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Foreign.
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I'm Dan Runcy and you're listening to trapital and you're about to hear the conversation that kicked off our second annual trapital Summit with the CEO of Versus and IMAX board member Steve Pammin. I've been lucky to call Steve a friend. He's one of the smartest people I know that understands the entertainment business inside and out from his time at McKinsey, Time Warner, JP Morgan, Chase, the NFL, HBO, Parkwood Entertainment with Beyonce and his roles now at Versus imax, as well as his past roles as a board member at wwe. One of the key things that I think has been a through line with Steve's career is turning moments into events that matter. This is more important now than ever when it's harder than ever to break through the noise even for some of the most established stars. How do you do it and how do you do it consistently? You'll hear us get into Steve's work with Beyonce, specifically around the Formation on the Run tours and her Coachella concert. But you'll also hear us talk about versus, IMAX and a whole lot more. A lot of attendees afterward told me that this was their favorite conversation from the summit and you'll hear why. Here's my conversation with Steve. This episode of trapital is brought to you by Lelo Tour cycles are the number one driver of fan list growth and they have the data to prove it. LELO's new drop report, How Live Events Fuel Fandom, analyzes over 200 million fan actions across the world's biggest drops to help you turn live moments into long term fan relationships. In this report, you'll unlock exclusive insights on tour drops, shared publicity for the first time, over 15 artist highlights from Shaboozi, Party Next Door, Ski Mask, the Slump God and more. You'll also see the data behind why drops convert up to seven times better than then traditional campaigns and trends, and insider tips from tour executives, artist managers, agencies, labels and festivals. You can download LELO's new drop report by clicking the link in our show notes. I mean you had to come out to a Beyonce song.
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A
I was going to say that brought.
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B
Back some memories and I think that song too because that specifically was Homecoming 2018 and it was one of the more memorable Coachella performances but also one of the more memorable live music performances. And when I think about that event in many ways what people probably think from the outside oh well, it's Beyonce. Of course she was going to get a lot of attention. But no, the amount of work that goes into making that Happen. Sure, we all saw the documentary, but you were on the inside. You know better than anyone.
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First of all, thank you for saying that. It still means a ton to be a part of something like that. I think there's a couple things that come to mind. One is just the team aspect, right? So by definition, she is, you know, beyond superstar. Same thing with Swiss Beats and Timberland and all the folks involved in NFL and other things, but the intentionality of having an entire team from top to bottom. I tell people the one thing I learned that started my career at McKinsey and Company, a consulting firm, is that you judge the best institutions in the world not by who sits at the top, who are the entry level employees, right? And so when you look at a Parkwood and you look at what we're trying to build at Versus in the whole nine, don't judge it by like me, Swiss and Tim. Judge it frankly by the Donna Marie's and the Demas and the folks just starting off because if they're excellent and they're intentional about the excellence, it'll make all the difference in the world. And then just in terms of the basic framework of how do you make these things in the moments, again, it comes straight out of, before the NFL, I was at hbo. Literally, the HBO playbook is you start off with storytelling. It's all about what story. When we did versus, like Brandi and Monica, this isn't just putting two R&B singers up there against each other. That's an entire story. That's a movement and that's something that divides people, but it's also something that brings people together. Versus is nothing but an instantiation of the barbershop arguments, right? Of the beauty shop discussions. So you start off with that story and the story can't be what is it about the event? It has to be, what do the people communicate about? The second thing is execution right out the gate, right? You have to over deliver, right? You and I have talked about this. We used to have on the whiteboard at Parkwood. I used to literally do divide it up into three columns. 8, 10, 12. 8 is the cost of whatever event we're putting on, right? 12 is the value we want to create and then 10 is the price. So we want people to feel like when they come to the Formation World Tour, even Cowboy Carter recently, we want to feel like, man, these guys overdid it, right? Because no matter what the price is, if you feel like you got more than what you paid for, guess what? You're going to end up doing, coming back. Right. And then last but not least, the scalability of once you have something like a Coachella. You know, again, I've talked about this. All it is is four frameworks on how to scale it. Right. First off, it's just basic ticket sales. What are you getting directly from the consumer? Second is what is the media production you're having. So the thing that's interesting about Before I Let Go, that song wasn't performed at Coachella. That actually came out a year later when we debuted the movie on Netflix. Right. So again. But it was designed for that. And again, before I Let Go, when we think about the black college experience, the closing songs at almost all the parties would be two. One is Candy by Cameo. The other is Before I Let Go by Frankie Beverly and Mays. If you actually listen to the record, it's actually an interpolation of Candy for the instrumental. That's the beat, Right. The lyrics are Before I Let Go. So that was our way of putting an end to the party. So Coachella for us wasn't two performances across a week. It was an entire year. Right. Including on the run. Then last but not least, you have our partners, you have American Express, et cetera. And then, you know, we had commercial products and licensing, which again came from the league in the sense that every time you go to a football game, if you and I go to Rams game, it's not uncommon for 40 to 50% of everyone attending to be wearing the uniform or merchandise. Right. Why isn't that way at concert? So we intended to do that starting out with formation. And you see what happened with Cowboy Carter, 40 to 50% of everyone was dressed in the theme and motif renaissance. They're all dressed in disco and silver. That's to create that fandom. Because it's not just her on the stage, the stage is the entire venue. But once you get that going back to 8, 10, 12, once you get people believing their part of the story, if we can keep producing that at a reasonable cost, charging a bit more, it becomes circular, not linear. So that's how you build these things. It's not a one off thing. The goal is to build Beyonce into a franchise. The goal is to build versus into a franchise. So any individual event doesn't have that much bearing compared to the overall franchise. The same way you had 16 games played this weekend at the NFL. Some of them great, some of them not so great. But the franchise itself is lifted up higher.
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Right. Sunday Night Football will always have 20 million, 25 million people.
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Absolutely. Regardless, no matter what the city. That's right. Regardless of the matchup. Because there's a consistency also too in quality. Right. But again, the game might last three and a half hours. In terms of broadcast, it's really an hour of action. But look at the discussion before and after. So if we were to announce verses, if I would say Dan and Steve during verses next week, do people believe just the verses takes that three and a half hours. All the discussion. Think about the number of discussions that have had about verses that aren't happening and will never happen. If I hear Fat Joe talking about another hypothetical verses, you know I'll die. But the truth of the matter is that's what we actually built and that's what I take pride in. You have never seen a Drink Champs episode in the last four years without him asking about Versus. I can go at any barbershop in the world and just say, you know what, who wins, Dan or Steve in a Versus. I don't have to explain the rules. I don't have to explain 20 songs. I don't have to explain the ethos. Everybody has an opinion. And that to me is when you start talking about building a franchise. And what I would love to see, and I challenge everybody else is, is we need more of that.
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Let's take a break for our chart metric stat of the week. Big news from Sphear Entertainment. No doubt we'll do a six show concert residency in Las Vegas at the Sphere in May through June 2026. This makes Gwen Stefani the first female headliner as either part of a group or a solo act on that stage. And it also continues the trend of 90s and 2000s artists and bands like the Backstreet Boys that will be at the Sphere. It's cool to see always like no Doubts music. And I was looking through chart metrics, specifically the RIAA Awards, to see how well their albums have done over the years. I was a bit surprised to see only one of their albums, Tragic Kingdom, their debut album from 1995, went Diamond. The others only went two platinum or single platinum with Rocksteady, the Singles Collection and Return of Saturn, respectively. Of course, Gwen Stefani did solo stuff afterward and there's been some hiatus there in between. But they did have a pretty memorable Coachella performance in 2024. So I'm eager to see what their Sphere residency looks like. Let's get back to the episode. And I think with Beyonce too. You've mentioned the Dallas Cowboys analogy, right? If you're trying to aim for that level. I was Thinking about how Roger Goodell, NFL commissioner, had recently said that he no longer sees the MLB or the NBA as his competitors. He sees Google and Apple as his competitors. And when I hear this, sometimes I wonder, okay, how much of that is leveling up in this way? Like everyone has a mood board versus what is actually attainable.
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Yeah, I mean, I think it's a little bit of both. Right, Right. So I tell people all the time, aspiration and execution should never equal. Right. Aspiration should always be ahead of execution. The problem, and I say this all the time with respect to the music business. I always consider myself a music person. I'm very versed in music events and how to produce music. But you have to be a business person. What I've been able to see across excellent businesses is that some of the greatest businesses are formed under duress and pressure. And what I see with the music business is, you know, down 1%, down 2%, up 3%. So the enemy of greatness is just the fact everybody seems to be doing good. And you know, to be candid, Roger, who I owe a lot to, Roger was annoyed whenever we bring up mls, Right. He was annoyed when we bring up the NBA because to your point, he felt like, look, we are a storytelling machine. We are media that happens to put on football. Don't compare us to basketball that we're already ahead of. Right. And so I think, you know, we constantly have to challenge ourselves. Is everybody happy? You know, the one thing we did versus, frankly, because as artists and as business people, we were unhappy during the pandemic. We're unhappy that people don't give credit to people like Patti LaBelle. People don't understand what Gladys Knight really means to the culture. And so by getting that discussion around a small group of people, that caught on. And so frankly, it allowed people to talk about more than who is bothering who in the music business and to refocus on the music. So I really challenge myself, I challenge everybody to stop thinking about, we're in the music business, we're in the people pleasing business. If you can please people at a reasonable cost, you can make a lot of money if you just reframe it on how we're going to sell music. By definition, you locked yourself into a box.
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Let's talk about the reasonable cost piece, because especially for artists like Beyonce, I've referred to her as a Veblen good before the value goes up. And the success of the Cowboy Carter tour financially has shown that even if the ticket prices are twice, maybe three times what they were for the 2016 formation store. The same stadiums are still being sold. But I wonder, obviously it's everything that you all have done that helped make her product be at that level. Yeah, but is there any downside to what that may look like long term, especially if we're in the people pleasing business at a reasonable cost?
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Yeah. Well, let me caveat it by saying, and I'm not backing out. I didn't work on cowboy Car.
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Of course not. That is important to say.
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But. But I think that really illustrates the entire business unit. Not just Parkwood, but. But Live Nation. Everybody has to be on board with the same cause. And what I'm starting to see now, unfortunately with B and with others is you see too much profit taken. So going back to the 8, 10, 12, you never want it to be 8, 11 and a half 12. Right. The fact that value is so close to price is greed. Greed breaks up the cycle. Because the hardest thing in the world isn't to sell the tickets for the current tour. The hardest thing in the world is to sell future tours. You want to be like Frankie Beverly and Mays. You want to be like Coldplay. You want to be like U2 where you have an annuity stream that lowers the cost of acquisition. And what I'm seeing right now with some of the greed, right, People are acting like it's like my mother said, don't go to the grocery store hungry, right? People are acting as if this is the last tour. People are acting as if this is the last bite at the apple. So they're taking every dollar off the table and not understanding if you don't have a ticket price, forget about profit. Where young people can go to the concert on their without asking their parents. You don't have a sustainable business because those young people are going to be the parents one day. And the beautiful thing about a Beyonce and a Taylor is if you go to those concerts, you'll see multi generations there. But my big fear, just to be honest, we're pricing. And that's not just music, that's sports, everything. We're pricing the average fan out of a decent experience. In the quest for these super fans who are paying, to be quite honest, their last dime for this. And when they disappear, all your profits will.
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B
It's interesting because obviously Beyonce performed at Coachella. There was more talk this year about the layaway plans. I forget what platform. It isn't Klarna, but they had their own internal thing at Golden Voice. And it's not like it just started this year. This was a thing, you know, back when Beyonce did Coachella. But it's only a higher and higher percentage of people doing this. Yeah.
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And I think, you know, that's a shame. And. But it goes back to the aspiration. If you think of yourself as just producing the concert, then there's a pressure about all the profit pool has to come out of that event. However, if you think about as a whole ecosystem, we had with Coachella, we had the Netflix special, right? We had the song, we had a live album. So the profit pool was based on a variety of products. So even if we took from the customer, making this up $100 per, the ticket price might have only been 65 of that. But what I'm seeing, again, without the coordination and the intentionality is, okay, Columbia is maximizing their profits from Cowboy Carter, Live Nation is maximizing their profits, the venues are maximizing their profits, and nobody's looking at the entire customer experience. I mean, I'll give you a concrete example. On the Formation World Tour, when we did exit surveys, the number one and two problems that people had with the tour had nothing to do with us. It was parking, bathrooms, the two things that me as a manager, I had zero control over. But we wanted to make sure the next tour, when we went out for on the Run, we talked with every one of the venues. I needed all the bathrooms to be staffed because here's the weird thing going back to profit. The most expensive ticket for on the Run 2 was what we call Club Carter. That's on the field ticket. 70% of the buyers were women. When you think about the way these stadiums around the world are constructed, it's not even 50, 50 women and men's bathrooms. And then the bathrooms, the best ones, are on the club level in the 200 seats. They're not on the pitch. So we're asking people to pay $2,000 a ticket and then use Porta Potties. Like, that's absurd. So, you know, it was a shame, but we literally had to go out and contract with portable bathroom companies, bring those trucks in on tour to give people that experience. Same thing with parking. We did a deal with Uber where we wanted to shuttle People at MetLife Stadium from Grand Central because we have so many young people coming to the stadium and in the middle of New Jersey. I'm not worried about them getting there at 6pm but how did they go home at 2am and so I tell people, there's life by a thousand, you know, blessings, there's death by a thousand. Paper cuts. You got to pay attention to the detail. Everyone wants to be us. I told you this at 8pm, right? Nobody wants to be me at 5am at these venues. And that's the difference.
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B
And that's the thing. When it comes back to the hard work, people just don't understand how much it takes. But I do want to switch gears a bit because I think in talking about events, of course we know what the Beyonce side of it looks like, but you've also sat on boards of WWE and imax and I think for those businesses it's been a pretty interesting past few years. I know you're no longer on the WWE board, but the growth that they've had recently has been pretty impressive. I mean, it brings you back to the attitude era for just how strong that business is. Are there any insights to how that business is run that you think could be beneficial for?
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Absolutely. And I mean, look, people poo poo. When I joined the board of WWE, that was 2000, well, 2020, when I joined, people said, wrestling, what are you doing? The whole nine. I mean, independent of the financial upside. The thing people forget is that Vince, as crazy as Vince is, put on three television shows a week, right? USA had Raw, right? USA had nxt, which is for up and coming wrestlers, and FOX had smackdown, in addition to the pay per view, what we call large premium events. He's been doing that for 50 years. So imagine a tour, right, that's been going across arenas for five decades, that at the same time sold tickets, literally was in the top 20 cable shows for again five decades. We're talking about started cable, came through cable, digital cable, satellite, now Internet. It goes back to what's the common denominator? The storyteller. And Vince used to tell me at the end of the day, he said, Steve, WWE is for the 15 year old boys. And I'm like, well, look at the stadium. There's more than 15 year old boys. He said, you're looking at the outside. He said, The 15 year old boy exists even in a 40 year old woman. Once you step foot in a WrestleMania, I want you thinking of that because no one else would laugh at the folding chairs if we were at a WWE event right now, you and I, you put me in a headlock, we fight, then someone would come in, Jonah. So it is silly, but again it involves the people and people love it. And for him. And what I really learned there is again, going back to TV doesn't compete with the live event, it actually grows it. The merchandise. We used to go to WrestleMania and this was hilarious. They would literally have people waiting two hours before the fan stores opened up. They would be holding the WWE championship belts, wearing WWE merchandise again at five in the morning to wait in line to buy, guess what? WWE merchandise and WWE Championship belts. Because they weren't buying a T shirt. There wasn't the utility of that. They weren't buying the belt. They were buying the feeling of being involved. So the big thing I learned from wwe, which again, now that they merged with UFC and the whole nine, I think all of us learn is how can we bring people as a part of this music community. That's how you turn these events into moments. Instead. What I see, particularly in hip hop is this whole notion of we're better than the customer, right? We're the coolest. We show up late. And again, you and I talked about this. If I wanted to invite this entire crowd to the NFL sales and marketing conference, that conference has a ticket, says 8am at 8:01. That conference is on point. It's going right. If I wanted to invite someone to the game tomorrow night, Cowboys Commanders, when that ticket says 8 o', clock, kickoff at 8:05, that ball's in the air. They don't care if Jaden Daniels was sick or anybody died. They're playing that game. How many concerts, particularly in hip hop and R and B, and you know, I love that, how many concerts are we going to to start on time? And it has nothing to do with the man isn't, you know, holding us back or any of this other bs. It's the disrespect we have for the customers. I used to fight with some of the biggest names in the business. Why wouldn't we just say if it's not going to start till 10, why wouldn't that be on the ticket price? First of all, how is it that again, WWE is completely scripted, right? Everybody knows what's happening. They're comfortable with that. WrestleMania will do two 80,000 seat things. But you can't get the set list unless you go to private sites from any of these artists. They won't even share the set list. Like, what secret? If I perform this, I'm making this up in London. Now I'm going to Paris. What? Like, what are you trying to hide? Like, where is the thing? And that's where I go back to when I see people like Roger. Say what you want about Roger, but the NFL is a very successful business and the discipline and the angst he has. But when I see some of these people who aren't making Beyonce money who aren't doing WWE numbers, literally coasting. It really hurts me because they're going to be the ones to destroy the business, not technology.
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B
Let's briefly talk about imax, because you're on the board there now. I think there's some similarities there. That business is stronger than ever. Selling tickets a year in advance for.
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The Odyssey, well, I mean, you know, it goes back to a through line and I've been blessed. I tell people now I'm living my teenage life. I'm going to the movies for free, watching wrestling and hanging out with DJs like Swizz and Tim. But again, you know, I take it to go back to say, is the value really that much better in seeing IMAX versus seeing, you know, Dolby? I think it's questionable for certain people, but again, you want to feel a part of something. If you're going to do it, do it up is sort of, you know, the way Richard Gelfon at IMAX looks at it. So if you're going to go see Oppenheimer, you're going to go see the Odyssey, why not see it in the best possible light? One of the craziest things, and obviously being on the board, I'm not in charge of strategy, but I pushed IMAX to do this. When you go to the biggest concerts in the world, they're now video productions with staging in front. How come you don't go to a stadium show and you see Taylor in imax? Why isn't the sound in thx? I mean, what's hilarious is you're spending. Well, not you, but the taxpayers in most cities are, are spending two and a half to $3 billion. Tennessee, Nashville, building a brand new stadium with a gigantic video board, probably the biggest in history. You know what their sound system is there a PA sound system. When we go on these tours again, for people in the business, they know this, but most people don't know we bring the sound system. What business do you know would survive going to a venue bringing their own sound system that has giant video boards, by the way, that don't work for anything other than the 10 football games a year? That is insanity. That'd be the equivalent of Christopher Nolan saying, hey, we're doing the Odyssey, but we're going to bring in our own sound, we're going to bring in our own screens to the amc. And so I go back to the benefit of seeing these businesses isn't that they're each perfect, it's that you start to see the through lines and you see that it's our ego that's preventing the movie business from learning from entertainment. It's our egos preventing television from learning from music when actually we're going after the same person. And that to me is hilarious because they don't put these arbitrary things up. When you go see print Sign of the times in imax, they don't think of that as AMC or Warner Brothers or even imax with the companies. That's Prince.
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We only have a couple minutes left. I do want to talk about versus.
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Yeah.
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What are the next steps?
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Yeah, I think. Well, first of all, with us, you know, and I'll admit this, we made a cardinal sin in that we focus more on distribution than the customers for a second. So we did the deal with X, which, you know, by definition we regret it like two seconds after signing it because. And you know, and again, I tell people all the time, this is baseball averages. So you learn from the mistakes. The average versus viewer is a middle aged African American woman. Brandi and Monica actually, believe it or not, wasn't the biggest versus. Nor was Dipset and the locks. You and I have talked about this. The biggest versus in terms of viewership was actually Ashanti and Kesha Cole was by a factor of a mile. And I tell people this. When you have a core customer like the black woman, we're supposed to over stimulate. We're supposed to over satisfy to do a deal with a guy, no matter how much money we made, who basically was comfortable after we did the deal. I want people to know, not before, but after we did the deal, saying he doesn't think black women are qualified to fly an airplane. Listen, you know, pardon my French, him, you know, the beautiful like. And. And again, the beautiful thing is Tim doesn't need the money. Swizz doesn't need the money. I don't need their money. And so the truth of the matter is we did this because we love the music and we love the musicians. We didn't do this because we loved X. So we said to ourselves, until we can figure out the next distribution point outside of X, they can save the money and we'll go about our business because it's not worth it.
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Well, I'd love to continue this conversation, but we'll have to pause for now. Steve, I appreciate your time. Steve Pimmen. And that is a wrap. Thank you again to Steve for joining me on this one. I'm still getting hit up by people that came to the Trapital summit about how much they loved the 8, 10, 12 concept. Thank you again for sharing the insights. Thank you to Shaun T. Smith who captured the video and audio at our trapital Summit. Thank you to G and Eric, our video and audio producers for everything that you do to help make this trapital Summit episode and all of our episodes possible. Thank you again to our Tropical Summit sponsors for putting on the event the Rain Group, Warner Music Group, Splice, Live Nation, urban beat, bread, soundcloud 2 loss, linktree and luminate. We couldn't have done it without you. And most importantly, thank you for listening. If you really enjoyed this conversation with Steve or any of the conversations we have on trapital, then leave us a review that helps spread the show. Make sure it gets in front of the right people. Send the show to someone that you think would enjoy it. Whether it's this episode or another one. Rate the show. That all helps make sure that trapital reaches the right people and word of mouth is still the best way to grow. Thanks again. Talk to you next time.