the billion dollar market we were wrong about
Hey! Here's the latest from Trapital:
new essay: How Ringtone Rap Influenced Modern Hip-Hop
In 2006, T-Pain was the face of a billion dollar global market. “Buy You A Drank,” “I’m Sprung,” and “I’m N Luv (Wit A Stripper)” sold nearly 10 million ringtones combined. He sold more ringtones than albums or digital downloads. The man who rhymed “mansion” with “Wiscansin” gave the music industry a breath of fresh air when it desperately needed it.
The ringtone wave is long gone, but its themes have lived on. Artists now make songs specifically for TikTok, just like they did for ringtones. The music industry now tracks TikTok and streaming charts like it once tracked ringtone charts. And yet again, hip-hop is the driving force behind it. The similarities between the ringtone and streaming eras are strong indicators for where the music industry is heading.
Read the whole essay here.
Live Nation has another rough quarter
The global entertainment company lost $3.7 billion in Q3 and $7 billion total since the pandemic restrictions. In Q3, the company’s revenue dropped 94% year-over-year. This quarter, it paid more in refunds than it generated in sales. The company now has $1.9 billion available in liquidity and has taken further cost-cutting measures to stay afloat.
Live Nation’s stock is up 22% after today’s vaccine news, but Live Nation and others in the live events sector should remember an important point: Consumer behavior often lags safety precautions.
In Live Nation’s Q3 earnings call, Rapino cited a survey that said “95% of fans” are planning to return to live events when restrictions are lifted. But 2020 has taught us anything, we shouldn’t trust surveys or polls!
Read more about Live Nation’s challenges in Music Business Worldwide.
Supreme acquired by VF Corp for $2.1 billion.
photo via (brandchannel)
The famed streetwear brand has been acquired by VF Corp—the owner of Vans, Timberland, and The North Face— in a deal worth $2.1 billion. This deal comes three years after private equity firm The Carlyle Group bought a 50% stake in the streetwear brand for $500 million, which valued Supreme at $1 billion.
Here are VF Corp’s most notable acquisitions:
- 2000 – The North Face for $155.4 million
- 2004 – Vans for $396 million
- 2011 – Timberland for $2.3 billion
VF’s strength is extending the life of mass-market consumer brands. Under VF, The North Face, Vans, and Timberland have succeeded well beyond their peak popularity. But those brands benefitted from VF’s partnerships with retailers like Macy’s and Kohl’s—stores that Supreme-heads avoid at all costs unless they a) have to walk through the store to get to the mall, or b) got a holiday gift card and have to buy something.
Read more about Supreme’s story in this article from Complex.
Hip-hop under Biden’s presidency
Hip-hop culture shifts over time, and the U.S. political landscape is a contributing factor. How will Biden’s presidency impact hip-hop?
Obama’s presidency was defined by projects like Jay Z and Kanye West’s Watch The Throne, musicals like Hamilton, Run The Jewels, Shonda Rhimes’ ABC shows, and Kendrick Lamar’s To Pimp a Butterfly. They instilled a belief that “we made it,” “anything is possible,” but there’s more work to do.
Meanwhile, the Trump era was defined by projects like Childish Gambino’s “This Is America,” Jay Z’s 4:44, Kendrick Lamar’s DAMN, and films like Get Out and The Last Black Man in San Francisco. They were strong reminders that the system is broken, and offered deep reflections of who we are as a country, and as individuals in a polarized society.
It’s too early to tell what Biden’s presidency will bring. These things are best evaluated in retrospect. That said, most hip-hop artists are more relieved that the Trump era will be over than they are happy to see Biden as President-elect. That alone may change the tonality.
Spotify introduces “pay-for-play” promotion tool
Last week, Spotify announced a new program that will give songs an algorithmic boost in exchange for a reduced royalty payment. With this new experiment, Spotify will boost these songs in their radio and autoplay format. It would give artists a chance to prioritize the records they most want fans to hear. Spotify chose to take money off royalties so that any artist can opt-in, but critics don’t care. They believe it’s a form of payola—a shunned practice in the music industry.
An ongoing concern. For Spotify’s existence, it has been criticized for embracing tactics that favor those with deep pockets. Spotify may not charge for playlist placement on its in-house playlists, but plenty of independent playlists still do.
Why Spotify is doing this. “Money” is the quick answer, but more specifically, Spotify wants to be the “Google for audio”– a search engine for all things audio. Companies pay Google ads for high placement on search results. Spotify ultimately wants its customers to do the same.
Coming soon from Trapital
Podcast interview with Audiomack CEO and co-founder Dave Macli! Coming this week!
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Enjoy the rest of your weekend! I'll be back next week.
Dan
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