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Trapital Mailbag #2! D-Smoke’s Potential, Lovers & Friends Fest, Jay Z the Wartime Leader, The Cost of Album Bundles, and Def Jam…oh Def Jam
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Foreign hello and welcome to the Trap Ital podcast. I'm your host Dan Runcy. This is our second trapital mailbag. Trapital members sent in questions about the business of hip hop. I filtered through the best ones. The first one that we did of this was awesome in the fall and now this is time for round two. So. So let's get right into it. Our first question is from Paul from New York, who wants to know if DeSmoke from Netflix's Rhythm and Flow has crossover appeal. As most of you know, or at least I hope you don't unless you've been living in a box. Desmoke is a rapper who won Netflix's Rhythm and Flow competition. He has been making his way on several promo runs. He's had sit down interviews with Rob Markman and Genius. He walked out with Deontay Wilder a couple weeks ago for the heavyweight fight before Deontay Wilder got his ass beat. He also has done interviews with Sway and plenty of other exposure, so he's definitely getting his name out there. He's gotten several comparisons to Kendrick Lamar because they're both from Southern California and have a very similar vibe. But the thing that makes D Smoke stand out is that he is multilingual. He can rap in both Spanish and English, and he's not just rapping bs. He's thoughtful with his lyrics. He's getting labeled as a conscious rapper. The challenge, though, is that hip hop doesn't really know what to do with a rapper like him. You really haven't seen someone like that, especially when we look at the multilingual aspects. Will fans view this as something that is entertaining, that I want to hear the same way that I want to hear Kendrick Lamar, the same way that I want to hear J. Cole? Or will it get looked at as a novelty? If we look at this past decade of hip hop, there's been plenty of artists that were extremely talented, but their career didn't necessarily take the trajectory we thought it was going to. This may sound crazy to say right now, but we go back 10 years ago, we Wale was supposed to be that dude. And I'm sure that the big Wale fans will hit me up and be like, what are you talking about? Wale did this, this and this. But if we're keeping it a buck, if we go back to 2010, right around the time that he got signed to MMG, everyone expected this guy to blew up. He understood the HBCU circuit, he was big on the blogs, he could do the club bangers, he could do the thoughtful rap. We thought that his career was going to go to the next level, but as I've written about in the past for things just didn't necessarily work out for him. Part of that was because of management, but the other part of it is because people honestly just wanted something that was a little bit simplistic and wanted to be in a more defined lane. And Wale was almost too talented in several different ways that he got relegated to niches. That's what I think could happen to D Smoke. I don't want it to happen because I do think that he's extremely talented, but I think that's a legitimate fear that any big D Smoke fan should have about the potential of his career. With that said, though, I do think that it is easier for an artist to find their niche and be successful than it was for Wale 10 years ago. So if the goal for someone like D Smoke is to find the niche of someone that will appreciate both the bilingual aspects of his rap and the consciousness of someone doing the Kendrick Lamar thing in their own way, then more power to him. But I think this is something that we should all just keep in the back of our minds. Our next question is from Wesley from Los Angeles. I think he sent in a question from the last time we did this too. He asked if Travis Bot will lead to a producerless future where humans no longer play a significant role in the music production and how long will beat makers be able to compete? For those of you that don't know, Travis Bot is this AI created artist and influenced by the real artist Travis Scott. And this company took all of the Travis Scott lyrics and used this AI machine to create a Travis Scott song. The beat sounded almost identical. The style of the flow was very similar to what Travis Scott did. There's a big barrier to get between a computer replacing an artist. I really don't think that'll ever happen. But beat making is this gray area. With that said, I don't see it happening at the highest echelons of hip hop and here's why. I still do think that beat making and the production of records is a skill. And although I think technology has democratized a lot of the ability to do that and reduce the barriers made it easier for the kid in his basement to upload something that beats stars and then that could end up being on a Drake record, that is all great. And the fact that that is happening has reduced the power from the your super producers from 15, 20 years ago. But with that said, there still is going to be a room for the taste making that happens from these super producers. And when I say super producers, I'm talking about the folks now that are at the highest levels, whether it's your Jetsons or your Mike Wills and so on. I still believe that it takes an ear to understand how best to craft something. Especially if you are trying to make a concept album or if you're trying to do something that actually has thought into it. There will be artists that completely make their own beat production and rely solely on computers. The fact that artists like Tyler, the creator and others can literally arrange everything on their album just shows how far technology has come. But I don't think it's going to get to the place where a human being will completely be replaced. I think we'll see it as we see it in technology right now. Now, the technology will make it easier, but we're not gonna see a complete takeover. They won't be true threats to one of the core pieces of music creation, specifically in hip hop. The next question is actually from a group of people from the community number that I have. Those of you that are on the newsletter for Trapital or you follow me on social media. I'm using a text marketing platform now called Community. And I had people reach out and I spoke to several people specifically about the Lovers and Friends Festival. This was a music festival announced by Golden Voice. This is the same group that does Coachella, but it's a music festival announced by them that was a throwback to the early 2000s, the late 90s, and all of the artists that many of the people that grew up in that era listen to. The thing is, the music festival rolled out to a bit of controversy because a few of the artists that were on the lineup started saying that this is not true. I never got an advance check for this. This isn't happening. Which caused the Golden Voice and the artist to clarify things. And several of the artists, I think Lil Kim specifically was one of the ones that said that it wasn't true. Ended up clarifying it and talking to them later. But a few days after all that confusion, they added a second day just for a high level. They have Lauryn Hill, Usher, Ludacris, Alojohn, TLC as headliners. Jhene, Aiko, Summer Walker, Meg, Thee Stallion, Nelly, Doja Cat. So there's a mix. But most of these artists are from that early 2000s, late 90s phase. I think that there's a few things here. One, it's an obvious nostalgia play, which is great. I Think that with the growth and expansion of music festivals, you need a variety of them. And just seeing how successful that B2K Millennium Tour was last year and all of these rap groups that are doing reunion tours, this is the type thing that people want to see. So I'm not only interested to see how many people from the LA area go, but how many people fly in from Northern California or elsewhere in the country or even outside of the country to attend an event like this. There's a few advantages here for Golden Voice as well. This type of event is obviously cheaper to put on than your traditional music festival that they have, because whether it's a stagecoach, which is their country music festival or Coachella, it's expensive to get those artists. They are getting the big, biggest artists in the world. They're paying them upwards of $4 million for a headlining appearance. I guarantee you that Lauryn Hill, Usher or TLC did not get $4 million to perform at this type of event. So it's cheaper to put on these artists. Maybe at one point could have commanded that, but they're not anymore. That said, there is a challenge. Will all these artists show up? I think it's a little bit more straightforward to be able to get the rising artist that is eager to do it. But a lot of these artists are grown. They could easily back out. It's nice to have additional money, but I'm sure most of them are living fine now and can easily change their minds. The running joke for a while has been whether or not Lauryn Hill actually shows up to any of the music festivals that are on her schedule, or if she does, will she show up on time? So anyone buying a ticket should keep an eye on that. The other thing, though, that's interesting about this festival that I'm keeping in mind is what will the aesthetic of this music festival be? I look at the events that Golden Voice puts on. I'm specifically looking at Coachella or even Firefly, because I think they put on Firefly. That's the one in Delaware or it's somewhere in that area. These music festivals that cater to a certain type of person, it's the type of person that's going to show up finding some vintage 90s NBA jersey or. Or it's an influencer. I can guarantee you neither of those crowds is the type of person that wants to go to Lovers and Friends. Lovers and Friends is catering to the type of people that, you know, used to watch 106 and park or used to watch BET in the 90s and actually grew up in that MTV era and not the way that things are today. What is the culture of the festival going to be like? That's something that stuck out to me personally. The more festivals I've been to. One of the ones I went to a couple years ago was Bottle Rock in Napa Valley in California. That music festival, Just Being Blunt, is one of the bougiest music festivals I've ever been. To get one area, they have artificial grass laid out. How many music festivals do you know have that? But based on the artists and the acts they get, it's mostly catering to a type of person that would be willing to pay for that quote, unquote, luxury experience. Luxury might be a strong word. Might be willing to pay for that higher end experience. Meanwhile, if you go to outside lands, it's the complete opposite, because that's not necessarily the case. Keeping that in mind, I'm very interested to see how Golden Voice does this. Music festival organization is their thing. They understand how to curate. They're also used to people canceling. I remember I was writing an article last year about how Kanye had backed out at the last minute from one of the years he was supposed to perform. And he was just like, oh yeah, whatever, move on. And I think to an average music festival elsewhere, it would be a big shock because the music festival itself doesn't necessarily have a strong brand and it's based on the artist. But Coachella doesn't necessarily have that problem. Coachella's brand is so strong that it just needs a decent lineup. Things are a little different with Lovers and Friends. There's a case to be made that any of the names here could easily been swapped out for the headliners, which plays into their favor. But this is the first festival. It's an inaugural festival. There's always a risk. This is a new thing they're putting out there. They'll need to see how it goes this year. The fact that they added a second date is great, but I'm very interested to see what it looks like in the future. Next question is from Chris from New York, who asked what were Jay Z's successes as CEO of Def Jam and was his tenure there considered successful for Def Jam? This question comes in light of Paul Rosenberg's departure from Def Jam. Paul Rosenberg was there for two years. There really wasn't much remarkable that came out of the Paul Rosenberg administration at Def Jam. Logic dropped a couple albums that topped the charts. So did Kanye West. But for someone that came with this goal of trying to bring back focus to Hip hop after the CEO before him expanded the slate to bring on Justin Bieber and Alessia Cara and people like that. Rosenberg didn't necessarily accomplish that. I had written a fairly critical take about Rosenberg's tenure in one of the trapital updates, and I think Chris's question was a follow up to that. Here's how I look at Jay Z's tenure as Def Jam CEO. There was plenty of good things that came out of it that he should be able to hold his hat on, and I think there's several things too, that we're able to see that he was able to translate into what he ended up doing with Roc Nation. So Jay Z was at Def Jam from 04 to 07. During this time, he was able to help propel Rihanna's career, put Rick Ross on. I believe in his tenure, Kanye west had dropped both late registration and graduation. Under Jay Z's clock, we saw Neo go through his rise and come up to the mainstream and the dream as well. These are all big artists that came through. Jay Z had a pretty big hand in being able to push that forward. There were some downsides to Jay Z's role as well. I think that young Jeezy came out of the gates hot with Thug Motivation 101, but I think his subsequent albums after that didn't necessarily do as well. Some of that has to do with Jeezy himself, with just the content of those albums. But a lot of that has to do with Jay Z as well. If you're the label head, you have the luxury of picking and trying to help back and support which artist has the most push. For anyone that does remember what it was like in 2005, and me personally as someone that was in College in 2005, I could tell you that Thug Motivation was one of the most played records that I can remember. Even Jay Z's verse himself on Jeezy's Crazy Go Crazy song was one of the most played songs that year. And I think it's still looked at as like in one of Jay Z's best guest verses. That was a great opportunity to be able to capitalize. And if we're just calling a spade a spade. Jay Z released Kingdom Come under the Death Jam tenure. What the hell was that? He acknowledges himself that that was his worst album, but it has to be put under that as well. With that said, there's more pros that comes with cons. But I find it interesting thinking about how Jay Z himself looks at the tenure of Def Jam. While he probably feels successful at certain things. I think he probably has some reservations. There was a quote he made that he wanted to try new things. He wanted to try to do merch. He wanted to try to buy things and truly bring the brand out of Def Jam, which is something that I'm been pushing for in my writing. That's what I think the next Def Jam CEO needs to be able to do. So it's good that Jay Z's already thinking with that, but he just wasn't able to do a lot of these things. He was very frustrated in the record label model. I think his quote was, we have 57 artists signed on this label and only four of them are going to break. What kind of business is that? Well, I mean, it's a little ironic to frame it that way, because that's not unlike the venture capital business, which Jay Z himself is very vested in. It highlights what Jay Z himself truly prioritizes. Jay Z operates best in situations where the boat needs to be rocked. He can come in and rock it and make the changes that need to be done to propel them to the next level. That's why he focuses on underdog brands. That's why we've able to see him push Roc Nation to where it got to. That's why he was able to come in through the Nets with the Brooklyn Nets and make it a brand when there really wasn't one there. He truly is a wartime leader. He is not a peacetime leader. He is not the person that you bring in to just keep things moving smoothly. That is what is the thought with bringing him in with Def Jam. To be clear, things were not necessarily smooth. I think there were several problems with the administration before his. But Def Jam was still in a good spot in the pipeline, considering all of those names that he had. Yes, a lot of that was because of Jay Z's brim, But a lot of those came because of the prominence that Def jam had in 2004. The way that we see him build brands, the way that we see him establish himself as a leader. That wartime mentality has been great for a place like Roc Nation, where he got a bunch of funding to help do it, but he was able to help push things in the way that he wanted to. I don't necessarily think that we saw Jay Z execute the best of his skills, although there was still some good that came of it. If I was to rate the tenures, and let's say I gave Paul Rosenberg's tenure at Def Jam a D minus, and I'm not giving it an F. I'm only giving it a D. Just because I do think that that rap camp that he put together was innovative to some extent. Not that we didn't see it before in hip hop, but there were remnants of that that can be picked up elsewhere. If Rosenberg's tenure is a D, then I think I would give Jay Z's a B or a B minus that there could have been opportunity to just push things a little bit further. Our next question is from Chica from New York. She wants to know what is my take on this new initiative, which is a incubator for music in West Africa? Mr. Eazy, who is a Nigerian music executive, started an incubator specifically for emerging artists, and he wants to give them the tools and funding they want to truly become artist entrepreneurs. The artists that join and get selected to join the program get $10,000. They could then film a music video. They got mentors. Some of the mentors include Diplo and other afrobeats producers, and Mr. E.C. himself. From there, the top 10 artists that get selected go on to Ghana and they do this masterclass and they learn more specifics about the business and songwriting. The final step is the top two people get additional money for management and other things. It's interesting. It's this mix of Y combinator with the rhythm and flow competition. It makes a lot of sense in this era that we're in where artists are much more hesitant to give up their masters or to sign deals, even when those deals may make sense in some ways. I think just the language around this has made it made people be more hesitant. Well, this gives them an opportunity to get some of that support that they might otherwise avoid. It doesn't sound like Mr. Eazy himself is trying to maximize everything from this artist. I think he wants to cap his gain at 20 to 30% of the artist's revenue. His goal is to truly help spur the interest. It would be awesome just given how much potential and growth there has been in the music industry and in the broader economy in West Africa. If you look at the numbers, the growth that's happening in Nigeria and Ghana is impressive. And I think that should interest anyone even outside of the music industry. You just look at the tech growth and other things that are happening. It's great to see this, and I hope that it provides a platform to those that wouldn't otherwise have it. I say that though, because these types of programs can often cherry pick the best talent, because we've seen this happen several times in the United States. Sometimes it's the artists or the companies or the teams that were already going to be most successful that benefit most from this, when it could have been much more beneficial for that to go to someone that didn't necessarily have as much. That could be seemed like a minor problem or a minor inconvenience because people are getting an opportunity to hopefully pave the way. It does give artists much more flexibility than a standard record label deal does. If you think about it, it's not too different from that rhythm and flow model. I forget the dollar amount they all got. Was it 250,000 or half a million dollars that Desmoke got? I forget how much he got. That and the exposure just gave a lot of those folks more opportunities that they wouldn't otherwise have. Mr. Eazy can use this as an opportunity for growth. I think that would be awesome. And this is something that I'm going to check in on myself because I'm interested to see how this model will progress and whether or not other parts of the world that are in a similar place to where Nigeria and Ghana are right now in the music industry would follow Suitcases Our last two questions are from Freddy from Los Angeles. He slid in three questions which we're only asked to do one, but I think these are good questions, so I'm going to take the top two. The first question is considering album bundles run at a loss. Would artists be better served to use digital products instead of physical goods in order to improve scale and customer acquisition costs? This is a really great question. I'm gonna answer it in a few parts. First. I think I need to first state where my thought is on album bundles. Album bundles are artists way to top the Billboard charts. Streaming is heavily devalued relative to album sales. People aren't necessarily purchasing albums on their own. Artists need to have some way to incentivize album sales to ensure that they can top the charts. Because if they rely on streaming alone, it won't necessarily help them top the char and get all the earned media and growth that comes with that. So they bundle things from tickets to merchandise to other random things that fans, especially superfans, value in order to bump up their spot and to increase the number of sales they have. Even if the fans themselves only want the bundled item and not necessarily the digital or physical album, it's ridiculous. It needs to be updated. I don't think it'll happen anytime soon, but now that we've got that out of the way, I do think that having a digital good all things held equal would save a ton of money. Because what Freddy's alluding to is that for every T shirt that is a cost for shipping and that is also a cost for the product itself. There is a cost associated with that and it increases each time. Oftentimes it exceeds the actual value of the cost of goods sold for the artist himself. But a lot of these superstars have unlimited budgets. One of the things I wrote about recently in an article was about how Travis Scott essentially spent as much money as needed to ensure that AstroWorld topped the charts. He was able to send all the T shirts and all the merchandise to make sure that he topped the charts. I wrote about his 24 hour model to drop a new piece of merchandise every 24 hours. And it served him really well to do that. The thing is though, and this is why physical goods have an advantage over digital goods, each of these items that is sold gives the hype beast and gives people an opportunity to take a picture of themselves on Instagram and post it on Twitter and post it anywhere else on social media. It's a form of clout. It's a form of repping that you love that artist. It's hard to do that with the digital good. Even just thinking about the way that artists do this, there have been some forms of this. Like last year I went and bought one of Meek Mills album. It came with a six month free subscription to Tidal. It came with the proceeds. All went to charities to help support police reform and criminal justice. So it made sense to me. And the bundled good that I got was the digital product. But I can't stun anywhere to show that I got a six month subscription to Tidal. One, no one cares. Two, it doesn't have the same thing of me wearing one of these T shirts that says, you know, I just went to AstroWorld and all I got was this fucking T shirt. Like Travis Scott sold to all of the tens of thousands of kids that went to, I shouldn't say kids. Tens, tens of thousands of adults that went to the AstroWorld Festival or bought the T shirt. That's one of the barriers for digital goods. With that said, I do think that artists are at least smart about how can they reduce their cost. Travis Scott is in going to Next Level or Bella and Canvas or some of these higher end places to buy his T shirts. He's buying the same Gildan T shirts that are on the big tables at Costco and putting his label on those and then selling those for like 50, 60 bucks to all of the fans. So the cost do work out, if it's the likelihood of being able to see that clout, see that benefit and knowing that that's gonna lead to album sales. I just don't think that a digital good can create that same level of social media impression and all of that. So with that said, I just don't see that happening soon. But it's a great question and it's something that I'm gonna continue to think about. Freddie's last question is in light of the news of Marcy Venture Partners $85 million round, where do I see Jay Z's venture capital firm placing investment bets in and will this be a self serving vehicle to the Roc Nation portfolio, Jay Z's newest venture capital firm? Well, technically this is his only one because Arrive, the one that he launched before, has now been rolled into its own app. Marcy Venture Partners is his venture capital firm. He has been pretty active. This is now one of the largest rounds that he's raised. This fund focused specifically beyond consumer brands. They've already made seven investments. At least that's what's been public on Crunchbase and other sites. We clearly know that Jay Z is interested in venture capital and wants to become a more active player in this space. I know him and Nas are cool, but he did just see Nas this past decade become one of the most known, not even just in hip hop, but one of the most known celebrities when it comes to investing. A couple weeks ago Tide or one of the other business accounts had posted the top celebrity investors that invested in the most number of startups. And it was Nas, Ashton Kutcher, Carmelo Anthony, Kevin Durant, Will Smith, so on. And Jay Z's list wasn't on there. He's had some successes. His early investment on Uber served him pretty well. I'm currently reading the Super Pumped book right now. The book about Travis Kalanick and the downfall of Uber. Jay Z tried to send additional money to Uber to increase the investment round that he had. I think it was either the Series A or the Series B. I forget. And they had to send him some of the money back because they didn't want him to get all in because they didn't have much more room for him. Those are the type of things that show that he has the money and based on the math I believe that is the investment that officially gave Forbes the confidence to label Jay Z a billionaire. Jay Z wants to be more active in this space. He wouldn't have launched this firm or raised this size of a fund if he didn't want to and already be on this many investments this early on. I think he'll continue to be an active player in this space. I do think that this will be able to be a self serving entity within Rocket Nation. If we think about it, he has management deals now with so many of the biggest names in hip hop. He's having so many of the biggest rap of the biggest athletes on and signed to his label. And the more of them that are actively pursuing their own investments as many of them are, that in turn is going to help Jay Z. They are going to want to put him on, they are going to want to see if he wants to be the lead investor and it's just going to help build and reinforce this ecosystem. There's a tremendous opportunity here. I think that Jay Z, from a business perspective, honestly is looked at more strongly than almost everyone that is on that top investor list. Not saying that he necessarily is better than they are in regards to business, but just understanding the cachet and the power that he has in this space. He wants to leverage that. He wants to continue to build. This expansion is just another form of that. Rock Nation has not shown any hesitancy when it comes to trying to expand on an opportunity and I don't look at this any differently. Nas named his Queensbridge after the neighborhood and the project complex that he grew up in. So of course Jay Z has to do the same. And you saw what Queensbridge was able to do with the number of exits that Nas had. Jay Z wants the same and he'll most likely get the same as well. I think it'll just be a matter of time and that's it. That's a wrap. Thanks to everyone who sent in questions. That was a lot of fun. I am grateful for the paid trapital members who make this possible. It's great to answer these questions that are a bit more in depth. You all know I love this stuff. I really hope that people got value out of it. Not just the people that ask questions, but those listening too. If you want to participate in the next one and you're not currently a member, you know what to do. Go to Trapital Co. Go to the top right and click on the link to become a trapitalist. You can join the amazing group of smart people who make this all possible and are part of this movement to elevate hip hop culture. If you enjoyed this podcast, please tell at least one friend about this podcast. Word of mouth is still the best way to grow. Go to Apple Podcast, Go to itunes. Leave a review rate the podcast. I will screenshot and share the podcast ratings on Twitter Instagram. That can encourage more people to share the podcast. And if this podcast is your first introduction to Trapital, then make sure you check out the rest of the content. Go to Trapital Co. That's T R a P I T a L Co. Sign up for the weekly newsletter, get all the the content there and also shoot me a text. That's also a great way to stay in touch with travel content. You can text me Dan Runcy at 415-234-3074. Thanks again. See you next week.