like the moment passed and the only reason you're coming to me is because you don't feel like you have the momentum that you had before. So there's a few factors here that I think are important to consider, and there is that human element that I think just changes. It's one thing to be a Twitter pundit and put your thoughts out there, but it's another thing to really still say no when a company that you know, they're rolling out the red carpet for you their show, they're presenting the seven, eight figure check, whatever it is, and then you still saying, no, I'm good. And then I think you even see us at the highest levels as well. You look at the deals that you know, someone like Drake or the weekend, you're more so hitting now into the nine figure deals and these artists are more likely to be able to continue to have ownership, but they're still licensing their masters or licensing their music out to the major company. So there's still some trade off there. It's very rare that you ever are really seeing superstar artists that still are hitting those superstar artists levels that is like, you know what? I'm good. Let me just go release everything independently. Cause I think at the end of the day, if you are a priority on these labels, and if you are still getting the best that you can get, you're more likely to figure out, okay, what trade-off is commensurate at what level? And that doesn't mean there wasn't a better way that could be done optimally. My explanation here is more of an explanation of the entire landscape of less of an advocacy for one position or another. But I do think in general, just given how much harder it is for record labels to be able to truly, I think, focus and invest on that artist development piece because they're expecting artists to come to them when they've already hit zero to 60. I think it really puts the onus on the artist to be like, okay, are you happy at 60? Because if you're happy at 60, you may not need the record label, and maybe you think you could get to 70 or 80 yourself, but it may take some time. But if you're trying to get to a hundred, it's gonna be really hard for you to do that independently. So a lot of it requires some questioning on where you wanna go, how far you wanna go, and why that may or may not be as important to you. [00:22:52] (Mid Ad): Today's episode of The Trapital Podcast was brought to you by Revolt. Revolt is on a mission to curate and share the best of the best in hip hop culture and social justice. You may remember a couple months back I had the CEO of Revolt, Detavio Samuels on the podcast scene. He talked all about the mission and where things are going, and I think this is one leading company that is elevating what's happening in black culture. It was launched by Sean Diddy Combs back in 2013, and the multi-platform Network offers breaking news videos, artist interviews, exclusive performances, and original programming. They have content for everyone, like Asset over liabilities and original podcast with the host of Earn Your Leisure that gives you a behind the scenes look into the business investments of artists like Soulja Boy and Rick Ross. They also have the Drop Revolts weekly newsletter and curation of the latest in hip hop and black news, and they have the black print where sits down with innovators and change makers laying the ground up for the next generation for the culture. You can learn more and sign up for Revolt's newsletter, the drop@revolt.tv.[00:24:00] Dan Runcie: All right, this next question here is about a specific deal that's going on, but it's gonna be a good one to answer. JB from Atlanta asked, now that Hasbro has sold E-One's TV and film division, could quality control be a potential buyer? So a few things to unpack here. Earlier in November, Hasbro announced that it will be selling its TV and filled divisions of the comp company. Note that this news, three years after Hasbro had initially acquired all of Entertainment One, which included its music division. And then I think it's been about a year now. My time may be off, but it's been about a year plus now that it had rolled off its music division, which then became Monarch, which is run by Chris Taylor and that team. You may remember them because they were the team that was involved with the selling and the acquisition of Death Row records and then that deal with Snoop Dog. But Hasbro overall has kind of been in this, oops, maybe we should have done this deal when they went and bought E-One. And I think the big takeaway away for Hasbro has been that if we want to leverage the IP that we have, and as many of you know, Hasbro toy companies, so it has the IP there, but it also has some brands that were in that production, like Peppa Pig and things like that. They can still own the IP, but they don't have to own the in-house production to be able to then leverage that IP and make it happen, and then when you own those divisions, it just can be so costly to try to do that. So they got a lot of pressure from Wall Street and other analysts to sell that division and focus on what they do. If you're an owner of an IP, Oftentimes that IP may be the most valuable thing that you then have, but does it always make sense for you to then be the ones that produce it? Of course, there's unique examples of this, right? I think Disney is a company that clearly does both, but Disney is such a unicorn in what it does in so many ways, and we've all seen that flywheel what they've done, and that flywheel is so relevant because it's hard to see another company that could really do that to that level. But it's more likely than not that if you are an IP owner or it's probably in your best financial interest to partner with a company that you can leverage through their production because they are skilled at being a production company to do that thing. So that was a lot of the reason why that sale happened in the first place. Now let's talk about the QC part of this. I would be very surprised if Quality Control was to go on and buy a TV and film division because I also look at Quality Control as an IP. I mean just given the ownership structure, they may joint own some of that with Motown, give the joint venture there. But they are IP owners that can then use that to leverage, whether it's the brand or the story of your little baby Migos and even the rise of coach K and P and and things like that. And while QC does do investments, like I know they're involved with SoundCloud and they have a few other things going. I would be very surprised if they went on to acquire a type of, you know, studio themselves. I know that QC does have a film division, but my impression of that has always been more so, yeah, let's stay quiet, let's have that something that we could have that small and manageable in-house, but if they still have a big release, I think they would probably wanna go to shop that and market the same way that any other big time producer would want if they wanted to push something further. No different than, I think you kind of saw with the Little baby documentary that eventually went on, Amazon was released on Amazon Prime a couple of months ago. So I would be surprised there, if anything, I mean, I think QC is one of these record labels that may be looking for an outside investor itself, but I'm not quite sure what the Motown relationship, just given the joint venture ownership there and how that may look, whether or not who the actual company is that owns, whether it's the brand or the artist or anything like that.Moving forward from that. All right. Couple more questions here. So is music investing specifically, like in catalogs, is music investing still a good idea in 2023? And my answer is yes, but not in some of those 2021 pandemic era evaluations. And that's because I think what I liked about the catalog boom is that it brought awareness to something that I think a retail investors in the niche knew, but a lot of others weren't focusing on, is that there's a lot of value to be had with owning some of these catalogs because there's certain artists that I think do have the potential to just feel similar to a evergreen stock or something like that continues. Provide consistent revenue that isn't correlated with the economy time and time again. But I think there's a few things that happened that people may have missed. One, there is a decay curve with all of those assets. And even as much as people wanna tell you that the Beach Boys or Michael Jackson or the Beatles are timeless, everything has a decay curve. I mean, you could even go back, you know, decades, even. Frank Sinatra or Elvis. I know that you know that the movie that came out recently, but even folks like that, the discussions that are happening now about those people aren't anywhere near the type of discussions that you may have heard, at least when I was growing up, and that just shows you how much has changed in several decades since then. So, and I think the music listening would've probably aligned with that as well. So there's that, and I just think that the valuations that were being paid for a lot of these things probably just wouldn't happen again. One, because interest rates are nowhere near as low as they were, but I think even regardless of interest rates, there was a lot of overpaying for those assets just given the excitement. So smart on a lot of the artists for cashing out when they did and getting a lot of those returns because at least from what we've seen from a lot of the reports, You've seen some of these financial time stories talking about Hypnosis. And Hypnosis has at least from what the returns have been from their catalog has not been able to generate returns that a lot of the investors feel satisfied with and feel are in line with what they had, which is why I think you started to see more challenges there. There was almost an entire year period where the company didn't make an investment, and I think you've seen a lot of things ring true for others. There are still catalog sales happening. It just may not happen at the particular dollar amount that people wanted. For instance, there was Pink Floyd deal that was being talked about for a while. It's still being talked about. I believe they wanted $500 million, but based on some of the recent findings that had come out, the offers that they started to get were much smaller than they would've liked. So people are still interested in buying Pink Floyd. It may not be for the amount of money that the rights holders wanna sell it for, but there's still interest there, and I think that rings true all the way up and down the board. Listen, it wasn't even just music investing. The quarantine era of the pandemic led to a lot of sales for things happening that just probably wouldn't happen in the same way today. All right. Another question here is how does the globalization of hip hop Influence its business and cultural impact? And this question came from chat GPT. Someone had submitted this question and then it came back as, oh, what do you think is a good question to ask about the business of music or the business of hip hop? So this is a fun one. I know I've written about it a few times, but for the sake of brevity, I'll tackle it in two ways. First, A lot of the Western hip hop artists were able to reach a much bigger audience as a result of globalization, and I think it made it easier for some of them to launch global brands as a result. I look at folks like Rihanna and folks like Jay-Z. Look at some of the deals they've done with, whether it's ACE of Spades for Jay-Z, or the Fenty partnerships with Rihanna. These partnerships are tied in with European companies and there has to be some relevance for how big you are seen in Europe and other areas for those things to really have an impact. And I think you saw that compound as well. When you look at someone like Rihanna and Fenty Beauty, being able to enter Africa and just given the ethos of that brand being able to be inclusive and have shades for all skin tones, it makes perfect sense to be able to do it in Africa, which you just think about the beauty industry. This is an entire continent of people, especially women. Different complexion and skin tones that were largely overlooked by the many other major brands. So being able to have that influence there directly ties into an artist like Rihanna, you know, years, decades earlier, being able to tour in these places and being able to have her name out there, being able to be seen in that way. So I think it affects it from that perspective. And of course, Jay-Z, Rihanna are more so people at the top of that chain that are billionaires, but I think it really made a large impact on everyone else on the other side, I think it's made a huge impact on international artists too, because we've seen in so many other places that hip hop has truly been that connective tissue. It's really been that gateway that can help. Raise and elevate the voice of the unheard or elevate the voice of the people that may not have either gotten a chance to get their word out there or can really speak to some of the challenges that are happening. And that's the way that hip hop started. You look at Public Enemy, they saw themselves as the black CNN. They were trying to voice what's really happening. You listen to songs like Grandmaster Flash, The Message. This is what's going on in the streets of New York right now. And I think that if you listen to a lot of hip hop from other areas and you hear things translated, you're hearing a lot of that. And even someone like Bad Bunny, how he speaks about some of the challenges and the oppression that's happening in Latin America, or even things that are happening in Puerto Rico specifically, or even how we spoke out about disaster relief and even L G B T Q issues. It's not a coincidence that this is a hip hop artist that is doing this in their own language and that's happening. So I think we've just continued to see more and more influence and we'll continue to see how hip hop continues to be such a big driver. And it's not just Latin America. You're seeing it in France and you're seeing it elsewhere. And as globalization of music more broadly has made it more possible for artists in local languages to truly rise up. I think you're gonna see more and more of that coming from hip hop in a lot of those local language areas. All right. And the last question we have here is from Quai Bangs who asks, do I notice similarities in emerging artists that follow the start-up path to start-ups themselves? And I definitely do see a lot of those. And I like the question because I've been hearing so much from founders in the space and start-ups in other companies about two things. Truly identifying and seeing artists as founders, not just as the creative talent behind what they're doing, but they are the ones that are the founding person of this company that if successful as it can be, it'll be a company built around them to then help focus and really benefit and speak to their strengths and address their weaknesses as well. No different than a start-up would be who is that? Who are your co-founders that you're gonna find that may not be on the talent side, but can help with the business? Or if you wanna do it all yourself, who are the people that can be around you to at least help support in that way? And I think that you've seen some of those things happen, from time and time again. You look at the start of Dreamville, I very much do. Ibrahim Hamad and Jay Cole as two people that are in line with being able to do that and continuing to push forward, which I think has been pretty strong, seeing how they've been able to do that over the past decade. Plus, you look at any of these record labels and I think you're more likely than not going to see some type of tandem there. We talked about Quality Control. I think you see a lot of that too, and I think no different than a start-up may try to get equity for what they're doing. I think you're seeing certain artists start to explore this as well, whether they're trying to explore on chain, we're trying to sell tokens or they're trying to get a more formal structure in place. I recently had the investor, Cooper Turley, Cooper Tupa on the podcast, and he was talking about this as well, and how he's investing in companies that are looking at this investing artist specifically so that he can take an equity stake out of the artists themselves and be a bit, you know, less dilutive than a record label that may wanna take 80% of the cut moving forward in exchange for in advance. So there's plenty of trade-offs there. I think it's an interesting thing to continue to explore, but I think that it is a sign of what that path to the future looks like. Cuz I think that artists, our founders, at the end of the day, how they go about that, you know, is one thing or another. And who wears that CEO hat. Whether it's someone that artist proactively puts in place or it's someone. It ends up being at the record label that they signed to, or it's their manager. There's so many ways that these hats can be worn, so you'll be interested to see how it plays out. But wow, that was fun.That was a quick bunch of rapid fire questions there, but this was really great. I hope you enjoyed it and I hope you enjoyed the podcast this year as well. Definitely continue to share it with anyone that you think would be in. And let me know if you have any other questions. We can keep this in mind. I wanna do these more regularly in general. So, yeah, if you're listening and you enjoyed this episode, send us a quick note, whether it's, you know, on social media or email. And then we'll keep them rolling so that the next time we do a mail bag podcast, we can keep it rolling.

This episode is a two-parter. At the top, I talk about the news at Motown Records with Ethiopia Habtemariam stepping down from her role as CEO and Chairwoman. After that, I talked to Zack O’Malley Greenburg about Hip-Hop’s wealthiest artists of 2022. After years of compiling the list for Forbes, Zack O’Malley Greenburg released the 2022 edition independently. This time around, he used insights from Columbia Business School to better grasp on the wealth of the industry’s biggest moguls.Jay-Z tops the updated list with an estimated net worth of $1.5 billion. In second is the newly-minted billionaire Sean “Diddy” Combs. The rankings are rounded out by Ye ($500 million), Berner ($410 million), and Dr. Dre ($400 million). Zack joined me on the episode to discuss the rankings, and two artists in particular — Diddy and Berner. Diddy has a portfolio of diversified assets that include media, music, spirits, and now cannabis. Berner is the biggest surprise of the top 5 but has quietly built a cannabis empire with a large runway for further growth. Here’s everything Zack and I covered on the show: [13:56] Zack’s process behind putting the list together  [15:40] The newest billionaire on the list[16:41] The growth of Diddy’s DeLeon tequila brand[29:02] Sean John’s place in Diddy’s portfolio [30:28] Diddy’s latest moves in cannabis and possibly Twitter [32:45] The evolving business of REVOLT[36:19] Berner’s “surprise” $410 million net worth[31:50] High potential for Berner’s business[34:52] Berner’s business success supersedes his music fame [39:50] Drake moving up the ranks [43:50] Girl Dad storiesZack’s Hip-Hop’s Wealthiest Artists list for 2022: https://zogblog.substack.com/p/hip-hops-wealthiest-artists-2022Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSSHost: Dan Runcie, @RuncieDan, trapital.coGuests: Zack O’Malley Greenburg, @zogblog Download The Culture Report here: https://trapital.ck.page/a23b7a6a4a Sponsors: MoonPay is the leader in web3 infrastructure. They have partnered with Timbaland, Snoop Dogg, and many more. To learn more, visit moonpay.com/trapital Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital Trapital is home for the business of hip-hop. Gain the latest insights from hip-hop’s biggest players by reading Trapital’s free weekly memo.TRANSCRIPTION[00:00:00] Dan Runcie: 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.[00:00:23] Dan Runcie: Hey, today's episode is a two parter. The first part of the episode, we're gonna do a breakdown on one of the more recent news that happened in the music industry. Motown Records CEO and Chairwoman Ethiopia Habtemariam has stepped down and there is a lot to unpack there. So we're gonna talk about that. And in the second half of this episode, we're joined by my guy Zack O'Malley Greenburg, and we are gonna talk about the recent list that he put out, which is his hip hop's 2022 list for the wealthiest artist. He has some new announcements, some usual names, and we break it all down. But first, let's start with the news at Motown. So it was last week, shortly after Thanksgiving. Ethiopia and Universal, and Motown announced that she will be stepping down from her role. This is a role that she has officially had at this level for just over a year and a half. I think it was March, 2021 that the role was announced, but she's essentially been the face of Motown from a leadership perspective for over a decade now and when the move happened, I think that there were a fair amount of people I could understand that could have been caught off guard by it. But when I start asking around, asking a few people questions who I know understand the situation pretty well, it's quick to see that what's being pushed publicly isn't quite reflecting what's actually happening behind closed doors. But before we get to all that, let's talk about some of the wins that I think Motown and Ethiopia have accomplished over the past decade, because I think these stand out and they're really important. I look at the 2015 joint venture deal that she did with quality control music, as one of those deals that can ultimately help bring a record label from its days of resting on its laurels to being able to get a bit more current. We've seen this happen time and time again. You look at Interscope in the early nineties. Interscope was a legacy rock and roll label. Jimmy Iovine was trying to figure out the next thing and then boom. Here comes Suge Knight. Here comes Dr. Dre and Death Row records comes through. Not only does Death Row continue to rise up with the supportive Interscope, but you also see Interscope adopt a bit of that cool factor and really revive itself, and now Interscope is continuing to be one of the strongest record labels that we have. You also saw that a few years later happened with Republic records and with cash money signs. The deal that I've talked about plenty of times on this podcast, that 1998 distribution deal and that deal did a lot for Baby and Slim, but it arguably did even more for Republic Records, which now I believe it's in its fourth year in a row, the leading industry or the leading record label in the industry when it comes to overall market share. And I do think that what quality control and Motown were able to do, do deserve some similar praise. But the slight difference here is that Motown for a lot of its time and even more so as we continue to learn, was saddled under the Capitol Music Group umbrella and didn't really have the opportunity to standalone as a true record label that could run on its own and be a standalone entity. The same way that we see with Interscope, the same way that you see with Republic. And some of the other record labels that are under the Universal Music Group umbrella. When the news first announced though, there wasn't as much chatter about Ethiopia's departure. You think about the times that Def Jam has turned over CEOs. There are think pieces on think piece. You can't get people to stop talking and sharing their opinions, and some of them on base, but people sharing their opinions about what Def Jam did and didn't do wrong, but there wasn't as much here. You saw a little bit in piece that Gail Mitchell at Billboard had done where I think she did a good breakdown. You could definitely read between the lines a little bit of some of the things that necessarily weren't being said, but what I think we started to unpack and what we started to get a sense for was, even though Motown had increased its market share considerably under Ethiopia's tenure, I believe back in 2017, it was around 0.4%. And as of most recently from what Billboard reported in 2022, it's at 0.95%. And that's great, more than double. And you think about how much more recorded music has grown from 2017 to 2022 now as well, that's a pretty huge growth and that's nothing to shy away from. The thing is, record label executives and the music industry aren't just judged on market share. You're judged on how efficient you are with what you do to acquire that market share. You're also judged on your ability to score deals and your ability to do it in a way that's efficient. Everyone still has a PNL at the end of the day. But I think the slight difference for some of these companies is that because they sit under the Universal Music Group umbrella, you may not necessarily know what's really happening unless you have a really discerning eye and you can put two and two together. And if you look at some of the moves that Motown has made over the years, there have been a number of big signings. But have those big signings always necessarily led to the type of results? You know, someone like Universal CEO, Lucian Green wants to see from a record label that now would be standing alone and no longer under the Capitol Music Group umbrella. You look at an artist like Lil Baby, who you know, through quality control, is part of that Motown collective. But, you needed a few more artists at that level and you needed to get them at affordable rates. And I think the biggest win that we saw from Motown in recent years was they recently signed NBA Young Boy. This is about a year after he started working with his record label, but how much did it cost to get NBA Young Boy? He had just posted on Instagram, this is two months before this deal was made public. He had just posted on Instagram, this was in August, 2022, that he was a 60 million dollar dude. You're saying you're a 60 million dude. A lot of people thought that was a cash money deal. They thought that was probably what Baby and Slim offered, but you later find out that this is what was coming from Motown, and I don't know if that's the number or not, but you can just assume a few things. One, NBA Young Boy was someone that just got out of his deal at Atlantic Records and he's getting out of his deal. This is the second most streamed artist according to HITS Daily Double for year to date for 2022. But as we also know about streams, not all streams are necessarily weighted the same, and those YouTube streams may not necessarily lead to the same payouts that you may get from the digital streaming providers. Your Spotify, your Apple music, your titles, your Amazon, and so forth. So you have that. You also mix that in with NBA Young Boy's audience isn't necessarily the type to go buy up a bunch of vinyl. They're not the type to go buy up a bunch of digital copies or then necessarily sell out an arena. And it's great that he has those streams, but he has those streams because he is dropping an album every other month. It's not the same as Columbia having a big release from Harry Styles and then monetizing the shit out of that. Or Kendrick Lamar having a big release on Interscope, and then that continues to do numbers and numbers. It's not the same type of thing in that way. So I think, even if you were able to win a bidding war, which is great, obviously a number of labels would've wanted to get NBA Young Boy. There's a certain price to everything, and even though we may not know the specific details, we can put two and two together. There are also a few other recent signings that could be called a bit into question. There were signings of Diddy and Brandy, and these are names that I think a lot of people, especially millennials and Gen X folks grew up with, and they're gonna be people who have done quite a bit in the music industry, but they're at a different stage in their career. They're hot. Their years of earning meaningful revenue for a record label aren't necessarily where they are at this particular point in their careers. That's okay. But does the price that was paid to get them, justify that. And I think there's kind of an unsaid thing where if you're signing someone who is already well off, they are likely doing this for their own choice, then it may cost a little bit more than an equivalent artist who could produce just as much from a revenue side as what you may expect from Diddy or Brandy moving forward if they don't have that name and that cache. And to be frank, the stability to not do a deal unless it's gonna be lucrative enough for them. And then you also have artists like Smino and Vince Staples who are talented at rap, and they definitely had the moment where you thought things were rising up, but they don't move units like that. And then it brings you back to the broader piece of what's happening, specifically with the JV, with quality control music. And I think that you've seen a lot of success there. Little Baby is one of the most successful artists that we've seen, but I think you just needed a few more artists, even Migos. I think that Migos in some ways from a commercial standpoint, peaked with that first culture album that came out. Culture two wasn't able to hit the same heights and Culture three definitely wasn't either. None of the solo artists were necessarily able to do that, and unfortunately there was some, you know, conflict between the Migos themselves. Takeoff is no longer with us. There's just a lot that just didn't exactly line up. It's really tough, and it's even tough to share it this way because I think one of the reasons you didn't hear a lot of chatter and discussion about this is a lot of people really wanted to see Ethiopia succeed, myself included. We wanna be able to see these black executives continue to reach the highest ranks that they can because we also wanna be able to see the same, whether it's toon feat at Def Jam or other. But the way that things are presented externally and this effort to necessarily hide things may have you thinking that these executives have more control and influence than they actually do. And they weren't necessarily given the same level of influence or control that John Janick may get at Interscope or that the Lipmans may have at Republic. So we really have to be honest when we're reporting these things and what we're showing and what we're not, because it does a disservice not only to the industry about, you know, trying to hide these things because listen. This is a place where there's plenty of people that are talented. People learn from where they can come through and it doesn't, and it isn't gonna hurt people the way that you think that it is. And one of the reasons that these things often can be controlled this way, the music's industry's PR machine can be so strong and it can have you having this, you know, Misconceived perception, and while I think insiders do know, there's a lot of folks who are on the outside that will eventually rise to those ranks who just don't necessarily have a clear picture. And anytime that there's that big of a delta, that's how information just doesn't necessarily get itself to the right people at once. And we wanna make sure that we're doing everything we can to empower the folks in the next generation. And I know a lot of this is swimming uphill. This is an industry that is controlled by a lot of lawyers, and it's an industry that really thrives on the PR of how things spin, but been behind closed doors. It's a very different situation. In some ways it's almost a stark difference to something like tech where so much of the drama and decisions that happen within big tech are happening. You know, out in the open you could see things and while some of that, you know, can be to a fault, I do think it leads in some ways to some better discussions around what success can look like and what opportunities can look like. So I hope we can all use this as a reminder to make sure that we're being transparent as we can. When we call things out, it helps more. Think and be able to have the right discussions about what success looks like, and the more that we can report on what success benchmarks actually are, so that you're not just relying on an imperfect key performance indicator like market share, and you're actually reporting on. Efficiency. It's great that someone landed a deal, but how much should it cost to get that artist assigned? And will that payout turn out the way that you think that it is? And at the end of the day, this is about PNLs. Are you bringing in enough profit to offset any of the loss? And is there future belief and potential in your ability to get the buy in, do it in an efficient way, and keep driving the business? Quite the buzz after Thanksgiving. We'll see what the rest of the year brings. I think things will be pretty quiet until things head into January. But with that, let's turn things over to the next part of the episode. Here's my conversation with Zach O'Malley Greenberg about the wealthiest hip hop artists in 2022.[00:13:06] Dan Runcie: All right. We have Zach O'Malley Greenberg back with us, who recently released Hip Hop's wealthiest List for 2020. Your second year doing this independently, by the way. So shout outs to you on that. And it was great to see the results. We had some expectations, Jay-Z, number one, but there's two people I really wanna dive into with this conversation. Let me just run through the list first. So you have Jay-Z, number one, one and a half billion. Diddy to newly minted billionaire, 1 billion. You have third, Yey at five hundred million dollars. 4th, Berner, 410 million. And then we have Dr. Dre at 400 million. So let's start at the top. What was it like for you, not just releasing this independently, but being able to put it out and as you were putting it together, what were some of the stuff that stuck out to you?[00:13:56] Zack Greenburg: Yeah. You know, first of all, this list is probably the thing that I put the most effort into every year. At the end of the day, you see these numbers, you know, 1.5 billion, they get reported. And it was the same in my days at Forbes, as doing it independently. People take the number, everyone with it. And I think a lot of times people just assume it's like, ah, somebody's pulling them, out of wherever. But you know, I would say I put more time into those numbers, than I have put into some cover stories, you know, that are several pages long. So it's going through each of these, you know, these superstars and figuring out, you know, what's in their portfolio. What is each asset worth calling? People, you know, who have knowledge, whether it's, you know, within the camps of the stars themselves, or industry experts that are covering, you know, the booze business or the weed business or something like that. Finding ways of valuing these assets. And, you know, and I think the new thing for me, aside from doing it independently was, I've been taking courses at Columbia Business School this year. I'm part of a fellowship where I sort of do my first year of business, school light, and get to bounce around and learn some of these concepts that, you know, maybe, I didn't know before I got to sharpen them. And it's given me some new tools for looking at things like Diddy, Ciroc Partnership and, you know, ways to value things that are a little bit weird and not sort of like a run of the mill asset. So, yeah, you know, I mean I think the big takeaway, the big surprise is probably Berner being on the list, being ahead of Dr. Dre. Like you said, I think Diddy being a billionaire, finally, you know, Diddy would say that's not news. You know, you would say that he should be higher. I'm sure it's been really cool to take a look at it, you know, independently and with some of these new tools in my toolkit to come up with, I would say my most active list.[00:15:40] Dan Runcie: Yeah. Well, that's good to hear. And I wanna talk about Diddy first because I feel like. That's the one. I'll be honest, the news there surprised me a bit, not because I didn't think that Diddy was a billionaire, but more so because of how his business is and how things are structured. And it made me wonder, okay, how much has changed? Because I knew that Ciroc was the main thing that he had, that was the one of the largest drivers of his net. But you can correct me if I'm wrong, but I thought that the sales had peaked around the mid 2010s and maybe there was a slight decline, but maybe, you might have more intel on that. And I know that revolt and I know that business there. And with Sean, Sean itself, I know he had sold it and bought it back. So I was a bit curious to see or maybe hear how much net worth changed as a result of something that had appreciated in value versus your calculations of how you'd be doing this now as opposed to maybe how you had done it years back?[00:16:41] Zack Greenburg: Yeah, I mean, so, you know, I think my methodology changed slightly. The breakdown isn't that much different. Ciroc is still the main component. You know, you could say safely, it's the slight majority of his 1 billion net worth. And it's a weird arrangement because he does not hold an equity stake. However, the deal is structured to emulate an equity stake because, you know, it wouldn't have worked as an equity stake cuz Ciroc is owned by Diageo, it's this giant public trade company. They couldn't really be like, Hey, here's, you know, a quarter of our company or something like that. There wasn't really anything to do with that. So it was more creating a framework around the Ciroc brand to function like an equity stake. So if Diageo were ever to sell Ciroc, Diddy would get, you know, let's say the proceeds after you back out the amount of money that Ciroc has put into the partnership. So, you know, it would be a lot. And there's no doubt that even if things have sort of flattened out a little, it's a multi-billion dollar brand. You know, I mean, if you look at something like Ketel One, you know, brands like that that have changed hands, you know, these are billion dollar brands and you know, Ciroc is I think number two behind Grey Goose. So it's up there. They're not gonna sell it, but if they did, you know, we're looking at a pretty big payday. So the question is how do you value something that isn't gonna get sold? And really, you know, you wanna really nerd out about it from sort of MBA type perspective. You know, thinking about valuing cash flow. That's, you know, one of the fundamentals of valuation in corporate finance and stuff like that. And, you know, there are formulas and without getting into like the, you know, sort of like more details of it where you can sort of enter assumptions into the formula and you can get a number. But basically what I did was I took the way I was doing it before I ran the numbers that way, and then I kind of did some pre cash analysis and kind of like average things out and any way you slice it, these Ciroc partnership is, you know, worth a little more than half of his, billion dollar valuation. The other things that, you know, I think perhaps I had been, you know, undercounted a little bit in the past or have appreciated. A lot since then, you know, revolt is still hanging around there. And that's another thing where the valuation could depend on you. Do you value it as, you know, sort of a, like a TV based entity, even though it's more digital? Do you value it as a news outlet? Do you value it as a tech startup? There are a bunch of different ways to look at it, but in any case, you know, he is the majority owner. Another thing that I think people sleep on is DeLeon tequila, that is really growing and he owns half of that. Actually. It's a 50-50 joint venture with the AIO and they're moving a hundred and something thousand cases a year now. Actually, you know, booze has done really well during the pandemic. You might imagine people, I don't know, I feel like we're back to, you know, some of our old ways of going out and doing things. People are drinking at home during the pandemic. So, you know, Ciroc and DeLeon didn't get hurt in the way that, let's say the live touring business did. So Diddy was pretty well slated there. And then you go through and he's got like a pretty immense art collection. He's got some real estate that's appreciated pretty rapidly over the past few years. You know, some of which he owns out, right? And, you know, you kind of add it all up. And, he's comfortably a billionaire. And yeah, I mean, if you notice like  you know, some folks when they hit that status or when they make the list or something, we'll kind of like to tweet about it. But, you know, I don't think I saw anything from Diddy because, you know, he's thought that he's a billionaire for, you know, years already. And, you know, maybe he was, but now I, I definitely think that he is and, I would expect, you know, to see other, let's say mainstream business outlets follow suit in, you know, kind of acknowledging what's definitely the attitude.[00:20:40] Dan Runcie: Yeah, appreciate the breakdown there and thinking about just like different categories there. If thinking about Ciroc itself, as you mentioned, maybe the sales flattened out a bit, but looking at revolts specifically, and I know that business has, you know, gone through some evolutions as well over the past few years, would it be safe to assume that the biggest valuation change here for Diddy's assets that maybe brought him to a billion is daily owned and some of the artwork in terms of like what's appreciated? If we assume that whether it's Ciroc or Revolt have flattened out a bit. Like would those be the ones you say that had put him over 1 billion? [00:21:21] Zack Greenburg: Yeah, you know, he was pretty close before, last time I did it before was, I think it was three years ago. I think he was at 740. You know, personally, you know, without getting too deep into it, I would've put 'em a little higher. But, you know, you get your files. I did. And that spar deal and you know, you gotta create a consensus. And I think, you know, and Forbes always says it, it would rather be conservative about valuations that it would rather understand an overstate, but you know, so that's part of it too. Yeah, I think there's definitely been an appreciation in the value of DeLeon the real estate, you know, there's a lot of startup stakes, and he's not doing it as, let's say publicly as, Nas or Jay-Z, but, you know, he definitely hops in as an angel in a lot of, a lot of startups that, that have done well. So, but, you know, yeah, I think DeLeon doesn't get the glory of Ciroc, but you know, it's a younger company. There's more room to grow. And not to be a shit, but it actually tastes really good. I've tasted other, you know, celebrity tequilas and they're not good, but it is a tasty booze, if I may say so myself. And I think the way that he launched it was that he found this sort of, you know, like a boutique brand that had already won some awards and then he kind of got in with Diageo and, and they boosted. To where it is now. So I really think that's probably like where you could see a lot more growth, if he's gonna start to try to challenge Jay-Z for that.[00:22:53] Dan Runcie: Why do you think that DLleon hasn't gotten that same amount of love that Ciroc has gotten, at least publicly?[00:23:00] Zack Greenburg: I think a lot of attention was focused on, you know, like Casamigos or some of the other really big brands and it hadn't quite gotten to that level with the same, you know, distribution and mind share. And, you know, frankly, I mean, I think Diddy has been devoting more energy to Ciroc, but you know, you're starting to see it, you know, it's a little bit less in your base kind of vibe with the brand. it's like more of a sipping thing, less of the shots at the club kind of thing. Although I'm sure, you know, you could sit either or do shots at either at the club. But I think it's just not around as much. I mean, I think the case volume on Ciroc is still like 10 times more than 10 times as high as DeLeon. So, you're just not gonna see it around as much. And I think that's why.[00:23:51] Dan Runcie: And the other thing too, that you mentioned is that DeLeon itself is actually a joint venture with Diageo, unlike Ciroc Partnership. So of course I know that the Ciroc partnership, now we're talking 15 plus years ago at this point when things kicked off and different positions, different leverage and relationships. So I wonder if the relationship is part of the reason why Diddy was able to have the type of ownership. Partnership with DeLeon that he may not have, at least in writing with Ciroc? [00:24:23] Zack Greenburg: Yeah, I think so. And I think that was part of his motivation, for how he structured DeLeon. He wanted to have that. Actual equity stake, you know, like ironclad 50-50 joint venture type thing, rather than an agreement that mimics a joint venture. So, you know, I think that the success of Ciroc definitely convinced Diageo like, all right,, we can do this with another brand. He's the guy. And, for my book, 3 Kings, I talked to some books over there and you know, I think I talked to the CEO at the time, and they couldn't have been more abusive about him. And of course, you know, like whatever, he's part of their team. Of course they're gonna say good things about him, but they were saying just like the attention to detail. Like he would, he would go to clubs and, you know, go to the bartender and be like, why is the Ciroc not on the top shelf? And what are you going to do? You're gonna be like, oh, sorry Mr. Coles gonna leave Joe here. You know, and they'll put it up on the top. I mean, it's sort of like a retail politics level of stuff. And you know, I always say that, that Diddy, you know, in a way, like you could argue. Who has had the most scheduled career and you know, who's the goat of, you know, on the business side. And you know, I think a lot of people would say Jay-Z, and they wouldn't be wrong. But, you know, I think Diddy in a way has done more with less because he hasn't been musically relevant in, you know, a really long time in that way. Still puts stuff out in whatever, but it's not like the anticipation that exists when Jay drops an album or even a verse on, you know, on a DJ Khaled song or something. And, you know, I always like to say that Diddy is kinda more like Richard Branson if he happened to just have had, you know, like a moment as like a big time rapper And you know, certainly as a producer, he's had ahead a lot of things. And not to diminish that, but he acknowledges himself. He says, I don't write rhymes, I write checks. And I think that's a strong student. I think it's especially impressive to see that he's done it without being particularly talented. [00:26:40] Dan Runcie: Yeah. I think that, His true line of being able to sell a lifestyle is what sets him apart in a lot of ways. He did it with his music. I think in a lot of ways. Bad Boys modeled after so much of what he learned at Uptown, and then you're able to transfer that lifestyle to, okay, this is the music that you listen to now. This is what you wear while you wear Sean John. This is what you drink while you're listening to this, right? Mm-hmm, you're gonna drink and this is the media that you're gonna watch. Now with the cannabis line that he just bought, this is what you're gonna smoke while you're enjoying this lifestyle too. Mm-hmm. And I think that a lot of those businesses have had varying success and we can go into that, but I do think that the ones that have been the most successful, Ciroc, Sean and the music, there's that tight connection and there's a key timing aspect that goes into all of it.[00:27:35] Zack Greenburg: Yeah, and it doesn't even need to be his music. Right? That is popular in order for the Ciroc Formula to work, it's the Ciroc Boys, it's DJ Khaled, Summer Watermelon, or whatever it is. You know, I think his ability to make those partnerships, to find other people you know, who are kind of doing now what he was doing then musically are, you know, I think that that's part of the formula and that's why it works so well. And you know, I mean, it's funny, like DJ Khaled, you know, something like Wild Thoughts was doing exactly what Diddy was doing a couple decades ago, right? He was taking a song from a couple decades, you know, one or two decades ago and putting, you know, some new voices, the modern voices on it. And it was a song that was great before and now it's got, you know, like more kind of a vibe to it and you know, goes off the chart, so I think Diddy is just very savvy with that kind of stuff, even if it's stuff. [00:28:31] Dan Runcie: Let's talk about Sean John for a bit, cause I'm curious how that factored into your methodology with everything, because as many people know, he started the brand over 20 years ago and well, in 2016 he sold the brand, then the brand was up in auction, and then he bought it for public number I saw was 7.6 million. So now he has that back as an asset. How did that piece of it factor in for you and just the journey overall of Sean? [00:29:02] Zack Greenburg: Yeah, and not much now. You know, I mean, I think what factored in more was, sort of like his cash pile. Like he sold it for. Like, whatever it was five years ago, something like that. I think he got, he got 30 million out, 40 million, something like that, that he then put into other things. And uh, you know, obviously without him it doesn't do well. And so he went bankrupt and I think it's really smart for him to buy it back. You know, who knows what he might end up doing with this, but, I think there's just,  you know, like a tremendous market for sort of like nineties nostalgia right now. You know, I think Sean John, or even a Rocawear, if they could have, I dunno, that's a little more complicated, but I think that, you know, if he's at the helm and his part as a lifestyle, Would never count him out. So, but yeah, as far as what it's worth right now, it's sort of more of a rounding error and overall number. But, you know, be interesting to see what comes.[00:30:04] Dan Runcie: And when you made your list around the same time, I believe that same week, there were two other announcements that came up. One was the cannabis company that he bought for, I believe it was 185 million. And the other one, I don't know if this one was a hundred percent confirmed, but did you see that thing floating around about him making an investment in Twitter along with Elon Musk's bid?[00:30:28] Zack Greenburg: Yeah, no, you know that was all after the numbers got finalized, so, you know, those weren't really factored into it. But you know, I mean, yeah, it all makes sense. It's all part of the lifestyle thing. It's all part of the Diddy empire, the Diddy MO, and you know, he's look, I mean, on the cannabis side, right? Like he's puff daddy, you know, like what are, what are you puffing? It's exactly, it makes sense. It's like part of the brand. And, you know, if he could do the same thing with cannabis leaders with vodka, Which is to say like, I mean, I don't know. I think when he started vodka was not, you know, it was not really seen as a stylish thing. It was more like, you do a shot to get drunk. I mean, I don't know, maybe that's physics. I was in college when that happened, and that's when, that's sort of the vibe on vodka. But he made it like the champagne of vodkas. He associated his lifestyle with it and similarly, I think with weed, it's like, you know, we're in this very nascent part of the canvas economy, you know, becoming legal and, and sort of how do you start to differentiate brands, you know, and when you have legalization you can have, you know, like. The champagne of weed, right? You can start to differentiate, you know, like what type of buzz you're gonna get because it's regulated and you can actually say like, this is the thing that has this much THC and it's gonna give you this kind of high, versus like, this is just gonna knock you on your ass. I think it's a great place for him to get into, but you know, at the same time it's like, It is a really hard place to do business still. And you know, it is not without risk. It, you know, because it is not federally legal yet. You have to do, you have to do most of your business in cash. You can't get loans in the same way, especially if you have a plant touching enterprise. You have to do all these, handle all these different state regulations, which are constantly changing and are subject to the whims of, you know, clinical races and you know, potentially gerrymandering, all kinds of stuff that has nothing to do with Diddy. So, you know, I think that's the tricky part. And you know, also not being a first mover in the way that somebody like Berner is. But at the same time, it's like, you know, he fills a different niche in the mark potentially than Berner does. [00:32:45] Dan Runcie: And yeah, no, that'll be fascinating to watch. Yeah. I think the thing about Revolt is a great concept in the vision, of course. Makes sense. Seeing how influential Diddy was with MTV and whether it's the voter die shirts that he would wear or some of the other programming, he leveraged it so well as a hip hop artist. So if you know you have that impact, why wouldn't you wanna go start your own company and go do the same? Right. I think some of the timing just became a little tough in that he started the cable network in 2013. People are already starting to cut the cord at that point. And then I know the company's transitioned much more into digital media, but even that, given that so much of it is social media based, relying on other platforms and their algorithms, I think we saw so many of those companies in that same timeframe, even the ones that were perceived as being successful, whether it's your Buzzfeed or your Huffington Post or your Complex, like all of those valuations came back down to earth. And you look at a company like Revolt, which I think was largely playing the same game, although I think they still make tons of great content and there are tons of great, brilliant people working there. I think that the digital media itself and where things transformed was a bit tough. Like let's say that Diddy had started let's say 2007 as opposed to 2013, I think we'd be having a very different conversation, [00:34:03] Zack Greenburg: You know, or 1997 , you know, I mean, yeah. I think it could be a whole different conversation and, you know, yeah. That's one of the smaller pieces of the empire, and I think, like you would say, he would make a certain argument about it and, you know, valuing it more like on the line of being a tech company. But it's hard to escape the fact that it, you know, it still. I would say yeah, like primarily a media outlet point and whether it's, you know, via cable or the internet or whatever, it's like these are not, like, these are kind of tricky places to be, but you know, it does make sense. There is a demand for that kind of stuff and it's a crowded marketplace, but, you know, he does have something different to offer and, you know, I think that there's a reason why it's still around and, you know, it'll be interesting to see how it goes, how it proceeds as we enter like the next phase of this sort of media shake up in a amount of time.[00:35:03] Dan Runcie: Yeah, definitely. And I think the other thing too, that I should have mentioned earlier is that given that this is a black owned media company, I know he's been vocal and Byron Allen and others have been vocal about advertisers not contributing the same level of money into black owned media companies that they would to, let's say, some of the Revolts competitors in the space that maybe started and run by white founders, white executives, but they're commanding more money from that perspective. So I think that's another tough thing there. But overall, like we said, this is a small piece of the overall pie. And yeah, it'd be interesting too. Especially the newer businesses, how many of them can continue that Ciroc magic, the bad boy flavor? And see? See where that lifestyle keeps going? Yeah. All right. Now let's talk about the other big one on the list, Berner. And based on the response that I saw from people sharing the list of people talking about it, this is the one that surprised a lot of people. But I know it didn't surprise you because you've been following this for a while. You've been talking to Berner, getting a better understanding of his business. So it'd be great to hear the breakdown because I think a lot of people out there may know Berner now more so for this product than they may actually know his music or anything else that he's done in hip hop up to now.[00:36:19] Zack Greenburg: Yeah, absolutely. So, you know, I think Berner is one of the most fascinating names on the list. Definitely the most surprising. But, you know, I've been following his work for a while and, you know, he is a master marketer and his whole journey about how he turned cookies, cannabis, You know, it is a billion dollar company and it's just a little tricky to value, but, it is a billion dollar company and the way he did it, you know, I would say it's a case study, but it's actually pretty hard to emulate. It is sort of like a singular way of doing things. So, you know, for the people who don't know the background, Bernard born in California and San Francisco grew up there, moved to Arizona as a teenager and, and would bring back good weed from California when, whenever, you know, would make trips back to his old stomping grounds. And that's how he kind of got his start. He moved back to San Francisco, during the early, you know, weed legalization gold. Worked at a dispensary and, you know, kind of popularized this Girl Scout cookie, strain of weed. And so his thing would, at the dispensary, he would, you know, they used to sell things. It was sort of like an index car with the name of the strain. It was very clinical. But he would sort of like do these doodles and cookies and, you know, these like bright colors and stuff. And, and it started to get some tension. He became, you know, Wiz Khalifa's weed man when he was in San Francisco. And on one occasion brought this fully butted six foot tall weed plant onto the stage at Khalifa's show. And, you know, I think it was sort of instrumental in that Khalifa had created the Khalifa kush and all this. And so Bernard ultimately parlayed this sort of underground, you know, weed connoisseur image that he had as both on the legal and illegal markets into this brand. Cookies started opening stores, created a clothing line that, you know, kind of goes along with it. But the thing that he did with the way he set up this company is pretty, pretty unusual and very hard to value, but I think is quite brilliant. He started striking these partnerships with dispensaries and, you know, essentially it was a licensing deal where he would get a cut of revenue. And then the other part of the deal is that he could also buy out any of these partners. At market rate, at a time in the future, you know, in the future to be determined. And you know, like some of these numbers are out there, but you know, I think the system-wide sales are close to half a billion dollars now. And he gets a cut of that. But you know, at any time he could decide to roll all you could raise money, roll all these partnerships up into one giant weed company that's, you know, making. You know that, that kind of revenue and, and suddenly, you know, all you need to do is you put a multiple on that and, and that'll tell you what the company would be. If he rolled it all up and bought everybody out. And I talked to Wall Street analysts about this and covered the space and they said, you know, yeah, you could put like a five x multiple on this, so that would mean it's you know, yeah, like about a $2 billion company. Then you have to factor in the cost of buying out all those partnerships. You know, long story short would probably be about half billion dollars because it is a very tricky business. In fact, you have to be very liquid when doing everything in cash. It's kind of complicated. People I talked to, you know, bankers and stuff, said, yeah, you would apply a private company discount due to the uncertainty of the market, things like that, that's operating in it, you know, you would knock 20, 30% off of that and you know, so that it brings it down to around a billion dollars and then Berner still owns about a third of it. And so there's the bulk of his fortune right there, you know, so his stake is probably worth around $300 million. This point, I figure. And I think that's pretty conservative. You know, you add in some other thing invested in the clothing line, which he owns, you know, a huge part of still, you know, some homes, cash stuff like. And you get to that 400, 2 million number.[00:40:27] Dan Runcie: Nice. Yeah, I've been seeing people wearing the cookies hoodies, walking around San Francisco, walking around other places. But definitely seeing the apparel thing push and I feel like he has one of those brands there are probably seeing even more of that stuff. I think it was a couple weeks ago I was driving by and I saw the store in Hate Ashbury neighborhood here at San Francisco. So yeah, no, definitely making moves. A few things there that stuck out. So he of course has his own standalone stores. As you mentioned, there's 55 of them across the country right now. And he also was selling them to other dispensaries. And I'm sure if and when weed does become legalized across the country, that will then just make things even easier from a distribution perspective from other places that he may be able to sell any otherwise. So in some ways the investment isn't just based on what's currently there or there's also a speculative nature. As this underlying product becomes more and more legal, there will be more opportunity to further sell this and further have its reach to different places. [00: 41:36] Zack Greenburg: Absolutely. And the clothing line also builds the value of the cannabis brand. And you know, if and when it is federally legalized, you gotta think. I mean, you know, this is one of the top brands in the business. And in fact, you know, there aren't really brands in this way in the cannabis space. There's strains, it's almost saying like in beer, you know, like, yeah, people like IPAs or people like those or whatever, but there isn't really like a Budweiser yet or a dogfish head, you know, or something like that. And, you know, to go back to Diddy, there's not really a champagne of weed. So, you know, I think that Berner has built up all this credibility in this space and, you know, if, when it goes legal, it's like to be one of the top weed brands in this space that is going to, you know, potentially rival or, you know, at least kind of start to eat into alcohol business. I mean, you know, 2 billion is not a large number for a company. There's a lot of potential for it to get a lot bigger and, you know, we can get into the whole. There's definitely a lot of arguments, pros and cons, about the benefits of THC and Cannabis General. And, you know, we will be here all day on that. But just from a business perspective, you know, it seems like we're headed toward legalization. Berner actually thinks that republicans are more likely to make federal legalization happen. He said, cause they're all about their paper. So I'm not saying who he's voting for anything. I don't. You know. it was an interesting perspective and, you know, like I think that he's really got kind of the key to where…..[00:43:15] Dan Runcie: One of the other things that sticks out to me about him is that he's someone who is much more known, at least on a general awareness perspective, for the business that he's built as opposed to the music. I feel like his music was a bit more of a regional thing and he puts out a ton of music, but it never hit the same levels as some of the other artists who are having nine figure net worths as well. And I feel like there's often this thought, and which I do believe generally is true, that the artists who tend to be the most successful with product sales and investing and some of the more lucrative business opportunities that artists have done, they're more likely to be the household names who have been releasing music and touring for decades than a lot of times it's because they're releasing products that are lending their names, so they're leveraging their influence to now sell things that have a larger stake in and can be bought time and time again. He's a little different though because he doesn't necessarily have that. I'm curious what you think about that piece of it, because I think so many of the hip hop cash lists over the years do have at least somewhat of a correlation as to who are the more well known artists or who are the more popular artists at the time, and not necessarily who is building the strongest business, you know, that is being worth the most, and that is not correlated with how much mainstream popularity that artists may have.[00:44:44] Zack Greenburg: Yeah, for sure. I mean the funny thing is when you look at it, he is the most prolific artist on the list. But, you know, he has the least name recognition as well, right? I mean, Jay-Z, Diddy, Kanye, Dr. Dre, none of them are putting out music at the pace with which Berner is putting out music. But everybody knows who they are and not everybody knows Berner. You know, I think you could almost argue like, well, are you really gonna put him, you know, on the list with these guys who have that much more name recognition? But you could also argue, should we really be treating, you know, Diddy as a rapper anymore than we should be? You know, treating Richard Branson, as I know Richard Branson didn't actually rap ever, but, you know, effectively Diddy is just focused on business at this point and you know, he puts out songs here and there. Music is an ancillary Berner also used. You know, the Music Chief boosts the weed business, but he's in the studio like all the time, more than any of these guys. Yeah, it's just kinda fun.[00:45:48] Dan Runcie: I think another person that maybe thought of a similar way, someone like Chamillionaire who had one really large hit, mm-hmm. But wasn't necessarily known for having classic after classic after classic album or touring the world in the same large ways as some of the other big names we did, but his investing journey is something that has been pretty well documented and I think as a result, he's definitely further than a lot of the other artists that came around the same time as him that may have had even more commercial success. So I feel like even though there is a lot of a correlation between who are the most well known artists and who are the wealthiest artists, he is someone else who is a bit similar in that Berner way of, hey, yeah, there may have a smaller overall impact from the music itself, but was able to wisely use that and then now leverage that into something where, you know, the artist is making more money from the business moves and more known for that now. [00:46:49] Zack Greenburg: Absolutely. I mean a great example of Chamillionaire and, you know, the work that he's been doing in the startup world. So at the same time, it's like if he hadn't had that one day hit, you know, would he have been able to get into, you know, the Silicon Valley kind of fear in the same way, you know, I don't know, but I think all it takes is one hit to be in the mix. And certainly like Burner never had that one hit, right? He just had a lot of, you know, really solid albums and stuff, but he was doing it in San Francisco. And I think, you know, in that way that you see somebody like Jamon Green getting really involved in the startup world, would he have been that guy if he were in, you know, like Cleveland or something? You know, I don't think so, but if you're in the mix, in the Bay Area, you're just gonna have access to a lot more opportunities, you know, in the startup world. And I think the startup world, cannabis world, you know, it. Kinda the epicenter. So in a funny way that the two have a lot of commonalities I think are familiar.[00:47:51] Dan Runcie: Yeah. This is good. I'm excited to see what next year's list looks like as well. And I know you may not be able to share publicly, but in order to get the five, you probably evaluated a few others. Are there any names creeping up, arising up that you think may make a  2023 appearance?[00:48:08] Zack Greenburg: I think, you know, Drake is creep enough, big new deal. You know, he doesn't have quite the same level of, you know, sort of like outside assets. Like he doesn't have, like a Ciroc or a cookie or what have you. And, you know, I think he does have this whiskey, Virginia Black, but it's like, never like still around, but it never really took off and it only tastes okay. It's okay. I don't think taste ultimately matters a lot of times with this stuff, but I'm kind of surprised that he wasn't able to like boost a little bit more. But I don't know. When I think Drake, I don't really think whiskey. Maybe that's just part of it. I mean, I could see him with more champagne maybe. [00:48:51] Dan Runcie: Yeah. I'm interested to see for him how this new deal he has and the music that he makes as a result ends up factoring in, because of course we know that music itself may not be the largest revenue stream for a lot of these artists. Drake has this huge deal with Universal and Republic now, and he's releasing music more frequently than ever, and we can assume that it's likely because he's getting better upside and margins for the music he's releasing. So if he keeps up at this, like two, three albums a year clip. I mean, the numbers are gonna speak for themselves. Last year he streamed more than all pre 1980 artists. Like it's gonna catch up. [00:49:29] Zack Greenburg: Yeah. Yeah. I think the other thing with net worth less as opposed to. Is that, you know, it's just harder to get on these lists if you are a big cash earner. Like if you are earning a lot on an annual basis, you know, things get factored into that, like taxes and cost of living and all that. And so, you know, you're getting these huge outlays, but you know, it's not in the same way that it was like going into this, this growing asset that can be valued. And in a way that's kind of like a quirk of the system because, you know, I'm valuing Berner’s stake in cookies, you know, like it's not tax, right? Like  if he were to sell it and he were to get $300 million, you know, whatever, a third half of that would be gone to the government. But that's not baked into the formula until he sells it. So you know, this is how Bloomberg and Forbes do it. It's just kinda what it is. But, it means that if you are holding assets, you know, the taxes aren't taken out. Whereas if you're a cash earner, that gets deducted before it gets added to your cash pile. So, it just means Drake is more likely to be at the top of, you know, let's say top earning artist. And you know, it's a little harder for him to get to the top…[00:50:59] Dan Runcie: That's a great distinction. No, we'll definitely keep that in mind for next year. Do you think you'll do another top earners of the year list as well?[00:51:05] Zack Greenburg: I don't know. Maybe, we'll see how it goes. Being a new dad, and doing this full time program, you know, this fellowship at Columbia that I mention. It takes a lot of time. And you know, I don't wanna put out a list unless I have the time to really dig in and get the numbers right. But yeah, you never know. I got this one out. So, there could be more. More to come.[00:51:28] Dan Runcie: And I think on that note, just talking about dad life in general. Let's close things out there. So by the time this comes out, your daughter will be six months old and we can both share one funny thing that our kids did this past couple weeks. So I'll let you start.[00:51:44 ] Zack Greenburg: Oh, man. Well, I think the thing that's really most exciting is that she's laughing now and the thing that she mainly thinks is funny is when I'm laughing. So like, we'll get into this thing, I will make myself start laughing and then she'll go, ha ha. I go, ha. And, and it’s very dorky, dad life. But, that is like one of my favorite things to do is have like, sort of a laugh off with Riley. So, yeah, I don't know, man. I pick her up from daycare every day and she just gives me this huge smile and I know that she’s still really young, but I can tell that she's specifically recognizing me, you know, and that we have this bond already. That there's like a specific connection. I just had no idea that babies could sort of, like, differentiate people and start to have unique relationships in that way. And that, it's like the best part of my day every day. So… [00:52:41] Dan Runcie: That's awesome. That's awesome. Yeah. How about you? [00:52:42] Zack Greenburg: Yeah. How about you? [00:52:43] Dan Runcie: Yeah. I feel like there's something about that. Like yeah, the first couple of months I remember I would like, ask my wife, I'd be like, you think she recognizes us? Like, because she understands who we are. And I think over time there was like, yeah, no, we can get that in. Even things like now, The mirror is something that she is obsessed with. I'm sure you probably feel the same with Riley too. But yeah, the mirror. At first it was kind of looking at the mirror where there's like, okay, what is this screen? Who is that person that I'm seeing? But I think now it's like looking at us through the mirror and like seeing that it's us. And maybe she's starting to be like, oh well, I see them through this. Like she probably still isn't at the point where it's like, oh, I can see that's looking at me. But she'll look at that other person staring at her in the mirror and start smiling and stuff too. So I'm like, oh, that's cute. So yeah, man. Wild time's flying by. She'll be five months by the time this comes out. Wild man. [00:52:35] Zack Greenburg: Yeah. . Yeah. Yeah. We do a lot of like….[00:53:38] Dan Runcie: oh, yeah, yeah, yeah. Where's that? Little, little peek-a-boo style games. [00:53:42] Zack Greenburg: Yeah. Yeah. In the mirror. Yeah, exactly. Exactly. We'll have to have our kids together sometime soon. I guess, you know, but of course babies, not so interactive with each other yet.[00:53:54] Dan Runcie: Yeah. No. We'll get there. That'll be fun. Zack. This is great, man. Good work as always. It was great to see the list and again. The fact that I think you got just as much coverage and buzz and recognition for this, doing it independently is a great sign. Not just for you, but I think in general for people that are always questioning, okay, you know, what's the power of what I do elsewhere versus individually. So great job on that and we'll definitely keep tabs on this coming years. But great work, man, as always. Appreciate that.[00:54:25] Zack Greenburg: Thanks man. Same to you.

Rich Homie Quan was one of the defining rappers of the music era that preceded the industry’s shift to streaming. He — along with the likes of Future and Young Thug — made “mumble rap” a hot commodity in the mid-2010s. But while Future and Thugger continued their careers, Quan took a hiatus from the game, until now.Quan dropped his first project, “Family & Mula”, in almost three years back in October. During the long layoff, Quan admits he lost both his confidence and heart for rapping. He refused to quit on himself during the down period, which only spurred him artistically and business-wise. That’s because the eight-track EP is also the first under his independently-owned Rich Homie Entertainment label. Now ten years into his career — most of which spent under a label — Quan felt now was the time to go independent. Not only for the creative freedom, but also for the CEO role that comes with it. I caught up with Quan to reflect on his 10-year music career up to this point and how he envisions the next ten playing out as an independent artist and a CEO. Here’s everything we covered:[2:41] Reflecting on the loss of Takeoff[4:07] What Quan misses about his “come up” years[5:16] Why Quan went independent at this stage of his career [5:40] Taking on a CEO role[7:57] Why Quan doesn’t like his hit record “Flex”[10:33] New partnership with Troy Carter and Suzy Ryoo's Venice [14:44] Differences between Quan the CEO and Quan the artist [15:54] Rising as an artist before the streaming era took off[17:25] Distinctions between album, EP, and mixtape [20:16] Quan’s non-music business pursuits [21:56] How pandemic re-motivated Quan to do music[24:00] Quan wants more credit for influencing Atlanta sound[31:14] Quan’s 10-year vision for himself [35:54] Did Quan start “deluxe” project drops?Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSSHost: Dan Runcie, @RuncieDan, trapital.coGuests: Rich Homie Quan, @RichHomieQuan Download The Culture Report here: https://trapital.ck.page/a23b7a6a4a Sponsors: MoonPay is the leader in web3 infrastructure. They have partnered with Timbaland, Snoop Dogg, and many more. To learn more, visit moonpay.com/trapital Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital Trapital is home for the business of hip-hop. Gain the latest insights from hip-hop’s biggest players by reading Trapital’s free weekly memo.TRANSCRIPTION[00:00:00] Rich Homie Quan: I was kind of afraid of my creativity on that song. You know what I'm saying? If that makes any sense. Like, I don't know. Cause I make a lot of music, man, and it's a lot of songs that's probably similar. That's like that. That will never come out only because of my mind. But that's why lately I've been letting the team I create, decide, you know? Pick which ones they feel like that needs to be heard. You know what I'm saying? So that's why I've grown as an artist slash CEO.[00:00:31] Dan Runcie: Hey, welcome to the podcast. I'm your host and the founder of Dan Ruey. 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. [00:00:51] Dan Runcie: Today's guest is the one, the only Rich Homie Quan. R.H.Q came through to talk about his partnership with Venice and how this is a new start for him as an artist. He's independent now. He's seen what it's like on the label side. He's seen what works, and what doesn't work. But this is his opportunity to have more creative control. To see more of the money that comes in and out, and ultimately have more of a say on what makes the most sense for building his career and moving. So he talks about the benefits of the Venice partnership. He also talks about some of the other things that he's working on as well. We talked about his real estate game and how he made over a million dollars this past year from his real estate business. We also talked about where he sees himself in Atlanta's influence. He says he's top three and not three from the city. So you have to listen to hear the name chops that he has in here. Some of the other multimedia projects and a whole lot. Quan also recorded this one while he was getting his hair braided, so I gotta give him credit for multitasking. Shout out to Quan. Hope you enjoy this episode. All right. Today we got the one and only Rich Homie Quan with us. Man, before we get started with any of this stuff, let's just do a quick check, man. How are you? How are you living? How are things right now?[00:02:03] Rich Homie Quan: Oh man, I'm good man. Mentally, better than ever. I'm just in a good space right now, man. I love the space I'm in, probably better than ever, man. I'm good, man. Yeah. How about you, man? How are you, you know what I'm saying? Mentally, you know what I'm saying? You know, spiritually how you feeling? [00:02:021] Dan Runcie: Yeah, I mean, I'm good. I mean, things have been good getting ready for the holidays and everything right now, but, I feel like it's kind of been a tough week, I'm not gonna lie. Thinking about take off and just thinking about artists passing so young. I mean, I mean, I know that this isn't anything new necessarily, but it just feels like it's been so much recently, so I've been thinking a lot about that.[00:02:41] Rich Homie Quan: That part, you know, like I've been trying to get it out my mind, man. Cause like me and Takeoff wasn't close, but I have worked with him, you know what I'm saying? On numerous occasions, on numerous occasions. And with him being from Atlanta, man, it just hit, that one hit a whole lot different, man. That one touched me, man. That one hurt me, man. That hurt a lot of us, man. You know what I'm saying? Like I think I was walking say the best man, like hip hop took big ill man that that was a humongous ill man.Humongous.[00:03:10] Dan Runcie: Yeah. And there were so many of you that came up right around the same time. I feel like you came out and then they had the moment, like there were so many of y'all from Atlanta that rose up.[00:03:22] Rich Homie Quan: Yes. Yeah. So that's why it's like, I, I kind of felt a different, like I saw, I saw before, um, they were with QC all us sitting on Gucci couch before we, before we got our first million, when we still were grinding and grind mode. So like, just to see that and know like, man, that could have been me, that could have been any of us. You know what I'm saying? Like, so that, that one definitely like hit me. Alright man, real hard.[00:03:47] Dan Runcie: Yeah, for sure. And I mean, you were just talking about it, you going back to being I QCs couch. I was just looking back at the double like cell cover, the freshman class for you on the cover. And man, it was such a moment. I mean, when you think back to that moment when everything was rising up, like what do you think on the most, what memories stick out to you the most about that time?[00:04:07] Rich Homie Quan:  Uh, what memories stick out about the most? I would just say more so recording in the music, being so. Because at that time we didn't have all those eyes on us. So then, you know, like we could say whatever and when, and no one, you know, we can say how we really felt. You know what I'm saying? Because you was in that grind and it just, you know, once you get to a certain level and certain things, you can't say no. Cause you know what I'm saying? You got certain people looking at you and that dissecting your words every, every type of way. So I would just say, man, just a recording process, man. Then man, the way we record the way, it'll be all five of us in the booth at one. Or maybe you should say it this way or this way. And it was just a know, just a vibe man. And the learning experience, man. Cause we were so young at that time, like we didn't know we'll be here 10 years later, you feel me? So yeah, that's the beauty of it all. [00:04:56] Dan Runcie: And I mean, for you 10 years later, you've done a few interview recently. You talked about why you wanna be independent and what this next chapter looks like for you? What has been the big thing that's made you wanna have this next chapter? Be independent, be on your own terms as opposed to how the last decade was up to this point?[00:05:16] Rich Homie Quan: Would say the most important part about being independent and what I wanted about it, what I wanted, uh, from it more so, it was just the fact that I had tried everything else. I had tried being with the other independent labels and I just thought it was my turn. I had saw every side of the sword, but just this side of the sword and it's just been so much more fun.Just when I say fun, it's more so from a business side. And I say that because at first I was such an artist mode. It was hard for me to be a CEO, but to continue to say I'm a CEO when I'm not doing none of the CEO shit. And I say that to say like, I'm not in tune with the conversations, or I'm not on every phone call. I'm not CC'd in those emails and those important emails. So now man, with me being a ceo, I'm more in tune. You know what I'm saying? I'm knowing, I'm knowing what the budget is for this. Uh, just understanding the budget, know what I mean? Understanding, so, you know, just taking this a whole lot more serious, being independent, knowing now, like it's really the, that's why I'm probably in this such great space because I know the opportunity I have, I know what I've done.[00:06:27] Dan Runcie:  You talked about seeing the money and just being able to see what the costs are looking like, what the money's coming in. What was the biggest surprise there? Cause I know you didn't see a lot of that as the artist, but now that you're being CC'd on those emails, now that you're seeing those things, did anything stick out to you?[00:06:40] Rich Homie Quan: The most? To me, uh, it was just more so of money I would see go without videos and stuff like that, and I would have no knowledge on my input when it's my money that's paying for these. That made me just put my, you know, like, damn, I would've rather shot the video with so and so and so, and maybe, you know, it could have been better for a cheaper number than a number of, uh, someone who's big, big, like, you know what I'm saying? So it just started making me like, way more in tune man, just way more in tune and like, how can I call my c myself a CEO if I'm, if I don't have those last say sos on, you know what I'm saying? Who, who, who I think should shoot the video. So it's like, yeah, I just want to stay in tune, man. And stay at it. Stay at it. Yeah. All the way around the boy, man. Like I'm getting older now and I still got people I look up to and I'm looking at some of the transitions they had to make. You know, sometimes you gotta realize everybody can't go with you. Right. And that's part of better. [00:07:40] Dan Runcie: And I feel like you're talking a lot about something I've heard you talk about at other interviews too. Creative control, being able to have more say so over the process. And I was surprised it stuck out like a song like Flex, which was a hit that people liked. Like you really weren't feeling that song as much. [00:07:57] Rich Homie Quan: Oh, oh. Like one of mine like, because I felt like at the time Flitch came out, I was such, I was more so of, I don't wanna just say a street rapper, but those were my fans. My fans were like the people who came up from similar situations to me. And I just didn't want my fans to ever think like I was crossing over or making crossover music. And, cause that was one of them songs. Like it wasn't a, I was known for making pain music, you know what I'm saying? So to say. And uh, that was one of, one of those still good different records, but it made, it was, it was a gift and a curse to me cause it made me realize. It's not what I like, it's what people want, and it's all about the fans. And that was my biggest song, like solo to this day. So it's just, it, it just made me realize like co you just, just focus on making the music and let the people decide for you, which is which man, you know what I'm saying? But it turned into a good situation, man. To this day, I still patrol. I still perform Flex Man, you know, so still getting paid off. So, you know, that's. That's one of the perks, man. You know what I'm saying? Trust your team. Definitely trust. Trust your team. The ones that love you, who love you, that you keep around.[00:09:13] Dan Runcie: Yeah, and I feel like that's a balance I hear from even the folks that have been doing this in entertainment for years. I feel like Denzel was someone who had said, he's making all these equalizer movies, right? But he's like, those movies pay the bills so that I can do these August Wilson plays and all of these things that really mean something to him. So I feel like Flex might be that for you, that gives you the ability to do the stuff you really wanna put out so…. [00:09:38] Rich Homie Quan: And that's what it was like. I was kind of afraid of my creativity on that song. You know what I'm saying? If that make any sense. Like, I don't know. Cause I make a lot of music, man, and it's a lot of songs that's probably similar. That's like that, that will never come out only because of my mind. But that's why lately I've been letting the team, I create, let the team decide, you know? Pick which ones they feel like that needs to be heard. You know what I'm saying? So that's why I've grown that as, as an artist slash ceo, know what I'm saying, getting outta the artist mode and going step back. I trust these guys enough. You know what I'm saying? Not, they're not gonna make me look bad, let alone make themselves look bad cause they're part of this. This represents them as well. [00:10:15] Dan Runcie: Definitely, definitely. And if we fast forward a few years, here you are now you have R.H.Q Entertainment, you recently have the joint venture launch with Venice. Shout out, uh, Troy and Susie, the folks over there. Talk to me about this. What's the vision for that joint venture? Where are things going? [00:10:33] Rich Homie Quan: Oh man, where are things going? I think, uh, the world is starting to see, and we haven't even got started yet. That's the crazy part. Like we haven't even got started yet, but like, you know, it was one of those situations. The distribution was nothing I hadn't had. You know what I'm saying? So like I said, it's all about me, like always throwing new things and never want, try nothing twice. You know what I'm saying? Like I still don't know like what my future holds, but I just know like, man, Venice has just been such a tremendous help to the RQ brand and for what I got going on, it just fit perfectly. And it wasn't one of those, or we just jumped straight into it. I think like a big shout outta Red man. Cause red, like he did not give up man. And it might have took us six months to get everything just done the right way where everybody's comfortable. And most importantly, everybody wins, man. You know what I'm saying? Big shout out Detroit. I was just with him last night. He flew down here, man. It was tremendous. Every time I'm, I'm big on energy and energy last night. Created a crazy vibe, man. You know what I'm saying? At the vintage man, Susie, everybody, the whole team Alyssa. I don't wanna eat nobody out, but man, uh, I love it, bro. I love it man. And it was the best situation for me. And like I always like to say, I don't wanna encourage no younger artists or anybody upcoming who wants to do music. I'm not saying independence may not be for you because at the same time, music takes money and sometimes a label situation may be the best for you. It just wasn't the best for me anymore. Cause it's something I. You know what I'm saying? And with me being in the game 10 years, like kind of saw it all. And now I know what's best for me, man. The creative control, you know what I'm saying? And like, and I still have a partner, you know, I still have a partner, man, but now man, I'm, I'm really boss ceo and I'm, I'm loving it.[00:12:24] Dan Runcie: So now that you do have a partner, but like you said, they're not a record label, it's more on the distribution side. What are the things that they are gonna be doing for you and like what does that partnership look like in terms of your role, in terms of Venice's role? [00:12:37] Rich Homie Quan:  Okay. You got a partnership, man. It's more so of a, uh, like a lot of things I didn't know, like on the technology side of things and stuff that's showing me, man, you know what I'm saying? Even with more opportunities outside of. You know, I'm, I think that's the biggest thing now, man. You know, opportunities outside of meals, you know what I'm saying? Movie ventures and stuff like that that I had no idea that I thought I could tap into, but you know what I'm saying? It's showing me, man, it's beautiful man. It's beautiful man. Feel top priority. It feels better. You know what I'm saying? Like I've been in label situations. The team we got over there, they're working hard on 80% of these labels I saw, and I.So that, that's what I love and that's what it's been, that being able to show me, man, that like they ain't playing, they ain't, they ain't playing. You know what I'm saying?[00:13:26] Dan Runcie: Oh yeah. Cause, cause I mean, Troy gets it and I know just seeing the way that they've structured things, a lot of it is thinking about how to think beyond streaming too.Right? Like what does web three look like? What do NFTs look like? [00:13:39] Rich Homie Quan: Exactly. So that's what I'm saying. It's stuff that I had no knowledge of. Of course I hear it, but now I. A person who can show it. And that's what I told him last night. Like, man, it's different when you, everybody that's talking, but you, you've shown and prove everything you said, man. So, and that's a big, and with me being able to have a direct line to him to be able to talk to him, you know, like, and no showing on the labs.[00:14:29] Dan Runcie: No dope. No, that's for sure, man. So yeah, it's been good to hear you just talk about the ownership and just what it means to be a ceo. And I know it's two different hats you gotta wear. Do you feel like Quan the CEO is any different from Quan the artist? [00:14:44] Rich Homie Quan: I would definitely say according to CEO is a whole lot different from the, uh, from the artist. And that's only because as an artist, I be in my mind a lot. You know what I'm saying? I be in my mind a whole lot. But as a CEO, I get it. Where you gotta get out your mind. It, it ain't about your mind or your feelings, man. It's business. You know what I'm saying? It's, it's business and, and that's why I have to separate. It's what they're totally. And is only corn as an artist with the microphone, whatever. When I'm not the microphone, it's about the family and it's about the beast. You know what I'm saying? In that order. In that order, and God, of course, first with him being first, you know what I'm saying? I'm backing up. You know the son. [00:15:23] Dan Runcie: Yeah. No, that makes sense. That makes sense. Yeah. And thinking back just about your career, I feel like we're just talking at the beginning of the conversation, right? Whether it's you, Migos, Rockos, a few of you that came up in this same timeframe, but I feel like y'all were a little bit early then when streaming really took off. And I often wonder like, man, like they obviously all had successful careers, but would things look any different, and maybe it was like two or three years later when you saw how streaming was streaming really copied what y'all were doing.[00:15:54] Rich Homie Quan: I remember, yes. I remember that. Like when the first, like my biggest records, like those were so hard copies, you know what I'm saying? It's been like, it wasn't no streaming, it was just like, but a lot of my packs packs. You know what I'm saying? Me and record sold like no, like, you know, physically. So it is different. Like there was still city players then and stuff, you know what I'm saying? So it was, when they first started talking streaming, I was like, I can get paid out that, nah man put, I wanna sell money just now. Like you said. I really feel like they got something from the numbers we were doing and, and turned it. All the way. So I love it, man. And that's why this run here is more important. Cause I'm gonna get me some of that. No money, I promise you that.[00:16:37] Dan Runcie: Oh yeah. A whole lot. Yeah. The thing. Yeah, the thing. I feel like that you all. A lot was just dropping in the frequency of when the mix tapes came out. Right. It was like you didn't let up.[00:16:49] Rich Homie Quan: Like all Now and now Mix Tapes are album, they're no more mix tapes, you know what I'm saying? Like I think I saw something from He is gonna bring mix tapes back and it's like even now Mix tapes are album, then there was still mix tapes. Right. You know what I'm saying? Like come on. But yeah, it's ok. I got something. [00:17:07] Dan Runcie: I know, man. I know. So, yeah. So you had the recent release that came out. It was an EP For you though, how do you distinguish or make a distinction between EP versus albums versus Mix tapes now? Just given that everyone is putting out music and however they wanna label it, maybe. [00:17:25] Rich Homie Quan: Yeah. Yeah. To me, I differentiate 'em only because man, like, so what? I just put out the little EP man or mix tape. I feel like EP mixtape, same. Mix tape. I'm doing, I'm, uh, I would say I'm rushing the music, uh, album. I'm gonna take a little more time. You know what I'm saying? It's gonna be a little more thought out. It's gonna be, cause I still look up to my favorite albums coming from your, coming from your tis first album. You know what I'm saying? I'm looking at the structure of those and the instruction of those can't be within a month, two month process. That process may take a. You know what I'm saying? Because you know, I need the content to rap about, but that's the only way I differentiate towards the time I put out a man. You know what I'm saying? Time. [00:18:09] Dan Runcie:  Yeah, that makes sense. And I feel like for the most part, you can hear that from a lot of artists. Once in a while you'll hear a mixed tape that people feel like it's just as goods an album, but for the most part, The more effort that you hear or you hear to the production quality, you hear it in the bars and yeah.[00:18:25] Rich Homie Quan: And they last longer.You know that last longer. That's why I feel like a lot of the music is here, you know, today and gone in two weeks because it's so much similarities and that's why I've been trying to stay creative with the process. Stay corn, don't change my style, but I can't evolve in my sound. And when I say what I mean, it's like, you know, I don't see the same stuff I used to see. Now I'm rapping about the things I'm seeing now. Cause I'm old. I'm trying to put my peers and the, uh, the younger generation on real estate, man, that's probably less jewelry. Let's be, you know what I'm saying, little less flashy and get the things that really matter. You know what I mean? We, we screen the block, let's go buy a couple of properties on the block. So now, now we have a reason to, you know what I'm saying? Stuff of that nature, man, you know, and me just, you know, respecting my position and, you know, playing it.[00:19:13] Dan Runcie: Yeah. You been getting more real. [00:19:16] Rich Homie Quan: Oh man. A whole lot. Whole lot. And I think last year, you know what I'm saying, a million plus on real estate, you know what I'm saying? And not a music checking ball, you feel me? Just last year. So I definitely getting into a whole lot more, man.[00:19:31] Dan Runcie: Nice. Was that a rental property or a sale property to be here? [00:19:37] Rich Homie Quan: Uh, rental. A couple of flips and me selling my first. Nice. You know what I mean? Yeah. So it's like, yeah, I did a million plus in real estate. No rap, no rap cap. And is this mostly in Georgia or is it El you got,  uh, not only in Georgia, you know, like I'm born and raised here, now I'm getting on. Now I have, I'm getting to the level I'm going out, you know, in different states and, you know what I'm saying, going to buy, you know, smaller, smaller stuff and just, uh, revamping them, doing resell. I'm doing a clip flipping and stuff like that, man. [00:20:08] Dan Runcie: That's what's up man. That's what's up. Appreciate that, man. Yeah. Are there any other businesses that you've been getting involved with outside of music? Uhuh, you? [00:20:16] Rich Homie Quan: Yes, sir. Uh, also with the 18 wheelers, got a couple of 18 wheelers, you know what I'm saying? We got box trucks, you know what I'm saying? A couple of car lots and stuff like that. Car mechanics, some stuff like that. It's every type of way to keep it. Keep it rolling man. Keep it moving, man. You know what I'm saying? The pandemic opened my eyes up a whole. And I really had to take advantage of that time opposed just sitting in the house making babies.[00:20:42] (Mid Ad) Dan Runcie: Let's take a quick break to tell you about a podcast I am sure you'll love. It's called nineties Now, A show all about the music, movies, tv, pop culture, and more from the nineties with a twist of what's happening. It's hosted by two radio vets, Kelly Alexander and Sharon Highland, along with their millennial producer Alex Brisson. The three of them navigate all that is and was the nineties, and you'll hear a wide range of nineties music. They had a really interesting episode about Diddy and Bad Boy and him starting a new record label. They had another breakdown on Beyonce, especially with Renaissance coming. And they look back at the decade that was the film, the TV, and so much more. And you'll also get to catch up with some of the beloved actors and actresses and entertainers that made that decade what it is. You can find nineties now on all of the major podcast platforms. Also check out their website nineties now.com or follow them on social media at nineties. Now fm[00:21:44] Dan Runcie:  I hear you on that man. I hear you on that. What was it like for you during the pandemic? Obviously you couldn't tour. I know that gave you an opportunity to explore these other ventures, but what was it like for you. [00:21:56] Rich Homie Quan: uh, the pandemic? Uh, what was it like for me? Uh, I would say that's definitely the moment I caught my groove back in the music. Opposed when I had took that long break. You know what? Being here. Cause I had just moved at that time. I had just moved and got me another house. I had bought my, uh, the house for something. And when I moved, I didn't set the studio equipment up for like close to a year. Just I, I'm syn like, come on man. And I think, I think the Migos might have had a just drop sign. I'm had my employees just dropped, but I'm hitting like in a competitor mode. Like I go drop me one two with just like, man, get up off your ass and go. Go get up off your ass and go do something. And since that day, man, I haven't started recording. I built, I built the studio back at the house. A new one, A dope one. That's where I'm at now. And get here, get it done. And it's just like my whole mindset changed like, nah man, we ain't giving up. We ain't quit right now. Nah, man, I'm from Atlanta. We, we don't throw in any white flash. You feel me? It's going hard. I think, um, it started with that then from dropping some music, uh, in Lincoln with Ben and them trusting my plan and wanting to have my back, you know? [00:23:05] Dan Runcie: For sure. What has it been like for you with live music just coming back in general? Have you been going and doing as many shows as you were doing before the pandemic?[00:23:17] Rich Homie Quan: I would definitely say I'm doing more shows than I was doing before the pandemic, and that's probably because of the new music we've been dropping. But I've been trying to get like a little more social, social active on the social media a little bit too, man, that's, that's played a part and me just, you know, like I say, taking it a whole lot serious, more serious now realizing that the game don't need me, game doesn't change the players do. And realizing that I need the game, so let me act like I need this shit like you. Changing my mindset shit, man. That's, [00:23:49] Dan Runcie: Yeah, no, that makes sense. And in other interviews too, you've talked about your place in Atlanta hip hop and your respect in Atlanta, hip hop ain’t you say you feel like you don't get the credit you deserve.[00:24:00] Rich Homie Quan: Nah, I don't, I don't, I don't get the credit. Uh, I don't, uh, like I say, I feel like the sound, like the Atlanta sound today. I feel like I should be one of those ones in that heavily influenced sound. You know what I'm saying? But I wasn't vocal about it then. So I don't respect them. But they know, like we know, like we know and they know, you know what I'm saying? Like you can't mention the Atlanta sound today without mentioning corn. Corn, period. Period. You know what I'm saying? That's why I'm, you know, top three and I'm not three. And that's, that's, that's what it's been. And I'm gonna show, I'm gonna show these people that I'm gonna show you. I'm gonna let the music show you. It ain't just me saying it. I know what I, I know what we've been working on. They gonna see what I'm top three.[00:24:44] Dan Runcie: And so top three are not three. Who? The other two? I don't know. That's what the people decide. I didn't know three because, like I, but cause it's really like a five in hour. Like I got like a. And the five will be, um, no order. Savage is up there and it's just for today. It's not all time. You know what I'm saying? Bro. You got Savage up there. You got Future Up, you got Thug up there, baby up there, and myself up there and I'm just, you know, I'm top three and three. That's for everybody else. [00:24:47] Rich Homie Quan: I don't know. That's what the people to decide. I didn't know three because, like I, but cause it's really like a five in hour. Like I got like a. And the five will be, um, no order. Savage is up there and it's just for today. It's not all time. You know what I'm saying? Bro. You got Savage up there. You got Future Up, you got Thug up there, baby up there, and myself up there and I'm just, you know, I'm top three and three. That's for everybody else. [00:25:16] Dan Runcie: Yeah, no, I hear that. And I mean, just here are the names you think about, thinking about you and a thug. I mean, I feel like lifestyle is one of the most influential songs of the decade.[00:25:27] Rich Homie Quan: For sure,  for sure. Yeah, for sure. Or lifestyle and definitely that the uh, the rich game mix tape, the rich Oh yeah. Tape as well as the still going in. And I promise I never stopped going in that influenced the sound that influenced the sound man. Cause that's when the differences came. The some type of wave and, oh man, that room was crazy that that decade did. It definitely influenced the sound.You know what I'm saying?[00:25:56] Dan Runcie: Yeah. And I mean, even just the way that you see that artists are trying to do multiple things on a track, whether they're trying to sing, they're trying to real like the, I feel like you dug a lot of you were doing that early. So you combine that. You combine with the frequency that people are released in music. We, a lot of these pop stars just, you know, try to do different things on the, at all.[00:26:23] Rich Homie Quan: You know what I'm saying? Like Yeah, I think, I think we showed it like they ain't gotta be a single, the hold the tone. And I think it more people just want to go try like that. Cause I know I can't sing, but I can hold a decent song where I can make you, I can, I can trick your mind. And I think a lot of people want to try that and that's why, that's why you hear it so much. It's an unorthodox sound. We ain't trying to sing, but it does sound, we try to hold a song and you hear that in 80% of the music you on the radio today. If you weren't hearing that then 10 years ago, that's all I’m saying.[00:27:09] Dan Runcie: Yeah, no, you see where the trend is for sure. But yeah, I mean, For you. I do know that, you know, even though you had that moment, there was a period where you know, you weren't released in music and there was, I know that in past interviews you've talked about how it was a bit of a difficult time for you. What was it like for you to be able to come back from that? I know you talked a little bit about how the pandemic was an opportunity for you to reset things. What was it like for you to really be able to come out of that and then still be in the place that you, you are today? [00:27:42] Rich Homie Quan: Oh, man. To come outta it, I think it was just like amazing. Took a whole lot of praying for one, stand down and like I said, man, not wanting to give up, man. You know what I'm saying? Knowing like, I think I, I started something beautiful and it's still so. So many pages I've yet to get to, and I know I'm capable of getting to, I get to scratch the surface and like me being such an asshole to myself, you know what I'm saying? Like on days I would just make up, I would wake up mad just for no reason and like the people around me didn't deserve it. You know what I'm saying? Like. I'm the leader and a lot of times like, man, I just know, like I couldn't, I couldn't continue to live like that and call myself a child of God, man. You feel me? So once I got that cloud, my head, man, it felt, it felt amazing, man. But I had to take it a day at a time like it. I wouldn't be talking the way I'm talking now if I didn't get filed over. Like it was some tough, tough, tough nights. Like I think, like I said, I went a year without getting in the. And I've always kept me a studio, like at my house, like a nice, yo, I didn't, I didn't listen to the radio three years, you know what I'm saying? But I'm still doing shows. Like I never stopped doing show, but my, my heart wasn't in my mind, was there, but my heart wasn't it. And I think like in this bitch heart gotta be in anything. And I like for my shit genuine and you know what I'm saying? My heart just wasn't in it. So sitting back in this house for that, Um, reminiscing on a lot of things, a lot of memories, those good ones. And waking up one day is like, well, this is how you gonna hear your story. And I myself telling myself like, you better than all these niggas. But in order to say that, you gotta go put in the work to be able to show, show that. And that's what it was, man. And I ain't got, I ain't got, I did in room since I do everything down here. I sleep down. You as you see, I'm getting my hair braided down here. We play the game down, the vibes down here, it your energy out. Don't even come down here. You know? And that's just what it been, man. [00:29:58] Dan Runcie: And I've imagine that some of that exact competitive nature too, right? Yeah. You don't listen to the radio for three years. You're focused, you're locked in, but you're still performing. When you start listening to the radio again, I'm sure you're hearing what's popping off and you're like, no, I'm better than these.[00:30:13] Rich Homie Quan: Oh yeah. Like when I'm hearing, I'm like, oh, this what people going crazy about. Oh no. We got to, we got to go to work.To go to work. And it was like, and when I started going to work, like at first I didn't, I felt like, um, cause I, I was so used to doing songs fast, like going crazy. And when I got back in there, it wasn't like I just got back in there and was the, it was the corner I am today. Oh no, it took time. It might have took six months before I got back to playing my songs back in the car from my, for the people around me. You know what I'm saying? So still I had to gain my confidence back, man. I had to get it back man. But I got it. Oh, I got it. I got it.[00:30:50] Dan Runcie: And I know too for you, I feel like there's a few things, cuz obviously it's you as an artist, like we're talking about Wanda artist building that up. You've got the confidence and you got the swag back with that. But I know that you've talked a lot about how 10 years from now you want Wanda CEO to be doing more of the work and you don't necessarily wanna be making music as much. You talk to me about what you see that 10 years from now looking like.[00:31:14] Rich Homie Quan: Uh,  10 years from now is a long time and I try not to see that. Like, and when I said. Cause I try to make like real short term goals that are real possible. But I do know and I like 10 years from now, I'll be 43 and I probably said 12. Cause 45 sounds like a better number just to leave it alone. It um, I won't be focusing on Coin the artist, but as far as point the CEO coin, the CEO may start writing more. Cause I just love music that much, but I still can never not see myself created. So, uh, I've been even dipping into it now, like more writing. Writing more, but I would probably doing, writing more, focusing on, cause I been trying, I've been doing models moderat lately when they do the fashion show, I'm walking the runway. It's the first time I did that, I had just did the fashion week. So I'm already trying how that?[00:32:05] Dan Runcie: How did you like doing the runway for the fashion show?[00:32:07] Rich Homie Quan: Well, I haven't done that yet. I, I do that next week. But just the fashion snow itself, just going to fashion week in new. Aw man. Amazing man. Like, just being around people like, oh my, like, I was almost like, I didn't want my phone. I, but I was, man, that's the boy from my show out. You know what I'm saying? Just like seeing Cal coo, no, see, uh, you saying boat? Amy? What's her name? Amy W Winnie. Winnie Harlo. Yeah. Winnie Harlow. Man. Like just seeing her in person, just made and being. Front next to talking to court a like, dang. It just gets you in different room. I'm, and I'm saying like, I maybe could do this. I maybe we could do this for the next 20 years after rap. You know, I'm saying stuff like that. So it's just like, you know, other stuff. Even like being an author, I wanna come out with a memoir. I'm ready to write my book, you know what I'm saying? Cause I do want to get in movies and I, uh, wanna come out with a autobiography movie one day. So, not even me playing myself, but at least writing it. I'm trying to get in directing, trying to get in. I see 10 years from now I see myself, that guy, man. [00:33:11] Dan Runcie: Yeah. Okay. I feel like we're gonna see you at the Met Gala next year or something.[00:33:15] Rich Homie Quan: For sure. For sure, for sure. I'm gonna be at, uh, try to be at a whole lot more of a man, a whole lot more and all this stuff that's clean. I just gotta let 'em know I do this shit too.[00:33:26] Dan Runcie: The memoirs are good. I mean, Gucci's was good. Ross's was good. I mean, there's so much, and I mean, you're obviously gonna be able to tell stuff that no one's stole before. You're gonna have the …[00:33:35] Rich Homie Quan: Yeah, and I got stories that, I got stories that I know like, I mean, I just don't give that, I think that would be dope into a book. Like, especially me being real, I think it'll be more raw. Cause I love to read, so I would definitely give more, more details on my book, you know what I mean? I would definitely, yeah, it get spicy, it get spicy.[00:33:55] Dan Runcie: Have you done as much on TikTok lately? Just, you know, whether you are the on camera, off camera and, and I'm have a lot of opinions about it.[00:34:03] Rich Homie Quan: Yeah. I'm, I'm still adjusting. I'm still adjusting. I'm still adjusting. So now a lot of my TikTok has been like, like stuck on the music, but I'm starting, I'm, I'm gonna start, I'm, I'm gonna get a little more personal show, show the fans a different side of me. Cause that's what I'm transitioning to now. Like I am a rapper and that's what fans love. I'm transitioning just to showing them a little bit of, a little bit more of my personal side and just decide deciding which side of my personal side and what I'm willing to reveal. No, that makes sense. Cause I want to be authentic. I don't just wanna get on there cause everybody's doing it. I wanna have something different to offer and that, you know, it's authentic. You're getting a real me.[00:34:42] Dan Runcie: Yeah, like, I can't see you trying to do some like trick, like, you know what I mean? Like everyone trying to do these visual tricks.[00:34:48] Rich Homie Quan: Like no, never, never, never, never, never. That, that, that goes against my morals and ethics, you know what I'm saying? Like , you know what I mean?[00:34:57] Dan Runcie:  Yeah. No, for sure man. Well, no man, I'm excited for you, man. I feel like this is a good chapter. I feel like whether it's a pandemic or other things, like these triggers that happen in life, give us a good opportunity. Just pause, reset, and come back stronger. And I feel like you got the infrastructure there to keep moving, man. So proud of you. Excited for you for what's coming, but man, before we let you go, give us a heads up of what to look out for. What should we look out for the next couple months coming? [00:35:25] Rich Homie Quan: Uh, next couple of months coming from me. We In November. Yeah. Oh shit. Some weeks after this, man, you can look for us to be reloading the family in Moula. You know what I'm saying? We're not gonna call it a deluxe, we're just gonna reload it. Cause I feel like the reloaded is a deluxe anyway. And I think like that's a trend I started years ago. So they, they, they say deluxe, but we reloading it with seven new songs.[00:35:51] Dan Runcie:  Wait, wait. So, so you started the deluxe. [00:35:54] Rich Homie Quan: Yes. I'm not gonna say that, but it was called Reload. No, God, I'm not gonna say I started, but I think I did. You know what I'm saying? I think, I think men, I think Men Thug, what's the first artist doing? You know what I'm saying? The Duo Mix tape that they name the album. You know what I'm saying? So it's like a, you know what I'm saying? You know, history beats yourself. [00:36:18] Dan Runcie: Yeah. So dope man. We'll look out for that and we'll look out for the rest of this stuff coming from you.[00:36:23] Rich Homie Quan: And more videos. Yeah, more, more videos in your face. A whole lot more. Yeah, man. More RQ, the brand, more RQ Time, Venice and more of us going up putting it in they face. Man. I'm on the way. We're here now. We're here now. [00:36:39] Dan Runcie: Love it man. I love it. Quan, it's been a pleasure, man. Thanks for joining. [00:36:44] Rich Homie Quan: Thank you, man.

Cooper Turley, better known as Coopahtroopa, is betting big on ushering a new generation of music. In September, he announced a first-of-its-kind investment fund focused squarely on web3 music projects and artists themselves. Coop Records raised $10 million and Coopah will be the sole general partner. He’s hesitant to call it just an investment fund though. That’s because Coop Records is also a record label and incubator. Coopah will invest directly into web3-native music artists in a “seed round” — turning emerging artists into venture-backed startups.Structuring an artist’s company is what Coopah sees as web3’s biggest opportunity: resetting ownership dynamics. NFTs are another vertical of the Coop Records fund, in addition to the seed-stage investing in both companies and artists.  Coopah joined me on the show to give us an in-depth look at how Coop Records is eying its investment opportunities. Here’s everything we covered:[0:00] How Coop Records started[2:06] Focusing on emerging artists, not established ones [3:35] Coop Records’ investment thesis[7:24] Investing in artists during “seed round”[9:50] Structuring artists as a holdings company[11:40] What does an exit look like for artists investors?[15:00] Artists as CEOs[20:11] What makes a music NFT historical [22:28] NFTs as a replacement for masters and publishing[27:18] Accredited investors vs. fan investors[29:30] Artist success stories with community building on web3[31:40] Focusing on story when marketing NFTs[34:25] Optimizing for engagement not reach on social [39:24] How tokenization changes the artist-fan relationship [47:00] Predicting the year that music NFTs go mainstream [48:25] Coop’s big question for web3Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSSHost: Dan Runcie, @RuncieDan, trapital.coGuests: Cooper Turley, @Cooopahtroopa Download The Culture Report here: https://trapital.ck.page/a23b7a6a4a Sponsors: MoonPay is the leader in web3 infrastructure. They have partnered with Timbaland, Snoop Dogg, and many more. To learn more, visit moonpay.com/trapital Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital Trapital is home for the business of hip-hop. Gain the latest insights from hip-hop’s biggest players by reading Trapital’s free weekly memo.TRANSCRIPTION[00:00:00] Cooper Turley: And I think that gets to this artist development piece more broadly is that you're trying to start the process much earlier, much earlier than I think a lot of the major record labels are starting now. Because I think they often wanna see artists having some proven. Track record before they're willing to sign them.[00:00:24] Dan Runcie: Hey, welcome to the podcast. I'm your host and the founder of Dan Ruey. 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. [00:00:49] Dan Runcie: Today's guest is Cooper Turley, aka Coopa Troopa. He is the founder of Coop Records, which is a new venture fund, a 10 million fund that is focused on investing in the future of music, specifically in web three. He is someone that has made a name for himself as a thought leader in the space. He was involved with the Dow Friends with benefits and he's now started this fund to make economics better for artists and ultimately help them take more advantage of the opportunities that are around them. So we talked about a lot of it. We talked about how he views the space right now, why he started this fund, and what the fund's investing in. There are three main areas that we go into. We talk about investing in music startup. Investing in artist seed rounds and investing in NFTs themselves as an investible assets that him as a general partner and little Bited partners would wanna see returns from. So we talk about what the economics of that look like. I think that. Cooper stands out in a lot of ways because he has a much more nuanced understanding of how Web Three fits in with the broader ecosystem of what's happening right now in music, what some of the trade offs are with the financials, the relationship with fans, what services it offers versus the traditional record labels and more really insightful conversation, and I hope you enjoy it. Here’s our chat.[00:02:07] Dan Runcie: All right. Today we're joined by Coopa Troopa who just launched Coup Records, which is his fund that is investing in the future of music and Web three specifically. And first off, congrats. I saw the announcement, it's really dope. So walk me through the process from thinking about you wanna start this fund to where you are now, today with it.[00:02:28] Cooper Turley: Absolutely. Well, first of all, thank you for having me. I'm really excited to be here. I've been in music for the last 10 years in crypto for the last five, and so I've seen everything from ICOs to Defi, to Dows, and not most recently NFTs. You know, throughout that time I've been active across public markets as a trader, behind the scenes, as an angel investor, as a community builder, and as an operator. And when I started to think about how to connect all the pieces together, I've always been a fan of music. I felt like there was never really a clear vehicle to help elevate and amplify the space. And so I found coop records to be the best way to really just zoom in on this niche that I'm so excited about and figure out how to really help the founders, artists, and builders that are supporting this space everyday.[00:03:05] Dan Runcie: Makes sense. What were the conversations like getting buy-in from LPs?[00:03:10] Cooper Turley: Basically helping to explain what music NFTs are, why this is a vertical that you'd wanna invest in at this time and day? You know, historically I think that music has gotten a bit of a bad rep, cuz it's very antiquated in a lot of ways. You know, there's a lot of systems that are very complicated and hopefully we can unpack some of those on this episode. But, I think we through presents a new opportunity for artists to monetize in creative ways. You know, as someone who's been a curator my whole life, it's very easy for me to understand the value of investing in songs, artists, et cetera. But for someone who's not music savvy and not passionate about this sector, you know, the majority of those conversations are why would anyone wanna collect a song? Why would someone wanna invest in an artist? And trying to help people understand why there's an opportunity here that I think is. Influential and paramount for the next chapter of music. But once people get over that line, you know, I've kind of been able to build a brand for myself that I think speaks very clearly to why I'm so excited about music. And so for investors that are looking to get exposure to the space, coop records is a great way to get that exposure without them having to get as deep in the trenches as I am.[00:04:07] Dan Runcie: Right. And I gotta imagine that that probably took a few conversations just given things that I'm hearing too, from folks. People, they understand the promise and the opportunity of what NFTs and what web three offer, but there's. Hesitation, there's still perception about what's going on and some of the headlines that people see. How did you communicate or address some of those concerns while still sharing the value add for what you have? [00:04:32] Cooper Turley: Yeah, I really focus on emerging artists. You know, I think that this is where the vast majority of value will accrue over the next couple years with Web three. And so when you think about investing in music, most people's mind goes to like, how do we get Drake to drop NFTs? I actually don't really focus on that at all. Instead, I think about how do we develop the next act that becomes Drake using Web three tools? And so for investors that are kind of hesitant about getting involved in the space, I point out early examples like X copier people, you know, crypto artists who really made a brand and a name for themselves on the back of selling their nfts. And obviously in the case of people, he had a major brand before, but it wasn't until the existence of NFTs and sort of these community based assets that they started to see monetization aspects with their fans and with their collectors. And so trying to highlight that there's an opportunity here to develop and support emerging artists new to Web three through music, I think it really made a clear case that. This isn't about trying to get your biggest celebrity to drop NFTs. I think that will happen at some point in time. But this is about investing in the infrastructure and the artists that are going to make this space very valuable over the next couple years.[00:05:31] Dan Runcie: And one of the things I like too about how your fund is structured or reminds me a bit of Matt Pinkus and how his music fund is structured. It's not just focused solely on startups that are trying to build the next tech platforms. You're also looking more broadly. The NFT space itself and what that opportunity looks like and it'd be great to break each of those down. So let's start first with the music tech companies, cuz I know that's 85% of your fund looking at preceded seed stage companies. What's your thesis for the type of company that is a coop records company that you're looking for? [00:06:04] Cooper Turley:  I'm a really big fan of composability. So in Defi there's this concept of money Legos or protocols and platforms that could plug into one another. I believe the same thesis will play out with music, where we're gonna have music legos, where there's different marketplaces, service providers, tooling, infrastructure that can help sort of amplify what an artist can do with Web three. And so when I think about investing in a music tech company, I think about culturally, is this company aware and active within the pocket that I'm spending a lot of my time in? And then beyond being aware of sort of the artists, the songs, the type of platforms that are doing well in this space, do they have the open mindedness to wanna work in collaboration with those other platforms? So in accurate, we can kind of create this toolkit in this stack where if I am an artist who's new to web three, it's not about choosing Spotify versus Apple, it's actually about trying to develop a presence across many platforms. And hopefully those platforms. The life of the artist easier by making everything connect together with one another.[00:06:56] Dan Runcie: And I feel like this speaks to one of the broader themes that I know you've talked about before, is. It can't be this approach of web three versus web two. These things need to be collaborative. No more zero sum games. How can you think more broadly about the opportunity there? How do you view that more broadly, not just with the fun, but also likely how you're seeing the space with any artist that you're working with too?[00:07:21] Cooper Turley: I'm really laser focused on web three platforms because I think there's a lot more room for change within those platforms. You know, I have nothing against legacy platforms like Spotify have done fantastic work for artists and I think there will be at a time and day when they're able to enable music, NFTs to be purchased, collected, listened to within their platform. But the reality is these companies are so sophisticated that trying to move the needle is very complicated. And so for someone like. I'm running this fund as a solo gp. It's a relatively small fund, and so when I think about where I can have impact and leverage, it's typically working with very early stage founders. You know, I can get in the trenches and help to develop the product. Think about how we're onboarding artists, think about new marketing strategies. And so for me, I think right now it's about cementing the cultural relevance and value of this emerging wave of Web three music. And once that's been clear and established, we can take those same values, ideas, songs, artists, and help to bring those into the traditional industry in a more clear way. Because right now I think that a lot of the bigger players, let's call it major labels, et cetera, they recognize that there's value to be captured in Web three, but I don't think that they have the same level. Boots on the ground cultural awareness that maybe someone like, um, myself or some of my colleagues have. And so I think the challenge here is a, making it very clear what that culture is so you can start to translate it to larger players. And then once that they agree there is something of value there, you know, being able to act as a connector where you can say, Hey, maybe instead of going and doing a 500,000 or a million dollar drop for the biggest act on your roster, let's go ahead and find an emerging artist who's curious about the space and develop them with the course. Five or $10,000 drops and instead really build that community and that collector base in a very organic way.[00:08:56] Dan Runcie:  And I think that gets to this artist development piece more broadly is that you're trying to start the process much earlier, much earlier than I think a lot of the major record labels are starting now. Because I think they often wanna see artists having some proven. Track record before they're willing to sign them. And in some ways your approach isn't too much different. Maybe it's just a bit of a different stage because one of the other areas that you're investing in is artist seed rounds. And can you describe. What stage an artist would have to be in order to be at the seed round, and what types of things you're looking for there from an artist?[00:09:33] Cooper Turley: I think it's very similar to what I look for in companies. You know, has this artist been able to prove a little bit of traction? You know, have they demonstrated that they're culturally aware of where this industry is headed? You know, different things that I feel like are interesting to kind of describe. Cause it's not very concrete. Like you can't point to like a specific amount of sales or a specific amount of volume and say, okay, this artist is ready to be invested in. But it's really just a development process of like, is this person making web three a focal point in their career? I believe that that's something really important for me personally, cuz that's where I had the most leverage. But once they've demonstrated that they've been able to release on some of the bigger web through platforms, you know, once they've been able to collaborate and onboard other artists to the space, you know, you start to see that these people have like a little bit. Leverage was sort of their career. And at that point in time, instead of signing a traditional record deal, co records can really be the one to say like, Hey, let's go ahead and set up a company for you. Let's think about how we wanna do a cap table. Let's bring on some partners to give you the capital that you need to go and hire a team around you. So instead of selling your next three albums to a major label, you can instead fund this through accredited investors. And then over time think about the ways you wanna bring other partners into the fold, but not need to be so reliant on the capital to do that in the first place.[00:10:38] Dan Runcie: And with the artists specifically, cuz I know that you've started the fund. Maybe for the people listening, is there a particular artist that you have made a seed investment in just so people can get a good idea for, okay, this is someone that we invested in, this is where they're at in their career, and this is what the opportunity is [00:10:56] Cooper Turley: Not publicly. I think by the time this comes out, we'll be right around there. You know, I can say that privately, behind the scenes we're working. The first round, you know, we've had some very serious progress on it. Investors are excited about it. We're going through the whole corporate structure, but for me, this is a very different lane because it's not as simple as just investing in the safe note of a precede company. You know, there's a lot more complexity around IP ownership, around revenue sharing around. Kind of how this artist thinks about their company and what kind of rights they're giving back to people. And so it's a slower process, but it's one that's currently in motion. I expect that we'll probably have the first one announced within the next one to two months, but I can definitely say there's one in motion that I'm really excited about. And I think, you know, by the end of this calendar year, we should have that one announced. [00:11:37] Dan Runcie: I think part of this too is also the structure of things. You mentioned this earlier, and I think for a lot of artists it's probably. Not necessarily a new way to think about it, because I think in general, artists do think of themselves as having multiple revenue streams, but in order for this to work, in order for you to be able to make an investment, there needs to be some type of, whether it's a holding company or some type of structure in place so that you can make an investment that would touch all of these things. Can you talk a little bit about what that looks like on the artist side? [00:12:05] Cooper Turley: Yeah, it's a fantastic question. I wanna start by saying, This is early days and so this is the first stab at it. I think that this model will evolve and change over time. The way we're thinking about it is there's one Hold Co, that represents the artist ownership across their various income streams, uh, that hold co owns subsidiary entities, one of them being a music entity, which owns the masters in publishing for that artist. One being a live entity, which owns touring and merchandising, and then one being a Web three entity, which owns NFTs and. And so all of that wraps up into the larger hold cow. But the reasons those subsidiaries exist is because we wanna limit liability to each of those different vertical. If there's an issue across web three, we don't want that to end up touching the masters. If an artist wants to go and sign a record deal, they shouldn't have to figure out what to do with their touring or what their NFTs to be able to enter into agreement with a different party. And so we've kind of split up the different verticals into buckets that make sense relative to the type of partners and the type of work that it is. But all of that rounds back up into this holding company and when it comes time to invest in the artist, quote unquote, that artist is selling anywhere from five to 10% of that hold cow to accredited investors so that they can have exposure and pass through to those underlying revenue streams. But there's not this sort of majority ownership, creative control, et cetera. It's really, here's capital and exchange for you to go do what you do best. In exchange for that, we have exposure to these underlying entities, which represent the artist brand in its entirety.[00:13:27] Dan Runcie: And for an investor like you, I think most people listening have a good idea of what an exit looks like for a startup, but what does an exit look like for you as an investor, for an artist, if you're going in at that seed round?[00:13:39] Cooper Turley: I think there's a couple ways it can pan out. You know, one I think would be IP acquisition. Let's say that there's a buyout of someone's masters or publishing, et cetera. You know, there's kind of larger capital inflections that can happen later down an artist's career. I'm more excited about this idea of taking artists public cuz it's something that hasn't really been done before, but I think will happen eventually. Where right now, if you're a fan, you can't really invest or bet on an artist. I think we're starting to see us at a very granular level with music NFTs, and it's something I would love to cover as the last bucket next, but to me, I think an exit here is helping an artist really take this company that we structure for themselves and explore what it means to go public. And so rather than only accredited investors being able to buy into that five or 10%, how do you invite fans to participate in that convers. I think that there's a lot of, uh, legal nuance there that needs to be figured out. And so I don't have that answer today, but I would say that more broadly, the two ways that this could happen is a, investors are seeing a return from the IP becoming more valuable, and they're being capital injected into the whole co. Or B, more optimistically the artist, quote unquote, going public by either, you know, listing on a traditional market or what I think is more likely is creating some form of a token, which represents exposure to this entity that's been set up to represent the artist brand in the first.[00:14:49] Dan Runcie: Got it. And then from a structure perspective, do you ever hear any type of pushback or comments from artists who feel like, oh, you're getting a slice of all these revenue deals. This feels similar to a 360 deal. Do you hear any of that at all?[00:15:04] Cooper Turley:  Yeah, I mean, it is a 360 deal, and I think that that's really important to like zoom in on, because 360 deals have gotten a really negative rep because of the percentage ownership that they typically encompass. So traditionally with 360 deals, it's anywhere from 50 to 80. When we talk about a 360 deal in this context, it's five or 10%. And if you start to look at the way that companies take on dilution and precede and seed stage rounds, it's kind of the same concept. You know, like that company is basically taking all of their revenue into this central entity and they're selling off dilution to investors. And so I think for artists, this is particularly scary because there's been such a history of people taking advantage of 360. But I don't think the structure with 360 deals incorrect. I just think the ownership targets that those deals are typically set at is what's really predatory. And so if we can zoom out a bit and instead say, Hey, five or 10% can give you a couple hundred grand, maybe a million dollars to go invest in a team around you, there's ways for that capital to be really value added where the dilution is actually necessary and valuable because it helps you advance your artist career in a way that you simply couldn't do without it.[00:16:04] Dan Runcie: I agree with that. I think that that's, Testament of some of the challenges with the broader major record label system as well, right? It's not that people shouldn't be willing to trade some level of ownership in exchange to get a boost from the company. It's how much ownership, it's what the terms that the actual economics look like, not the economic agreement itself.[00:16:28] Cooper Turley: Yeah, it's correct. And I think that it's something that is really important to help educate artists on. And this is the area that I'm actually most fascinated by is like artists really thinking about rights ownership, thinking about dilution, thinking about cap table management. And just with that in mind, I wanna highlight, it's a very specific type of artist that is willing to enter into this quote unquote, artists seed round. Because I think that most artists are not thinking about their brand as a ceo, but I think there are very selective artists who think about their entity as a business and for those specific artists being able to demonst. There's value in having employees. There's value in giving them long term options and equity, and having these ownership incentives be a little bit more aligned. I think traditionally music has existed in this weird ballpark where we've basically only ever sold masters in publishing. We haven't really experimented with equity or any of these other ownership vehicles that startups have been taking for the last couple generations, so I'm excited to explore it. You know, I by no means have all the answers, but I think. My time investing in precede and seed stage companies has given me a little bit of context on how things work behind the scenes, and I'm hoping that with a little time and effort, we can sort of mold those same practices and help apply them to artists more broadly.[00:17:34] Dan Runcie: That makes sense. And I have to imagine too, with artists as well, there's some artists that love the mentality of being the business person themself that can be the CEO and wear multiple hats. There's other artists who I. As much as they want the business to work for them, they just wanna focus on the art. So there's specific things that you're looking for to determine, okay, is this artist gonna be wanting to be the ceo? Or maybe making sure that they are partnered with someone that may wanna be in that role instead[00:18:05] Cooper Turley: Yeah, I mean, you just touched on it perfectly. I think that there's situations where artists have partners that are acting as their ceo, you know, and in many typical startups you have a ceo, a cto, a ceo, et cetera. Um, the artist isn't the only person that's responsible for their success. They're obviously the largest player in that. But it's less about, is this artist capable of being a ceo? It's more about is this artist capable of building a team around them that can. In tandem as a unit and as an organization. And if that artist is uncapable of operating as the CEO, because they're phenomenal at making music, it's very likely that there may be a manager, an agent, a business partner, et cetera, that could step into that role. And I think the biggest thing that I'm excited about is to realign incentives around the service providers around an artist. So whether that be a manager, an agent, a business manager, a lawyer, et cetera. Typically, all these actors are just operating on commission, you know, and they have five or 10 clients because there's no guarantee that they'll be with that artist in 10 years time. You know, these contracts aren't really a center aligned for those key players. But if we can instead start to create an instrument where a managers may be able to take a salary and then have equity that's vested over four years, I think there will be more situations where artists would be willing to enter into a full-time quote unquote agreement with their manager, because that a manager is now incentive aligned to actually spend all their time developing one. Instead of needing to commission off of five or 10 different artists just to be able to make a living.[00:19:24] Dan Runcie: It's a huge point because there's so many managers I've talked to that just talk about how thankless that job is, and that's purely just from how they're treated, not even getting to the economic aspect. You start thinking about the economics about how managers are treated and yeah, maybe you'll get 10 to 15 to 20%, but if that artist levels up and then they wanna level up their manager too, they can just be like, Hey, sorry, I wanna move on. And you, the person that brought them from zero to 40. Now you have nothing. Right?[00:19:54] Cooper Turley: Yeah. I mean, it happens time and time again from smaller artists to the biggest acts in the world. I mean, I don't have to name names here, but I think we all know examples of this happening time and time. And it's really just a game of incentive alignment. You know? And when I think about the term web three, to me that means ownership. And so for all of these different deals that I'm doing, it's about how do you create ownership incentives so that everyone who's contributing value to this entity is able to capture that in some way, shape, or form. And so I think it's a very difficult conversation to tell a manager, Hey, instead of taking a 15 or a 20% commission, you're gonna get a base salary and then have a couple equity percentage points that best over multiple years. But when you start to zoom out a bit, you start to see like, hey, maybe 1% of equity can actually be more valuable than 20% commission. Because if you're operating a multi-million or multi-billion dollar business, you know that's a life-changing amount of money. And so I don't expect this is something that's gonna happen in the short term. I think it's gonna take a very new class of partners, managers, agents, et cetera, that are willing to enter into these type of. Situations and these type of organizations. But I'm very excited to work with the emerging class of talent that's willing to try something out a little bit differently because I think that new class of talent is looking for an opportunity here. And I think that we've seen time and time again that the systems that exist today work, but I think that there's a lot of room for improvement and I'm excited to use some of the artists that we're working with help push the needle on what that could like. [00:21:11] Dan Runcie: Yeah, and I think the other point that you mentioned too, was aligned as well, just in terms of artists being able to have that team around them. We've seen so many examples where whether it's Jay-Z, having someone like a Dame Dash next to him, or you have Jay Cole and e Bama, they've been working together for years. Kate, uh, Kendrick Lamar, and the whole Top Dog team. These artists are doing it themselves, and oftentimes the ones that try to get stuck, so no different then. Yeah, a startup, if you're trying to raise money, they're gonna push back. If you have the technical co-founder being the same one that's trying to go raise money, right? Like you need to have some expansion there. So I think so much of that makes sense. I do wanna talk about the other piece that you mentioned though, the NFT piece of it, because the way that you're investing in these, I think could be eyeopening to some of the folks listening because you're looking. And I heard you referred to historic NFT opportunities and NFTs as collectables. Can you talk a little bit about what you're looking for if you're investing in NFTs through this fund and how that may separate from what a lot of people may assume when they think about an nft. [00:22:18] Cooper Turley: Yeah, so there's a really amazing market of songs that are being released as collectibles right now. You know, there's platforms like Sound xyz, where every day an artist is releasing a song with 25 editions as NFTs. And I've been really active across these markets for the course of the last two years. Personally, you know, biggest collector on Sound today, one of the biggest collectors on catalog. And I'm really excited about being able to collect these early songs from artists that are building in Web three. You know, the analog I'd make here. Music, rookie cards. You know, we have rookie cards for basketball players, for baseball players, et cetera. We don't really have rookie cards for artists, and I think in a lot of ways these early music NFTs are sort of the equivalent of an artist rookie card. And so personally, I've been doing this for the last couple years. I recently just put out a post called the Music NFT Collector Thesis. This is how we're thinking about collecting from the fund. But to really break it down, we're thinking about how do we sort of acquire early NFTs that represent historical relevance of this. Web three and Music NFTs have been around for maybe a year at this point. I think that there's a huge opportunity for fans to start getting involved by collecting the songs that they love and for the fund. I almost look at music NFTs as the new form of like masters and publishing. You know, it's not quite one to one, but there's almost this new market being formed of Tradeable assets that you can buy for something like 50 bucks when it drops, and then hopefully have the ability to resell at a later. And I think for the fund, you know, us being able to participate in these markets and say, Hey, we are aware of what's happening on the ground floor with the next generation of developing artists, we're actively collecting these songs that we can show that were there from them, beyond needing to set up a company and needing to do some crazy type of investment situation. And I'm really excited about the opportunity just to have. Ownership over some of these really early collectibles, cuz I think they're very historic in the development of these artists' careers and I believe they're extremely valuable and will continue to demonstrate. So in the years to come. [00:24:03] Dan Runcie: You brought up an interesting point just about how you feel like NFTs could replace what we are naturally thinking about masters in publishing. I guess in terms of how artists are monetizing and what their ownership looks like. Can you talk a little bit more about that and specifically how that could look or what that could look like? Years down the road.[00:24:23] Cooper Turley: I mean, I'll start by saying that, um, masters in publishing are extremely valuable. You know, I think that this is a system that has worked for generations. There's a huge trend around catalog acquisition. I think that will continue to exist for many, many years to come. I think for someone like myself, me trying to get in the catalog acquisition game is not a smart move. You know, there's a lot of players with a lot more experience. There's a lot of people with a lot more money. The one unique advantage that I do have though, is developing thesises within this small pocket of web three artists, and the best way to get exposure to them is to simply buy their nf. You know the way that this looks is if there's the first song an artist ever released their artist rookie card, and there's 25 additions of that being sold for 50 bucks. If you zoom out and one of these artists becomes the Weekend, Drake Post Malone, Jack Harla, whatever it might be, there's a very high likelihood that those early additions are gonna be worth a lot more than $50. And so instead of trying to invest in the masters in publishing rights, those songs can also go on Spotify. They can stream extremely well. You can have relationships with major label. But I believe those early collectibles have a market of their own. These markets are not tied to any sort of royalty rights because it's just collectibles. You know, there's 25 additions of this digital vinyl. I can buy it for $50 and then sell it for whatever price I want in the future. And I think this is a market that not many people are paying attention to right now. But I think when it comes to new and creative revenue streams for artists, I think that collectibles are gonna be a very, very big market in the years to come. I think it's the most clear way that fans can start to get involved with sort of, Collectible nature of getting involved with an artist and as a fun, I think we're really excited to be participating here to say, Hey, we're really excited about this. I think there's some really amazing plays out there right now, and we're gonna continue to support artists on the ground floor to help develop this thesis. [00:25:59] Dan Runcie: Why do you think that a lot of people aren't paying attention? Or what do you think some of the, if there's friction or if there is just in a bit of a natural adoption curve, like what do you think's going.[00:26:12] Cooper Turley: It's just new. I mean, this entire market has only been around for a little bit more than a year at this point. You know, in total, I think we have less than a thousand artists that have ever minted a music NFT before. There's probably less than 10,000 people ever collected one before, and so. Relatively speaking, it's just a very new and small market. And I think for a lot of players that have bigger fish to fry, it's probably not worth their time to invest buying records for $50 because they have multimillion dollar record deals in place. You know, and so for someone like myself, um, a lot of what I do is help educate artists that there's a lot of value to be captured in web through right now based on how early it is. You know, I think that there's a lot of unlearning that can be done with the way artists are releasing music in Web three. And so traditionally, when you're putting out a song on Spotify, most artists I know here in. They'll take eight weeks in advance to think about what distributor am I gonna put this out through? Am I gonna sign this to a label? What's my advance? What's my marketing rollout? What's my TikTok campaign? How am I getting pre saves? How am I making the music video? And what I've been preaching is like, Hey, if you have a song, you should put that out tomorrow. You know, like there's people out there that would probably wanna collect that record. And if you can 5 25 people to come and collect music in FT for 0.05 E, they're basically $75. That's the equivalent of half a million streams. And so I think trying to teach people that you don't need to have this giant rollout process to make this headline moment with music. We've gotten really conditioned to trying to shoot for the new Music Friday playlist. You know, all of these emerging editorial playlists. One of the beautiful things about the SoundCloud era was people were just uploading music in real time and if you had your finger on the trigger, you could go and just repost something and be part of a wider movement. And I think what's happening with music and FTS now is artists are gonna start to see that you don't need to have a six week rollout to put out a collection of 25 songs. If you make that song on Wednesday and put it out on Thursday, you can immediately get funding from your biggest fans and use that funding to go and market the rest of your career and instead be able to obviscate the need for a lot of those major capital advances that typically get artists caught up in a weird position in the first place.[00:29:05] Dan Runcie: Yeah, that makes sense. I feel like if the funding's in place and you can replace early on, because I think for a lot of artists, the economics don't really work out either. Unless A, you own the underlying masters in publishing to begin, so you're just bringing on a. You know, revenue per stream or just general from what you're getting from streaming or on the other side, you're just massive, like Drake or someone like that. And your billions of streams per year brings in plenty of money. But for a lot of other artists, it ends up being either A, a loss leader if you're focusing solely on streaming or a, or you're leaving money on the table some type of way. So I feel like that approach is something that makes sense for a bunch of. On the investing side though, I have a few questions on this, but the first one, on the investing side though, how do you feel like the appetite will be for, let's say an artist does have early investors, the likelihood for those investors to be folks who are accredited, folks that just wanna be able to get a return, versus people who are actual fans of that artist. Any thoughts on what that mix may look like for the average artist that's going through the web? Growth cycle and the rep do growth curve?[00:30:19] Cooper Turley: Yeah. I mean, I can speak on this from the artist seed round that we're doing right now. Every investor in that round has been an active collector of this artist for many, many months. Prior to that, they all have personal relationships with the artist. You know, they may be an accredited investor, but they're not just bringing capital. They've been active and supportive of this artist's career way before the seed round even started. And so I think if we zoom out, there will definitely be situations. Investors just want to put in a couple hundred grand and not really worry about getting involved on the ground floor. But given how early it is right now, most of the investors who are interested in participating in these capital markets are ones who want exposure to both NFTs and to the artist equity. And so I think that over time, collectors to me are a little bit closer to like early investors. Think about them like almost angels or sort of like seed round investors. Over time, collectors will start to mirror more fan behavior. But I think for right now, a lot of the collectors I know, they're just excited to get exposure to an artist's career and to go and support them more so than they are to really go to their show or to buy their merchandise, et cetera. And I think that's where a lot of the pushback comes for web through music is like, oh, these people aren't actually fans. They're just, you know, buying NFTs. But if you zoom into what that means, it's almost a different form of fandom where they're providing capital to be able to have exposure to an artist's career. And their expectations are a lot less on the fan side. I need you to collaborate with this artist. I want you to put out this type of music. It's more so like, Hey, we just wanna support you and your career however we can. Because the more that you're able to identify your vision and create a brand around it, the more valuable our NFTs are going to become. And so it's a very mutual relationship I think hasn't really existed in music in the past.[00:31:50] Dan Runcie: You're really getting at this aspect of community and how artists can foster that, how they can build around them. We've seen the power of that in the SoundCloud era, so we've seen a lot of these things happening and what streaming in general has enabled to happen. What are some of the success stories that stand out to you when you're thinking about artists to be like, oh yeah, they've nailed community, or they're nailing community, like that's how you do it.[00:32:13] Cooper Turley: Yeah. I would say a couple artists to check out. Daniel Allen, I think has done a fantastic job of this in the web three space. Latasha who started something called Zora Topia has done a fantastic job at this Early nft. Artists like Matt Cha os. Grady bloody white. I mean, the list goes on and on, but basically you see. The small pocket of artists that are really making web through a centerpiece for their career, and they're leveraging that into creating more community conversation. Where typically all these artists have a collector chat where once you've bought a music nft, you can get into a private chat with that artist. It's typically 20 people, 25 people, and that artist is in there every day saying like, Hey, what do you guys think about this demo? Hey, I'm thinking about dropping a song next week. Which one do you like more? What do you think I should do for the supply? Do you think we should do an airdrop? And that conversation is a lot more interactive. And I think in a lot of ways artists have typically maintained separation from their fans to kind of uphold this like form of mystery and this like storytelling aspect. But what I'm seeing now is that collectors are getting really close to the artists that they know and love, and those artists are realizing that for a very specific demographic of their audience, they can be very value added, asked the right questions. And so instead of just doing a meet and greet or doing like, you know, 50 people standing in line to say hi, back to back for an hour and a half, it's like, hey, if we wanna have a valuable conversation about the future of my career, These other people that I can turn to, cause I know they have exposure to my brand and they actually typically have experience That's very valuable and it's something that I think is gonna happen more and more with the next generation of collectors to come.[00:33:37] Dan Runcie: Yeah, I think that's a good way to just think about the framing of it, right? Meet and greets can be great, but it's so transactional. It is really isn't an opportunity. And it kind of has a bit of this like hierarchical thing. Like, oh, I paid $500 extra at this concert to like take a picture with you. Versus no, like if you've really been with this person, then how can you help shape that in the same way that someone that was really early on can? So I feel like there's so many principles there and there's so much that aligns with, especially on the financial side. I'd love to hear your thoughts on the marketing side of it, because I know that's a piece that a lot of artists have had questions about, but I also think that we've seen from. Project specifically with Web three projects like outside of music where whether it is the creator themselves who's been able to market or get the word out effectively, or they've been able to just find ways to build their distribution themselves. What are some of the ways that you've seen artists who've been successful on the Web three Path have been able to replicate, or at least make up for some of the marketing that they would get from a major record label, but otherwise they're recreating on their own.[00:34:47] Cooper Turley: I think it starts from the story, you know, like first of all, what is the music that you're releasing and what is the story behind that? But more importantly, like what is the narrative with how you're using the technology? And so almost fusing together like the creative side with the tech side, you know, whether this be something as simple as like creating your own artist website where people are mentioning s from, or it's something like, hey, we're using on chain splits to reward and compensate. 15 different contributors, five of which didn't touch the music, but were helpful in the development or the project management or the visual assets, et cetera. You know, I think there's new creative channels to help bring more people into the table, but I would say generally Twitter is kind of the main resource for all web three artists. You know, the ones that I see doing really well are typically putting out tweet storms, talking a lot about the drops that they're doing, why they're doing it, and how they're doing it. I see a lot of artists doing these sort of collector chats and more private investor relationships. If they have a bigger release coming out, it's not only about posting the tweetstorm, it's also about going and finding time to talk to some of your bigger collectors one on one and being like, Hey, what do you think about this? How can I get you involved? What are some feedback you would have on this drop? Are you excited or not excited? And I think typically with music, traditionally, how it's released, Artist makes a song, they have their internal team, and then they put it out to the world. And when it's out to the world, everyone forms an opinion on it. With Web three music, a lot of the time, there's a lot more happening behind the scenes before the release actually comes out, so that when it is time for one of these releases to happen, you start to see these things sell out because there was a lot of work put into the record before it came out, and that's not untraditional from typical music, but I think the difference there. Active conversations with your collectors is very new. You know, typically it's like people around a table at a major label that are talking about like, how are we gonna market on TikTok? But this is different because it's going and having very direct conversations with the people that are supporting you the most. And in aggregate that sort of. Neural net of all these different people talking about your drop in tandem. It creates this sort of network effect where when it does come out, there's almost a rippling effect that helps to make the drop become more successful. And I think that's something that I'm seeing being replicated time and time again.[00:36:44]  Dan Runcie: And I know that, as you mentioned, Twitter has been a great space for artists to be able to share things. There's so much. There's so many people in the one three community that are active there, and I think have added to a lot of the discussion and narrative around it. But as someone who's active on Twitter myself, I know how small sometimes those circles can feel. What other platforms or what other areas are you seeing some of these conversations happen, and how long do you think until we're starting to see it not just becoming necessarily a Twitter thing, but it is expanding to more platforms and it's becoming a bit more of. Early majority, at least being able to catch on.[00:37:22] Cooper Turley: I think it'll be Twitter for the foreseeable future. You know, I think that's just where the vast majority of Web three people live. And I think it's actually the one social platform where you can talk about Web three and not get ridiculed for it. You know, I think across nft, TikTok, et cetera, it's very taboo to talk about NFTs, and I don't think that those users are really as tapped into sort of like the valuable aspects of Web three. And so I think for the immediate future, let's call it the next one to two. Twitter, I think is gonna be the source for all of that. And to your point, some of these communities do feel very small, but I think that's actually one of the biggest differences with Web three. You know, I think with traditional marketing platforms, we optimize for impressions, we optimize for plays, for eyeballs, et cetera. On Twitter, if you have 50 people that are consistently showing up to each of your drop, you're doing an amazing job. You know, I think that this is the biggest thing that shows why Web three is valuable is you don't need to have a million monthly listeners to make a couple thousand bucks. If you have 25 people that are willing to come and support you, you can make the same amount of money and have a deeper relationships with those individuals. And so I always say to artists, Even if you're only getting three, five reactions on your tweets every single time, that's very impressive because the benchmark to move the needle and Web three is a lot lower because every individual person is much more active and the quality of those conversations is much higher than what you could expect from a TikTok, Instagram, et cetera.[00:38:36] Dan Runcie: And I think in general, like with those platforms, you're more likely to reach people who are just casually following or passively engaging versus whether if you're already in that audience that's Twitter, you're likely reaching a more active fan base to begin with. And it gets to this whole concept of where can you not just reach followers, but reach people who are actual fans of their music? And a lot of the platforms that have grown tremendously large in the past few. Are much more overindexed on followers and less overindexed or or under indexed rather on true fans.[00:39:08] Cooper Turley: Yeah. And so there's still a lot to be done there. You know, I do believe there's a world in which artists that are using Web three and music NFTs become viral acts that have fans in the traditional sense. I try not to like focus on that too much because there's a lot of work that needs to be done to get there. I think that will happen, but I don't think it's healthy to think. What that looks like today, because frankly, we're just far away from it, you know? And I think for me, helping an artist get a thousand collectors is much more important to me than how do they get 10 million streams on Spotify? You know, if the ladder happens, that's great. But I think the former's actually a lot harder to do because it's a much smaller design space. But, you know, I think there's something really exciting there. And a lot of the work that I do as a collector is really just educating fans on like, why would I wanna collect music? Like, why would I wanna participate on the other side of these? I think from the surface, a lot of bands got really bad experiences with NFTs because artists were just selling random drops that didn't really have any merit to them. They didn't actually care about the output. They were just kind of doing something to be cool at the time. But now what I'm starting to see is that these emerging artists, they really care about their NFTs. They care about them just as much, if not more, than their release strategy on Spotify. And for those demographic of artists. If you are a fan that's looking to sort of develop a brand for yourself around. I believe that this web through music space is a great opportunity to do so. And what we're now seeing is a very small group of music collectors who are building their entire Twitter brand around collecting drops on sound, or writing newsletters or writing mirror posts, et cetera. And I think those are the type of people that I want to try and amplify in Spotlight because it's a very much two-sided marketplace here. And in order for these artists to be successful, you also need to have collectors that are willing to be active in these markets and see success from the music they're collecting as well. [00:40:42] Dan Runcie: This is one thing that I keep in mind. More broad trends about like what's happening in music, but I also keep it in mind with artists and creators who are trying to expand beyond the folks that they're naturally reaching. Because if you're only going to try to focus on the people that you naturally reach on a regular basis, it, it can work. And I do think that it's kind of like shifting a bit of the psychology, because I think so much of us have been conditioned to just focus. Who is the next person you're gonna reach? What is your customer acquisition cost? It's not just artists, it's the whole industry that's thinking about it this way, but you can build a sustainable business if you are just focused on the pub shot reach. I know it's a bit of that thousand true fans mentality applied to web three, but I think that there's plenty of nuances there. And sometimes it could be less than that. Sometimes it could be more than that. But I think there's some really unique things. One thing. Interested to hear your thoughts on though is just with artists specifically and fans and just the nature of that relationship and whether or not the tokenization of their relationship changes anything. Right. Because I feel like with fans, there's a lot of this conception that because they don't feel like there's nothing that's like financially tying them to them, maybe that brings up, you know, a different relationship than they would if they do feel actually, you know, financially tied to the. Is there any downsides or is there anything that you think of in terms of how that broader tokenization of the relationship changes any of that dynamic or expectations?[00:42:21] Cooper Turley: I definitely think there's downsides, and I think there's a lot of pressure that comes with it. You know, I think for artists that are selling nfts, you need to think about new mechanisms. Like, what is my floor price? What is my volume? Is this asset trading above what I sold it for in the first place? That's a lot of pressure, you know, and that takes a lot of time to get right. I think that over time people are gonna recognize. Collector is getting mad about floor prices. The same as a fan being mad about the type of song that you're releasing, where that's just kind of the name of the game. You know, everyone's entitled to their opinion, but it's not like there needs to be a huge reliance on that. I think the one thing the artists need to focus on is actually being consistent with what they're putting out in releasing. If you're giving it your best effort and you're doing things to add value back to early collections, to be able to engage with your community and doing things that show that you're being intentional, that to me matters a lot more than like, what is the price of the tokens themselves, because I think over. We need to recognize that not all fans are the same, and it's not like all music is only gonna exist as NFTs. What's gonna happen is that all these songs are gonna be available on Spotify. If I'm a passive fan, I can go and just listen to that song. There's no expectation for me to ever have a financial relationship with that artist. But the new unlock here is if I wanna go deeper on that relationship. This is something that I've wanted to do for a long time, and I believe many others do. I can now collect something that represents a limited version of that song. And for other people that are excited about that artist's career. Not only can we share on our Instagram story, we can now go into a private collector's chat and say, Hey, I was able to pick up this sold out drop. I was able to pick up one of their early rookie cards, and I think what we start to see is that the fan base gets a little bit more. It's delineated across different verticals where there's some vans who are just showing up to a concert, you know, all the time. I go into GA at a show and I'm like, how do I get these people to buy music and FT use? And the reality is most of them probably never will because they just wanna go and have a good time. They wanna party and forget about their nine to five job. And that's perfectly fine. But I think for the small subset of people who are really passionate about music, those active listeners being able to answer into these more deeper relationships, it's really gonna empower curation in a very new way. And I think the analog I would make here, Sites like Height Machine really drove the success of SoundCloud in a very massive way. You know, there was a demographic of curators who were saying, Hey, we love this type of music. There was all these different blogs, like This song is sick, you know, all these EDM blogs, pigeons and planes, et cetera. They were adding cultural zeitgeist to these songs. And I think the financialization of these assets is not only gonna incentivize people to wanna curate and write about these different article. It's actually gonna give them the means to sustain themselves on the back of doing so. Or if I'm a curator who's really successful at identifying talent, I don't need to go work for a major label as an a and r because I can simply spin up a newsletter on sub stack, go and look at the drop calendar on sound, xyz, and then the event that I'm able to really identify. Successful drops, I can actually start to make a living on the back of my taste. I think that's something that hasn't really existed before and something that I'm personally really excited to see happen more and more in the industry at large.[00:45:08] Dan Runcie: That last piece is huge because it makes me think back to the blog era, especially at hip hop with just. How popular it was when, whether it was sites like Two Dope Boys or Now, right. And their influence on being able to have a mix tape that they're putting out. They're putting their stamp for approval. They're the media channel that's sharing the tape, that's being released from Dap Piff and being like, Hey, here is this new kid Cutty record that you need to listen to a kid named Cutty. You know, this is the mix tape. Check it out. Or the cool kids, or Charles Hamilton or whoever, one of these artists, The difference though, is that even though the artists in the blog era and the people who ran these websites in the blog era were so influential, and I think at a time they even had more influence than the major record labels did. They didn't capture the upside. They created the culture. They created the influence, but they didn't capture the upside. This allows that to happen in a way. The next version of Two Dope Boys could essentially be the one to, like you said, they could start up a newsletter, they could be able to release this and be like, Hey, I'm the one that is putting this investment in and then this is gonna stay there from here on out. That's something that's really special. And to be honest, I don't feel like there's enough discussion around that. So I'm glad you brought that point up.[00:46:26]  Cooper Turley: Absolutely. And I think the one, the one thing I wanna zoom in on there, That doesn't require the artists to sell any of their masters. You know, them putting out 25 editions of a collectible song that a curator can go and buy and then help spread the word about within their pockets. There's no conversation around like, what percentage master publishing does this curator now have? Do I need to bring them into my creative decision, et cetera. It's a new market that now exists on the back of taste and curation, and I think in a lot of ways, music NFTs get pushed back cause they say, oh, you don't actually own the rights. Why do these things have value in the first place? I'm a big believer that community has a lot of value to it. You know, I don't think that art needs utility or needs IP ownership or Masters or publishing to be valuable. I think these curators are able to tell very compelling stories about the impact that music has and being able to add a new market into the equation through music and fts, it really unlocks a new mechanism for artist fandom that I think is very simple to understand. I don't think the average fan will be able. Rationalize what a master or a publishing right looks like. But I think they can understand what a rookie card or what a limited edition of songs looks like. And so I'm very excited to watch these markets mature. And I think that ties back into why the fund is collecting music, NFTs, cuz we believe that. More people are going to be able to understand what it means to own a collectible than they are going to know what it means to own masters or publishing. And so you sort of have these two different sides of the equation. I think they can both work in T and in unison with one another to make the aggregate music market more valuable as a whole.[00:47:51] Dan Runcie: And I think your fun will be a, a test to see how well that works. So, It'll, it'll be, it'll be fascinating. I feel like the structures make sense. You have each day, each piece of it there. I'll be very interested to see what the returns end up being like for each of those categories. Right. Of course, you know, most of the fund is looking at your precede and seed stage music and web three startups, so I assume that it's naturally gonna be what the expectations would be for any young startup. But I'm very interested to see what those expected multiples or the exits will be for the NFTs and then, The artists seed round investments themselves. [00:48:26] Cooper Turley: Absolutely. I will say that the vast majority of the fund is going into web three companies, but time and time again, people get really excited about this idea of investing in artists. Again, do not have the answers whatsoever, but. I'm noticing people are really excited about that ballpark. So I'm excited to at least start that trend with this first fund here and in the future. I'm hoping that we can create playbooks for many artists who don't even use nft, use their web three to also start to enter in these agreements as well. But you know, I'm really excited about it. You know, like I said, I've been in music for 10 years, crypto for the last five. I feel like this fund is a great way for me to really fuse those two passions together. And it's a very small market right now, but if you made it this far in the episode, I hope that this is something of interest to you and I would love to keep the conversation going if you have more.[00:49:06] Dan Runcie: Definitely. Before we wrap things up and let you go, one of the quotes you had mentioned, you referenced this earlier, the conversation too, that we're not at the point in Music Web three, where Drake is gonna come through and drop an album or a Bieber or a Post Malone or one of those artists. If you had to pick a year that you think that will happen though, what year would you pick?[00:49:26] Cooper Turley: Uh, 2025. Okay. And I think what's gonna happen is that a lot of the biggest artists in the world will just happen to have NFTs under the hood. You know, I don't think it's gonna be like one of those major superstars doing their first drop as NFTs. I think there's like a developing culture of artists right now that are gonna really gain a lot of momentum over the next couple of years. And when they release that major album, you're gonna look back and see that their first songs actually happen to be minted as the collection of 25. A lot of major artists are really excited about this. You know, I spend a lot of my time talking to artists who are currently signed to deals that are saying, Hey, I wanna drop, but I can't because the major label doesn't let me. And I think what's gonna happen is that major labels are gonna wake up to how valuable these early collections can be. And instead of blocking their artists from doing these drops in the first place, they're gonna start to really ramp up and get engaged with them too. So instead of just like, how do we put this album out on Spotify? It's gonna be, how do we develop a relationship with these platforms and onboard our catalog into the. So the biggest thing that I see as a question mark for web three is do we recreate the same systems of Volt? You know, is there going to be a world in which the major labels are just driving the vast majority of NFT sales? I think you're already seeing early examples of this like Warner's partnership with Open Sea, and one thing that I think is really important for us to recognize is that artist independence is very, very valuable. You know, I think that artists owning their own rights and knowing how to run their own companies and run their own business is extremely valuable. And so I'm hopeful that there's a world in. Artists can coexist with labels in a more free form matter. You know, I'm hoping that there's a world where artists can upstream their most viral song to a label, but still retain the rest of their catalog. But I think what's gonna happen over the next year or two is there's going to be. A shuffling of different power dynamics from artists to label relationships. And I think the most forward thinking labels are gonna recognize that it's okay to give up a little bit of control so that an artist can run their business more properly. And if you have 20% of the biggest artists in the world, that's probably more valuable than having 80% of someone who's not really doing much with their career. And so I'm eager and excited to see what those relationships look like and hopefully try and, you know, form some of those early stage relationships along the way.[00:51:41] Dan Runcie: But it's to your point, yeah, they would rather have 20% of that than 80% of the field at this point, so, mm-hmm. , I think we'll see more of that and actually we'll see more of that, not just involving multimedia, but involv. More merging technology. So yeah, it's only a matter of time. 2025 is earlier than I thought you were gonna say, but things move quick, so we'll keep the, we'll keep an eye out for it.Cool. Absolutely. Yeah. Thanks for coming on. This is great.[00:52:07] Cooper Turley: Thank you, man. I just wanna say, I really appreciate this podcast because you're so well versed when it comes to both the music side, the tech side, and the financial side. I think that it's, Um, difficult for me to find pockets to really talk about the financialization of music. You know, there's a lot of pushback that comes from it, but you know, the way you structured this conversation I think really gives a clear picture of why I'm excited about more of the financialization of music. I think it gives a lot of credence to emerging artists and sort of the way I'm thinking about collecting. So really appreciate you making this happen. I think it was a fantastic episode. I'm excited to share with all my friends.[00:52:37] Dan Runcie: Likewise, no. These are the conversations that need to happen, right? The more that people can talk about it, the more it just gets in the open and the faster things get to where it should be.So thank you for making the time. This is great. [00:52:49] Cooper Turley: Yeah. The last thing I'll say here in closing, I write a weekly newsletter called This Week in Music, NFTs. If you're interested in any of this conversation,every Monday I publish a short edition that talks about upcoming drops, top stories, bonus read from the community. So if you're looking to get more involved in the web three space, that's where I'd recommend getting started. And then if you are a founder or an artist that's building something and looking for investment, the best place to reach me is via email coop Coop records xyz. But again, thank you so much for having me, man. This was a fantastic conversation. I really appreciate your time.[00:53:18] Dan Runcie: Thank you. And if you're not following him on Twitter and you reactive on Twitter, make sure you do that. What's your Twitter handle?[00:53:23] Cooper Turley: Twitter is at kooopatroopa. Good stuff. Thanks man. Thanks for having me.

Today's episode is a two-parter. Part 1 is on Spotify and YouTube’s billion streams and views playlists. After reviewing both lists, there’s a lot to learn about the streaming era and the strategy for both platforms respectively. I broke it all down with Tati Cirsiano, a music analyst at MIDiA Research.Spotify’s list is more reflective of passive consumption. Spotify’s top-performing songs are more correlated with radio hits than YouTube, which is a more active consumption experience.YouTube’s Billion Views Club has more international stars than Spotify. With streaming continuing to grow across the world and plateauing in the United States, YouTube’s list more reflects future music consumption. Part 2 is with Glenn Peoples from Billboard. We talk about its new Global Music Index that takes the publicly traded stocks from the biggest music companies in music to give an overall picture of stock performance for the industry. Here’s everything Tati, Glenn, and I covered on the show:[3:03] Immediate takeaways from each Billions Club playlists[5:15] How “meme traffic” impacted both platforms[9:37] Passive consumption vs. active consumption[12:11] International differences between Spotify and YouTube[14:57] The Justin Bieber conundrum [16:36] How Spotify and YouTube enable fragmentation of fandom[21:26] Gym-going and seasonality’s impact on streaming numbers[26:14] Short-form videos eventual effect on YouTube streaming[27:55] YouTube vs. Spotify competition intensifying [35:58] MIDiA’s upcoming predictions report[38:33] What % of the Global Music index Spotify takes up[39:23] Why music industry stocks fell further than the overall market[46:25] Streaming platforms increasing prices[50:22] What goes into calculating Average Revenue Per User for Spotify[55:23] Spotify’s podcast strategy & acquisitions[59:18] How much of Trapital’s audience comes from Spotify[1:02:53] Why TikTok should launch it’s own streaming service[1:09:39] What Glenn expects 2023 to look likeListen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSSHost: Dan Runcie, @RuncieDan, trapital.coGuests: Tati Cirisano, @tatianacirisano, Glenn Peoples, @theglennpeoples Download The Culture Report here: https://trapital.ck.page/a23b7a6a4aSponsors:MoonPay is the leader in web3 infrastructure. They have partnered with Timbaland, Snoop Dogg, and many more. To learn more, visit moonpay.com/trapitalEnjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapitalTrapital is home for the business of hip-hop. Gain the latest insights from hip-hop’s biggest players by reading Trapital’s free weekly memo.TRANSCRIPTION[00:00:00] Tatiana Cirisano: Spotify's list is more of an accurate reflection of what the passive majority listens to, whereas YouTube is more of a reflection of what people are actively fans of and actively engaging, which is interesting because that was a question that we asked in our last episode where we were like, how do we measure, like, what are new ways to measure consumption? And I said, well, it'd be interesting if we could actually measure, you know, active consumption versus passive. And now here I'm looking at these two lists, I was like, oh, this is actually potentially an example of that.[00:00:37] Dan Runcie: 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 executives in music, media, entertainment, and more, who are taking hip-hop culture to the next level. [00:00:57] Dan Runcie: Today's episode is a two-parter. We normally don't do two-parters, but these topics were so closely linked, it made perfect sense, so we had to do it. The first part of this episode is a conversation I had with Tati Cirisano from MIDiA Research, and we talked about the Billions Clubs. Spotify and YouTube both have their respective playlists that have over a billion streams and views respectively. So we talked about what can we learn from both of these playlists together. What does it tell us about the most popular songs that do well on streaming, but also what can it tell us about these two platforms individually? What are the differences between the two playlists? Are there certain songs that perform better on others versus that and why? And what that means more broadly for the sector, Just given how big these companies are. Second part of the conversation, I talked to Glen Peoples who works for Billboard, and he recently released this Global Music Index, which is a value-based index that takes the publicly traded stocks from many of the biggest companies in music, combines them, and gives us an overall picture of how we can look at the performance of the music industry, at least in the publicly traded companies. Hint, it's been a down year for stocks overall, so nothing too surprising there. But we talk specifically about Spotify, who stock is noticeably in a tougher place, at least from, where it was year to date compared to some of the other companies. So we talked about why that is, what to expect, and more. Really great conversations. Let's start things off with Tati. Hope you enjoy it. [00:02:31] Dan Runcie: All right. Today we have Tati Cirisano back with us from MIDiA Research and we're going to dive into the Billions playlists that are both from Spotify and YouTube. What a fascinating list that's like a tripped-out memory lane, telling you what songs are popular, but also how these lists are different. I feel like they both have somewhere between like 3 to 400 songs, but there's a whole bunch of different trends here. I know that we both have a bunch of notes here, but Tati, I'll start with you. What stuck out to you most when you were looking through these lists? [00:03:03] Tatiana Cirisano: Oh my gosh. So there's so many things. I guess I'll start with the things that stuck out to me that don't have to do with differences, but just stuck out to me in terms of just looking at both. And one was that I felt like there was definitely a dominance of songs and artists from the last decade and maybe even just the last five years, which was interesting to me because there's been such a debate recently about is old music or what we call catalog, which is often not actually old music. But is it sort of cannibalizing new music? Does new music have more to compete with? And that whole argument. So it was interesting to see that there actually weren't that many or weren't relatively as many older songs. I believe the YouTube Billion Views Club had, like, one song from the 70s. It makes more sense with YouTube. And I think YouTube had even more dominance with more recent songs. And that kind of makes sense because if it's visual-based, maybe some of these songs we don't have the music videos, or maybe they're not as good. But I thought that that was interesting just off the bat from both ways. [00:04:03] Dan Runcie: Yeah, I would agree. I think that YouTube's list did trend much younger, and there's a whole MTV effect of just what music videos look like then and now. But I also feel like what's important is with both Spotify and YouTube, that when these platforms accelerated in growth, a lot of the artists that were releasing music around those times accelerated and growth too. And I feel like I saw some trends there. If I think about YouTube and its rapid growth phase more so in the early 2010s. There were a few songs there that I saw, whether it was like a party rock anthem or songs like that, that streamed really well on YouTube. Still nowhere near a billion streams on Spotify. And I think on the flip side of that, on Spotify, there were a few songs that were in that late 2010s era when Spotify was in its rapid growth phase that weren't on YouTube's playlist. So that was one of those interesting things. Like, for example, I think Drake's song Nice for What, a billion streams on Spotify. It's in the Billions Club, but it wasn't on YouTube's list. And I remember that music video, I think it's at the skating rink and he has, like, Issa Rae and all these people in it. So there was definitely some influence of the platforms too. [00:05:15] Tatiana Cirisano: Yeah. And that reminds me, too, of with the influence of platforms, it felt like, there were, so okay on both platforms. I felt like there were a lot of songs that were driven by, like, a viral hit or a novelty, which kind of just goes to show how embedded music has become in, like, meme culture and social media and just like online culture in general. But it also, like, looking at the differences within that, it felt like, this is like, I mean, you'd need to do more of a real, like, study and look at the actual numbers on this, but just from scrolling over the list, it seemed like, more of the TikTok traffic is going to Spotify. Like, there were a lot of songs that had a billion streams that I just remember being moments on TikTok, like Dreams and the Roses, Imanbek remix, like those songs and many others had passed a billion streams on Spotify, but had not cracked the YouTube list. And then on the flip side, YouTube had a lot of stuff that was more, like, just these, memes about, I'm trying to think of an example, like the Dame tu Cosita song and video, like that. There were actually an abundance of songs on the Billion Views Club for YouTube that were linked to these videos, including Crazy Frog. [00:06:24] Dan Runcie: I saw that. [00:06:25] Tatiana Cirisano: It like that was just, like, that was a moment in time in meme culture that kind of preceded TikTok humor. I don't know, like you can almost track meme culture's impact based on these two platforms lists as well with TikTok driving more traffic to Spotify and sort of the old, almost like Vine humor going more to YouTube. [00:06:45] Dan Runcie: That point makes me think of two things I also saw as well. So I believe the first YouTube video that hit a billion streams was Psy's Gangnam Style. I don't think that song has a billion streams or anywhere close to that on Spotify's list, which I think speaks to your point about just the visual nature of that. And that of course is a pre-TikTok era. The other song I think that lines up with this a bit, and this is because of memes within the music video itself is Nelly and Kelly Rowland's Dilemma music video. That is the most popular YouTube video that Nelly has, and I'm pretty sure that Kelly Rowland likely has too. And it's because of this one scene in the music video where Kelly is texting on this 2002's phone and she has Microsoft Excel open, and that's what she's actually using to text. So they're both, you know, generating money. And Kelly was even talking about an interview semi-recently talking about, I didn't even know what Microsoft Excel was. They just told me to type. But over time, and now we obviously have a different relationship with texting. That type of event can blow up on YouTube in a way that not necessarily going to Spotify. [00:07:54] Tatiana Cirisano: Right. Like, there's an inherent difference in just what you're going to do on these platforms. Like, there's a number of reasons why you might look up a music video on YouTube. Maybe you like the song, maybe there's a celebrity cameo, maybe somebody told you that. It's a crazy, wild video and you're just curious. Like, there's a lot more reasons I think than there are reasons why you would stream a song. So that just by definition kind of opens up a lot of differences in these lists. [00:08:18] Dan Runcie: The other thing, too, that you mentioned earlier was the decades and how YouTube's list only had one song that I think that was before 1980 and there was only a handful even from the 80s and the 90s as well. And while Spotify had a bit more, I still think it was quite less. Last time I looked at Spotify's list, it was less than 10% of the 300-plus songs that were more than 20 years old. And I have to assume YouTube may be even closer to 94-96%. Part of that, I think, as you mentioned, is music videos, but I also wonder is part of it with Spotify having a bit more of a close link to radio play and just things that were popular on the radio at the time. Like for instance, a song like Goo Goo Doll's, Iris, that was on Spotify's list is not on YouTube's list. I don't necessarily think the song had like a memorable music video necessarily, but I think it's the audio of it, it makes people think of, you know, what was that movie that it was in? I'm trying to remember the movie that it was in. It'll come to me, but there was some 90s movie that was in, I'm drawing a blank on it right now. Oh, City of Angels. So it was in that, and then, but I just don't think that people, like, recognized the music video they would like, it wasn't necessarily this big, like TRL hit the way that like a boy band song was. [00:09:37] Tatiana Cirisano: I noticed the same thing where looking over Spotify's list, it felt very much like just a list of every radio hit of the past 10 or 20 years that it was really, really tied to that. And I wonder, like, this kind of brings me to another thing that I wanted to talk to you about with this, which is how my sort of theory with another reason that these are different is that Spotify's list is more of an accurate reflection of what the passive majority listens to, whereas YouTube is more of a reflection of what people are actively fans of and actively engaging, which is interesting because that was a question that we asked in our last episode where we were like, how do we measure, like, what are new ways to measure consumption? And I said, well, it'd be interesting if we could actually measure, you know, active consumption versus passive. And now here I'm looking at these two lists, I was like, oh, this is actually potentially an example of that. And the other reason that came to me is because at MIDiA, we've recently done a report on looking at different types of entertainment and how much of consumption is in the background of another activity versus focused. And YouTube, like, people that watch music videos on YouTube are much more likely to be doing that as a focused activity in the foreground rather than something in the background, which makes sense because it's visual, there's, you know, social features to it, et cetera whereas they're a lot more likely to just put on their Spotify music in the background of something else. So I wonder if that's also part of the reason that Spotify seems to have more of a tie to radio and those songs that were just kind of popular for everyone whereas YouTube is more what are the songs and artists and videos that people are like engaging with.[00:11:09] Dan Runcie: That's a good point. It makes me think, well, on the YouTube side, I'm much more likely to listen to a YouTube playlist run, right? Like, I normally don't do that when I'm watching YouTube. I know YouTube has playlist, but I'm more likely to put a Spotify playlist on, which speaks to that. And I know some of the stuff that you've researched and the team has researched on MIDiA as well, is just this whole nature of probably a bit more on the digital stream provider side, but how to measure active versus passive engagement of, or actually listening to a song. And maybe this is a closer way to get a gauge for that because, you know, especially when these artists have these big week sales that'll come out and we'll see the numbers come through, it would be great to know, okay, how many people said yes, I want to listen to this Taylor Swift song from the Midnights album as opposed to people being like, oh, it just happened to be what's dominating today's top hits or if I'm listening to, you know, the number 50 or the top 50 songs in the US. These are the ones that happen to play. [00:12:11] Tatiana Cirisano: Yeah, yeah. That makes total sense. And I think the other reason why Spotify's list probably is more tied to radio is because it's a lot more, like the user base is less international than YouTube 'cause that was the biggest difference, looking at the two lists was just how few internet, like non-Western artists there were on Spotify's Billions Club versus YouTube's. [00:12:36] Dan Runcie: That stuck out too. And I think YouTube as well also had a list of artists that had the most Billion Views Club songs were and artists like Ozuna were high up on that list. I want to say he had at least 10 videos on YouTube that hit a billion. But on Spotify, it's far less. I think J Balvin was another one too, where there was a big discrepancy there. And yeah, I think the fact that YouTube has had much more of a market share and in general listenership in these regions outside of, you know, US and Western Europe as opposed to YouTube. So maybe part of that, where it's a signal of like, okay, this is where Spotify's clearly trying to grow and has been trying to get more share in. So, like, if Spotify achieved its goal, then it likely would have more of that and vice versa.[00:13:28] Tatiana Cirisano: Right. And then it is YouTube's sort of a more accurate representation of, like, what the music landscape of the future looks like in that way where it will be less dominated probably by Western artists. As you know, streaming sort of infiltrates all these other places. And that is so interesting for, like, the fragmentation conversation that we've been having because it means things are just further fractured and, you know, there's going to be lots of artists and songs on these lists that we've probably never heard of. Like, it was so interesting to me because part of the, like, excitement that I had to do this little project of, like, opening the two and comparing them was, I was excited to be surprised. I was like, I want to see what things are on the list that I'm like, I have never heard of that. Or what is that? How did that end up here? And I did not have that moment once looking at Spotify's playlist. But looking at YouTube's, there were so many videos and so many artists that I just had never heard of, and that was exciting to me. So I wonder how much that's a product of YouTube specifically versus that being what will happen inevitably when streaming is more widespread.[00:14:34] Dan Runcie: And were most of the surprises that you had, were most of them from an international perspective, or were there any Western-based music surprises? [00:14:43] Tatiana Cirisano: That's a good question. There were definitely a handful of Western ones that I can't think of right now, but the majority were probably just artists I'd never heard of or songs, yeah, artists I didn't know anything about that had billions and billions of views. Yeah, I don't know. Let me think about that. [00:14:57] Dan Runcie: Yeah. While you're thinking about that, one thing that stuck out to me was there were certain artists that I think surprised me both in a way of, oh, I thought there would've been more here, or there were actually a bit less here. One artist is Justin Bieber. So I know that Justin Bieber is very popular, but if you would've asked me who were the biggest artists of the 2010s, I probably would name four names, maybe even five names before I named his name. But if you look at, even if you're just looking at Western artists, the artist that is the one with the most songs on Spotify and the one that I believe has the most songs on YouTube as well, Justin Bieber is in the top three of both of those lists. I believe it's at least nine songs on Spotify and at least maybe 10 or so on YouTube. And there's something about that fandom that I didn't necessarily, I mean, I knew that he was huge. I knew that there were so many songs that were quite popular, especially the album that had, like, Sorry, and Love Yourself. Like, that one was huge, but I thought that there were other artists, like for instance, an artist like Beyoncé or even someone like Taylor Swift, who, I don't believe that Beyoncé had a song on the YouTube list at all, or a song that's really close to that. And at least up to now, I don't think that Taylor Swift has a song on Spotify's Billions List. I think that Blank Space will probably get there eventually, but I don't think she has a song this moment that's on that list. So to see the two of them who I think a lot of people largely think are two of the largest musicians in of the past decade, but to see someone like Bieber just have hit after hit on both of these lists, I was like, wow.[00:16:36]Tatiana Cirisano:That's so interesting, the Justin Bieber conundrum of all of this. Okay, I have a couple of thoughts on that. I think, so he was sort of Made on YouTube, right? That's where he started posting clips. That's where he was discovered. And I think something else that this ties into that I wanted to bring up is how, with YouTube, the artists that reach these Billion Views Club, I think probably are more likely to have sort of built a community on YouTube which Justin Bieber did, and that was kind of like the roots of his fandom. So when I was reading YouTube's, like, blog about the Billion Views Club, and there were a bunch of artists' quotes, and a lot of them had to do with the artist saying, you know, like, YouTube was a place to build a community. And Alan Walker was one of the artists who said that. And he was someone who, he's an electronic music artist who when I was looking at the YouTube Billions Views Club, he came up again and again and I was like, it seemed random to me because he's a great artist. He has a big community of fans, but I just didn't think that he would have billions of views. But he seems to credit the community aspect for that. So I think that could be part of it. But then as soon as you said, oh but he's also one of the top artists on Spotify, I'm like, okay, but that's a completely different story because there's no community building on Spotify. So is it just that the fans are, that obsessed with the music that they're, you know, maybe migrating over and streaming there as well, or are we just misremembering, you know, how big of an impact Justin Bieber had? And then that brought me to thinking about how, I mean I think this relates to Taylor as well, but they both built their fan bases at a time when things were just kind of a lot less congested. So I think it was in many ways, easier to get a billion views or billion streams on something a couple of years ago than it is now, now that people's tastes are so fragmented. So maybe that's also part of the reason why, like, I wonder how many of those streams came from, you know, pre-2015 or something versus from then on. I wonder when they were accumulated. So yeah, that's sort of my rant of thoughts. [00:18:41] Dan Runcie: That one about Bieber is a good one because I didn't think about that, but I think it's absolutely right. He was doing all those cover songs of all these other artists when he's like a teenager. He's growing the base there. And to the point that you had brought up in an article a couple of months ago, we talked about the last time we're on the podcast, he is in a different category than someone like a Beyoncé or Taylor Swift. Like, when Taylor made Teardrops On My G uitar. I don't even like, that was probably around the same time that YouTube started. Like in some ways her fandom predated so much of what people know as music. And of course, Beyonce became a solo artist from Destiny's Child well before YouTube even started. So I think that's a good point there with some of it. The Spotify thing though is interesting, yeah. I mean, I think those songs did get a lot of radio play as well. Like everything off of that album, that Bieber's album that Sorry came on as well. Like, they got a ton of radio plays. So that ties into the Spotify piece of it, too, and maybe a little bit of misremembering of certain things of, well, and you know, like I'm a little bit older than the custom Bieber demo, so there could be some of it there where they may not hit me in the same circles that, the same way that, you know, someone did with Beyoncé for instance.[00:19:53]Tatiana Cirisano:Yeah. I have another thought related to this that I feel like I'm struggling to articulate, but I'm going to try, which is that on the Spotify list and the YouTube list, I thought there was more overlap when it came to which older artists were on the list than there was when it comes to newer artists. And I wonder if that is also sort of further proof of this fragmentation that's happening because it would make sense that if a decade ago, two decades ago, people kind of had less to choose from to listen to. Everybody kind of has the same favorite artists from those decades that they've listened to enough to reach a billion streams. Yet now that people have more choice and things are fragmented more, their favorite artists and songs today are more varied. [00:20:39] Dan Runcie: Yeah. Yeah, no, I think there's something there because if you think about it, the lists are quite similar. And I think even if you look at YouTube's list, which I think even though YouTube's list is less reliant on radio, the biggest songs they have from the 80s and 90s are still the same songs that people have heard in bars and in stadiums and in TV commercials for decades now. So there's consistency there. Things do start to get a bit segmented to your point of where things are right now. So both of these platforms, in many ways enable the fragmentation of fandom. Their algorithms made it easy for people to have their own circles. So I do think that that piece of it is true. So I think that's a good point. [00:21:18] Tatiana Cirisano: Yeah. Okay. I'm glad I could put that into words 'cause it was one of those things where I had this thought and was like, does this make sense? [00:21:24] Dan Runcie: Yeah. Oh, yeah. [00:21:25] Tatiana Cirisano: Yeah. Fascinating.[00:21:26] Dan Runcie: Another thing too, that stuck out, this stuck out a bit more on Spotify's playlist than others, but how certain songs have shifted from when radio, for instance, was more playing songs that I think people more often wanted to hear in their cars. But Spotify, it's on-demand, it's everywhere. I think, for instance, workout music is something that we've seen a pretty large uptick on with Spotify. A song like Eminem's Till I Collapse, which is in the billions playlist for Spotify, I don't think I heard that song once on the radio. Maybe I'm misremembering things just relative to how big Eminem's hits were in the early 2000s. But that song is one of his most played songs. And I think it's because it's a song that a lot of guys listen to when they want to work out. Maybe it's something that they also will play, like, I don't think they to like LA Fitness necessarily like on the speakers, but I think it's more so of like a, no, let me go listen to this while I try to, you know, set PR on the bench press or whatever. So I feel like there's things like that, also seasonal music, right? Of course, just Mariah Carey and some of the records and accolades that All I Want For Christmas Is You has continued to reach and all of the remixes and versions she's done of that song, like that doesn't happen without streaming, right?[00:22:41] Tatiana Cirisano: I was going to say September was also on there, which, you know, every September everybody starts to sing. That is a seasonal song. So, yeah, no, I totally agree with you. And I also noticed that both lists had a lot of, like, upbeat music, like what you're saying, like stuff that people work out to. And I feel like it's for different reasons. Like I'm Spotify, maybe those types of songs dominate because like you're saying, they're the things that people put on in the background of something. Whereas on YouTube, the reason might be because those tend to have more vibrant videos. Like, I feel like more people are likely to watch videos for, you know, an upbeat reggaeton song than like some acoustic, I don't know, Taylor Swift song, even though she's a massive star. Like, overall, you know? And on that note, I don't know if this is just my, you know, anecdotal takeaway, you'd have to, again, like actually go through all the songs and do some data crunching. But I felt like Spotify had actually more varied in terms of like upbeat songs were on there. But also a lot of, Coldplay, a lot of like earlier Ed Sheeran, like, those more like, not so upbeat, more acoustic songs, whereas YouTube barely had any of those because again, I think there may be less likely to be something people watch the video of. I don't know. But that was interesting just how uptempo the two lists were. [00:23:59] Dan Runcie: Yeah. I would need to go back and check to see if like a song like Coldplay's Yellow. Is that on YouTube's list? [00:24:08] Tatiana Cirisano: It's on Spotify's, but I don't think it's on Youtube's.[00:24:10] Dan Runcie: And that would speak to that, right? It's a more somber video. I'm pretty sure Chris Martin's head is laying like sideways on the pavement in that video, right, or on the bed, if I remember correctly. So yeah, it's just not going to be as, I think, yes. Like, if you have five minutes, like, this is the thing that I want to be able to get to. So yeah, it's such a fascinating distinction. And I think with it, it's clear that with both of these platforms, the two of them are really trying to compete more and more with each other, with both Spotify trying to get more and more international, YouTube trying to have more and more influence just in terms of the overall revenue that they generate for the industry. So I do want to talk about the two of them as companies distinctly, but before we get there, I think that the international piece and just how revenue is generated for each of these streams or each of these views will be an interesting distinction over time because, especially with Spotify, these streams that the artists are generating don't necessarily get weighted the same in terms of the pro rata and the pools that they get put into and then getting separated. So if one artist has a bunch of streams from a bunch of their fans, but a lot of their fans are in places where the subscriptions cost $2 per month to subscribe to Spotify, or there's a over index of free accounts versus paid, like these numbers don't necessarily reflect that, which is fine. I think we're just trying to get a gauge for what listening looks like. But the revenue may actually look very different for, let's say, thinking about like one of these, you know, 80s or 90s radio hits. The person that's listening to that account may be more likely to be paying 10 or maybe soon $11 a month for Spotify subscription if I'm just thinking about what that consumer may be like and therefore essentially getting more revenue per stream than some of the newer artists that may have a younger aboard international fan base. So that was another point that I thought was interesting. We won't have that data, but just based on inference, I feel like that's a trend in terms of where it's going. [00:26:14] Tatiana Cirisano: Yeah, that makes sense. And I also wonder, like, if short form video becomes the more dominant form of consuming video, and the people that are watching music videos on YouTube shift to watching 32nd videos that use music on shorts, like, what will that do to the revenue mix? And it'll also depend on if the way that UGC platforms payout to the music industry changes where it's no longer this, you know, blanket payment for uses and is more per use. I think there's a lot that could get shifted around there. And I wonder if, like, does that mean YouTube is sort of cannibalizing its own, one of its own sources where people that are watching music videos are now going to shorts instead? Or is there an opportunity? Like, I think there's an opportunity for both. But I guess these are just questions that come up in my mind when I think about it. [00:27:02] Dan Runcie: Yeah, it's like in some ways it's similar to when Instagram adds stories, right? You're trying to get a sense, is this additive or is this going to take away, And I think YouTube's goal is that would be additive, but you're bringing up, I think, a valid thing where it's a little different with music and how you're registering streams. And I do think that there's a certain number of people that the better and better that shorts get, there's going to be less desire to go check out the actual video. And if these songs aren't registering, I think at least for a stream or a view, it's 30 seconds of listening needs to be registered, at least to be counted as a stream. Then if that doesn't happen on a short end, you're just getting these clips, then how does that impact the actual artist themselves, right? [00:27:47] Tatiana Cirisano: No, you put it really well. Like, the better that shorts gets, the more it might actually threaten people going to YouTube to watch the video.[00:27:55] Dan Runcie: Yeah. So many interesting, I think, things to just dive into with this. But I think it's a good point to just talk more broadly about Spotify and YouTube in general, just in terms of where they are, how both of them want the other one. And I think based on these blog posts and based on a number of the letters that, the emails that you'll see from Lyor Cohen when he's describing where things are with YouTube. There's clearly a goal to, you know, establish itself as the leader in the market. And I think the growth has been pretty strong, but of course Spotify, I think still with nearly 200 million paid subscribers is definitely, you know, I think leading on that front. But where do you see this play out in terms of whether or not the trends and clearly what these playlists tell us about the tendencies of these two companies and also where things are going and who we think will be more or less dominant, let's say five years from now? Let's not say 10 years. I think that's a bit too far out, but let's say five years from now. [00:28:51] Tatiana Cirisano: Yeah. Well, I've written about this, I've written a couple of blogs about this, but I think that YouTube does have a lot of advantages, especially for just where the music landscape is going. So one is that, in the streaming world, there's so little differentiation, right? All the DSPs kind of offer the same experience, the same catalog, the same price. But YouTube actually has a differentiating factor in that it's an audio-visual platform, and that they also have shorts, and they kind of have this ecosystem of apps that feed into each other. And that's sort of the second advantage, is that ecosystem aspect where, you know, based on our data, new generations of fans are really looking for more ways to actively participate in fandom and, you know, not just listen to a song, but create content around it. And YouTube has that it has this, you know, creator proposition. In many ways, YouTube was the first, arguably the first, you know, creator platform. The first place that you could post video content online and build a career around it. So, fans want this, but also artists need more ways to directly engage with their fans and monetize and actually not just be discovered, but sustain fandom and build communities. And that's the thing that I think so many social platforms lack, is they can help artists get discovered, but it's still really hard for them to connect the dots. So when you have YouTube, if you think about like the journey of, a fan through the ecosystem, you know, maybe they discover a song on shorts, and they can actually just click it and go straight, you know, go straight to the artist's YouTube page where maybe they watch the video that just came out and then they can go to YouTube music and stream the song, and it kind of creates this more frictionless experience. So I think we're already seeing a lot of consumers spend more of their music time on platforms that let them play around with the music, like the TikToks of the world and the shorts of the world. So if you have an ecosystem that combines that with streaming and the ability to just go seamlessly from one to the other, I think that's really powerful. And that's also why, you know, ByteDance launching a streaming service could really change the game. I think ByteDance and YouTube have a lot of the same advantages in that space. So I think YouTube is well positioned for the current era and what both artists are looking for and what fans are looking for, I guess is how I would frame that.[00:31:22] Dan Runcie: Yeah. I think that YouTube's biggest advantage with this is that A, it still is under a much larger company that prints money from search, which is Google, right? So the fact that it in itself is the second largest search engine, largely because of Google, I think that piece of it will serve well. And I think secondly, the fact that when there's so many more things competing for your attention, whatever can make that have less friction, it can make it easier for people to access that platform as we've seen based on the rise of TikTok, I think those platforms do tend to win out in this area where you're ultimately trying to either capture or monetize attention. And the way that streaming is going, even though I know it can be lucrative for artists that own their assets or have favorable terms, it is a bit more of a measure of capturing attention for a lot of artists and being able to essentially market and position themselves out there to share what they have so that they can monetize elsewhere. And I do think that, I know I've talked about this previously, but just Spotify may be in a little bit more of a difficult position just given the fact that its ultimate goal is still to try to get more monetization from its non-music audio, whether it's your podcast or your audiobooks and stuff like that.[00:32:41] Dan Runcie: And I think that is a little bit of a tougher bet relative to YouTube, China. going with shorts and essentially try to compete more directly with TikTok or just other things in general that are making it easier. That said, I still think that Spotify is more strong from a product perspective of actually being able to, you know, ease of use of listening, being able to find and skip to the song, and being able to listen to a song on my phone you know, turning off the screen and then putting it in my pocket. And I know that YouTube does now allow you essentially to do that if you pay for subscription, but I think the friction, at least in the consumer's mind, is a little different than it is with doing that with Spotify, even because you do that with Spotify for free account especially. So I do think that there are some pros and cons there, but to your point, I do think that because YouTube is moving more in the direction of creating less friction for people to use its product and just the fact that it's visual, it's engaged, and to your other point, it's a bit more directly connected to fans being able to actively choose what they want to listen to, like the data and all those things are going to be more impactful and insightful there.[00:33:48] Tatiana Cirisano: Right, Right. So I think artists will kind of go to wherever the fans and the remuneration opportunities are, and I think YouTube is right now, providing more of that than Spotify is. Like, Spotify is a place where you can monetize scale, but you can't monetize niche. And YouTube is an ecosystem where you can monetize both. And I think there's no reason why streaming services in general shouldn't be a place where you can monetize both. But we haven't really seen that happen yet, and I think YouTube is moving in that direction. So I guess I come at this question because of the work that I do from such a perspective of what do the artists and the fans want. But of course, that doesn't necessarily mean that alone isn't going to, you know, make YouTube overtake Spotify. So I guess I'm a little bit biased just based on the work that I do. [00:34:38] Dan Runcie: Yeah, I could see that. Because there's just so many other, there's just so many factors at play here. It's such a dominant position and at the end of the day, nearly 200 million people in the world are paying for the service and that is much higher than a lot of these other services. It'll be interesting to see how this plays out though. I feel like to some of the points you brought up earlier. Just going back to the Billions Club, if we had this conversation two years from now, I'd be interested to see, one, which old songs creep back up and which songs that have come up recently end up rising up and hitting those places, and does it line up with a lot of the points that we brought up here? So I'm excited to see what that looks like. [00:35:15] Tatiana Cirisano: No, me too. And also what the pace will be like? Will there be just way more songs that have hit a billion streams in a shorter amount of time, or will the opposite trend happen because of fragmentation? Like, I'm not, I'm not really sure. So yeah, as always, excited to see definitely what comes next. [00:35:30] Dan Runcie: Well, Tati, this is great. Thanks for coming to share these insights. And I think now I got to go back and count how many Crazy Frog videos there were on YouTube's list because when I saw that, I'm glad you brought that up. I was just like, my goodness, I forgot all about this trend. [00:35:45] Tatiana Cirisano: Yeah, at least in that ratio, you know, we have confirmed YouTube wins. [00:35:49] Dan Runcie: All right. Before we let you go, what do you have coming down the pipeline? Are there any upcoming research or any recent things that you've put out that listeners should keep an eye out for?[00:35:58] Tatiana Cirisano: Yeah, I would say coming up one of my favorite things that we do at MIDiA Research is our predictions report where every year, at the end of the year, we put out predictions for the coming year. And we also rate ourselves in terms of how much we got right from the past year. I believe our success rate is somewhere above 80%.[00:36:16] Dan Runcie: That's legit. [00:36:17] Tatiana Cirisano: That's great. But yeah, so we always do I believe we always do a free webinar on that. It was free last year. So look out for that because it's a great chance to interact with us even if you're not a client. And it's a lot of fun. [00:36:30] Dan Runcie: Awesome, we'll look out for that and, yeah.[00:36:33] Tatiana Cirisano: Yeah.[00:36:33] Dan Runcie: We'll have to see. I'm curious about what the hit rate will be this year. So definitely let us know what the success rate is...[00:36:39] Tatiana Cirisano: We will.[00:36:40] Dan Runcie: from the ones you made last year, heading into this year. [00:36:42] Tatiana Cirisano: Awesome. Thanks, Dan. [00:36:43] Dan Runcie: Awesome. Well, thank you. This is great. [00:36:45] Dan Runcie: All right. Hope you enjoyed that first part with Tati breaking down the Billions Clubs. Here's my chat with Glenn Peoples.[00:36:53] Dan Runcie: All right. Today we have Glenn Peoples with us who is from Billboard, and he just released this Global Music Index, which has stated that music stocks are down 44% this year, twice as much as the market. And Glenn, it'd be great to start here. What's going on? Why are socks down in the music industry?[00:37:13] Glenn Peoples: Hey, thanks for having me. Well, stocks are down in general. So it's not that just music that's having a tough time at the stock market. You know, a big component of the Global Music Index, which I created for Billboard is Spotify. And Spotify has had a tough year, just like Netflix has had a tough year. There's, I think, enthusiasm for streaming stocks was high at the beginning of the pandemic and dropped quite a bit since then. And investors are not looking at growth so much as looking at margins, looking at profits, and so they're expecting a lot more from streaming services right now. So it's a tough time to be a streaming service, whether you're Netflix, whether you're Spotify. You could say, well, the investors got carried away. They were overvalued. Yeah, maybe so. It's just been a tough year for streaming services and when Spotify is that big of a component of the index, it's down, well, as of yesterday, it's down 60% for the year. And so that's a lot of market cap that's gone and that's dragging down the index. And that's the short version. [00:38:17] Dan Runcie: Right. So of course, it's a value-based index. Market cap is what defines it. And just so listeners know, how big of a factor is Spotify? Like, how much is their stock and their market cap weighted in terms of the overall index?[00:38:33] Glenn Peoples: I would say it's probably, again, this is just ballpark. It's probably about 15% of the value of the index. It was a lot more obviously. I would say right now at its current price, it's 10 to 15%. Universal Music Group is the biggest component of the index, and there's some other companies just a handful that really stand out above everybody else. Live Nation, Warner Music Group, Sirius XM are some of the big ones. [00:39:02] Dan Runcie: The thing that stuck out to me about it is that, of course, Spotify stock is a huge piece of it, but even if you were to take out Spotify, the non-Spotify stocks in that index still are down more than the overall market has been this past year. So it also makes me think that there may be something going on that's a bit deeper than just streaming. [00:39:23] Glenn Peoples: Yeah, it's not just streaming. You know, a lot of music companies had a great 2021 and I think that they just had further to fall. So there were some really high valuations and it just sets these companies up for a pretty big fall when investor sentiment turns and the market turns. And ever since the Fed announced in, I believe, December, that it was going to start raising interest rates. You know, stocks have started to fall and Spotify definitely started to fall then. And it's been a long, what is that, roughly 10 months since then. Things have calmed down a bit, but stocks are, boy, they're really having a tough time. It's really volatile a lot there. I think there's two ways to look at it. One is what's the value of the stock? What's the value of the company as valued by investors? And what's the potential of the company based on the company itself and the intellectual property it has? And those two don't always line up. You know, Spotify I still think is a very good company. I think it has a lot of work to do, but it's growing at a good clip and I think they have good people there. But when you are a streaming stock and you're facing really a once-in-a-generation kind of environment with very bad inflation you know, crazy, I was about to say unemployment, but unemployment is not that bad. It's just a very strange time in the market and a very strange macroeconomic climate. And you're seeing good companies have very difficult times with their stock prices. You know, Universal Music Group is down. But the market is down overall and Universal's not going to escape the just general downturn of the market. That's saying something because Universal is the biggest music company out there holding up market share very well has a big share of the top 10, any given time, big artists. But you can't correlate stock market performance with company performance just perfectly. It's a very strange time in the macroeconomic climate right now. [00:41:23] Dan Runcie: Yeah. The interesting thing with the major record label stocks, and even some of these other companies that, yeah, even though they may not be streaming services themselves, when streaming makes up such a high percentage of the overall revenue for this entire industry, then Spotify's stock is in many ways going to be at least somewhat correlated to what we see with Universal given the fact that these companies have equity in each other, they're so dependent on each other, so a lot of that is given. You mentioned Live Nation earlier, and I think that their stock is interesting, too, because even though it isn't directly tied to streaming, that stock had hit record highs in the middle of the pandemic when there were no shows going on. So that just spoke to how much of a disconnect there was if you looked at how the company was actually doing in 2020 and even in 2021 when there were nowhere near as many shows as they had had in 2019, but they now are actually being able to realize more of that revenue. But the stock has adjusted in a lot of ways since. So there is a bit of this disconnect. I think there was just a good amount of excitement as well about what's happening in music as an investment class. Specifically, you looked at all of the catalog sales and the booms that happen thanks to the low-interest rates, and they're no longer low anymore. So you're also seeing that play a factor in, and you've also heard some of the acquirers of those catalogs expressing a bit of disappointment that the returns aren't quite what they thought the returns were going to be as well. So some of those things, I think, Brought some of the temperament and a lot of the companies that are in your index down to, I don't want to say necessarily down to earth, because I think there's still plenty of room for growth for a lot of them, but it's clear that we've moved past that era of the pandemic when things were just high for the pure speculation of where it could be in a few years.[00:43:15] Glenn Peoples: Yeah, I think the honeymoon is over for a lot of music stocks. You know, music as an asset class was really attractive. And, you know, look, just the fact that Universal is public and Warner is public once again, and there are numerous streaming services from Tencent Music and Cloud Music in China to Anghami and Spotify and Deezer. There's a lot of music companies that are publicly traded right now and that says a lot about music as an asset, as a segment, set aside the problems it's had in the last year. So music companies had a great 2020 and 2021, and it's been downhill since then. But the fact that there are a lot of publicly traded music companies right now, and so much investor interest in music catalogs like you mentioned, I think says a lot about music as an asset class, music as an investment in general. Look, five years ago, how many publicly traded music companies were there? I mean, Spotify has been public for about five years. Pandora was before it was bought by Sirius. You know, but you didn't have Tencent, you didn't have Cloud Music, you didn't have Anghami, you didn't have Deezer, you didn't have Reservoir Media, or Believe. Warner was private. Universal was private. So the fact that Wall Street has taken a liking to music, I think says a lot despite what the stock prices say right now. [00:44:40] Dan Runcie: Yeah, I agree. The fact that this wasn't even possible, just shows what's happened. And a lot of companies, even outside of music, are starting to have money at least level back off now that the pandemic is over, now that the quarantine highs for a lot of these stocks are over. I'm interested to see where did things go from here, because I still believe that there's a ton of potential in each of these companies if the expectations and if the investors expectations of the market are where they need to be. I still think that music is a hot and a popular asset class, especially for investors. But is it 30 x value? Is it 30 x multiples for some of these catalogs that just bring 'em to certain valuations, or does it need to be more level? Because I do think that there's still plenty of value if those multiples and a lot of those things are where they should be. And even thinking about whether it's live entertainment or streaming in general, I think there's still plenty of room for growth. There's still a lot of opportunities there, but it's just being able to get a clear idea on, what is the actual TAM? What is the actual total addressable market for these areas? And I think if anything, you saw that challenge happen with a lot of the discourse around Netflix and what the future is there, you started to saw things drop right around they had, you know, around 220 million subscribers. I think Spotify was likely asking similar questions, too, and I still think there's growth, you know, for the right price there's always going to be something, but what that price would be and how many people are willing to pay for it, knowing that, of course, if it's a paid product, you're not going to hit all 8 billion people in the world. But there is some actual number out there. So I think the more clarity that there is on that, and of course that's part of the game to figure that out, but the closer that you can get to what that actually is, the more that investors can make sound decisions. [00:46:25] Glenn Peoples: Yeah. You know, as we're talking now, there's a lot going on. We're a couple of hours away from Spotify releasing third-quarter earnings, which will, I'm not sure how much that'll say, look, that's backward-looking, but the company will take the opportunity to talk about a lot of things investors and analysts are curious about. Yesterday Apple announced it was raising prices for Apple Music and Apple TV Plus, and the Apple bundle. And YouTube premium prices went up as well, I believe, for the family plan only. And what do we see today? What we see Universal shares went up almost 12% and closed. They're trading the Netherlands, so that's already closed. In the middle of the day, Warner Music was up 7% to 8% at its best. Believe was up. Hipgnosis shares were up about, and those closed, that trades in London. That closed up about 8% I think. So investors, I think, get the news that they've really been waiting for, that prices are finally going to go up. You know, Netflix has raised prices. Pricing in streaming video on demand is a lot more flexible than it is for music and music prices have barely budged in over a decade, and executives have been saying for months and for years that prices will go up. But they haven't. [00:47:45] Dan Runcie: Why do think it took this long? [00:47:47] Glenn Peoples: Well, I think, companies were much more concerned about growing the market than maximizing revenue per customer. Is it more important to get the customer in the door or to charge more per customers is the question, and I think that they've been much more concerned about building the customer base and building relationships. And then at some point, it's a timing issue. When do you raise price? When can you do it without turning people off? And I think what we see these days with inflation is what it is, is companies might feel a little more emboldened to just raise price and think they can get away with it. Name one price that's not up in the last year. Except music streaming, it seems like everything else is up. And so somebody had to be, you know, first to do it and YouTube and Apple did it, which could embolden Spotify to do it finally. And I think my impression of Universal's shares going up almost 12% is that they think Spotify's going to raise prices as well. That doesn't seem like a bump just from Apple. That seems like a bump from broad price increases across the board.[00:48:51] Dan Runcie: Yeah, I would agree. I think that it's going to happen and the reason why I think it probably hasn't happened until this point I was talking to Will Page about this, who is a former chief economist at Spotify. And his perspective on it was that the difference, and it was mine as well, the difference between why a company like Netflix would continue to increase prices but Spotify hasn't a bit in line with the type of content that you're getting. In a lot of ways, Spotify and Apple are offering a lot of the same thing. Sure. I know Spotify has its podcasting, Apple has its podcasting and non-music audio, and we'll talk about that in a second. But I think when they're all offering the same thing, then there's a bit more pressure to try to offer price discounts and bundles and stuff like that as opposed to Netflix or some of those companies offering differentiated content. So you're more buying into something that you're going to get on Netflix that you can't get on Hulu or on Disney Plus, or on HBO Max or one of the other services. So I feel like there's a factor of it there. And I remember a few years ago there was some tests about it and some discussions where in Europe they were exploring what. 12.99 would look like, or maybe it was 13.99. But I didn't hear anything necessarily come definitive from that. Maybe it was 11.99, but there was some price increase that they were exploring in Europe. So it feels like it's inevitable that Spotify will join in and yeah, if your price is going to increase 10%, then your stock price will likely increase around 10% as well.[00:50:22] Glenn Peoples: Yeah, that makes sense. Most people look at how much revenue a company takes in every month. ARPU, average revenue per user, Spotify considers a metric lifetime value. And so it's not focused solely on price. Price plays into lifetime value, but so does churn rate, and the family plan is something that is reduced churn rate. As churn goes down, lifetime value goes up. I mean, for a subscription business, what you don't want are people coming in and out and churning in and churning out and taking time off or just leaving the subscription service for good. So if you cut down churn rate, the value goes up, and that's more value to creators. That's more value to publishers, to record labels, and to Spotify without raising price. If you can work on lifetime value without having to raise price, that might be the low-hanging fruit that you do in the meantime before you consider raising prices. And now it appears like everybody's to the point where they say, okay, now we can raise prices.[00:51:22] Dan Runcie: Right. Yeah. I think the fact that we're here says a lot. So we'll continue to see, and I'm sure that the next price increase after this probably won't take this long if this is the one that got us here. The thing with Spotify though, is I'm sure we'll see what investors feel more broadly about the company's strategy because non-music, audio and podcasting specifically has been part of its big bet on how it can have better margins, how it can just essentially make more money and have something that they can continue to grow. But there's been a lot of pushback. There's been a lot of canceled shows and studios, and some of that's standard for the industry. But some of it also feels like there's more and more question marks on, okay, they've spent billions on this. Is this going to work? Is this going to take off the way that they expect it to? What's your current take on the future outlook for Spotify's non-music audio strategy? [00:52:16] Glenn Peoples: I think it's a good strategy. You build up a platform starting with music. You attract hundreds of thousands of users and then you turn it into an audio platform that's not just music and you introduce spoken word content. I think it's going to take quite a few years. So I think expecting changes, you know, we're only two years into some of their acquisitions for podcast studios and for platforms such as Megaphone. I know investors might not want to wait five years, but it's going to take a while. And, you know, long-term Spotify thinks that they can get some pretty good margins out of podcasts, margins that exceed what they get from music. They think that they can get the math when I look at audiobook margins, they bought an audiobook distributor called Findaway. And I think as retailer and distributor, Spotify gets about 60% of sales. Audiobook download margins are pretty good and that's about double what they're going to get for music. How much business is out there for audiobooks? Yeah, I mean, right now probably not that much, but over time I'm sure they can build it into something much more considerable. And, you know, if it's 60% gross margin, that's really good. You're not going to get that in music. You can build a platform based on music, but then eventually you got to go looking elsewhere for margins. And so I think it can work out for Spotify, it's just going to take a while and some people might not have much patience. I get that. But it's going to take a while. [00:53:41] Dan Runcie: It's something I've thought a lot about because I understand that podcasting itself is something where the audience takes time to build. You want to be able to see these shows grow over time. But I also think that so much of their biggest growth has come from acquiring shows that are already popular. And I know they've made big acquisitions, whether as with Gimlet or with The Ringer, or they have the exclusive deal with, or the licensing deal with Joe Rogan. But how many others of those are out there that they haven't necessarily had? Are there going to be more in-house ones that can build up? Because I feel like one of the challenges I've seen with the strategy is that they've had a lot of money spent on getting these big-name celebrities to then have shows where they have other big-name celebrities as guests and things like that. And a lot of that is antithetical to what's made so much of podcasting be effective for a lot of folks. And sometimes it works well, but a lot of times it doesn't. And it's content. You do have to make some bets, but I'm interested to see how many more of those wins that are going to be out there for them, because that's the piece that at least gives you some bump 'cause at least we've seen the numbers and successes from the popular acquisitions, the shows that they've had. It's the in-house development where I think by nature there is a natural, whether it's just the likelihood of success of you're starting anything new, not everything is going to take off, but the real success metric will be, okay, two, three years from now, we're there Spotify originals that are at the top of the charts and are creating and demanding that audience the same way that some of these other shows, whether it's outside of the network or some of the ones that they've acquired are able to do?[00:55:23] Glenn Peoples: Yeah, it looks to me like they have kind of a three-prong attack where they spend mightily for somebody like Joe Rogan and that's not going to last forever. That licensing deal will be up, I don't know, maybe next year. And what do they renew or do they go spend a lot of money on somebody else? I mean, Joe Rogan brings 'em a lot of a lot of listeners I'd wager. So they have a very small number of really big shows, and then they have a lot of in-house shows with Parcast, The Ringer, Gimlet, and they can go acquire some other ones. And then they have a lot of DIY stuff. And then you get into the long tail. And this is where I think there's a lot of potential to monetize listening just like there would be in music. They bought a platform called Anchor. That's a podcast creation and distribution. Megaphone rather, is more the distribution tool. And so they have the infrastructure in place to let people create shows, distribute shows, and now they can monetize those shows. Now, do advertisers want to monetize or advertise against, you know, podcasts nobody's heard of. Not sure exactly how that's going to work. You might be not getting good advertising dollars on some of the shows, but to the extent that you can monetize the long tail podcast, Spotify is building that. And if anybody can do it, it looks like they could. So it's not about Joe Rogan. Joe Rogan might have been something just to get his podcast business off the ground, a very expensive way to get his podcast business off the ground and get it noticed by listeners and noticed by advertisers. And they might not, you know, have another Rogan after that deals up. But there's a lot of stuff out there to acquire. You know, Spotify, you take a look at the top 50 or a hundred shows. Spotify is Rogan and Call Her Daddy and maybe one other one. But there's a lot of stuff out there that they could go after. But again, this is kind of the long tail and maybe the midtier stuff that would be in-house productions. I think that really is the test of how they're going to do in podcasting at scale how can they monetize the long tail of podcast? [00:57:20] Dan Runcie: Yeah. I think the other thing that's an advantage for them is the advertising business and being able to not just offer, but sell better data to advertisers on who's actually listening to podcasts because outside of Spotify, using podcasts downloads, or relying on some of these third-party tools to be able to tell you how well a show's actually doing is not the best way to actually determine if people are listening. There's so many shows out there that now have ghost downloads from people that we're downloading and subscribing to these shows back in 2014, 2015, 2016, that are no longer listening to those shows, but because of the metric of downloads, It's essentially an RSS feed. They don't know if you and I are actually listening to a show versus it actually being downloaded. I'm talking about more from Apple Podcasts and from other places outside of Spotify itself. Spotify's advantage is the fact that it can provide data just as precise is what it does in streaming, essentially. Are these people listening for at least 30 seconds? Are they going and listening to the middle? And I know some of this exists with Chartable and some of these other tools, but that's the advantage that Spotify has. So if you can essentially have that, offer that to your advertisers and then say, hey, this is the better data to base it on, not self-reported podcast downloads, which is a very tough metric to use if you're trying to base that purely on advertising. This is how you can ensure that you're reaching the right people. And I do think if you have enough of a catalog there and you're able to monetize enough, then in principle, you could then pull the advertisers yourself. And if you pull them, then I think that helps also attract the shows. And you can become not just the dominant platform, but the dominant platform that can monetize as well.[00:59:08] Glenn Peoples: Yeah, well see. You have a lot of insight. You're a podcaster, so you have a lot of insight into what Spotify's doing. As a podcaster, how is the platform for you? Do you get a lot of listeners from Spotify? [00:59:18] Dan Runcie: There's other platforms that I still get more listeners for. Like, I still get more from Apple Podcasts, I would say. But it's up there though. It's interesting because even though I get more listeners from Apple Podcast, if I put a link in my newsletter that has the Apple Podcast link or the Spotify link of where to listen, more people click on the Spotify link. So that also makes me think, okay, one of these is measuring what's already been there, people that could have been listened to my podcast since 2019 to prove my point when I started it, versus what's capturing things now. And I think as we're just seeing Spotify continue to grow and we're seeing more and more stats of how, I forget the exact metric, but them becoming one of the more popular places for listeners to listen to a podcast. The data that I'm seeing on my side, even though I haven't precisely calculated it, more so a gut check of when I'm checking my newsletter analytics, I'm like, okay, I can see where this is trending.[01:00:12] Glenn Peoples: I think it helps Spotify that they're just an innovative company that is always improving the product, right? So, you know, who knows what they'll end up doing with podcast. They could revolutionize how we listening to it. [01:00:24] Dan Runcie: Yeah. The other thing, too, that made me think of it, you mentioned audiobooks earlier, and I feel like there's an opportunity for innovation there because audiobooks themselves, I think to date have in many ways just been looked at as another channel that's a companion to people either buying a physical book or downloading something on a tablet to read. But how can the art of creating an audio podcast feel similar to these high-production podcasts that we hear that sound like they are, you know, made by multiple people in a studio show? I think Malcolm Gladwell did something like this with his most recent book the Think Like Strangers, I forget the exact name, but something like Strangers where it sounded like his podcast does. You know, it's high produced, you can get a bit more variety. It's not just some voice actor that they paid, you know, some flat fee for, and then that's just what's uploaded as the audiobook. So if you're able to create that as its own unique experience, I think that there's an opportunity there with audiobooks. So I'm interested to see if the art and the content itself around those will continue to improve.[01:01:31] Glenn Peoples: I would love a company like Spotify to breathe some life into audiobooks. I used to do a lot more audiobooks than I used to. And you know, what's changed? I think what's changed is just the podcast platforms that are available that make it easier to listen to and find podcasts. I'm not much of an audiobook buyer anymore. But I would say that my audiobook listening has been cannibalized by podcast. [01:01:54] Dan Runcie: And I think some of that, too, like if it's in the same app, it's something that you're already using. I feel like there's an opportunity there because although it's been a while since I've used the Audible app, I have to imagine that the Spotify app is much less friction to be able to be like, I want to listen to this. Boom, here, let me click and listen to the thing. And it's a game of, yeah, how can you make it as easy as possible for the consumer. So yeah, it'd be interesting to see how that space develops. The last topic I want to chat about though before we end things is TikTok. I know you've written about this recently. TikTok has been trying to get into a number of areas, specifically streaming, and I'd be curious to hear your take on them, not just their potential in streaming, but what their strategy is overall in music and how you see them working, either not just alongside, but also competing with not just the streaming services, but other companies that are part of this, that are part of this chain of the, you know, music ecosystem.[01:02:53] Glenn Peoples: Yeah, I think TikTok is fascinating as far as TikTok launching a streaming service. I mean, that makes perfect sense. I mean, why would you not? TikTok sends a lot of traffic to streaming services. If you could keep people on the platform, or at least on an app from the same company, rather than sending them off to Apple Music or YouTube or Spotify after they see a video on TikTok, I think that's probably a better, I would say, it's a better listener experience. But you know, what we've seen over the years is people use the apps they want to use. You can't force-feed people an app. You can stick it on a device. It doesn't mean they're going to use it. People will use what they want to use and TikTok would have to build a pretty amazing music streaming platform for people to use it. And I guess the question is could they grow the market rather than just take customers away from the Spotifys and Apple Musics in the YouTubes? Yeah, I guess so. There's always that, but I always think of it as more of a zero-sum game that TikTok would be taking business away from others. On paper it makes perfect sense. You know, Billboard's done a really good reporting, had some really good articles about the impact TikTok has had on the business. You know, most recently there was an article about how it's just kind of, thrown A&R executives' lives into disarray because it's, it's very hard to capitalize on TikTok success, which everybody wants. It's much more random than sending something to streaming services or sending something to radio and promoting it. It's much more grassroots and not so top-down. So it's unpredictable on what's going to hit. And that's not a good way to promote music, not knowing what people are going to end up listening to, so it makes labels' lives difficult in that aspect. On the other hand, I think labels are probably pretty happy that there's an app out there that customers want to spend a lot of time with and potentially spend money on, and that they are licensing music too and they'll get royalties from. So, you know, labels don't build these platforms themselves. They have to count on other companies to do that. And I read articles every now and then that says that TikTok is going to be the death of labels. Now labels have to partner with these platforms. That's what they do. They don't build the platforms themselves. And TikTok has a great platform. And so it's another one to work with. The question is, is it ultimately good for the labels? Yeah, maybe they honestly don't have a choice. They have to work with TikTok. They have to go where the consumers are. But I think it's ultimately probably a net win even though it's, really thrown things into disarray and changed how people discover music, and it's just not as simple a path as it used to be in promoting music and get people to listen to it.[01:05:28] Dan Runcie: You brought up a few things that I want to circle back on because I think they're important to highlight. One, if you look TikTok's overall strategy, I agree this is something that they should naturally do. If you're the person that has the top of the funnel, then you would want to identify ways that you could do it yourself instead of having another app that is relying on yours to capture that same traffic and to capture that same business opportunity. That said, does that mean that you will succeed? Not necessarily. I think as we both understand and see, it takes a lot to have a platform that gets to where Apple Music has gotten to, to get to where Spotify's gotten to, even where Amazon Music and some of these other digital streaming providers have gotten to. It takes a considerable amount of time to get there. So being able to do that effectively and being able to necessarily grow the market and do that, I think it's tough. Are there regions that TikTok is going to reach that Spotify and Apple have not already spent millions of dollars trying to reach? Probably not, which does turn it into a bit of a zero-sum game. And then are you going to be able to try to offer it at a different cost? Are you going to try to do any of these things that really make it stand out? Not necessarily. And I think one of the bigger challenges, too, is just the consumer behavior that someone has when they're going into TikTok. It has grown as fast as it has because it's an app that doesn't require much active engagement. You can sit there and passively scroll through everything. It's a very passive entertaining experience. Streaming is not that. You have to go and find who you want to listen to. Even if you want to go check out the latest album, you have to go type in that person's name unless they're the biggest star in the world, and they may happen to be on the app when you open it. You got to type in the person's name to figure that out. So shifting that consumer mindset, I think is tough if that's what they're used to in your app. So I think that piece of it is going to be a bit of a challenge for them. And I think in general, we're kind of seeing TikTok adopt a bit of that Facebook strategy, where Facebook is a company that has tried to do any and everything because they're like, hey, we have billions of users. We are the biggest platform in the world. Let's try to do all these things. And more likely than not, Facebook doesn't succeed at a lot of these things. It's more likely to succeed at the things that are naturally aligned with why someone would want to be on Facebook to begin with, and whether it's Facebook's dating services or any of these other things that just didn't necessarily take off the way it could, I think that there could be, you know, some similar type of risk if you're thinking about TikTok. Even though it is aligned with music, even though there's a lot of these things, the mindset that a consumer has when they are going into a streaming service that requires on-demand activity is very different than a passive social media experience.[01:08:13] Glenn Peoples: Yeah, I think those are really good points. There's no guarantee that TikTok is going to make a winning music subscription service if that's what it chose to do. It's just not that easy. I mean, there are companies with big head starts who have built really good apps and have a lot of momentum. And you know, the thing that I've noticed over the years with subscription services and music streaming, in general, is that you have to have an excellent product. Having a pretty good product just doesn't cut it anymore. And there are a lot of music services that have been pretty good that have just gone out of business 'cause pretty good doesn't do it. With ByteDance and with TikTok, you have to assume that they could put together pretty good service. I would bet, better than average. And can they do better than that? Possibly. And what could they do differently that would transform it? And maybe that's the question. Do they need to do a transformative subscription service? Or can they just do something that's a little more traditional and not try to build a new mousetrap? Maybe that's the better option. You know, I'm not sure, but I think, people shouldn't expect that TikTok is just going to clean up the competition because they have a very popular short-form video app. That's just a different experience than what they would be getting into. [01:09:22] Dan Runcie: Agreed. Streaming is a very different game. It'd be interesting to see how it plays out. But Glenn, before we wrap things up and let you go, how do you think the Global Music Index that you created, how do you think things will look at 2023? What's your take on how you think certain things will play out in the index?[01:09:39] Glenn Peoples: There's so much negative forecast out there for 2023. There's a lot of economic experts saying that there's going to be a recession in 2023. You know, normally I would say, boy, probably pretty good. You know, the time to buy a stock is not when it's high. It's time to buy is when it's low. So right now the index is starting from would be starting year at a pretty low place. It's just that they're pretty dark clouds on 2023. It's really hard to say how it's going to play out. There's just a lot of really bad expectations for next year. So I think that as far as these stocks have fallen, they're not out of the woods yet. And I don't think we can assume that they're going to turn around and start growing next year. But if you look at 2022 as kind of a correction to maybe some stocks that were overvalued, then they're starting in a better place.[01:10:27] Dan Runcie: That's true. Maybe the overvaluation may have some, or the overvaluation of the overcorrection rather could lead things off to a good start. So it'll be exciting to see for sure. And we'll definitely be keeping an eye on the index itself. Once again, good job creating that. I think a lot of people were looking for a way to just capture everything that's going in the industry. So it'll be good to continue tracking it. And Glenn, thanks for coming on. It was great to touch base on so many important topics, and I'm sure we can have a similar conversation like this soon. [01:10:54] Glenn Peoples: Absolutely. Thanks so much for having me. [01:10:56] Dan Runcie: Thank you.[01:10:59] Dan Runcie: If you enjoyed this podcast, go ahead and share it with a friend. Copy the link, text it to a friend, post it in your group chat, post it in your Slack groups, wherever you and your people talk, spread the word. That's how Trapital continues to grow and continues to reach the right people. And while you're at it, if you use Apple podcast, go ahead, rate the podcast. Give it a high rating and leave a review. Tell people why you liked the podcast. That helps more people discover the show. Thank you in advance. Talk to you next week.

Megan Holston-Alexander is a partner at Andreessen Horowitz Cultural Leadership Fund. It’s the first VC fund that raised money exclusively from Black leaders — from entertainment to sports to business. The fund co-invests with a16z’s other funds and has raised more than $60 million across its three funds to date.The overarching purpose of CLF is to create generational wealth opportunities for Black communities. It’s a two-pronged approach. The first is getting Black dollars directly on the cap tables of high-potential startup companies. And the second is creating a pipeline for more Black talent at early-stage companies. Megan joined me on the show on the heels of hosting the first-ever Cultural Leadership Summit and announcing CLF III before then. Here’s everything we covered during our conversation:[2:39] Takeaways from the Cultural Leadership Summit[5:19] Building despite economic uncertainties [7:36] High-worth individuals also affected by macro economy [9:05] How has the Cultural Leadership Fund evolved?[14:54] Difference between entertainment and executive LP’s[17:16] Web3’s knowledge imbalance  [19:16] Megan’s interest in DAO’s[20:58] Will CLF’s investment model change?[22:42] How CLF used relationships and trust-building to scale its operation [28:35] Megan’s vetting process with LP’s[36:02] How VC industry at-large can create more opportunities for black founders and talent [39:15] Has the Bay Area lost its monopoly on tech? [44:59] What CLF is focusing on in 2023Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSSHost: Dan Runcie, @RuncieDan, trapital.coGuests: Megan Holston-Alexander, @meghalexander Download The Culture Report here: https://trapital.ck.page/a23b7a6a4a Sponsors:MoonPay is the leader in web3 infrastructure. They have partnered with Timbaland, Snoop Dogg, and many more. To learn more, visit moonpay.com/trapital Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital Trapital is home for the business of hip-hop. Gain the latest insights from hip-hop’s biggest players by reading Trapital’s free weekly memo.TRANSCRIPTION[00:00:00] Megan Holston Alexander: What we hadn't considered on the executive side is, while the athletes and our kind of entertainers can partner on different things or, like, help them go into new markets, when it came down to, like, core operations or how you should run on your board, or how to think about hiring X, Y, and Z, our black executives, like, hold that information, like, in the palm of their hands. These are people who've been, you know, operators for 20 or 30 years, and so they brought kind of an additional level of skill and kind of insight to bolster what our other LPs on the more kind of athlete or entertainment side were doing.  [00:00:40] Dan Runcie: 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 executives in music, media, entertainment, and more, who are taking hip-hop culture to the next level. [00:01:01] Dan Runcie: Today's guest is Megan Holston Alexander. She's a partner at Andreessen Horowitz, currently leading its Cultural Leadership Fund. And to date, this fund has raised over 60 million, invested in over 300 Andreessen Horowitz portfolio companies, and has brought over a hundred black leaders into this space. I'm talking to Megan right after the Cultural Leadership Fund hosted its first-ever in-person summit. It was a pleasure to attend that summit myself and meet so many of the people that are friends of the fund, LPs of the fund, and really make it what it is. So this conversation, we talked a little bit about what it was like bringing that event together, especially after the pandemic. We also talked about how events like that fit within the fund's overall strategy and how that strategy has evolved over the past few years. For a little bit of background, the LPs in the Cultural Leadership Fund are all black, and it is one of the first funds to have ever done that in the VC space, and specifically, to date, a lot of the investors had been athletes and entertainers, but Megan talked a little bit about how they've expanded to bring on more black executives, what that looks like, and how that ultimately helps support the goal of the fund even more. One of the fund's other goals is to increase the amount of black talent and interest in tech. So we talk about what some of the opportunities are, what some of the challenges are, and what the VC community can do to help improve this even more. Great conversation, so many insightful points that Megan shared. I enjoyed this conversation and I know you will too, especially if you are an investor or you're a founder yourself. Here's my chat with Megan. [00:02:39] Dan Runcie: All right, today we have Megan Holston Alexander from Andreessen Horowitz Culture Leadership Fund, and first, I got to say congratulations on an amazing summit. It was a great event to be a part of and to attend. How does it feel for you now being on the heels of that and just seeing the impact of everything? [00:02:57] Megan Holston Alexander: Yeah, so thank you so much for coming. It means so much that people would be interested enough and engaged enough to spend time with us away from their, you know, everyday grind. But we're really pleased with how it turned out. We were motivated because so many of our LPs had said to us, we want to get together, we want to meet each other, we want to meet the founders, we want to meet the investment team. So as an LP and kind of partner summit, I think it had the intended effect and it seemed like people really enjoyed their time, but also learned a ton. So I could not be happier. I will say I was telling myself that after it was over, I was going to have so much time to, like, get so much other stuff done, but, like, it just never, it never stopped. So, we were really proud of what we were able to put on.[00:03:38] Dan Runcie: 'Cause I'm sure an event like that makes you think about what else you could do, right? I'm sure you had a bunch of people buzzing with ideas on what other in-person events or what other things could look like, too. [00:03:48] Megan Holston Alexander: Yep. And that's always the hope, right? We bring people into a room together in hopes that, like, we can help some serendipity happen. So many people in our network work on similar things or adjacent things or things that would have a really nice kind of partnership together. And so anytime we get to make those introductions, our hope is that people will be buzzing after, and have ideas for events and programs and partnerships. So we'll see what comes out of it. [00:04:12] Dan Runcie: And I imagine that a lot of this probably had been in the plans for a while. It was just a matter of timing. So much of CLFs rise and growth had happened during the pandemic as well. And it was just a matter of, okay, when can you bring people together safely to make something like this happen? [00:04:28] Megan Holston Alexander: Yeah. Yeah. And when I say it was three years in the making. I am not kidding, because we were planning actually to host the first summit in 2020. So we were in process of like, you know, picking out venues and cities and where we wanted to be. And then, like, so many people when the pandemic hit that spring, it just kind of cleared everybody's calendars. And so it's nice to know that 2 and a half years after the original that the motive was still the same and the demand for what we were building was still the same that we got to put it on, I think, even better than we could have hoped in 2020.[00:05:00] Dan Runcie: Yeah, I agree. And then looking at, now, you, of course, get to have it on the tail end of your announcement for fund three. You've now raised over $60 million for this fund. What was it like raising in this climate though, just given where things are with the market and how things have been so far in 2022? [00:05:19] Megan Holston Alexander: Yeah, totally. Totally. So when it comes to like the market environment, you just never know what's going to happen and unintentionally, you know, I actually got to raise ahead of kind of the market changing earlier in the spring. And that was actually because I was expecting and planning to be a new mom. And the firm was really supportive of that. And they said, okay, kind of up to you. Do you want to do it before mat leaves? Do you want to wait until the fall when you come back? And me being like, I don't want to think about this while I'm trying to raise a baby. I was like, Let's knock it out early. So lucky enough, you know, I was able to close that out before people really started tightening their belts. But, you know, as a firm, we really believe that, you know, no matter what the economy looks like, what the macro, you know, face of the world looks like, builders are always building. And even more so, during times when they can be home and spend time thinking about the problems that they want to solve. And so our hope is that, you know, even in moments like that, we can still really rely on founders to keep, you know, pushing great, great companies out. [00:06:17] Dan Runcie: Yeah, and I like to think of these moments as well as when you do start to filter out some of the companies or ideas that maybe were a bit more fleeting, and you can focus on the real things happening, you look at the last economic downturn that we had, and all of the companies that came from that timeframe, too. So I feel like the call to action for so many fund managers like yourself, you mentioned the LPs or even to others is, like you just said, people are still building, and if anything, it's the real companies that are going to come out of this timeframe.[00:06:46] Megan Holston Alexander: Yep. And then a piece that I would add onto that is in these moments, while we know that like great companies will be built, we don't truly know what they are because people do build for the time and you don't know what kind of instances will be, like, permanent behavior changes or what things are like, just for now, it seems like it's a, you know, a really good idea, but in six months people won't behave the same way. And so the hope is that you just always try to lean in the things that you think will have kind of staying power. But you just try to do risk reduction. [00:07:15] Dan Runcie: Right, Right. And I assume, too, from a fundraising perspective with you and this fund specifically, because a lot of the LPs are high net worth individuals, some of their willingness to invest in funds hasn't necessarily changed as much as some of the more institutional investing in things that we've seen in the past year or so.[00:07:36] Megan Holston Alexander: Yeah. So actually I might argue the opposite. So when you're dealing with individuals, right, in their personal wealth and people who are really new to venture, right? That's a really, really scary moment because venture is a long-term play, right? It's not like you put your money in and then two or three weeks later, you can be like, Hey, Megan, where are my dollars? And so making a long-term commitment like that during a period of economic uncertainty is actually more difficult for an individual than it would be for an institution because one, it's not any particular individual's capital, but also institutions have much kind of more thorough game plans, right? They know what percentage they're putting into venture versus private equity versus, you know, bonds or whatever the case may be. So they're kind of more consistent and they understand that the market kind of goes up and down and that there will be moments like this, and it's actually a little bit more difficult when it comes to individuals to kind of get them over that hump.[00:08:30] Dan Runcie: Yeah, that's fair. Because I do think that even in some conversations I've had with folks, things like the price of Bitcoin or the price of Ethereum having a pretty impactful influence on what their net worth is and their own willingness to invest in particular things. [00:08:46] Megan Holston Alexander: For sure. [00:08:47] Dan Runcie: And for you with this fund, specifically, now fund three, but the fund itself has been around for a few years now. Do you feel like the vision for the fund has evolved at all in that time? I mean, I feel like the core mission is the same, but have any of the ways that you've either talked or pitched the fund evolved in that timeframe? [00:09:05] Megan Holston Alexander: Yep. So I think you're right. We've kept our two kind of core missions the same, but what we do understand now is there are a number of different ways to execute on it. So if you will bear with me, I'm happy to share kind of two, you know, how that looks on both missions. So on the first mission of connecting the world's greatest cultural leaders to the best new technology companies. You know, historically we set, you know, athletes and entertainers and musicians, people who, from, you know, a large scale of consumerism have contributed to cultural change. But over time we've realized black executives also have like a really, really huge impact on this space. So people who are in leadership roles at Fortune 100 companies, or even at startup companies, they can have a huge impact on culture and consumer behavior more generally. And so we wanted to be sure that we really leaned into bringing in more black executives into the fund than we ever had before. And that has proven to be really helpful for the firm because they end up being, you know, equally if not more useful to the portfolio than the musicians and the singers, and the actors, et cetera. And so we have really enjoyed kind of expanding and involving that side of the network. And then on the second side of getting more young African Americans in tech, you know, fo fund one, we committed all of our management fees and carried to, like, one set of organizations. We picked them in the beginning and wanted to support them through the life of the fund. But what we realized by fund two was like, well, that doesn't really give us an opportunity to invest in new non-profits that are kind of on the cutting edge of technology, right? As things are growing and changing, we want folks who are being innovative on the non-profit side as well. And so what we did for fund two and now for fund three is we opened up kind of the spectrum of what we would support from a non-profit perspective to kind of match where we thought the technology world was going. So for fund one, you see a supporting kind of big well-known organizations that have proven over time if they are directly putting black folks into the pipeline for technology. But now we're saying like, okay, how do we add to this? Well, Web 3.0 is a huge thing, not only as a space for investment for the firm, but also generally of wanting to be sure that black folks don't get left behind in this Web 3.0 revolution. So we support organizations like crypto tutors that is meant to do just that, and that's not something we would've had insight into in that first fund. Gaming is also a new, huge area in technology. It is now, I think, you know, people play games more than they watch TV based on current research. And so how do we ensure that black folks are being supported in the gaming industry? So now we support black and gaming. We support the Black Collegiate Gaming Association. So just ensuring that our philanthropic efforts can support and are aligned with what we're doing as a firm and where technology is going overall. [00:11:51] Dan Runcie: I actually want to talk about each of those two things separately. Let me go back to the first one. [00:11:55] Megan Holston Alexander: Let's do it. [00:11:56] Dan Runcie: I think it was really interesting what you said about athletes and that sector around sports in general, if I heard you correctly, them being but not even more influential or helpful for the fund overall, but maybe relative to some of the other folks, whether it's your LP such as your musicians or entertainers. Did I catch that right? [00:12:16] Megan Holston Alexander: If I'm hearing what you're saying, you're saying that I said that the athletes are not as useful?[00:12:20] Dan Runcie: Oh, the other way around. Like, more useful than, like, some of the others that work with the fund?[00:12:24] Megan Holston Alexander: Well, I was saying, from the executive side, did I say athletes and not executives?[00:12:28] Dan Runcie: I think it was athletes.[00:12:29] Megan Holston Alexander: Maybe I misspoke. But what I was essentially trying to say is from a cultural leadership perspective, historically, it has very much been athletes and entertainers and we wanted to involve, we wanted to evolve our kind of mission overall to include more black executives.[00:12:45] Dan Runcie: That was helpful. Yeah, 'cause I was curious to tap into more about like, why that is and how that's impacted the fund so far. [00:12:52] Megan Holston Alexander: Yep. Because I feel like, everybody thinks that when you bring on like just a celebrity, everything skyrockets, right? That it's just like, ooh, if you put this name on there, things just grow. And that's not always necessarily the case. We've, you know, really supported our companies in being thoughtful and strategic around the ways in which you use a celebrity. And we've also been, you know, in deep conversations with our kind of LP network and our network at large about wanting to be more than like a disengaged kind of passive investor. And so they love partnering with the portfolio companies, et cetera. But what we hadn't considered on the executive side is, while the athletes and our kind of entertainers can partner on different things or like help them go into new markets or help them with the launch of a new product, when it came down to like core operations or how you should run on your board, or how to think about hiring X, Y, and Z, like, our black executives, like hold that information like in the palm of their hands. These are people who've been, you know, operators for 20 or 30 years, and so they brought kind of an additional level of skill and kind of insight to bolster what our other LPs on the more kind of athlete or entertainment side were doing. So now we have this really robust group of black cultural leaders who can help in a number of different areas.[00:14:07] Dan Runcie: That makes sense. Yeah, I mean, we see the influence, we see how influential they are in all of these sectors, and if you're thinking about just like how your fund is structured, I know that you do have different folks on the team focused in sports, focused in entertainment more broadly, and I feel like eventually having, you know, whether it's even more of those or just being able find the best ways to lock in on talent, because I think we're seeing this more and more. I think a lot about like, let's say like 10-plus years ago when we saw the era of a lot of artists being named as creative directors for particular companies. And some of those turned into, you know, really flourishing partnerships, and some of them necessarily didn't. But now, and I feel like your fund was timing this. You captured this moment where we're seeing more than that. [00:14:54] Megan Holston Alexander: Yep, absolutely. And it's not just because you know, sometimes it works and sometimes it doesn't. And it's not just because, and not only because, you know, athletes and kind of other entertainment folks want to be more engaged, but quite frankly startups are requiring it. They don't want you to just let your name on something and then you disappear and like, you know, take the money and run or whatever the case may be. And so what we're trying to do is really build up to kind of core groups of people who are interested in each other and want to work together. And so there should be an equal expectation when we bring our LPs in and on our startup side that the startups want to work with these LPs and they've been thoughtful about how they want to engage with them, right? So if you want a particular person, why, right? Why is this person the best fit for your company? And so we really challenge our companies on that, where it's not just like, you want to get the biggest name, but the person who will actually be most influential for the product that you're building. And on our LP side, we say like, okay, what is it about this company that makes you most interested that you want to bring to the table? So it really is about working together. We are trying very hard not to make it where it's just like, kind of one-off, really transactional doesn't make a lot of sense 'cause those tend to be the things that don't work out. We try to be thoughtful on all fronts. [00:16:11] Dan Runcie: That makes sense. 'Cause it's like, otherwise, then it would just be like an Instagram ad or something like that, being like, oh, hey, go sponsor this product. And like, that's not what this is about. [00:16:21] Megan Holston Alexander: And it doesn't make sense. Like, make it make sense. That's the most important thing for us because those are what can be fruitful. And then say it's something that, everything doesn't always work out, but if you went into it with the right intentions and everybody did their best, like, that's all you can hope for. And then those people usually want to work together again, even if it didn't work out. So we really do take this long view on relationships, not just as a firm, but as a fund and the way in which we interact with people and hope that they'll interact with each other. [00:16:47] Dan Runcie: Right. And then at the second piece of what you were talking about, you talked about investing in companies that are ultimately helping to either further access or knowledge. Web 3.0 was an example and wanting to make sure that black talent doesn't get left behind in this space or in other spaces that may emerge. Where do you feel like things are right now? Do you feel like folks are on board? Do you feel like there's still a huge opportunity specifically with when it comes to Web 3.0 and black talent? [00:17:16] Megan Holston Alexander: Yep. I think until we get to a place where we feel like we have like, peer across the board equity, there's always work to be done. And being like an HBCU grad being from, you know, born and raised in Alabama, I have a very core sense of like what inequity looks like and how, what are the ways in which we can try to approach solutions to that problem. And so I think I'm lucky enough to have you know, that, sort of background where I can bring an interesting perspective into how we solve those problems. But I am finding that Web 3.0 overall has a lot of opportunity. One, because, like, nobody's an expert, right? Nobody's been doing Web 3.0 for 30 years. It is relatively new, right? There's people who've been doing it for the last 10 ish years, and there are a few people who are just really hardcore, but there is so many of our Web 3.0 companies, because there is just like a lack of, expertise in the space, they're just excited to get people who are interested and passionate about Web 3.0, right? So you kind of get to jump over this need for a long period of time having worked in X, Y, and Z or Web 3.0 in this case where you get to just work off of passion and start building the product. So that's one of the things I love about Web 3.0. The hard part is that there's a knowledge imbalance, right? It takes a lot of reading. It takes a lot of listening to podcasts and going through the a16z canon that a lot of people just don't have, right? The information is there, but everybody doesn't have time to read hundreds and hundreds and hundreds of pages on Web 3.0. And so the kind of that asynchronous ability to get information, I think, is where we have to fill in the gap. What is the answer to that? I'm not completely sure, but organizations like crypto tutors that I mentioned earlier, are making content easy, accessible, fun, really big on entertainment. And so while I think the opportunities are there for the roles, I do think we need to fill in the knowledge gap in terms of who gets the knowledge.[00:19:09] Dan Runcie: Agreed. And for you specifically, which areas of Web 3.0 are exciting you the most as an investor? [00:19:16] Megan Holston Alexander: Whoa, well, you know, with CLF being a co-investment vehicle inside of the fund, I feel like I get lucky enough where I get to see all the cool stuff, but I don't have to make the strenuous, anxiety-ridden decisions about, you know, which ones to pick. I just get the benefit of spending time with them all after the fact. And so for me, I am most excited about and I'll just say the one piece that I've been looking into a lot lately is like, DAOs. I love this concept of like governance and people getting to vote on what they do with capital and making decisions of that, like, things to buy and things to sell. I think the way in which communities are being built around kind of DAOs and that type of governance is really interesting. [00:20:00] Dan Runcie: Yeah, for sure. I think some of these conversations, whether it's DAOs buying sports teams or Dows trying to get involved with different things, we'll see. I think, like anything, we're in the early days and some of these things will come to fruition but there's definitely something there. Just looking at how decentralized so many things are becoming then I think a lot of those things do need to. [00:20:20] Megan Holston Alexander: Agreed and I think there's pros and cons of everything, and I think that's one of the things that, you know, gets missed in the hype cycle. There are things that will be really great about web 3.0 and there will be things that don't work out in the way that we hope, but in the end, we hope we shake out with the best kind of the pack. [00:20:38] Dan Runcie: Right. And then you mentioned it earlier about just the way that CLF invests and you co-invest. So you do get to see all the things that come through and you're not necessarily picking or, you know, making them the investments yourself. But do you think that's something that may change with either the vision or the evolution of the fund itself, where you would be making those investments? [00:20:58] Megan Holston Alexander: You know, we, at the firm, we never say never. We don't know what the future holds, but I think right now, the way that we've structured it, you know, we've got two really core goals at CLF, and the first is like getting black dollars onto the cap tables in Andreessen Horowitz companies and the more that I can do that, whether it's through co-investing or otherwise, I think that the structure that we have right now is one that works and that I'm I'm really pleased with. And then in that second mission or actually still the first mission, but the second way that we execute on it, right, so CLF has a fund and dollars out of that fund go into kind of the deals across a number of the funds inside of the firm. Not all of them, but most of them. But then the second thing that I get to do and spend a lot of time on, because I don't have to do, you know, a ton of that behind the scenes like diligence work, et cetera, is get additional strategic rounds for our portfolio companies. So not only is our LP base as a whole represented on the cap table, but anytime that there is a really thoughtful or smart partnership or somebody wants to add an additional strategic capital, we now can give even more black people on the cap table. And so I really enjoy spending my time doing that and I want to keep at it, but the firms, we never say never to stuff. Who knows? If it ever makes sense, we'll see. [00:22:14] Dan Runcie: Yeah, definitely. And then I think too, you mentioned this a few times just in terms of how the firm is structured in terms of building and investing in relationships. And I think this is something that I know you've talked about in other interviews, something that rings true with a16z overall. Can you talk a little bit about the way that you have the divisions or the way that you have the different verticals for, whether it's entertainment or sports and some of the events that you attend as well, and how that helps the overall mission? [00:22:42] Megan Holston Alexander: Yep. So for CLF, you know, historically when probably two years ago when it was just me and Chris the two of us, we did everything right and we realized that if we really wanted CLF to scale and to grow and to really have an impact on the communities and generational wealth, we needed to scale what we were doing. We need to get more cultural leaders involved. We needed to be able to make more kind of partnership introductions, et cetera. And so the way that, you know, made sense was, okay, we've got these cultural leaders. How do we bring together the best at what they do in order to help manage these networks? So we brought in folks like Derek who have been on the management and agency side for a number of years to manage the entertainment vertical, right? So when you have one thing to focus on and it's only entertainers, you can make much more kind of clear and thoughtful decisions around who to introduce to whom or who to bring into this company, or when a portfolio company says, I need this type of person, you can make a quicker decision. We brought in Deb on the athlete side. She was a manager at Rock Nation Sports for a number of years, so she really just has the depth of knowledge. And not only that, they both have this really interesting knowledge just about who players are, but how we can structure deals with them, right? This is what they're used to, and now we're bringing in this tech side, how do we make those deal structures match, or how do we make it more, you know, favorable to everybody involved? And so they brought another level of rigor to the deals and the strategic rounds that we were putting together that we needed a lot. And then both Julie and I work on the executive side, which I said is burgeoning. And so we really try to specialize. One as a firm, right? We've got a crypto fund and a bio fund, and people who are specialized. We do the same thing inside of CLF. We try to have people focus on a swim lane. And it's proven to be successful. So far, we're really pleased with that decision. [00:24:29] Dan Runcie: Yeah, I think it's effective and I think the names that you've been able to have as LPs in each of the rounds speaks to that too. And at the end of the day, especially in these industries, of course, I know relationships drive everything, but I think it's more so in these industries because especially with some of these high net worth individuals in entertainment, there's so many people from coming out of the woodwork who are trying to swindle them out of stuff or trying to propose them the most horrible deals and investment opportunities. So I think that's where the value add is here, as opposed to, or even more so than someone else who, you know, isn't in these fields. So they're not necessarily getting as much of the crap, if you will, from the proposals. So being able to sift through the good ones.[00:25:12] Megan Holston Alexander: I think you brought up a really good point. And I think that point is trust, right? So when you have people coming out of the woodwork, like you said, with investment opportunities, I got a good investment opportunity for you. But that person has no real background to be able to speak to like kind of whatever that item is or whatever that company is. We try to really mitigate the risk for our LPs and, and kind of partners that we bring into rounds for CLF, like, we never bring deals to people that we haven't invested in ourselves, right? We feel like how can we tell you like, you should invest in this, but like we didn't do it. And so people know that anytime we bring something to them, it is fully invested through Andreessen Horowitz, like, process, deal team, GP, et cetera. And so we try to, you know, really eliminate risk for them. And obviously, we always have them, you know, do your own research. Here is the information you make the decision for yourself. But we just pride ourselves on building trust with people because if we mishandle people and we swindle people, like that gets around and then that doesn't benefit us, right? If it goes around like, oh, those. sneakers over there, a16z are doing that. But we feel like we have really put forth a concerted effort that people know that they can trust us and they share with their friends that they can trust us. And that really is I think how we try to maintain and engage with our network. And so far, you know, that network has been able to grow and we always say, you know, we're not going to sacrifice a relationship for a quick buck that's just not our style. That's not what we do. I hope that that is kind of what's making the rounds. But so far it feels like people really have built a lot of trust in us and we don't take that lightly.[00:26:53] Dan Runcie: And I do think that information and understanding of these things has just gotten better in decades overall. And couple that with the fact that this is venture capital. Of course, it's a risk. Most of the companies that we're investing in probably aren't going to take off, but the ones that do are going to hit. And you're doing it with a firm that has a track record in this. So I feel like there's so much transparency. [00:27:16] Megan Holston Alexander: Well, I don't think I'm allowed to agree with that, so I'm just going to say okay.[00:27:20] Dan Runcie: Fair enough. Fair enough. And I think the difference there though is that I think about so many of these athletes, whether it's you get pitched on like opening restaurants with their name and all these other things that you know are just dated things. Of course, those things can still work. We've seen them be effective. But we've come a long way. [00:27:39] Megan Holston Alexander: And then one of the other things is, you know, we tell people, you know, that invest in our fund to please consider us a resource when things like that come up, right? We say we're a VC firm in your back pocket, right? So if something comes your way and you want us to, like you have questions about it, you know, obviously we can't tell you what to do, but we can help you figure out what are the right questions to ask when these opportunities come in front of you. And so that education piece that we do, I think is really valued by a lot of the folks who trust us with their capital.[00:28:10] Dan Runcie: And then with your LP specifically, is there anything that you're specifically looking for from a vetting process? Like, not necessarily talking about like commitment levels or anything like that, but more so things that you're looking for 'cause earlier we're talking about, of course, we've come a long way from the celebrity investors slapping their name on things. But I'm sure there are probably still some out there that may want to do that. And you're making sure that that's not who you're attracting. [00:28:35] Megan Holston Alexander: Yep. I'm trying to tell you all my secrets. You know, the most important thing for us is that we have LPs who want to engage. We want people who are willing to like, you know, hop on a call with us and share their interests or if, you know, you join the fund and you are entered in particular deals or we, you know, come across a company that would be a really great fit for you to talk to, maybe just have a 15-minute conversation with the CEO. There are people who love opportunities like that. So people who want to engage and want to learn and spend time with us and spend time with our LPs is who we try to really, really lean into because it's a symbiotic relationship, We want to support them. But at the end of the day, like our largest goal is to support our portfolio companies and whether it's the a16z team, whether it's our LPs, like it's all hands on deck. And so I love people who come in and have a genuine curiosity and they're excited about technology and innovation and they want to play a role in things that are being built. And so, we love those conversations and you can kind of really tell, like I've had people who you would never think, people who you would think would be super disengaged. Like, that person is interested in tech who are, have gone down like the Web 3.0 rabbit hole and they're like, ooh, and I'm going to do like a token that has this, and then I'm going to give it to my whole community back in Texas or whatever. Like, really is just a really, really thoughtful people. You don't have to be an expert. Like, that's not what we're looking for, but we just look, want people who want to be involved. [00:30:04] Dan Runcie: That makes sense. That makes sense. Shifting gears a bit on the talent side of things. We talked about it a little bit about how important it is to the fund to be able to just help develop this space and obviously your fund's doing its part. We talked about some of the areas that you're looking to invest in, how you're looking to just elevate this space overall, what do you think the rest of the VC community and landscape needs to be able to do to ultimately get things to where it should be. [00:30:31] Megan Holston Alexander: Sorry, when you say get things to where they should be, you mean in terms of like talent as an employee of companies? You mean talent in what way? [00:30:40] Dan Runcie: So I'm talking about talent in terms of whether it's black founders who are leading companies or black talent that are just interested in the space that are either going on to get jobs in the space or to work for other established companies, overall investing and then just being able to grow and see more black talent in tech.[00:30:59] Megan Holston Alexander: Yep. So I'll start by saying there's no one way to do it. I think there are a number of different approaches that people can take. But I usually divide it up at least of this industry into three things. One, funds can, or you know, firms can support black founders, right, by putting capital directly into their hands so that they can build their companies. Two, they can help more black talent get into early stage companies, right? So, employee 10, employee 15, employee 20, because we know that early employee equity can really change a life, right, when a company has a liquidity event, whether it's an IPO or a sale that now that person has capital to start a company or to angel invest in companies and kind of create some generational wealth for themselves. And then the third thing is getting more black dollars on cap tables, right? So ownership stakes, not just monetizing on a platform, right, for all of the amazing things that we're creating, but actually having its ownership in the platform to create generational wealth. And CLF focuses on those last two, but there are a lot of firms, again, focused on, you know, funding black founders. I think kind of focusing on those three core areas can really create economic, you know, extreme economic kind of opportunities for the black community. And so, you know, with CLF focusing on those last two, I think we've got a really special niche that we get to support in a number of ways, which I mentioned before.[00:32:26] Dan Runcie: Yeah. I feel like the closer that, or at least the more people, whether it's in this generation or in, you know, people that are a little bit older that are still trying to do it, being able to just get more focus on building generational. And just the knowledge and the mindset of it. I think all those things help. I think we're seeing more podcasts, more shows, more content from black folks that are specifically focused on this, which is great. I think, you know, there's never too much of it. So personally I think that I would love to be able to see more dollars and more hiring that happens in these places too 'cause I think we saw, especially in the past couple years, there was so many press releases that came from particular companies, and I think I saw recently there was a big tech founder that just announced, you know, a $400 million fund to invest.[00:33:16] Megan Holston Alexander: 400 million. Yeah, yeah. [00:33:17] Dan Runcie: But like, wanted to be able to actually see the results from those and being able to see the impact and being able to see people, you know, become their own Robert Smiths that can then, you know, pay for, you know, tuition for a future class. The more of those we see, and it's not just the one, you know, few names we already know would be great and I think those things will happen, but ultimately I think that's what so many of us want to see in this space. [00:33:39] Megan Holston Alexander: And there's so much embedded in this conversation, right? And I'll go on a little bit of an aside because I think one, we have to understand that like when we think about the future and black equity and empowerment, some people still don't care. Like, there are a lot of people who just do not care. It's not their problem. They don't want to help solve it. And then you have people who kind of commit to things but have no follow-through. And that's what we saw a lot of over the last couple of years. Like, after the murder of George Floyd, all these companies were like, yes, we're going to give this, we're going to do this. And then the follow-through two and a half years later is just not there. And then you have the people who are really, really committed but don't understand the expanse of the black community and think of it as a small sliver, like, really high, like, accelerators that they would want to support who still go to like a very specific set of schools, right, the talented tenth of the black people and are willing to support that. But then there is this holistic perspective around, like, non-monolithic blackness and how do we encourage economic empowerment and growth across the community as a whole? And that's what I want to get to. When we think about HBCUs, there's over a hundred of them, right? And how do we support more of them as opposed to like the same ones that get, you know, a ton of shine. Mind you, when it comes to HBCUs, like, they don't work outside of the community, be like, we depend on each other and we rely on each other. So, you know, I want to get to a more comprehensive perspective on, like, what supporting black economic empowerment looks like from a long-term perspective. So I think we'll get there, but there's a long way to go. [00:35:25] Dan Runcie: What you just said reminds me of, there was one of the tech companies that announced that they were going to have a black board member and that someone was going to take their seat away and they were going to make the opportunity for a black board member. And people were very curious, okay, who should it be? And to the point that you're making, who can we elevate to that point? Who could we provide an opportunity for? And I think they ended up choosing one of the most successful and high-profile black founders in this space. And while it is great to see that person in that role, that wasn't creating a necessarily a new opportunity in that same type of way, and it goes back to the talented tenth thing. [00:36:02] Megan Holston Alexander: Yep. We're here. And you know, I think you bring up a good point when, and now we're about to get into black history, but that's okay 'cause this is for the people. Conceptually, when you think about the talented tenth that's, you know, W. E. B. Du Bois and, like, his concept from a sociological perspective, and you think about who he was at tension with the most, Booker T. Washington and this concept of the Atlanta Compromise. Two very powerful black men, the founder of Tuskegee University versus, like, the first black man to get a PhD at Harvard. Conceptually thinking there are multiple ways in which the black race can succeed. And I think that's still very much the case, right? So, you know, W. E. B. Du Bois is very much like, we should be going to college. We should be getting these advanced degrees. Like we can have these like high power jobs, et cetera, and be in government, but Booker T. Washington is like, our people down here, don't even have running water, right? We should be focused on trying to get like basic level of education, jobs that provide us, like, a source of income that's steady, et cetera. So my point is, you know, reasonable people can disagree to what the solution is. And, again, I think there's multiple approaches and so I think if we can, you know, not just go one route, right? It can't always be about only the talented tenth, but kind of like also bring up a pathway where in Booker T. Washington space, right? That's why we'll have all the like, black agricultural people. Tuskegee is, like, the best university for, like, mechanical engineering and industrial engineering. And that's all like thematically with Booker T. Washington. So there's room for both. We just have a habit of focusing on one. Ali went there and went into a total black history tangent. [00:37:38] Dan Runcie: We could do a whole episode on that. But I'm glad you brought that up 'cause I do think that analogy and just, it ties so much of this together and ultimately the purpose of the fund and what you're trying to do. When I think about the nuance of all these conversations and the comprehensiveness of it what people need to hear so thank you for that.[00:37:56] Megan Holston Alexander: Fun fact. I'm actually a sociologist by trade. It was my undergrad. My undergrad degree, I got a Master's in it. I went to get a PhD, dropped out 'cause I hated it, moved to California, and got into tech and my dog is actually named after W. E. B. Du Bois. So fun fact for the people out there.[00:38:14] Dan Runcie: Still fresh, I mean for some of that, you know, I'm sure the sociology degree may have been, you know, some time ago, but still fresh. You still got it. [00:38:21] Megan Holston Alexander: It's good stuff. I love social interaction and studying how people engage with each other. So it's my secret passion. I'm a sociology capitalist, I guess so. [00:38:32] Dan Runcie: Of course, no, I think that there's some term there. But shifting gears a bit though, this is also somewhat on a sociology perspective, especially among VCs, the concept of where to live and where people are investing in has just been a bigger discussion ever since the pandemic had started and you are someone that lived in the Bay, you've recently moved to Alabama. And it'll be great to hear two parts. One, not just why you made the move, but also what is your take right now on the Bay Area, on San Francisco, because it is such a polarizing discussion point, especially from whether it was even people I talked to when I was at the summit or in so many conversations, for me as someone that still lives here.[00:39:15] Megan Holston Alexander: Yep. So it's polarizing for a lot of people, but my feeling is clear and I've always felt that, like, talent is truly, truly all over. So I moved to Alabama because, you know, I got two little babies and, you know, my parents are getting older, and I wanted to be able to have my kids spend time with them and to go to Mimi's house, and Mimi to be able to come to their school stuff. And so, you know, the pandemic really allowed us the opportunity to do that because as you know, Andreessen Horowitz moved to the cloud. Prior to the pandemic, we were very much a, you know, in office culture as most firms were. But you know, much to the credit of our leadership, they saw how much flexibility people had while still being productive and wanted to be sure that, you know, people were able to maintain that. So I'm really grateful for it. But, you know, my stance has been the same. I've always felt like people, smart people come from everywhere and they can be everywhere. I used to get really offended, actually. So I went to an HBCU undergrad. I went to Clark Atlanta, but ultimately got an MBA at Stanford. And somehow after I went to Stanford, everybody starts, like, picking up the phone for you, right? And then they'll, like, respond to your emails when they, you know, see a certain thing there. But people are like, oh, I see you went to Stanford. Like, you must be smart. And I'm like, I was smart before I went to Stanford. I was smart in Alabama, you know what I mean? And so I've always conceptually believe that, you know, yes, people get these extra markers, but that doesn't necessarily determine, like, I didn't go to Stanford and get smart. I didn't go to Stanford and get some magical thing that makes me, you know, smarter than everybody else. And so I've just always been a believer in, you know, talent being everywhere. As far as like the Bay, in particular, I do think, you know, something special happens when you can kind of create some serendipity and put people in the same place. It's not that like, oh, you know, everybody was just born there. They're very smart. It's like, no, like, people were actively coming there to join companies, et cetera. So you did get this great critical mass of people living in one place, especially when offices were in office culture. But now kind of that disbursement has happened and I think it just shows people that like, yeah, people who are interested in tech and building things. Also, they desire to live outside of the Bay Area for whatever reason, whether it's family or friends or I want to live near Warm Beach. Whatever the case is, I just think, and again, have always believed that you can live anywhere and be smart and productive and happy.[00:41:38] Dan Runcie: And I think a lot of this was inevitable. We knew that as technology got better and better, the power of conglomeration, especially from a physical location perspective, was only going to lessen. I don't think it necessarily goes down to zero. There, of course, is benefit and why people live in particular places, but I do think that what we saw the past 15 years up until maybe the past two years was at least like the last wave. And you saw it before, whether it was with, you know, the auto industry or the Midwest of all these other places. Like, we've seen this happen time and time again. But what's different now is that things are so fragmented and it makes me think a lot of things we see in music as well. We saw so many areas that were just such culture beds for where the new hot sound was coming from, where the hottest music was. And I think we still see a lot of that. But we're starting to see even that spread out of it too. So this is happening across the board. [00:42:31] Megan Holston Alexander: Yep. I agree. And, you know, I think as long as companies support their employees' needs in whatever it is to be productive, I think we'll get to the right answer. So for example, our firm allows you, if you want to go to the office, you can. There's, like, no office that exists, so, like, you can't get interaction if you desire it. But not requiring it allows both types of people to be happy. And quite frankly, like, most people don't even know I live in Alabama. Like, I'll be on the phone with somebody from work and I'll like, no, I'm in Alabama. And they're like, oh, how long you visiting for? And I'm like, no, I live here. And like, everybody's eyes bug out and they're like, what? You can be equally as productive and no one have no, you know, no idea where you are.[00:43:14] Dan Runcie: Yeah. And I think that, and it's interesting, I've heard, you know, from some founders that are trying to go back in the office, some founders that are, you know, doing things remotely a hundred percent. And part of it is all that works for you, but the fact is we have options now and that's basically it.[00:43:30] Megan Holston Alexander: And I appreciate, again, the flexibility of so many companies to, like, actively buck against what the normal used to be, because I think it would've been really easy or conceptually easy to say, like, we're going back into the office. Like, that's what it is, and, you know, that's the end. But for all the companies that are like, hey, the world is changing, let me adapt. I and I know so many other people are really grateful for that. And me as a new mom, the flexibility it's given me is just huge. [00:44:00] Dan Runcie: Right. And to tie it all in too, it just allows the greatness and the genius to come from so many other areas that aren't filtered by all of the other things that let people pick from the pools of talent that existed before.[00:44:13] Megan Holston Alexander: Agreed. The CLF team, at this point, I don't think anybody's in the Bay.[00:44:17] Dan Runcie: Makes sense. [00:44:18] Megan Holston Alexander: I knew we've got New York and Miami and LA. Okay, wait, no, we do have one person in the Bay. But the fact is that this team, CLF as it is now, could not have existed if we could only be in Menlo Park. [00:44:31] Dan Runcie: Right, right. No, that's a good point. That's a good point. All right. Well, Megan, this is great. Covered a bunch. We got a deeper look behind the fund. Everything that goes behind the work you're doing.[00:44:41] Megan Holston Alexander: Wait, we're not done, are we? [00:44:43] Dan Runcie: We're getting to the tail end. We're going to the tail end. Oh, you got more? [00:44:46] Megan Holston Alexander: You couldn't convince me that that wasn't only 20 minutes.[00:44:50] Dan Runcie: No, we definitely, we definitely had some good deep dives in here. This was good. But no, before we let you go though, what's one big thing that you're excited for 2023? [00:44:59] Megan Holston Alexander: One thing I'm excited for 2023 for the fund, I am really excited to continue to, like, bring people together. In the last two and a half years, we haven't been able to do that, but CLF as a fund and as a network really relies on putting interesting people in a room together so magic can happen. And you probably heard me saying it's all around like the summit a few weeks ago. Like, my favorite part of my job is when, like, I know somebody and I know somebody else and I see them and I'm like, ooh, they need to talk. And I'll bring them together and I'll say, like, I don't know what's going to happen here, but y'all need to talk and whatever happens, give me my credit. And then I walk off. And then there's like all this like zhooshing and this magic that happens. I love those moments. So hopefully I can get to create more of those in 2023 with the awesome team that we've built at CLF.[00:45:50] Dan Runcie: Well, we'll definitely be looking out for that for sure. Megan, thank you. It's been a pleasure. Thanks for coming on. [00:45:56] Megan Holston Alexander: You as well. Thank you. I appreciate it. You're doing something very amazing with Trapital, and I mean, I just feel honored that you wouldn't let me be on your platform. [00:46:04] Dan Runcie: Of course, these are the conversations you want to have. Thank you. Appreciate that. [00:46:08] Dan Runcie: If you enjoyed this podcast, go ahead and share it with a friend. Copy the link, text it to a friend, post it in your group chat, post it in your Slack groups, wherever you and your people talk, spread the word. That's how Trapital continues to grow and continues to reach the right people. And while you're at it, if you use Apple podcast, go ahead, rate the podcast. Give it a high rating and leave a review. Tell people why you liked the podcast. That helps more people discover the show. Thank you in advance. Talk to you next week.

At the top of the episode, I talk about Trapital’s new Culture Report and our opening section on hip-hop’s “decline.” This report is sponsored by DICE, and it was a great chance to chat with DICE President Russ Tannen about the future of ticketing and live events.Russ moved to New York City in 2021 amid the pandemic with one lofty goal: grow the music ticketing platform’s business inside the competitive United States market. If that wasn’t challenging enough, this was all while live musical shows were still hard to come by. More than a year later, DICE is still in growth mode, not only in the US but with aspirations for other international markets too.Russ was a day-one employee of DICE when it started in 2013 in Europe. What separated the platform then — and to this day — is its laser focus on the music fan. Unlike its major competitors, DICE is as much a discovery platform as a point-of-sale. Using the app’s own internal data, fans are recommended local shows to attend. The recommendation system was created with the intent of improving the live music-going experience for fans. This same reason is also why the ticket price you see on DICE is the final price, no extra fees added at check-out. DICE tickets also can’t be resold outside of its app, ensuring true fans, not ticket scalpers, will have first access to see their favorite artists. Russ joined me on the show to discuss the inner workings of DICE, from the app’s unique benefits for fans, artists, and venues alike to its overarching growth strategy. Here’s everything we covered:[0:35] The Culture Report[13:01] DICE entering the US market amid pandemic[15:26] Competing against other ticketing platforms[19:58] Re-wiring consumer behavior around attending events[22:15] Prior partnership with Kanye West[23:37] Has there been any artist pushback?[25:16] Showing ticket price upfront, not at checkout[28:10] How DICE deals with ticket-buying bots[35:57] DICE’s investment in data science is paying off[35:37] Partnering with Ice Spice[38:21] Early signals that an artist is on the rise[40:22] Correlation between social media and streaming numbers on ticket sales[43:16] Differences in ticketing in US vs. other markets[46:18] Sales strategies for low-demand shows[48:46] DICE’s plans to tap more into Latin music market[52:27] Expansion is DICE’s primary focus in 2023Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSSHost: Dan Runcie, @RuncieDan, trapital.coGuests: Russ Tannen, @RussTannen Download The Culture Report here: https://trapital.ck.page/a23b7a6a4a Sponsors: MoonPay is the leader in web3 infrastructure. They have partnered with Timbaland, Snoop Dogg, and many more. To learn more, visit moonpay.com/trapital Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital Trapital is home for the business of hip-hop. Gain the latest insights from hip-hop’s biggest players by reading Trapital’s free weekly memo. Sponsors: MoonPay is the leader in web3 infrastructure. They have partnered with Timbaland, Snoop Dogg, and many more. To learn more, visit moonpay.com/trapital Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital Trapital is home for the business of hip-hop. Gain the latest insights from hip-hop’s biggest players by reading Trapital’s free weekly memo.TRANSCRIPTION[00:00:00] Russ Tannen: At one point I was booking in London a 150-capacity venue, and I thought it was amazing when 400 people would show up for the hundred 50 capacity show, and we try and cram them all in. And I always saw that was an amazing sign. Those shows were always free, but obviously, now we are ticketing around the world, many of the best 100 to 200-capacity venues that exist in some of the best music cities in the world. So what's fascinating for us is to not just be speaking to the people that are running and booking those venues, but to be looking at the data of, okay, which shows sold out on and out at that level, and who's got the biggest waiting list at that level. And we see a complete global picture of that.[00:00:42] Dan Runcie: 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 executives in music, media, entertainment, and more, who are taking hip-hop culture to the next level.   [00:01:02] Dan Runcie: Today's guest is Russ Tannen. He's the president of DICE, which is a ticketing platform for live events that's working to make ticketing fairer for fans of live music. They're also working to make sure that there's personalization, so that fans have a better understanding for the music and the concerts from the people that they want to be able to see. And they've been using a ton of analytics to address some of the challenges that the live entertainment industry has faced over the years. DICE is one of the presenting sponsors for Trapital's 2022 Culture Report that is out and available. You can get that on the Trapital website or if you're on the email list. And it was great to talk to Russ about some of those findings and also get a better understanding for the main problem that DICE is trying to solve. There are several aspects of the live ticketing business from scalpers and bots that are raising prices, with artists and fans not necessarily being able to have the most direct connection possible, and fans not always necessarily knowing what concerts are in their area, other people that they may want to see, and being able to get personalized recommendations there. So Russ really brought us under the hood, painted us a picture of what the events business looks like. This is a company that started in the UK, was able to get a good amount of market share there, and is now expanding into the US. So we talked about how they're focused on the venues, specifically, that have capacity from 200 people up to 10,000, what that looks like, what the opportunities are, what some of the challenges are, and what he's ultimately looking forward to most. Here's my chat with Russ.[00:02:36] Dan Runcie: All right. Today we have Russ Tannen, who is the president of DICE, a company that is on a mission to help solve a number of the challenges right now in the ticketing and live events business. And I give you a lot of credit because this is a difficult business for a number of reasons, and you're entering a US market where I think there's so much opportunity for improvements with things. So it would be great to hear from you all, and for the folks listening, what your strategy is and why the US market's been so important for you.[00:03:08] Russ Tannen: Thanks Dan. Thanks so much for having me on. It's really good to meet you and to get a chance to have this conversation. I don't know why you think it's difficult. It's it's been so straightforward. It's been such a breeze the last nine years. No, it's definitely complicated. Before we jump into it, and I do want to tackle that one, I wanted to ask you a question first actually. What was the first concert you went to, Dan? [00:03:27] Dan Runcie: Ooh, the first concert I went to. So I am Jamaican and my parents are Big Harry Belafonte fans, so I must have been nine or so, and we all went as a family to a Harry Belafonte concert. I grew up in Hartford, Connecticut, so he had come through, so that was the first one. [00:03:44] Russ Tannen: Wow. What was the first one where you, like, bought a ticket or you were, like, going with your mates and you were, like, excited to go? [00:03:49] Dan Runcie: Okay. The first one where was actually, like, me going, it was a 50 Cent concert. He had come through, they had this concert venue, the Meadows in the Hartford area. So, yeah, we went to that. This is like right when he had, like, blown up. [00:04:00] Russ Tannen: How was it? Amazing? [00:04:02] Dan Runcie: I mean, at that age, it was amazing. I thought that it was the coolest thing ever. I mean, this was the person that everyone was talking about, Oh, you know, he got shot nine times. He's this mythical legend. And then you get to see him in this venue. And of course, you're also, you know, you're young, you're with your friends, you're finally, like, getting out, like, people are finally starting to go different places. So I really enjoy that. And yeah, I mean, that was with my own money for the first time.[00:04:25] Russ Tannen: Yeah. I love thinking about those memories. I found a picture of me going to my, like, first proper concert, which is, like, I used to have hair, obviously, when I was a teenager and it was, like, dyed green, and we were going to see Deftones and Linkin Park play. They were playing in London. And I remember just being with all my mates going, it was like the most exciting thing ever to, like, go to that show. And I love like, thinking about those things and that feeling and that emotion 'cause I think, like, if you have, like, a really amazing experience early going to a concert and feeling all of those emotions about going to see live music, then it can really stay with you, like, your whole life. And I think a lot of what we're trying to do and what we're trying to capture is that feeling for as many people as possible and to get more people having those types of experiences, like, more of the time, really just spending less time at home. Like that's what we're really, that's what DICE is all about. Like, more than being an app or being a company or all the other things that we're doing, like, it's really, like, how do you get more people to feel like they're going to the 50 Cent concert and just, like, this is it, like, but thanks for sharing that. [00:05:26] Dan Runcie: Oh, definitely. [00:05:27] Russ Tannen: Yeah, I moved to the US in April last year. So I'm joining on the call from New York at the moment. And we already had a presence here. We'd been building up the business in LA for a few years before, and obviously, the pandemic hit. And I think coming out of the pandemic, we realized that there was an opportunity to start working with a number of partners in New York and really focus on our growth here and building out a team. So when I got here in April, there were three people on the team here. We've built that out to 70 people in this office and a hundred people in the US team overall with other little posts in Miami and Nashville as well as the team in LA. And, yeah, I think it's an extremely competitive market, obviously, but I also think that one of the great things that the pandemic really showed us was just how big and how strong the independent music scene in the US really is. And a big part of that, I think, was the work that Dayna Frank did and founding NIVA and really uniting all of those independent venues together to lobby for the grants that they got to keep the businesses going. And I think that that was just like a really interesting thing t o come out of it and something that will go on for a long time and last for a long time. Now, that organization, and I think it helped to show everyone, you know, how strong the independent music scene is here and what a large opportunity for a company like ours that works only with independent venues and promoters has to build, you know, a very big business here, too, and to support all the artists that are playing in those venues. So we really focus between. 200 - 10,000 capacity. Those are the types of venues we work with. And for people that are listening that don't know what DICE is, you know, we're a mobile event discovery and ticketing app that's working directly with venues and promoters to, you know, increase sales for those shows and to do all the things you'd be expecting a ticket company to do. So, yeah, but that's really where we play. It's a very competitive space, but it's a bit different to thinking about arenas and stadiums and you know, maybe that part of the live business. [00:07:19] Dan Runcie: That makes sense. I do think that, of course, that you have, whether it's ATG or Live Nation, having those arenas and stadiums and a lot of the partnerships there, the independent opportunity is much more flexible and I think there's less pure ownership there from a lot of the big players, but I do know that there's still competition from, whether it's your folks like Eventbrite or others. How have you been able to work and gain market share given that dynamic with some of the other players from that 200 to 10K capacity venue? [00:07:51] Russ Tannen: Yeah, I think that we've been going for nine years now. And we had originally worked as promoters, we'd also run venues. We were working in artist management before starting DICE, and I think we had a number of different perspectives from day one in building the company and the kind of foundational things that we focused on were probably a little different to someone who's maybe more coming from a technology background and seeing a market opportunity and looking at how to build for the venue client. Whereas we always kind of still had a management hat on the whole time. And also we're really thinking about how to build for the fan, and we've had this kind of laser focus on building for the fan experience and that started all the way back with making it a completely mobile product, making the actual purchase of the ticket extremely easy, always showing the full price upfront so you don't get that sticker shock at the end of the purchase when it's suddenly more expensive, stopping the tickets from being sold on resale, introducing functionality like the waiting list where if a show sells out, you can join a waiting list and if tickets get returned to that waiting list, you can just pick them up at the same price. All these things that we did very early that just built a lot of trust very quickly, I think, with fans to become like their preferred platform for tickets and then through time thinking even more about social functionality connecting with your friends. We talk to fans all the time and fans would tell us the number one reason that they wouldn't buy a ticket for a show would be that they wouldn't know who to go with. But we would know that from all the fans that we had using the product, that there must be some that were already friends. So we made it so you could connect with your friends through the app, through your contacts, and then on an event level, you can actually see who from your friends is going to the show, who's been to see that artist before, who's saved that event? You can also go on a view where you can just pick, so me and you could pick this page where it will show us events to go to together based on both of our musical tastes and shows we've been to before. So there's all these things that we've built that are really just nothing to do with the person sat at the venue who's the ticketing manager, and they're all about the real end consumer being the fan. And I think that's just been a different approach to most ticket companies in the US previously that have built been more transactional. And so when we pitch, it's all about how do we actually significantly change how people are discovering the events at the venue and how do we increase the number of shows that they're going to by focusing all of their experience on the actual ticket purchase. And that's really paid off and that narrative is paid off. And when we think about a city like New York, where, you know, last when I got here, it was still events weren't happening. So obviously, you know, the number of users on the app was extremely low. We only had a few partners signed that think people were starting to think about putting shows on sale, but it was really early days. We were really selling a vision of what we could do in terms of driving sales and making people go to more shows. But now that we're 18 months in, we can see, you know, over a million people in New York City using the app every month. We can see over 40% of sales coming through discovery, which is sales that we are driving. That's really significant for the venues and promoters that we're working with and of course for the artists playing those venues. So I think that New York's a great case study for us, and we're excited to do it even more across the rest of the US and also around the world. We're already in London and Spain and Germany and France and Italy, so, yeah, we're just getting started really.[00:11:17] Dan Runcie: Let's talk a bit more about that consumer behavior aspect of this because this is where I think you make the distinction. So many of the other events promoters, it's more focused on their relationship with the artist, right? They're essentially the end consumer or the venue itself. But then it's the fan that then sees the after effects of it, whether that turns out in how tickets are resold or how they're initially sold and offered in the first place and the fees and all the other things that come up. And you all are making it more so of the destination for someone that wants to come to a show and wants to check that out, and by also with some of the other measures you mentioned, not having scalpers, resale value or resale, in general, going directly to someone on the waitlist, how do you feel like this piece of it has been? Because I think so much of this is just rewiring the psychology of how consumers think about attending live events. So of course there's the business aspect of it, but there's also a bit of retraining the customer because I think for so many years we've been trained to follow the way that it's been.[00:12:23] Russ Tannen: I know. I also think that everything is always in flux, right? And everything's always changing and shifting. And I think that the moment you stop innovating is the moment you start, like, failing, right? You've got to keep kind of pushing things forward and thinking about keeping the right north star, I think. And for us, keeping the fan experiences a North Star has been the thing that's really led to, I think, a lot of our success. And I think that with the resale piece, that's a really interesting one, how that's evolved even in the last kind of nine years since we started. And I think where we're at now is that we are so at odds with how, you know, some of the other ticket companies are doing it with integrated resale and this dynamic pricing debate that's obviously going on at the moment. And we're really at the complete opposite end of that, where we really believe that if you really rip off fans or give people an experience or perception that they're being ripped off, then the next time they think about what they're going to do with their spare money to spend on social activities or with their free time, they might not pick going to a concert, and we think it's such a short term view to be doing those behaviors. And I think definitely in the sort of capacity size of shows that we're doing and the types of independent festivals and promoters that we work with, it's just not what people want either. So when we are pitching to those partners or talking to artists even about how we do things, which is really about stopping the resale of tickets and having this completely fair waiting list platform, then a lot of them love to hear that, and that's what they want to be pitched. They don't want to be pitched that we've built a system that could squeeze every dollar out of a fan who can happen to afford it. So I think that's a better approach to be doing it. I think, like, with the resale piece, especially, a lot of the early success we had with artists was also on the fact that we could stop the resale of tickets. I was just thinking of when we worked with Kanye on the Project Wyoming launch parties around the US, it was very early for us when we just launched here. And, you know, that was one of the massive reasons that he actually wanted to use the platform was to stop the resale of tickets. So there's been lots of case studies like that that we've had where just really big artists are trying to use us just to stop resale, and I think it's a misconception that, you know, larger artists are actually all trying to just make as much money as possible from the fan using that dynamic pricing or participating themselves in resale. [00:14:39] Dan Runcie: How did the Kanye partnership develop? [00:14:42] Russ Tannen: It was really very last minute and unexpected, and it was all happening from LA, and Andrew who's on our team and was in LA at the time, running there and setting up the business there had a call very late. And so it all happened while we were asleep in London, and he'd been told to set up some links, no event details, all super secret. And then we were all in a meeting the next day and I remember him texting us saying, go to kanyewest.com, and it rerouted to a DICE ticket page for the show. So it was pretty wild. But yeah, it was via promoter that we'd been working with in LA who'd been sort of brought on to find you know, locations for those shows and stuff. And there's been lots of other examples of that, but great example of a large artist using the platform for protecting their fans, and, yeah, it was just a good one to do. [00:15:27] Dan Runcie: Do you ever experience or see any type of pushback from any artist specifically? Because one of the underlying things about scalpers is that a lot of times it's the artists themselves who also benefit from the secondary market, just with the price that is seen as what people perceive as the value for going to a particular show of theirs. And also, since some of these artists have also participated in buying their own tickets and selling them on the secondary market. Have there been any artists or instances where artists have had any pushback on that? [00:16:02] Russ Tannen: No. Like, the way that we see it is we really focus on attendance. So by having the waiting list, we're making it easy to return a ticket if you can't go, then we're going to be very, very close to a hundred percent attendance on any sold-out show. In fact, what we normally see is about a 15% increase in attendance when a venue switches from a traditional ticket company to DICE, which makes a big difference when you're in the room. And I think the artists get that. The other thing with the waiting list data that we have is that you can really see the true demand for an artist. So an example recently in London would be with Little Simz, where we did this small show and we had 11,000 people on the waiting list for her, and it's just, it was so easy for her to add another date on that show. So there's been thousands. We've had millions and millions of people on the waiting list and millions of tickets returned. But the really exciting story, I think is always when an artist sees those waiting list numbers building and actually adds a second date, and that's when they're really making money. That's a better way to do it, right, really fulfill the full demand, actually have the right number of people in the room, not just a load of tickets unsold on secondary, or use that data properly to make sure that the next show on the tour is going to be the right size, so not missing opportunity on the next go-round or on the next album. And that's one of the data pieces that we really pioneered and a lot of artists have used very successfully at this point. [00:17:22] Dan Runcie: That makes sense. On the pricing piece of things, does the fact that the ticket price, once it's set is not going to be any higher and it's not going to change, does that change either how you or the artist think about what that initial dollar amount should be relative to what they may do with a more traditional platform?[00:17:41] Russ Tannen: Well, I think that the way that ticketing fees and fees in general on to tickets has kind of evolved, has made it sort of less relevant, I think, to have it kind of separate. It's kind of all part of the pie in a way. And we just always thought that the best way to do that was to show the fans the full price upfront and explain that that includes any fees that related to the ticket. We also fight to keep fees kind of as low as they reasonably can be. So we hope that, you know, the tickets are as low as they can be, but the idea of a face value ticket in a world where that ticket is not available at that price anywhere, there's no box office to go to to buy a ticket from. There's no, you know, that ticket is never available at price. So to show that price anywhere to us feels a bit disingenuous to fans and really the, I guess, the theory is that you hook people in with the lower price, and then you just sort of surprise 'em at the end and they won't care because they're already down the journey. What we decided was that actually fans are smart, and once you've been to one show, you know that's what's going to happen. So it's better just to be upfront with people and say, look, this is the full price of the ticket including any fees that need to be added. And, you know, that's it. That's the price you're going to pay at the end. In terms of how that informs pricing, you know, we don't actually inform pricing ourselves. That's always down to, you know, the venue promoter, agent, artist. And I don't know. I don't know, maybe sometimes, because we see shows coming through now where they'll say, actually, let's put it up in 10 and make sure that that includes any of the fees. Or let's put that up for 20 or 30 and make sure that includes all the fees. So maybe a little bit is starting to happen. And, you know, I hope that's the way that that it goes 'cause people should really always be thinking about the final price that people are really going to pay. And, you know, that's another thing that fans tell us all the time that they like about the platform. It felt a little bit, I think, to begin with, counterintuitive to show people a bigger price. Like, it feels weird, almost, like, to start, but then actually if you speak to fans, then they'll say, no, It's better to know. Be upfront. How much is it going to cost me? Don't surprise me at the end. [00:19:38] Dan Runcie: And this extends industries as well, right? It's like the Airbnb thing. No one wants to be surprised to see the price double because of the cleaning and service fee ends up being twice as much as the rental. [00:19:49] Russ Tannen: Yeah, exactly. Yeah, yeah, yeah. Exactly. It's just the way that we think things should be, you know, so it's a change. Like, it's been one of the big things we talk in length about with partners, especially new partners coming on board. They've done it a certain way for a long time. But actually, you know, there's all types of legislation getting passed now to actually enforce upfront ticket pricing. And I do think this will be the way that everyone does pricing for ticketing, you know, over the next five years or so. [00:20:13] Dan Runcie: Yeah, it'll be fascinating to see how that all develops. I know that DICE has invested heavily in analytics and how you think about offering the best service, and so much of this also ties back to ensuring that consumers themselves are the ones that can get their hands on tickets. So how do you address bots? Because I know that's an ongoing concern for ticketing.[00:20:35] Russ Tannen: Yeah, with bots, in particular, we were very fortunate that we started the company when we did, and we built this from scratch as a mobile company. The main thing for us really with any bots or any really anti-secondary measure is that for the most part, you know, everything is happening on mobile. We actually have two of the founders of Google Deep Mind were seed round investors of ours. And very early day,s we were terrified that one of the reasons that the company would fail would be that we would crash on a big on sale. And we used to call it the Radiohead test. Like, if we could survive a Radiohead on sale, we could survive anything sort of thing. And we actually worked and we had our CTO at the time go into Deep Mind and like work with a couple of the developers there, thinking about the architecture that would support, you know, hundreds of thousands of transactions to support on sales, but also to think about how we could protect against, you know, fake people trying to buy tickets. So we've done a lot there, a lot around security. And yeah, we haven't had a problem with it to date. So we hope that that continues. But I think, honestly, the biggest thing is that we've built this all ourselves. We have this huge, amazing product team who blow my mind every day, every year that we do this. And yeah, I think that they've built something really special. That's not something like many other ticket companies have been building on the same, they've been building on the same platforms for many, many years. And I don't think it's as, new or as, you know, as capable of handling some of these bad actors as we are.[00:21:59] Dan Runcie: And I think, too, on the analytics piece, you've also used a lot of that to inform how you think about whether it's helping artists or venues or promoters think about capacity or other dynamics involved with selling a show or with putting a show on together. Can you walk us through that process and how that informs the end product that the consumer sees when they go to a show?[00:22:22] Russ Tannen: Oh, totally. Yeah. Our first hire was a data scientist, so I don't know. It's, like, we're starting a ticket company, what do we need? Okay. Like you might think, I don't know, someone from another ticket company or, you know, an operations person or like someone from a venue. Like, we were like, no, let's hire a data scientist first, 'cause we knew that our superpower would be personalized recommendations and building an algorithm that was extremely sophisticated, that was going to show people the right shows for them., Shows that we know that they like and shows that we think they're going to like at the right time. And, yeah, so we hired this amazing guy, Greg, who still works for us and, shout out to Greg, and he's been part of the team now for many years that's been working on how to ingest all the different data points we have, starting with our onboarding process, which is all about you know, syncing with your music library, but also, you know, onboarding process, showing you different artists and genres and everything, and then starting to record all of your different behaviors in the app, which shows you're going to what you've been on a waiting list for, what you've saved, what you're browsing a lot of, and using all of that to inform your discover page, which is really the heart of DICE and the home screen when you go in there. And when we have like a critical mass inventory in a city that we're in, like, in London or Paris or Barcelona or New York, once we have that inventory, then you have an extremely personalized experience that feels almost as personalized as your streaming experience can be where there's enough inventory that you're going to see things that you're really passionate about and excited about. And we're going to package that up in different ways for you. We're going to show you things that your friends are going to, we're going to show you the genres you like, your favorite artists. We're going to show you things from your music library. We're going to show you all the shows that have been announced for you from the last seven days. Fans are always missing these announcements because there's no coordination between venues or promoters on when things announce. It's just all getting announced all the time, every day, hundreds of announcements. So, when you're looking at putting up, like in London, we're maybe 1500 a month. In New York, it's not far from that either. There's so many shows, right? Like, how as a fan are you supposed to filter that? So we filter for them using the data and the algorithms that we've built, so that we're only telling them about on a Thursday, here's the shows that announced to you this week. And that's really where all of that. You know, that's the biggest piece from a fan perspective of where that all that investment that we've made in data analytics really comes to life, away from the numbers and the stats and everything. That's, like, the real-world use of it. And that's what's driving, you know, that massive percentage, that 40 percentage of sales that we're seeing come from discovery and from the push notifications we're sending. And, like I said before, I think the person, the people that really benefit from that is the artist because that's just sales that are just happening organically through the product that we've built and not another post that they have to do or another ad they have to pay for, which always comes out of their pocket eventually. So, yeah, that's where that investment pays off. [00:25:09] Dan Runcie: Yeah. That 40% number is quite high, and it's impressive, I think, just given that this isn't something where people are necessarily consuming their product itself on the platform, right? And I think sometimes that discovery versus on-demand breakdown, you would likely expect that more from, as you mentioned, streaming something where you aren't consuming the actual product there. So the fact that you've been able to do that there is quite strong. And I do have to assume that given the investment that's been put into the data science and the fact that you can direct people and understand what people like, are there any desires or goals to be able to use the platform and the insights you have on these customers to offer them things in addition to concert ticket notifications or things like that, or other ways to leverage it knowing that you're reaching music fans?[00:25:58] Russ Tannen: Yeah, there's two. There's two parts to that. One is, I think, uniquely with DICE, we've built it in a way that what we saw before was that people would discover the show in one place, then they would listen to the artist on their streaming platform. They would invite their friends through their messaging app, and then they'd buy their ticket from the ticket company. And what we tried to do was build that stack into DICE. So you're going to open DICE and discover the show. It's all integrated with Spotify and Apple Music to preview the artist, so you're going to listen to the artist in the app. You can invite your friend directly through the app and then obviously buy the ticket there as well. So what we see is more of the journey happening there. Obviously, the event itself happens off of the app, but a lot more of the actual process of the functional and the emotional parts of like, going to the show, like who you're going to go with, for example, that can all happen within the app and people just spend a bit more time in the app than I think that they would on a traditional ticketing site where it's more like search to purchase is the normal journey, I'm sure, almost all of the sales. So I think that's where we've managed to extend the amount of time people are in there. We are really excited about sort of commerce in general, and we'd made an announcement previously around merchandise and sort of doing more merchandise and things like that, and that's something you're going to see a lot more from us in the new year as well. So, absolutely, and that's something that we already do. We do some really interesting things with Rough Trade Records in New York and also in London where we'll do, like, vinyl bundles with album launch tickets and things like that. So there's already other parts of commerce kind of happening through the app. And ultimately I think the product is well-designed to make it very easy for people to buy things. So yes, whether we're selling them a ticket, or we're selling an artist something alongside the ticket, or we're adding something onto the ticket, I think that it's a natural progression for us and something that we're excited about exploring more. [00:27:44] Dan Runcie: That makes sense. And I know a lot of the data analytics discussion leads we've had here is focused more so on the consumer side. Does it inform as well things on the business side, such as the artists, thinking about what size venues that they may want to be in or the promoters thinking about how best to organize things?[00:28:02] Russ Tannen: Yeah, we've been working, I'd say that there's definitely some artists and teams who have been really tapped into that. And, you know, we have a whole artist development team based out of London, New York, LA, and they're working directly with artists and agencies and managers on these data reports where we're really showing them not just where we're seeing a lot of activity from their fans, but we're doing things like suggesting support acts based on other shows that the artists' fans have been to see that might be smaller shows, or we're looking at what cities we think they should play there. We're doing a lot of that on a very kind of bespoke level with artists and also working with artists on getting them into more of the DICE venues and thinking about really make sure that from day one, they're treating their fans well and building that community on DICE, using that waiting list data to plan the next show. There's been lots of successful stories and artists that we've done that with, but just one that's top of mind, a New York artist that's coming up would be Ice Spice, who we're working with on just doing a first show somewhere, so it's not announced yet. But our artist team here is working closely with her team on planning something there, and I think that's really exciting, like, an artist that's blowing up, who's also really keen to make sure that the experience for the fans is going to be amazing from day one, from show one. [00:29:11] Dan Runcie: So with someone like Ice Spice who is clearly having a moment right now, what does that onboarding, the initial process, look like? Is it similar to the Kanye example where these things happen, or did someone on your team looking and scouting to see who's bubbling and then reaching out to be like, hey, let's make this happen?[00:29:28] Russ Tannen: Yeah, I guess I kind of take it for granted now 'cause we've been doing it for so long, but, you know, we literally have a meeting that probably looks more like an A&R meeting at a record label where we are really saying, okay, what are people hearing? What arts are coming through? And that's how we've really, like, you know, a ton of artists now over the years, we've really identified very early as artists that we want to support and have worked with very closely on different types of shows that they want to do. Like, another example that's kind of top of mind would be someone like Cuco, who he identified very early and worked with on this huge block party that he did in LA a few years ago and continue to build that relationship with. But there's really, like, thousands of examples now, so, probably over a thousand artists this year. By the end of the year, it'll be over a thousand artists would have really worked with us very closely, not just on having a show through the platform, but whether we've informed which venue they play or which promoter they're working with or helping them with the marketing on that event or some other really tangible thing that we've done with them. And really that artist development team, I think is, part of kind of, like, the special source of DICE that's like just a bit different to what a traditional ticket company would do. And I really think the fact that we're able to do that is because of the brand that we've built around DICE, and it is a platform and a brand that I think artists do feel comfortable with and want to be associated with as well versus, like, maybe a traditional ticket company that wouldn't have that same kind of feeling to it. [00:30:46] Dan Runcie: Right. For the A&R piece of it, 'cause I think that's interesting and I think that it makes a lot of sense, what are the factors that go into the decisions that you're looking at? Because I know I talked to a few folks and there's been a bit of debate around which stats make sense to follow, which stats don't make sense, what's more signal versus noise, how do you determine that? [00:31:06] Russ Tannen: Well, I think, we obviously have, obviously, this really interesting data ourselves. So a lot of the venues we work with at the smaller level. And at one point I was booking in London a 150-capacity venue, and I thought it was amazing when 400 people would show up for the hundred 50-capacity show, and we try and cram them all in. And I always saw that was an amazing sign. Those shows were always free, but obviously, now we are ticketing around the world, you know, many of the best 100 to 200 capacity venues that exist in, in some of the best music cities in the world. So what's fascinating for us is to not just be speaking to the people that are running and booking those venues, but to be looking at the data of, okay, which shows sold out on and out at that level, and who's got the biggest waiting list at that level. And we see a complete global picture of that. So some of the data points that I think we are finding most interesting are actually the ones that we're seeing very early come from our own data. And then I think that that's always going to be the debate on the, you know, the taste versus, or the gut versus data kind of thing, and a lot of that comes from hiring amazing people, like, we have on our artist development team whose judgment we trust very much to pick the things out that are really going to cut through. But yeah, I definitely think seeing some of those early signals, which may, in the grand scheme of things, look quite small, but I think if you are playing a hundred-capacity show and you have a hundred people on the waiting list, that's a great sign because if you're already driving 200 fans to a show, and you are brand new then, I think that's harder than going from, you know, 3,000 to 5,000 and finding those 2,000 people, I think those first 200 is really difficult. [00:32:39] Dan Runcie: How important is streaming data or social media engagement or following in your analysis? [00:32:47] Russ Tannen: I have to talk to the team about how much they're tracking that. I think it feels more like, Ice Spice is a good example of this. So we are talking about Ice Spice, Morgan on the team who's working with her team is telling me about this track, and he thinks it's going to be big, and we're talking to them about doing a show. And then in the time from when we first started speaking to her team to today, you know, her Instagram following has gone from, you know, in the tens of thousands to in the millions. And so it's more like a, we're right about this one moment. It didn't matter a few months ago or whatever, that there was only 10,000 followers or whatever. We wouldn't have ignored it 'cause it didn't have millions of followers already. But I think that now it's more like, okay, yeah, that is a good signal that this is really going to blow up.[00:33:27] Dan Runcie: Yeah. And I think just given that large number, it's hard to ignore that. It's been interesting though. I've talked to agents on this platform and they've said that they don't see as much of a correlation between streaming numbers and ticket sales. And of course, I think there's nuance there. Yes, someone like Drake or Bad Bunny that's doing 10 billion streams a year is obviously going to be in arenas and stadiums, but I think it was more so highlighting that some of the newer artists, it can be tougher because you have people that have, you know, so much of a strong following, but they may not necessarily have that following because of their music or because of other things about them. So, and I think we've just started to see more and more of that. So it does create, in some ways, a bit of a unique opportunity for the promoters or events companies that can be able to determine, yeah, like what is the true signal and what are the things that have less weight?[00:34:19] Russ Tannen: Yeah. We really want to try and work with managers and agents more and more on providing this data that we see so that they get a sense of what is really happening 'cause it is just so different. I think if someone's put their hand in their pocket and spent $30 on going to a show versus hearing a track on a playlist, obviously, like, it's just not the same type of commitment at all. So we're working to keep growing that team and expanding the number of artists that we're having that type of relationship with. And, yeah, anyone listening who wants to get in touch with our artist team is very welcome to as well, and you can do that through the site. But, yeah, we are keen to be talking to as many labels and managers, agents everyone really who's interested in kind of digging into that, especially if their artists already have shows on DICE as well on in any of our venues. We'd love to get into that with them. [00:35:04] Dan Runcie: That makes sense. Switching gears a bit, going back to the entrance and really expanding things in the US market, one of the things that stuck out to me from your past interviews was how you talked about how live events and concerts is much more of a localized business, and I'm sure that the experience that you all had in Europe and everything in the UK, there's slightly likely some differences considering things being localized, whether it's in New York City or some of the other markets here. What are some of those notable differences that you've picked up on in the US and some of the cities in the US as opposed to things in the UK? [00:35:41] Russ Tannen: I'd say that one of the biggest differences is more of a technical thing, I guess, for us, which is that in European markets, the people who actually control the tickets, it's much more spread. So on one show you could have 10 ticket companies selling tickets for the same show, and then it's really just like on the fan to have a preferred outlet or who's, you know, boosting their link the most, honestly. So it's a little bit different versus the US where it's exclusively with the venue. So every show pretty much has one ticket company and it makes the market difficult to break into honestly because of that. It's very binary. You're either working on the show or you're not. Versus when we started in London, we could say, hey, to a promoter, we want 10 tickets to the show, and we would be able to list the show. So if you were going onto the app, you could see all these amazing artists playing. But we didn't have more than 10 tickets sometimes or 20 tickets versus US, where you really have to have the whole inventory and you have to be in a position to do it. I also think that how the market worked in Europe was one of the reasons that we invested so much in the discovery piece because we were competing on every single show. We had to sell our allotment of tickets versus in the US. I think the ticket companies as soon as they've signed the venue, they're almost more lazy maybe about it. So they haven't spent so much on discovery piece. And I think that's why, you know, our discovery story here and the way that it's working here is kind of a rich one and honestly just better for fans. But we needed to do it that way around. I think it would've much harder to start here and then go into Europe. So I'm glad it works the way it did. But that's been one of the big differences. I think for us, really, we're just excited about finding all of the best kind of quality independent operators, whether they're promoters or venues, and really helping them grow their businesses as well. And we love venues that have just really well-curated programming, like, we love the programming. Elsewhere, for example, is another New York venue that we work with where super diverse, amazing program that just kind of ticks all these different boxes, but always hits this quality bar that just seems like almost impossibly high, like, every night. It's really special. So we are really, like, excited about working with people like that. And New York such, it's an amazing city for music. So it's nice that this is kind of our main base here at the moment in the US. [00:37:55] Dan Runcie: Yeah. And given that in the US, things are much more all or nothing, does that have any type of impact on how the tickets may go throughout the entire process? I know at least in the US, I've seen a few things. If a ticket is on for a while. And we talked a lot about scalpers and just their influence when tickets and the demand increases, right? We haven't talked as much about when the demand decreases 'cause I know that at times, I've seen things where artists will have their tickets go on Groupon and places like that where they'd be offered for a much lower price. How has that piece of it been in the US where, let's say there's a show that you've wanted to put on and if the resellers are needing to sell for the same price, but the demand itself may not necessarily reflect where it is, or if the artist is struggling to sell, how does the pricing dynamic impact that?[00:38:43] Russ Tannen: Yeah, I think you obviously see that, and not every show can be a sellout with, you know, tickets being sought after. I think that there's different strategies around that always. I think that for a lot of our partners, they're more used to handling all of that themselves where maybe we might be able to work on doing like competition strategy or just doing discounts or looking at other marketing channels or extra support that we can give to a show, whether that's really checking that we've done and reached all of the different audiences we think might be interested in a show and really keeping that as mobile and really trying to stay away from email, honestly. I think that one of the changes, if you think about how event marketing has changed through the years from kind of posters to magazine adverts to heavy social media to email, I think those email days are very much on the way out and really focusing on our push notification strategy and just having a very sticky product that people going to keep coming into naturally to check. That's going to be the best way to really thinking about increasing sales on low-selling shows. I think it was also a really interesting summer for people just being very honest about their ticket sales. Like, there were literally artists just coming out and saying, you know what? We're canceling these shows. We haven't sold enough tickets. Like, that was kind of new. I think people haven't been that straight up before, but that was definitely happening a bit this summer. And I think that it was a hard summer for lots of artists and lots of events and also some people had some huge success. So it's definitely a kind of uncertain time still, only obviously one year or so out of COVID and shows being back. I think that people are still feeling some of that after effects. There was a, obviously, huge rebound last summer that we really felt here as we were putting together the team still, and then suddenly we had all these venues turning on and using the product for the first time. So that was an interesting experience. But this summer I think things kind of bounced the other way a little bit, and we're going to hit a steadier stride coming into the end of the year, and I think next year is one that people are going to find easier to plan for, hopefully. [00:40:31] Dan Runcie: Yeah, I bet. And I think that we saw a few things happen this summer. As you mentioned, there was some success, but I think it definitely was a bit subject to that power law, right, where the folks at the top were able to sell out and have their tickets sell for whatever the dynamic pricing set them at. And then a lot of the artists that were either your middle class of artists or emerging definitely struggled. But one area that I do see huge amount of opportunity is Latin America and in our Trapital Culture Report 2022, we talked a lot about how much growth Latin Music has had. Of course, Bad Bunny, but there's many of other artists as well. What does your Latin American strategy look like for DICE? [00:41:11] Russ Tannen: I saw that in your report and, yeah, it totally reflected what we have been seeing as well, actually pulled the stats to share with you as well as you've done such great work. So it was fun to kind of pull something back. So Latin ticket sales for us increased nine times in the past year, so, 829% 2022 to 2021. And Latin events listed on DICE have quadrupled 2022 from 2021. So we are absolutely seeing the same. It's obviously huge. We've been working with people like the Paramount in LA and for a long time, been working with lots of Latin artists. We just did a show last year with Karol G at United Palace, with the Cuco show I mentioned, we did Bad Gyal in Spain. And also we haven't touched on it yet in this interview, but last year we bought Boiler Room, and they've also had a lot of success with Latin and Reggaeton programming, and worked with many artists, especially at Primavera Sound in Barcelona, which was another one of the festivals we work with where we had Boiler on stage this year. And they had this amazing program there, which included lots of Latin acts. So I think that, yeah, like, I think the whole industry's feeling it. I think it's super exciting. I think it's so cool. And I think that people are still discovering a lot of this incredible talent, and it just feels like a nice moment to have that exposure. I think for us more on the venue side. We're also doing this big push into Miami, and we just signed our first venues in Miami. And we're really excited about building that up there. And we just signed Club Space there, but there's many, many more venues there that we're looking to sign. So yeah, I think this is just like an interesting time. We're probably a little bit further away from actually launching in Latin America itself. But, you know, our partners Primavera Sound are just doing, over the next couple of months, are doing their first festivals down there, which are selling really well. Like, they're going to be really, really well. So definitely got my eye on maybe trying to make it down for one of those and checking it out. But yeah, it feels exciting, doesn't it? [00:42:52] Dan Runcie: Yeah, it definitely does. 9x is impressive, and it's especially impressive because I think that a lot of the folks in the music industry are seeing the top line numbers on Latin, and they may assume, okay, well, yes, the Bad Bunny effect, his album is dominating. The difference for you all though is that you don't have artists that are like the Bad Bunny level. Well, I know you're working with them, but since you're primarily focused on that 200 to 10,000 capacity, it means that you're seeing this at that level, too. And that says, and I think that should instill a lot of confidence that this isn't just one or two artists that are pulling up everything. This is an entire movement. [00:43:30] Russ Tannen: It's a really good point. Yeah. I think that's a really nice way to look at that data. And that's, yeah, it's absolutely what we're seeing and I think definitely it's hitting that point where it's not just that kind of trickle-down effect, but it's also like this bottom-up ground swell of artists coming through. So, yeah, that's definitely the right way to think about that, I think, that's awesome. [00:43:48] Dan Runcie: Yeah, and I think that Africa, with what's happening with afro beats and some of the other sub-genres there, that's next up. It's only going to, I mean, it's already happening, but it's only a matter of time. [00:43:58] Russ Tannen: It's happening, yeah, yeah. [00:43:59] Dan Runcie: You know, we see those numbers start to have even bigger and bigger market share. [00:44:03] Russ Tannen: Yeah, it gets me excited 'cause we're, you know, it takes so much every time we launch into a new country, and we kind of have to do it kind of one by one, and it's a big focus. But we really want to build DICE into being a global business and be truly global. And that doesn't mean just the kind of markets that have this really established touring infrastructure, all these other things. We want to be everywhere and explore all of these different genres and cultures in a way that makes sense. And, yeah, we're excited to be everywhere in the next few years. But in the meantime, yeah, we are helping, you know, do what we can to support all different types of music and sub genres of music and subcultures within music, and we just keep an eye on what we think the next big thing is going to be as well. [00:44:42] Dan Runcie: Definitely. Well, Russ, this has been great. Before we let you go though, what's one big thing that's on your radar for DICE that you're focusing on for 2023? [00:44:52] Russ Tannen: I think for us the big thing for us next year is really going to be expanding across the rest of the country here. We are really excited to be in tons of cities, and there's so many amazing music cities in the US as you well know. And we're excited to keep building and be everywhere because we want to be sat having conversations with artists where we can talk about doing a full US tour with them, playing all in venues that we work with, and helping them to plan how to grow across the country. So that's going to be the big push for next year. [00:45:22] Dan Runcie: Nice. Exciting stuff. All right. Well, if people want to follow along with DICE and if they want to set up their own profile, where do they go? [00:45:30] Russ Tannen: They can go straight to dice.fm. So that's the best place if you want to partner with us, if you want to get in touch with the arts development team, if you are a promoter or a venue that wants to work with us, everything's there. If you want to buy tickets and play around with the app, then head to, you know, the app store, iOS, Android, and download the app and have a play around with it. And yeah, let us know what you think. And people are more than welcome to get in touch with me directly as well. So it's just russ@dice.fm and they can email me directly. It's great. [00:45:57] Dan Runcie: Nice. Sounds good. And yeah, the next time that Kanye throws one of these impromptu listening parties or these Wyoming get-togethers, I'll look to see if I see that DICE redirect. [00:46:09] Russ Tannen: Yeah, oh, well, I'll let you know if it's going to happen. I'll give you the heads-up. [00:46:12] Dan Runcie: Right. Sounds good. Thanks again, Russ. It's a pleasure. [00:46:14] Russ Tannen: Thanks so much, Dan. Thanks.[00:46:18] Dan Runcie: If you enjoyed this podcast, go ahead and share it with a friend. Copy the link, text it to a friend, post it in your group chat, post it in your Slack groups, wherever you and your people talk, spread the word. That's how Trapital continues to grow and continues to reach the right people. And while you're at it, if you use Apple podcast, go ahead, rate the podcast. Give it a high rating and leave a review. Tell people why you liked the podcast. That helps more people discover the show. Thank you in advance. Talk to you next week.