Why Def Jam Should Split the Record Label

The hip-hop label is on to something with its new Rap Camp, but can maximize its value as a separate business unit.

Def Jam’s Rap Camp participants (Photo from Def Jam via Highsnobiety)

Def Jam is on a mission to recapture its glory. CEO Paul Rosenberg—Eminem’s former manager—has a number of initiatives underway. The most notable one is “Rap Camp,” a week-long gathering with the label’s newly-signed acts. In January, the rappers met in Hollywood and produced over 200 songs together. The best tracks were chosen for the recently released Undisputed compilation album. In the background, an eight-part docu-series was filmed to capture the artist’s journey.

It feels like a modern version of Making the Band, but with none of the outlandish drama that Diddy’s show had. There were no continuous threats to shut down the studio. No one like Chopper who was always on sight. And no one like Dylan who swore he was a Top Five dead or alive rapper. This Rap Camp is a legitimate push from the thirty-five-year-old record label.

Rosenberg knows that labels need to think different. He shared his thoughts in an interview with Rolling Stone:

“Hopefully we’re able to demonstrate not only why you might need a label, but what a modern label can be in this era. It’s an optimistic and maybe altruistic way of approaching things, and I might be naive. But if we can show the support, camaraderie and brand benefit that artists might not be able to get elsewhere, that’s a huge win.”

To truly realize this vision, Def Jam should restructure. Currently, Rap Camp is exclusive to newly signed talent. This excludes artists who value Def Jam’s offering but are reticent to give their masters away. If Def Jam separates the camp’s operations from the record label, it can offer artists less binding terms and compete with the growing number of alternative options.

The separation would also let the record label focus on its established artists. There’s no need for the two efforts to compete for the same resources, especially in today’s industry.

Def Jam needs an identity for artists to vibe with

Rap Camp is not a new concept. In January, Dreamville Records had its own recording session for the label’s upcoming compilation album. In a recent interview with Complex, Def Jam’s A&R Dro Genao made a distinction between each label’s efforts. “[Dreamville is] riding off a staple artist. Me personally, that’s J. Cole's project. This is just people you don’t know.”

That’s true, but the connection to Cole is what built Dreamville’s identity— just like Kendrick Lamar with Top Dawg Entertainment and the Migos with Quality Control Music. It’s why those labels are relevant. Def Jam does not have a sole identity. And honestly, it never did.

Def Jam is arguably hip-hop’s most successful label ever, but its success came from a wide spectrum of big-name artists. LL Cool J was nothing like the Beastie Boys. Wu-Tang Clan had little in common with the rock band Slayer. The label had a brief moment with New York rap in the 90s, but there was never a signature sound. Not like Bad Boy had. Not like Death Row. In a landscape where labels operate like boutique fashion brands, Def Jam has been the Gap—a longstanding go-to destination with a general sense for what’s in.

Steven Victor, Def Jam’s EVP, wants to change that. He told Billboard that he limited the number of producers at Rap Camp to create that iconic sound. It’s a step in the right direction, but more can be done.

If an artist signs with Def Jam (or any label), it’s because they value the brand. Today’s acts care less about getting put on. They can get that anywhere. But without an identity to define the label’s brand, artists need to be sold on the opportunity.

A trailer from Def Jam’s Undisputed documentary (via YouTube)

The split will maximize value for the label

Like most labels today, Def Jam faces two challenges. First, it needs to convince artists that labels are still viable. Rosenberg’s label competes with non-label options, like staying independent or signing with a distribution service. Second, it needs to convince artists that Def Jam is the best label to sign with. These are two related, but very different challenges.

Def Jam can address both with this split. Rap Camp has all the tools to entice indie artists. It’s designed to build camaraderie, provide album placement, and boost publicity with the docu-series. But if Rap Camp was open to indie artists and those yet to be signed, then Def Jam can select participants from a wider and stronger talent base.

Instead of requiring artists to be signed, Def Jam can take 5-10% of revenue from the tracks that come out of Rap Camp and any music those artists release that following year. This would give artists the flexibility and ownership they desire, and help Def Jam compete with Stem, UnitedMasters, Amuse, and other distribution services.

Several Rap Camp rappers joined Def Jam because they wanted help to take the next step in their careers. “A lot of times, there are artists who don’t have the resources. It’s a blessing to be at a label that allows you to pluck roses from the streets and nurture and develop artists,” said Alexander “A.E” Edwards, Def Jam’s A&R vice president in the Rolling Stone interview. Sure, the label should want to help artists that need a boost to get to the next level. But it also should want a chance to work with the once-in-a-generation artists that will be fine without a label deal. Moving Rap Camp outside the label walls will attract that talent.

If Def Jam does a great job with the “open” Rap Camp, then many of those artists can choose to sign with Def Jam thereafter if both parties are interested. The label can structure the distribution deal to get first right of refusal with Rap Camp participants. But if artists choose to part ways, no hard feelings. Both parties still got something from the deal.

The goal is for Def Jam is to unlock the value it has created. Today’s artists are more hesitant than ever to sign to record labels. If all the label’s perks are kept within the confines of its traditional business model, it will continue to lose out on top talent.

Record labels need to prepare for the future

Def Jam—which is owned by Universal Music Group—still has established acts like Nas and Q-Tip. It competes with Roc Nation to keep its stable of mature acts. The separation will build autonomy for the harvest strategy needed for Nas and Q-Tip and the high growth tactics that support Rap Camp.

In December, I wrote an article on Roc Nation. The company’s diversification has helped protect it from changes in the music industry:

Although the company has shifted in priorities, music still served a critical role. Roc Nation used its record label as an opening to the entertainment industry, the same way that Amazon sold books as its entry into retail.

Amazon would have shut its doors years ago if it still relied on revenue from hardcover novels, just as Roc Nation would have struggled if it still banked on 360 deals. Both companies were well-diversified to handle the disruption in their initial industries and moved forward.

Def Jam’s record label split is not as drastic, but the sentiment is similar. The diversification elements are already there. It’s a matter of unbundling what currently exists.

For years, Def Jam was hesitant to change. Jay Z expressed his frustration with the label’s reserved nature when he was CEO last decade. But Rosenberg’s team is ready to push the envelope. “It’s about taking a risk,” Dro (one of the A&Rs) said to Complex earlier this month. “If you’re gonna come into a new atmosphere, in any business, you wanna shake shit up.”

Right now, Rap Camp is designed to attract the Grayson Allens of hip-hop. These folks got talent, but need an extra boost from an established organization and are willing to give up years of freedom to get it. But even Duke needed to get with the times and bring on folks like Zion Williamson and R.J. Barrett—the one-and-done stars who want in but won’t stick around forever. A little flexibility can go a long way. The same can be true for Def Jam.

Trapital is written by Dan Runcie. Contact me at dan@danruncie.com. If you enjoyed this article, forward to your friends and tell them to sign up for the Trapital newsletter!

I’ll be speaking at the Music Entrepreneur Club Tour on April 5 in Berkeley, CA. Check it out if you’re in the area. Great lineup of speakers! You can get tickets here.

'Red Table Talk,' 'The Shop,' and the Viral Content Trap

Both Jada Pinkett Smith and LeBron James' shows need to balance their desire for evergreen content and the urge to cover the hot story.

Jordyn Woods and Jada Pinkett Smith at the Red Table (via Facebook)

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In the past year, Jada Pinkett Smith’s Red Table Talk and LeBron James’ The Shop have made their presence known in the media landscape. Jada’s show just got renewed for 20 more episodes, and both shows were nominated for NAACP Image Awards. The hosts get compared to Oprah Winfrey for their ability to draw in celebrities for deep conversations. Jada plays the understanding Auntie role in her heart-to-heart talks on difficult topics. LeBron welcomes rappers and athletes in a black barbershop setting that’s often known for real talk and hot takes. Both shows have been praised for their formats. But recently, both have relied on timely pop culture drama. It’s an understandable but difficult strategy to maintain.

Red Table Talk’s most-viewed episode on Facebook Watch is the recent one with Jordyn Woods. The 21-year-old got all tied up with NBA player Tristan Thompson and reality star Khloe Kardashian’s ongoing relationship. The subtweets, blame game, and memes dominated social media for a solid five days (which is an eternity in 2019). In a prior episode of Red Table Talk, Smith hosted a survivor from the recently-aired Surviving R. Kelly docu-series.

Meanwhile, HBO has not released stats for The Shop, but the highest-rated episode is definitely the one with Drake. In October, the Toronto rapper came clean on his beef with Pusha T and Kanye West. It seems like the show’s producers are still eager for drama. Last week’s episode featured NBA superstar Anthony Davis and NFL all-pro Antonio Brown. Both athletes were at odds with team management and requested trades. This episode also had 2Chainz, who’s been on a promo run for his new album Rap or Go to the League.

It’s clear to see why Facebook Watch and HBO want their respective shows to cover these gossip-worthy stories. If the dirty laundry isn’t aired on their platforms, another outlet gets those views. The ratings game is real, but it’s also a trap. It heightens the urgency to create content that has a chance to dominate Black Twitter. This strategy has plagued talk shows over the years. It also steers well-crafted shows like Jada’s and LeBron’s away from the strong niches they have both identified for themselves.

Right now, Facebook needs Jada more than Jada needs Facebook.

Viral content usually has a short shelf life

The first few episodes of Red Table Talk focused on topics like motherhood, loss of loved ones, and body images. The Shop’s premiere episode followed a similar approach when it explored the double standards of how elite white and black athletes are treated. These topics have a long shelf life.

This is a stark difference from the most recent episodes of both shows. Chasing viral content has its challenges. The episode may get a high spike in initial views, but it usually has a shorter shelf life. It’s harder for the show to build equity with audiences.

There are a ton of shows that are already designed to chase the hot story and follow the 24-hour news cycle. Those shows pump content out early and often. Think about the shows that fit this mold: The View, The Breakfast Club, The Ellen DeGeneres Show. Each is a stop for celebrities on promo runs, scandalous confessions, presidential candidacies, and tell-all moments. These instances are built into the show’s business model.

While Red Table Talk episodes do drop weekly, The Shop is much more sporadic. A new episode comes out once a month—if that. What are the chances that a celebrity can keep a noteworthy story on the low until it’s time to sit down with LeBron and Maverick Carter?

It worked out with Drake. He kept his thoughts to himself until the episode aired. But with all the outlets available for celebrities to share stories, the chances are slim. Before The Shop episode, both Antonio Brown and Anthony Davis had already been interviewed by ESPN about their trade requests. AB had been active on Twitter and Instagram about his feelings too. Neither athlete shared anything new on The Shop. Their language was rawer, but the message was identical. The only unknown, for me, was whether the barbers on The Shop would ask Antonio Brown why the hell he went and bleached his mustache.

To be fair, it’s commendable that both Jada and LeBron’s shows are popular enough to compete with longstanding programs for celebrity tell-alls. This should not be a surprise though. Both have stars have established brands and brought their followings with them. The issue is maintaining that consistency, which is tough.

The broader question is whether Facebook and HBO will push for these shows to veer back toward their initial concepts or continue chasing ratings at the expense of long-term value.

I like that this clip is titled, “Damn, that’s where we’re at now?” because that was my reaction when I first saw dude’s mustache.

The networks have their own goals

The future of each show will be heavily steered by their respective networks. Red Table Talk is the brightest star on Facebook Watch’s dim platform. Last month, the social network announced that it will cancel two-thirds of its existing shows. And according to Bloomberg, Facebook Watch accounts for just a mere slice of overall video revenue. The service gained initial interest because of its massive user base, but it’s tough to counteract the trend that people have spent less and less time on Facebook.

Right now, Facebook needs Jada more than Jada needs Facebook. Popular shows switch networks often. Brooklyn Nine-Nine was scooped up by NBC less than two days after Fox canceled it. Don’t be surprised if Netflix, Hulu, or Amazon have already reached out to Overbrook Entertainment—the Smith’s production company— to lure the show away.

Competing networks may also seek out other stars who can lead a similar show. For instance, Jada’s friend and fellow Set It Off co-star Queen Latifah has had a couple short-lived talk shows. Here’s a quote from The Hollywood Reporter after her most recent show ended in 2014. “But despite the star power behind it, Latifah also failed to attract a steady stream of the biggest stars to help pump up viewership numbers.” Sound familiar? Latifah could thrive on a talk show with a more unique concept. She has worked closely with Overbook Entertainment in the past, so there’s an opportunity to continue that partnership.

The Shop has a different challenge with HBO. The premium television outlet has undergone several changes. AT&T has a brand new head of HBO, Bob Greenblatt, who has already thrown shade at Netflix. He said the competitor has no brand and compared it to Encyclopedia Brittanica. Dated reference aside, he has a clear stance on quality over quantity.

But HBO should be far more concerned with quantity than it lets on. REDEF’s Matthew Ball wrote about how HBO’s limited catalog makes it easier for Netflix to eat HBO’s lunch. Here’s a segment from his article:

Today, for example, Netflix will often release B-grade shows to greater success than its primary competitors (Amazon/Hulu/HBO/Showtime/Starz) do with great ones (which are far harder to find and make). … In today’s blockbuster-driven media environment, the number of “at bats” is a significant advantage; one “home run” (e.g. Game of Thrones) can be worth dozens of singles or doubles, if not more.

And since Game of Thrones and Veep are both in their final seasons, HBO’s feeling some pressure. The Shop, like HBO itself, is a bit conflicted in its own balance of quality and quantity. There’s a clear emphasis on high production value with each episode, but a monthly show will have a hard time sustaining promotional runs and high-profile drama.

The biggest blessing in disguise for HBO is that the Los Angeles Lakers will likely miss playoffs. LeBron will have more time this spring to film episodes. However, this is hardly a sustainable goal for either party.

The path forward

The problems that both shows may face are similar, but the ideal solutions are different. Red Talk Table values that its Facebook community can interact through comments on a platform it owns. YouTube offers that same functionality on a stronger platform with less pressure on one particular show. The streaming service plans to release 50 new shows this year.

YouTube’s leadership is more clear about where it stands in the media landscape. Here’s a 2018 quote from Susanne Daniels, the company’s head of original content. “I’ve always been a believer that you could make great shows for less money, and it’s not the episodic spend that makes something great.” 

For The Shop, the answer is a bit more pragmatic. It needs more consistency and frequency. Ideally, a new episode would drop every other week. This would keep the show top of mind, and it follows the cadence of how often many men hit up the barbershop. Scheduling may be difficult, but evergreen content can be filmed in advance. It’s also easier to schedule with fewer guests per episode. With a bit more intentionality upfront, this format can succeed on HBO or other networks.

A lot of folks look at Red Table Talk and The Shop as female and male counterparts. The comparison is a bit reductive and not entirely accurate, but its a signal of how the content is valued. Celebrities are usually expected to increase ratings on their names alone. Both these shows were unique cases where the hosts and concepts have strong appeal.

If either series ever got canceled, there’s little to worry about. Another network would pick it up quickly. The risk is that either show may veer off its critically-acclaimed course before it’s too late to steer it back.

Trapital is written by Dan Runcie. Contact me at dan@danruncie.com. If you enjoyed this article, forward to your friends and tell them to sign up for the Trapital newsletter!

Look who got featured a couple times this week! Check it out:

  1. I was a guest on Cherie Hu’s Water & Music podcast. We talked about my recent article on hip-hop and venture capital, why I said I would take $50,000 over dinner with Jay Z, and more. If you love Trapital, you will also enjoy her Water & Music newsletter where she covers the latest trends in music and tech. Subscribe!

  2. I was interviewed by Next Wave in Business, a nonprofit that provides a pipeline for employers to recruit Black and Latinx undergraduate students. We talked about career moves, professional development, and advice for the next generation. The organization was started by a few of my friends from business school. They are doing great work. Def check it out!

Why Kanye West is Bound to Keep Fighting for Ownership

Ye's lawsuit against EMI Music Publishing is understandable, but his pattern of business decisions may lead to similar challenges down the road.

Kanye West (via YouTube)

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Kanye West has made enough statements about freedom, slavery, and “choices” to last a lifetime. But he has a legitimate case to make in his legal “fight for freedom” from EMI Music Publishing. The Hollywood Reporter (THR) shared the following segment from Ye’s 2003 contract with EMI:

At no time during the Term will you seek to retire as a songwriter, recording artist or producer or take any extended hiatus during which you are not actively pursuing Your musical career in the same basic manner as You have pursued such career to date. (The preceding representation shall not be deemed to prevent You from taking a vacation of limited duration.)

That vacation line got me! EMI out here tracking PTO days?!

The Chicago rapper received an advance of a few hundred thousand dollars in return. The publisher has a 50% ownership stake in his music. Most artists in Kanye’s position have referenced California’s seven-year rule which limits the term of such contracts. Disputes like this often result in renegotiations between the publisher and artist. But Kanye wants more. Here’s another excerpt from THR:

The hip-hop star is not only seeking the ability to sign new deals with other record labels and music publishers, but West's lawsuit also alleges that EMI has been unjustly enriched by millions of dollars. He seeks a declaration that EMI may not exploit the compositions West has already delivered to the company after October 2010. In other words, West wants the judge to declare him the owner of these works.

If Kanye wins this case, it can shift the music industry. These decisions carry weight. Hip-hop is on an ownership tip right now. A victory would fuel that momentum.

But despite the potential to set precedence, this feels like a temporary solution for Ye. The Grammy award-winning artist has built his careers in music, fashion, and clothing on the strength of partners with deep pockets. He shows no signs of changing that approach. And now he wants complete ownership from EMI, Roc-a-Fella Records, Def Jam, and others who funded his rise in stardom.

Ye might be justified in this particular lawsuit. Regrettably, his business mindset and goals may land him in the same situation soon enough.

Partnering with the top names comes at a cost

Kanye constructed his career on the foundation of status at the expense of ownership. He signed with the Roc in 2003 to prove doubters wrong and certify his place in hip-hop. When Jay Z and Damon Dash split, Ye sided with his Big Brother. The Yeezus rapper felt more connected to Dame’s mentality, but rocked with Jay to learn “how to move in a room full of vultures.”

When Ye enters an industry, he wants to partner with the top names. In 2016, he asked Mark Zuckerberg and Larry Page for $1 billion to invest in his ideas. He came up short with the tech leaders, but a similar approach helped him navigate the athletic apparel world. Both Nike and adidas have been home to the popular Yeezy sneaker line. Kanye could have easily launched the Yeezys under his Yeezy Apparel company, but that’s not his goal. He let the athletic apparel titans take their cut so he could leverage their branding and distribution. According to sources, the Yeezy brand is worth $1.5 billion.

The few times that Ye tried the launch ventures on his own though, he came up short. In 2016, he shared that he was $53 million in debt. Vanity Fair broke down how Ye’s early failures in fashion attributed to that debt:

In 2009, he put all of his musical endeavors aside to work on his label, Pastelle—which then shuttered after seven months. Add to that however much it cost to create his line of G.O.O.D. merchandise, marketed to fans of his record label. He was chewed up and spit out for his attempt at a high-end women’s-wear line called Kanye West in 2011. The line never made it to stores. 

These setbacks stung financially and emotionally. When he speaks about his early days in the fashion world, he’s much more likely to reminisce about his 2009 Fendi internship alongside Virgil Abloh, who is now the men’s artistic director at Louis Vuitton. It gave West a desired stamp of credibility—like a business school grad who wants to get two years in at McKinsey & Co.

When Kanye gets reminded of his failures, he often tenses up. In 2014, Sirius XM’s Sway Calloway tried to connect with Kanye. The radio host mentioned his similar but smaller-scale failures in fashion. Ye quickly status-checked Sway with the infamous line, “It ain’t Ralph tho.”

This is Kanye’s mantra. The strategy has served him well. A few setbacks aside, these partnerships with Roc-a-Fella, adidas, Fendi, and others gave him the platform he coveted to bring his dreams to reality. But now that Kanye’s reaped those benefits, he wants ownership from the companies that boosted his launch. This is where the imminent challenge lies.

Here’s the “it ain’t Ralph tho” clip from 2014. Gotta give Sway credit for keeping his cool! (via YouTube)

The lawsuit might be a temporary victory

If Kanye wins this court case, he will reclaim his masters and publishing. He will get paid from the lawsuit and start earning the money that EMI and Roc-a-Fella currently make. Kanye’s income will surely rise. But Ye is not the type to let that extra cash grow quietly in a Betterment account. Kanye will likely use the extra funds to fuel his future business pursuits.

Last May, Charlamagne Tha God interviewed Kanye to get a sense for where his head is at. The two walked along 300 acres of Kanye’s newly purchased property. Kanye shared his future goals, “I'm going to be one of the biggest real estate developers of all time. Like what Howard Hughes was to aircraft and what Henry Ford was to cars.” Here’s a tweet from Ye shortly after the interview:

Despite the Yeezy umbrella branding, there’s no way this project will be funded solely by Ye himself or a small group of investors. Kanye will most likely finance it through bank loans (like he’s done in fashion) or get billionaires to front him money. In return, those billionaires will want a larger stake than Kanye may desire, but that’s the give and take. If these developments come to fruition and become successful, could we see Ye fight for more ownership from those partners? Just like he has with his EMI and Roc-a-Fella? There’s a pattern. In 2017, Kanye parted ways with Tidal because he wasn’t properly compensated for the 1.5 million subscribers who joined when The Life of Pablo dropped. Kanye clearly has justification, but the habitual nature of these disputes is hard to ignore.

Some may see it as a strategy: build partnerships despite the lopsided contracts and terms, become successful on the foundation of the partnerships, then take legal action to renegotiate the contract or retain ownership. Kanye is not the first in hip-hop to do this, but his rationale seems more reactionary and less intentional. The most logical answer is that he realizes the contractual limitations after the fact and wants out. It’s a less scandalous conclusion, but given Kanye’s public actions in recent years—in and outside of business—it’s the most logical.

The one things Kanye wants to reclaim (but can’t sue for) is his role as hip-hop’s chart-topper. Drake has worn this crown for a minute and shows no signs to give it up. Ye has been envious of the 32-year-old rapper for the better part of a decade. If you read Trapital regularly, you know that the “God’s Plan” artist lives the epitome of that partnership life. He has leveraged the industry’s value chain to build and maintain his position.

Kanye still wants that. His viral Sunday Services show his desire to regain cultural relevance. Last year’s listening party in Wyoming was another sign of his quest for belonging. I can picture Kanye saying to himself, “If I can get all these folks to come to this random ass ranch in middle America and STILL wear my MAGA hat, I still got it.”

And that’s the difference. While Drake is locked into his business model, Kanye wants it all—even if it leads to future disputes. A few extra bucks from EMI and Roc-a-Fella might validate Kanye’s rights as an artist, allow him to take a vacation that EMI can’t track his PTO days, and push hip-hop forward. But it feels like the Louis Vuitton Don will be in a similar situation again sooner rather than later.

Trapital is written by Dan Runcie. Contact me at dan@danruncie.com. If you enjoyed this story, forward to a friend and tell them to sign up for the newsletter!

Earlier this week, I tweeted that I write for the folks who bought polyphonic ringtones on Cingular that sounded nothing like the actual song. I’d like to dedicate this week’s story to y’all. Those days were rough… this is what 50 Cent - In Da Club sounded like! We made it out though.

Check back next week to see who the next Trapital story gets dedicated to!

Posthumous Careers are Harder Than Ever to Manage

Today's artists earn money in more ways than ever, which fuels the debates on how to best manage their careers when they die.

Mac Miller (original photo via Getty Images)

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Before Mac Miller passed away, he recorded an unreleased album with hip-hop DJ, Madlib. Some fans are eager to hear more music from the beloved rapper. Others are adamant that the unreleased music should stay shelved. These debates are nothing new. XXXTentacion, Amy Winehouse, Lil’ Peep, and other late artists have had their fans, estates, and record labels argue over the monetization of their posthumous careers.

Despite the music industry’s evolving landscape, these arguments are stuck in time. From Sam Cooke to Tupac Shakur to Michael Jackson, the same ethical concerns resurface each instance. And these issues will likely get worse before they get better.

Today’s artists make money in more ways than ever. The average rapper has more income streams than a multinational enterprise. There’s a number of business ventures to account for. Newer concepts and technology have further complicated the posthumous landscape.

Regardless of the intention, fanbases will question the integrity of each decision that’s made. Estate administrators will face more challenges to navigate an age-old problem in a rapidly changing industry.

The artist’s estate has legal authority, but its decisions are still subject to the court of public opinion.

Identifying the real issues

These debates have a ton of grey area. Those who advocate for the public release of shelved music are quick to cite ‘cream of the crop’ posthumous albums.

But there’s a big difference between The Notorious B.I.G.’s Life After Death (1997) and The Biggie Duets (2005). Life After Death was a completed project that was released 16 days after Big died. The album had a set release date that the Brooklyn rapper agreed to. It’s “posthumous” by a mere technicality. The sophomore release is considered a classic, but that’s not a rationale to let the people hear all of Biggie’s unreleased tracks.

Meanwhile, The Biggie Duets was a compilation of unreleased material, older tracks, and mashups with a wide range of artists. Method Man spoke for a lot of folks who were unhappy about the end result. “They got niggas on that album Big would have never rocked with, for real.” (He didn’t mention names, but I just checked the track list and whoa buddy he was not lying). The artist’s estate has legal authority to determine what gets released, but its decisions are still subject to the court of public opinion.

Mac Miller’s unreleased Maclib project highlights the nuance. The album is apparently “finished,” but has no release date, no statement from Mac Miller, and no word from his estate. Producer Thelonius Martin is not a fan of posthumous releases but said that if Madlib wants to release the joint album with Mac Miller, he should.

XXXTentacion’s estate has dealt with the same questions. The late South Florida rapper signed a $10 million deal with EMPIRE weeks before his death. His first posthumous album, Skins, was released in December. There’s surely more to come. Here’s a quote from X’s manager Solomon Sobande in his December interview with Variety:

“Right after [X] passed, I don’t even remember who gave me the advice, but somebody was, like, ‘Yo, pay attention to the Tupac estate and watch what they did.’ And I learned that’s it’s about not doing everything at once, but being able to spread things out. It’s about balancing and patience.”

Tupac’s estate might be a helpful guide for an unreleased catalog, but the estate has still faced controversy with a separate issue—the monetization of existing music.

The estate approved the notorious Tupac hologram at Coachella in 2012. There has also been a series of lawsuits with Death Row Records over unpaid royalties. And the disappointing All Eyez on Me biopic was heavily downplayed by the estate on several occasions.

The issues with unreleased and existing music will only get worse. Technology has compounded both challenges with new platforms to monetize content. It has also presented new opportunities outside of music to account for.

Technology’s role

The industry is torn on its position on unreleased music. Some think the music is unreleased for a reason and should stay that way. Others believe its fair game. Here’s a quote from entertainment lawyer James Sammataro in a 2017 interview with Noisey:

"If Prince or other artists truly don't want their works disseminated, they need to memorialise this intention in a binding document, or either not fix the work in a tangible medium or destroy the work."

In the streaming era, this perspective may call to question the ethics of digital streaming platforms. SoundCloud and Spotify allow artists to directly upload music. Many artists probably have unreleased music on their accounts. The streaming services may need to establish a position on how it should handle this music if an artist does not specify in their will.

Music that’s already been released may face even more challenges. The role of publishers will be increasingly difficult. An artist’s music is featured in more digital properties than ever. Someone will also have to fight legal battles with companies like Epic Games (creators of Fortnite) and others that directly and indirectly profit off music.

Many artists also earn income through Instagram and other social media platforms. They can sell and promote products like influencers. An estate can leverage that clout. Michael Jackson posts more on Instagram than I do and he passed before the app launched! These decisions raise questions for all parties involved. Even well-intended efforts can be received poorly.

Many of today’s artists also run side businesses in various industries. Management teams will need more than the standard entertainment lawyers to help the estate administer each step. The wide range of business ventures needs to be accounted for.

Still can’t believe the Tupac hologram “performed” at Coachella…smh (via YouTube)

Where to go from here

A lot of people want to see the industry set a standard. The most common ask is for artists to delete unreleased music and write comprehensive wills that address all possible circumstances. When Prince died without a will, many folks believed that those documents would answer the questions that his estate is left to determine.

Wills are still wise, but won’t solve the underlying issue for two reasons. First, artists with detailed wills still get swept up in posthumous controversy. Michael Jackson had at least four iterations of his will. His estate has managed enough lawsuits to start its own day-time TV show.

Second, there are too many unforeseeable outcomes. Wills would need to be updated in real time to account for the growing number of options for artists to monetize their art. No one knows if Tupac would have wanted a hologram because it wasn’t a thing in 1996.

The industry’s push will ease some issues, but there are still intangibles. The easiest cases are those where the artist did not live a problematic life, the estate is well-intentioned, and the record labels act in everyone’s best interest. It’s an ideal yet challenging expectation given the vast number of players and a wide range of interests.

Mac Miller might be a best-case scenario. The entire music community has shown its love and admiration for his growth in hip-hop. The sympathy for his substance abuse struggles has been overwhelmingly positive.

Some fans want to see a Mac Miller biopic. But if the project gets the green light, it’s inevitable that the portrayal of Mac’s battles with addiction and past relationships will polarize audiences. It’s a sensitive topic that requires a certain level of buy-in to push forward.

It’s important to maintain perspective. Fans are not a monolith. It’s impossible to please everyone. If estate’s make decisions that are fair, earnest, and not exploitative, that’s all we can ask for.

But no more no holograms, please. Let’s end all that.

Trapital is written by Dan Runcie. Contact me at dan@danruncie.com. If you enjoyed this story, forward to a friend and tell them to sign up for the newsletter!

Direct-to-Consumer Hip-Hop is Not a Game

Nipsey Hussle and other rappers have established strong brands to serve fans directly, but it takes focus and commitment to replicate their model.

Nipsey Hussle (Original photo via Meron Menghistab/BET)
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Nipsey Hussle deserves his roses. The 33-year-old rapper is fresh off a GQ photo shoot, a feature in Forbes, and several other media spots. Each interview is rich with business principles that he follows religiously. One of his tenets is the economic value in the scarcity of markets. In 2013 and 2015, he made headlines when he sold copies of his mixtapes for $100 and $1,000, respectively. On his Grammy-nominated album Victory Lap, he rapped about his quest for vertical integration. The Crenshaw native is one of hip-hop’s direct-to-consumer (DTC) gurus. It’s an approach that many in hip-hop desire, but few can execute well.

His retail store—The Marathon Clothing— is the channel aimed to bring this vision to life. “If I have 10 Marathon stores in different parts of the globe, and I drop 1,000 units to each store at $100 each, I’ll make $1 million as soon as we sell out the first 10,000,” he said to Forbes. “Then, we continue to fulfill orders, which generates cash on the books, with no distribution fee. That’s a different model, and we’re in position to do that.”

Nip’s self-made strategy may seem replicable, but it takes more than a high sticker price and limited drops. Fans are locked into Nipsey’s mentality. It’s a paradigm shift from the industry norm. Traditionally, artists rely heavily on distributors, make their music ubiquitous, and compete for digital streams. Those who occasionally attempt DTC tactics often struggle to find immediate success.

Nipsey has a diverse portfolio. There’s an opportunity to connect his customers behind a sole identity.

Direct-to-consumer’s growth in hip-hop

Nipsey’s approach is not for everyone, but several artists have done it well. Last year, French liquor company Luc Belaire did a Self Made Tastes Better video series with different rappers. The conversations with Russ and Rapsody stuck out.

Russ has been loud and proud of his independent journey. The New Jersey rapper gets hated on for his ‘holier than thou’ attitude, but his approach is still noteworthy. DTC is his means to bypass industry politics and connect directly with fans. He shared a follow-up in Forbes with Julian Mitchell:

I came up hearing so many rappers speak about how fake it is, and as I experienced it for myself, I realized they were right. From politics, social climbing and the emphasis on needing to know certain people to climb the ladder — I just don’t think it’s necessary to be successful. That’s why you don’t see me at industry events, or making the effort to be seen in certain circles. To be successful in this era, you just need the internet and fans.

The 26-year-old will probably never win a Grammy given the campaigning required to win. He could probably care less though. His strategy led him to sell out the Staples Center and earn $15 million last year.

Meanwhile, Rapsody built her direct-to-consumer approach out of necessity. In interviews, the North Carolina rapper often speaks on how the industry only elevates one woman at a time in hip-hop. In her interview, she said that 73% of her fans were men and 27% were women. Most mainstream rappers probably don’t know the specific demographic breakdown of their fanbase. The Laila’s Wisdom rapper’s attention to her consumers has helped her tour across the world, perform for thousands of fans, and not rely on the standard industry model.

The DTC life is not for everybody

For years, Nipsey has been a proud supporter of Tidal. He shared his thoughts in a 2018 Forbes interview:

Jay-Z owning Tidal was ahead of its time, and people still don’t get it. You hear people take shots, saying he only has a few million users, but that’s not even the point. That doesn’t even matter. Even if he only had his fan base on Tidal, he’s still vertically integrated, and he’s the first.

Nipsey’s support is on-brand, but we need to separate Tidal’s criticism from its value proposition. Tidal is positioned as a premium, artist-centric streaming service. There are audiences that value Tidal’s product. Audiophiles enjoy its high-quality lossless sound. Music fans who vote with their wallets value that artists earn a higher revenue share per stream on the platform. The company has identified these customers and has built partnerships to strengthen its base.

But most of the shots taken at Tidal still stem from the botched launch event in 2015. It might seem unfair that a tone-deaf celebratory event lingers with an organization, but that’s our culture. (LeBron James, Dwyane Wade, and Chris Bosh’s Miami Heat teams got flamed for their infamous pep rally for years).

The top artists who preached about artist ownership at Tidal’s event were justified, but they all made bank from the music industry’s standard model. The message would have hit home stronger if delivered by an artist like Nipsey Hussle. He could have reminded folks that he’s been saying “fuck the middleman” since 2003, had difficulty earning substantial revenue from other streaming services, and explain why he believes that Tidal is the solution.

The director-to-consumer approach also extends to how artists go on tour and give back to their fans. In October, Nipsey collaborated with the Time Done Campaign to headline a free benefit concert to raise money for criminal justice reform. Nipsey is an active player in Crenshaw’s revitalization efforts. He speaks frequently about the mass incarceration of black men in California. The choice to do this small benefit concert was on brand.

But intimate concerts are not always easy, especially for those who have not established their brands to naturally put on an event like that. In 2015, Future hosted a small series of free concerts called “Salute the Fans” to promote DS2. The event was out of pocket for Future, whose business model is to drop new music nonstop. In 2017, only Drake earned more revenue from streaming. The “March Madness” rapper has done philanthropic events before, but rarely in small, fan-centric settings.

Unfortunately, “Salute The Fans” was a logistical nightmare. Venues were changed and canceled the day of the concert. Future’s Freebandz team probably saw the success that Dreamville—a record label with strong DTC principles— had with J. Cole’s Dollar & A Dream tours and wanted to do the same. Unfortunately, they came up short. But the mishap flew under the radar and escaped schadenfreude. DS2 was too strong a force that year.

The event could have been more successful with more attention to detail. But it also would have been easier if Future chose an option that better fit his strategy.

A short clip from the 2017 grand opening of Nipsey’s Marathon store in Crenshaw (via YouTube)

Opportunities to expand

Nipsey has a diverse portfolio. His other business ventures span cryptocurrency, real estate, barbershops, STEM, and a co-working space. There’s an opportunity to connect his customers behind a sole identity.

In the 2PM newsletter, Web Smith recently wrote about how DTC brands can earn a competitive advantage:

A moat for DTC brands is the competitive advantage earned by focusing on brand, product, distribution, acquisition, and the hive – the brand’s most visible customers and product activations. This competitive advantage fuels incremental growth in established industries.

Nipsey Hussle has most of these things, but his hive is quiet. Currently, the most common displays of fandom are the occasional Instagram posts at the Marathon store. Nipsey can build a stronger public community with his day-ones by selling apparel that embodies his brand.

Right now, his ‘Crenshaw’ shirts get prime website placement. But those shirts do more to rep the South Central Los Angeles neighborhood than Nipsey himself. Nip still needs iconic gear that directly links to him.

For instance, Chance the Rapper has his “Chance 3” hats. J. Cole has Dreamville t-shirts and hoodies. Even the political podcast Pod Save America has fueled its base with ‘Friend of the Pod’ t-shirts.

Nipsey can also extend his strategy to other consumer products. If his customers are willing to pay $10 for Crenshaw lighters, there’s a market to sell additional high-priced merchandise. Companies like Supreme have mastered limited drops for expensive items. Nipsey can take a similar strategy with premium electronics like headphones or speakers.

Physical copies of Mailbox Money (2015) are still on sale for $1,000 at The Marathon Clothing

Most rappers go straight to the industry standard approach without taking a step back. They don’t realize that they’ve already made a choice. Rap is no different than other industries. Each artist needs to choose their strategy and make decisions accordingly.

Big name artists can rely on distributors and succeed. And DTC rappers like Nipsey can serve customers directly and succeed. The artists stuck in the middle are the ones to worry about.

Trapital is written by Dan Runcie. Contact me at dan@danruncie.com. If you enjoyed this story, forward to a friend and tell them to sign up for the newsletter!

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