[Music] music is what connects us it is what is universal it has that connective piece where we hear certain songs and brings us back to certain memories that we had and everyone has that everyone has that ability Napster in 1999 and the reaction the violent reaction of the music industry you know prevent don't let this happen
because the industry for several reasons does have much of its protection and its guard up when it's trying to work with any of these new platforms the reality is that the industry doesn't have a choice it eventually needs to adapt to AI let's expand the pie let's have not a zero-sum game mentality here that long
tail has its quarters it has its pockets and there's just more and more opportunity there that people can think if you're willing to put the work in we've never had this many opportunities for people who are creatives bet on that music and its ability to connect people well hello everyone it's Jimbo's Shaughnessy with yet another infinite
Loops today I have one of my favorite people back on the podcast this man Dan runsey runs tropical which has 20 000 or maybe even more readers that covers the intersection of Music one of my loves predominantly hip-hop also one of my loves and business clearly one of bylabs Dan so great to have you back on
it's great to be a repeat guest I feel honored thanks for having me we have so much to talk about uh going through your stock uh you've been on on fire recently Matt and and so the the first one that I want to ask you about is can the music industry Embrace Ai and what's going on in Ai and it has a lot of layers but I'm going to let you
uh uh construct our our analysis here the reality is that the industry doesn't have a choice it eventually needs to adapt to AI how it goes about it is what many people are trying to figure out now but you saw this 25 years ago with the introduction of Napster and everything going digital and that concept of
selling one album that people would buy for twenty dollars it got fragmented it got disrupted and even though the industry wasn't willing to buy into it it eventually caught on and there was clearly a lot of lawsuits during that era there was a lot of tension between where consumers were versus what the
industry was trying to preserve and we still see some of that linger in the industry today but I do think that with AI the temperature is different because even though people are a bit concerned about everything that's been happening people listening to this probably remember all of the takedowns that happened after that Viral Song with
Drake in the weekend where it wasn't them but it was their voices and it sounded pretty authentic and on point to some type of song they would put out and the industry shut that down and there were other similar songs that have came up since then the thing is the reason why I think AI is a future and will be
inflation of the industries that we're already seeing aspects of it take place there's companies like endel and others that have already partnered with the major record labels and others to create things like functional music artists that are signed to Major record label deals have partnered with companies like
this you have other companies like audio shake that are partnering with the record labels too to take any audio or song that's been created and split it up into its multiple stem components to increase the number of use cases for different songs so some of this stuff already is happening I think what people
are trying to figure out is what will the future be for anyone whether it's you or me want to take any r artist that we're a fan of create a song of that artist and then release it somewhere that's the Crux of it I do think that even though that currently is the Wild Wild West there is a way to be able to regulate it and enforce it and what I
always go back to is the early days of YouTube when YouTube was first introduced there were a lot of concerns about oh well if you have an artist and you're just putting their song on a video how do you know that that's going to be able to have the underlying rights holders be compensated for that and
eventually YouTube figured it out they figured it out in a way where you could flag for anything that an artist may not want to be associated with but if you're putting up an organic video the tagging and all of that was able to work and the artist does get compensated if I want to put up a song that has a drake or a weekend
um soundtrack on it they were able to do that and we now see that with Tick Tock and others and I do believe that the technology can eventually do the same with AI in the future where if I wanted to put up a song of Drake and have it it sound a certain way upload it with a particular video or a sound bite that I'm interested in Drake
could have some type of agreement with his record label that make sure that he gets compensated however many times to get streamed and played the same way that we figured it out in video and he once didn't think that it was possible I do think that that will be possible as well with AI so if we continue to think
about it that way the future is there it'll take a lot of legal uh disputes and things like that to sort it out but I believe it'll happen yeah and one of the things that I loved when I was reading your take on this is uh the first off you you made the great comparison about Napster in 1999 and the reaction the violent reaction of the
music industry uh you know prevent don't let this happen and I think that's a losing battle in not just music it's a losing battle everywhere as you point out in with YouTube YouTube I I learned this not too long ago YouTube only succeeded because Google took them over and fought all their legal battles
YouTube would have you YouTube would have gone bankrupt uh they would have been sued into bankruptcy if they if they hadn't um and I love your idea of hey let's let's let's play with compensation models let's expand the pie let's have not a zero-sum game mentality here but these are all like you know they're they're kind of
hardwired in in people's brains right that hey that's mine and uh you know Drake is a great example um and and it's also the the follow-on question I have though is what happens you know in books right fan fiction fan fiction is huge and um you know 50 Shades of Gray started out which sold I don't know how many
millions of copies started out as fan fiction what's gonna happen when the tech gets even better and say you Dad you you write a banger man and it's just unbelievable and then you have Drake sing it and like how is that going on and that's where I think there is a lot of opportunity to see more Innovation
because I haven't seen as much happen with that but that's ultimately where the future of this is part of this brings me back to some of the concepts that were quite popular with web 3 when that was all the way but one of the things that was important there was how do you find Subway to have a tag that continues so anytime that a piece gets
has any type of derivative work or any type of repurposing the underlying person gets compensated so like you said if I have a bigger article that I put out and then Drake ends up sampling that for something is there some type of thing that can automatically make that happen so that I don't need to have my
my legal team go meet with the OVO legal team and everyone that Drake talks to so I feel like that should happen the other challenge though that I often see when I'm hearing people talk about AI I hear this about AI overall not even necessarily with music but it's holding the technology to a higher standard than
we hold people themselves and in music what that looks like is one of the critiques I've often heard about using chat GPT specifically as a source for lyric inspiration and things like that is people have often imposed the question oh well how do you make sure everyone gets compensated when chat vpt is using all of the recorded music
libraries possible it's one thing it can be pretty straightforward if the attribution is clear where it says okay could you make me a song that is derivative of an Adele song and then I then put the lyrics up okay it's clear that Adele gets compensated or gets some attribution for that but if I say can
you make me a song that sounds something like a top 40 hit from the 2010s or something like that it can get much more messy the thing is though that's how actual people make music if you ask people who their Inspirations are you ask Draco whose Inspirations are he's going to talk about Michael Jackson he's
gonna mentioned Tupac he's gonna mention Eminem all these people are all of those people getting royalties from take care or any of his albums not necessarily but we all know where the inspiration is the artists tell us who they're inspired by but that inspiration doesn't attribute to them making sure that they pay anyone
that their work may have been quote-unquote derived from and we don't necessarily do that in music and I know that's a broader challenge with AI and I'm hearing about it now with self-driving cars and how people are holding those to you know higher standard than human accidents and things like that so this is a broader issue
than music but it is frustrating to see when we're holding it to a higher standard than actual artists themselves yeah that's really a great Point um and it seems to be at the Crux of many of these disputes not just in music like um there's a lot of very angry uh painting painters and illustrators and
whatnot who are saying they stole my work and when you try to remind them that hey did you ever go to a museum and copy the work of you know Rembrandt or Picasso or whatever well yeah whoa that's kind of what's going on here and then they just kind of shut down and so I suspect that like you uh it'll it'll get worked out and and
hopefully uh without you know enriching the lawyers Beyond where they already are um do you do you think that there are genres that will adopt more easily than other genres so for example I don't know um like I love hip-hop and I love EDM uh but I also love classical uh not a big fan of country is by a genre by genre have you ever
looked at that and and then kind of thought yeah this genre is going to be a blue dot much more quickly to the New World Order I feel historically we've seen hip-hop artists and Hip-Hop fans lean into new technology and new formats we saw this even before streaming we saw this with ringtones hip-hop artists were
definitely the leaders there and that whole culture was much more in tune with it earlier than others others followed but it was early there and I think we saw the same with streaming over the past decade those early years especially that 2014 to 2018-19 hyper growth period where everyone was at least in the U.S
and um Europe getting more and more streaming subscriptions a lot of the early listening was hip-hop and the streaming services leaned into that and I think with AI the songs that we're talking about that went viral it's Drake in the weekend so this is what we see and these are the fans that also tend to be online more they're talking about
what's happening in music what's happening in kosher so I feel like with AI and and any future development we'll likely see that there and I think it extends as well to contemporary and more pop music in general we've seen artists like Grimes who have said hey I'll give it 50 cut to whoever wants to use my
music or my name image and likeness for a particular song or a track there's that artist um Holly Herndon that had said something similar like hey here's what I have and here's what I'm putting out and I do think that dance music now is starting to have a bit more of that especially from what I hear in streaming
so that is where a lot of that inventiveness comes it's interesting that you mentioned country because I do think that overall it's a genre that does tend to be a bit more traditional in its ways where even up until several years ago CD sales were still the dominant way that a lot of the people were listening to country music but it
really wasn't until this past year where artists like Morgan Wallen and artists like Luke Combs have been doing very well on streaming services and reach gen Z and reaching fans as well where now they have younger artists that are leaning into it but this is now 2023 when this is happening we had seen
hip-hop and other genres leaning into streaming early so I do think that we'll see a similar adoption with both the artist and the fans with ai's future developments yeah um and one of the rules of thumb or heuristics that I use is uh you know like hip-hop for example they're the tip of the spear and you should watch them
very very carefully because everyone else is going to ultimately follow like you you just mentioned about country um and if you if you can get a good bead on you know who's the real tip of the spear artists are that gives you a really big advantage to see the way things are going to unfold I think
um so uh and and also you've got to go where the audience is right so like classical music that the uh I used to be the chair of the Chamber Of Music Society Lincoln Center and like literally ever ever since I was involved and loved uh kind of classical and Baroque music everyone was ringing their hands the graying of the audience oh my
goodness what's gonna happen our audience is dying well they forget that other people are also graying and that when they get to a certain age they're kind of like huh maybe we should go check this Con entered out at Alice Tully it might be something we might be interested in um so you know the adoption curve looks
suspiciously like the tech adoption curve as well with the younger more switched on people whose tastes tend to be more hip-hop more EDM Etc uh and leading the way another thing you you uh talk about that I find really interesting is you you think that the Algos the streaming Algos are getting substantially better talk to me a little
bit about that that's one of the things that I think Spotify and apple music and Amazon have got better and better at over time and we've seen a shift where in the early days there was much more focus on their editorial playlist you heard much more about the influence of a rap caviar or a Viva Latino or any of the other
playlists they had because they were in many ways being the Digital streaming versions of radio stations they were curating what you wanted to hear and they were showing that the thing is now the algorithms because they've had now years of data of our listening patterns and they understand what we want to hear
what we don't want to hear they've done the thing that a lot of streaming services do where they're gonna give you more of what you want and it isn't necessarily as important for them to show you the newest releases or to put it everywhere they have mixes upon mixes upon mixes and I'm talking specifically about Spotify but I know this it exists
on the other ones too but if you want to hear your favorite tracks that are your happy mix your ones that are your 2010s mix and things like that they'll put that in front of you and it's done in a way to make you stay what is going to make you click on the next song what is going to make you stay engaged and
they have more and more music that's been put up they know exactly what you may want to hear at particular parts of the day they line that up and I think that Spotify rap is its annual Flex that it shows you every year of how well it does that the one that they had at the end of 22. they essentially had mbti scores at the end
where they're showing you your Myers brick classification of you're the type of person that likes this and they've completely revamped the whole concept of genres and put moods out there and had people think about themselves more from a psychographic perspective as opposed to these broad buckets that radio
stations frankly were more so focused on and I think the impact of the streaming algorithms getting better is that increases the stickiness of those algorithms it makes you less likely to switch over time and I know myself I'm someone that did switch back and forth primarily on one hand because of my work and just making sure that I have a good
understanding of the pros and cons of each but once you figure that out there really isn't as much reason to then flip back to see what the next service has so even though it isn't like this loyalty program or something like an airline where oh well if I'm a United customer then I go switch to Delta what am I
going to do with these miles music doesn't necessarily have that but the fact that I would have to retrain apple or retrade Amazon to learn all my preferences all these playlists especially the ones that I may not create on my own that they just happen to know that takes some work there's some ease there and I may not want to do
that and I do think it's worked to their advantage yeah and Spotify seems to be and we're going to talk more about the big tree later on but Spotify seems to be really the leading candidate there I mean I used to put tons of time into building uh playlists for myself uh and used iTunes and then iTunes they
essentially wrecked the interface to the point where you know it was almost unusable but conveniently for me uh Spotify was on the scene and so I switched to Spotify and like literally right now Dan I their AI is making better mixes for me than I make uh because you know it I I love music I have music on like all the
time uh when I'm working it's mostly classical or especially Bach and Baroque very mathematical uh but when I'm not it's it's the wide range like I said I love hip-hop I love EDM I love all of that kind of stuff and you know you're bringing it up I hadn't thought about it but of course that's why they're
switching me as the day goes on to uh lesbach and and and more you know uh Mongolian uh techno all right it knows your your circadian rhythm right yeah it really does is this the death of djings oh good question I think that DJs still matter at The Outdoor Experience or being outside if you're at a nightclub
if you're at an event there's a certain pulse that people could feel because at that point people aren't looking at their screens and it does reset them in this place where they're not in control but they want to feel that collectiveness and DJs still do have a role there where I still think it is
very tough for someone to just plug in a playlist and then walk away for evening you need someone that can feel the Temple look at everything I do think that because everything is on demand and not just in music or audio I think we see this in video as well it does shift what curation looks like where these
algorithms do get better and better the thing though and I think that this probably applies a bit more in video than in audio but people still do value the recommendations that they may get from a friend or from some type about per individual person it doesn't necessarily have to be a curated DJ that they may like or enjoy but especially
for people that are online like you and I being active on Twitter and elsewhere if there's something that hits the Zeitgeist and part of that is due to algorithms so part of that's also just due to the nature of it we'll be more inclined to then proactively do our on-demand search on our respective
um search engines right I think an artist like Drake or an artist like Travis Scott Rihanna Beyonce they have the ability to at least perk the Intrigue even if someone may not be a die-hard fan themselves to be like okay well people are talking about this let me go check it out myself and that's something that even the algorithm
doesn't necessarily have to push Taylor Swift or something that has obviously done that over the past year with her album and the tour that she's currently on that's created enough Buzz too so there still is that mix but the DJ is less likely required to be this person that is on MTV that is curating their show to show you what music videos they
want it's less likely to be the radio station the director that is picking the songs it's more likely to be either a a friend or even a podcaster or some someone like that that you're interested in what they have to say or you're relying a bit more on these personalized algorithms that may know you better and
you're listening preferences better than you do yourself yeah and uh it fits in with my thesis that AI in particular the the models that are going to really thrive in my opinion could absolutely be wrong but are these what what they call Centaur models that's man plus machine human plus machine um and
um and curation good taste it's gonna be it's gonna be hard because you know it's it's uh a bit like uh the Supreme Court Justice who opined on pornography uh I can't Define it but I know when I see it right and and that's kind of the power of curation the power of the working uh iterating back and forth with the
algorithms uh when somebody has really good taste you you it's gonna it's gonna matter and I love this idea of separating out like in real life people are are different right they're not on screens they they want to be in the moment and that's where that kind of stuff is going to I think continue to persist and maybe you can get more
popular um are you seeing a lot of uh the more switched on artists gaming the algorithm I would say so because every aspect of music every time that there's been some popular medium the music and the art form adapts to that and with that you get people that are trying to take advantage of it you get people that
may do particular tweaks I'm thinking back to the CD era where it was in people's advantage to be able to either have a few hit singles and knowing that two or three hits and 15 other songs that you may not be as interested in doesn't really matter as much because you can still sell that twenty dollar product off of those three
singles so you saw how the production process was oriented towards that and then even the whole concept of greatest hits albums and things like that and artist fighting ways to repackage things what are the less stated things about the CD errors that they actually made more money during that Heyday in the 90s
from reselling things that were already released on tape and a track and other formats and vinyl that they were just putting on CDs and I think now with streaming you're seeing people do the same because it's a complete shift buying a whether it was a tape whether it was a cassette or a vinyl or an Al or
a CD in the past it was one individual item you were purchasing so it was really just that one time thing and regardless of whether you listened to it one time or a thousand times it was the same amount of money that that consumer was spending so that's where things were and I think now in streaming's exact opposite where you're paying this
monthly fee to access it but if you're playing it one time or 100 times the artist is being compensated more for that so what does that lead to it leads to a few things where you have artists that are doing things that are considered within the rules still but it's clearly doing things to game the system whether that's
they will have albums that now have 20 and 30 tracks on the album because they know it's in their advantage to be able to do that they will have songs that are a minute or a minute and 30 seconds because on all these streaming services you need a song to at least have 30 seconds to be played for 30 seconds to
count for one stream into its system so as long as it's 31 seconds or longer boom you have a song so I feel like when I was growing up there were a lot of four or five minute songs with three verses those are rare those are a few far between none of those 25 second guitar intros before the lead artist even says the first word nope we're
getting in there and out and I think you also have people that are trying to maximize the charts for earned media and attention and Travis Scott's one of the artists I think about as well with this he actually has the album that's coming out and it's lighting up with some rules that billboard itself has reintroduced
about how artists can try to combine a merchandise product that they have with the actual physical album even though people aren't necessarily listening to as much physical albums it's a way to that they've done because the industry wants to continue to preserve album sales and report on things that outweigh
so there's all of these little things that artists and the record labels have done because they're all trying to compete for market share they want to be able to say that we now have 13 of the market we now have 14 15 of the market Etc and they're all these things and I'm sure that as time goes on whether streaming streamings model gets replaced
by something else we're going to see even more tweaks and with that we with this we also see plenty of fraud as well there's some artists that have done streaming Farms where they just have you know songs playing on repeat the minute the song comes out and then you have super fans that lean into this as well
that will have the song playing on all of the streaming services simultaneously for a week just a while stuff up and they have their BTS Arby's and you know Swifty armies and things like that so some of it spuns some of it's a bit of an eye roll but there's a lot of again there's a lot of gamification out there
and you know uh when I was re-reading some of your stuff I I the that that really kind of floored me was uh a uh a song on Spotify needs uh 1250 plays to equal one uh CD sale according to uh billboard is is that still true yeah so that's still true so if you're using a paid service that's what they currently require so it needs to be any
type any number of streams on that from that particular album it needs to be any stab 100 1250 in order to count for one album sale so that then goes into this formula where that is that's how streams relate to album sales I know you mentioned iTunes earlier for people that are still purchasing digital downloads of songs if
you purchase 10 of those individual downloads 10 of those counts for an album so it's this backwards metric that they've used to then still find some way to have the numbers relate to people actually buying albums 20 30 years ago and seeing what the numbers did to line up there but even if you did the math
I not going to listen to one song or any song that many times and even if I listen to the album once a day for a month and that album has 15 songs on it it's not going to equal one full album equivalent unit as they say and this is one of the things that's done where it's still heavily and intentionally underweighted
and one of those things is because there's this constant tug of war of wanting to preserve the album sale as opposed to measuring things the way that they are right now which is a stream this is how people are streaming music yeah and and it's that uh backward uh compatibility desire that that causes so
many of these problems in my opinion right like I launched O'Shaughnessy Ventures because I felt like all the old models were collapsing and everyone was trying to cling to those old playbooks and they don't work anymore and and so uh another thing I love about you is you are very forward-looking uh in terms of like where all of this stuff
is going uh let's talk about that a little bit too because you know Kevin Kelly has this 1000 true fans idea and and and yet the Pareto distribution pattern you know the power law exists in music seemingly even more than it in other things I saw the stat that was courtesy of you um that 80 of artists on Spotify have
less than 15 monthly listeners talk to me about about that and like how how can uh people take advantage artists take advantage of these uh Pareto distributions um and and how can even more importantly how can somebody who's not in that power this part of the power law appear how how can they take advantage of it to to
try to get up there this is a huge challenge for the industry right now but it's also a challenge that requires some context because the unique thing with audio and with music specifically is that everyone relies on the same platform and by everyone I mean Taylor Swift at the top of that power law relies on the same
platform and your cousin that just decided to release a song for fun just to see if it worked is also on the same platform and it would be akin to looking at all of the people that play basketball and then looking at LeBron James on one end of the spectrum and my nephew that plays in his rec league in
Europe right now on the same spectrum and saying look at all the people in the world playing basketball how do these people get ahead and the thing is with the industry there isn't necessarily a metric that can truly separate what is a true musician who is a hobbyist that's trying this out versus who are the people that are doing this
full-time or try to do this full-time and who are the people that have clearly exceeded beyond that in our stars or Superstars uh in their own respective ways I know that the numbers are quite staggering and I think we see this happen in other fields as well I I know in Hollywood there was some stat about
how many actors that are part of the street Actors Guild that make over fifty thousand dollars a year and it's probably somewhat similar to this as well so I know that it exists I think in music it looks a bit more extreme because even in video it's not like Netflix content is also on YouTube and is also on Tick Tock as well
there is a bit of a fragmentation there I think though even though I think streaming has Unearthed a lot of it because back in the days of CDs a lot of people felt like there was still an opportunity for a quote-unquote middle class artist to be able to thrive because they felt that you could still have the people that you
could serve that would want to buy your album for twenty dollars and if you just think about the rough distribution of things and how most record deals worked if you sold an album for twenty dollars the artist could at least Bank on taking home between four or five dollars of that at least you know 20 25 of the
money that comes in it keeping that so even if you had you know several hundred thousand people that were buying your album in it you know over a year of all of the albums you have and that's it now still enough to make a living and I think in streaming it's much tougher to do that because you still need to have
millions or in many cases billions of streams in order to make uh healthy living there because most streams at least now and the number does change and it's getting lower but I believe on a lot of these Services it's less than a third of a cent that you may get for a particular stream if someone wants to stream it right now on one of
these services so those numbers need to add up and artists have a bit more pressure to find other ways to make money there so it's a bit challenging there and I think as me one of the counters that people will often say is well today things that flip because in the 90s it used to be about you go on
tour and going on tours away to promote people to buy your album and today it's the opposite where you promote the album because it gives you an opportunity to sell a hard ticket sale but even touring has a bit of that but not a bit has a lot of that power law dynamic as well right because we see the stats now where
Taylor Swift and Beyonce are on track and maybe both having billion dollar tours because of the high demand and people flying across the country or even a 2 different countries to see them versus your mid-level acts are struggling to sell out theaters and ballrooms and more normal sized venues and places like that so this is what
happens and I think that this is another aspect of social media and the increase of content overall is when you give people more and more options the more and more that they want the hits it drowns out all of the noise all of the different options out there droughts things out when people want to feel like they have something that they can
connect with something they can go back to you're more likely to see the hits and I think that's why in Hollywood you're just going to see more and more investment into these sequels and these franchises that at least bring some type of connection of familiarity and I think in music that's why artists like whether
it's Taylor or Drake or even some new artist like Bad Bunny and others they are the ones that the industry is betting the house on in unfortunately for some of those mid-level artists the Dynamics it's only going one way it's not necessarily coming back because there is more money that's being invested so or more money
that's being invested into those Superstar artists so for them it really does look at you mentioned Kevin Kelly earlier what are the ways that you could ignore the quote-unquote power law Dynamics I'm trying to serve everyone and try to have you play the same Playbook that some Superstar reach how
can you Leverage The Power of the Internet run a business that may be fairly low cost but still reach all of those people it takes a lot of grunt work content's one way to be able to do it and get through but it takes it's a struggle and it takes a lot of work but that's one thing I've seen from Independent Artists that have been
successful they do tend to be a bit more active on socials they do more in-person things and they're really about the business and managing the in-person interactions almost the same way that a successful newsletter or a podcaster or any type of Creator would be it's tapping into those things and realizing
that you're going to have to do things a bit personal you may not be able to rely on the traditional powers that be to help you get there yeah and and you did a kind of a four level so the Creator economy where you know you've got a bunch of hobbyists who are people or just do making music or making art uh because they like to
um and then you have the full-time creators who are trying to earn a living with it and you have the stars and then you have the Moguls and and I thought that was a convenient uh hierarchy to look at because one of the things that is part of our thesis at O'Shaughnessy Ventures is that power laws are not
going to go away but the tails are far more accessible than they ever have been in the past so you can have a like you if we look at a full-time creator for example you you can in your little corner of the world you can have a pretty good life if you if you can conquer those smaller heels that are further out in in the Tales
um now will you become a mogul yeah probably not I loved the quote from Jay-Z I'm not a businessman I'm a business comma man so so yeah I totally agree with that and and that doesn't mean though that the full-time creators can't put together a really nice living uh you know practicing and and and using
their art to to make that living which I I think is a net positive and and yeah you're always going to see like all of a sudden we're seeing and it's mostly hip-hop and correct me if I'm wrong here Taylor Swift would be an outlier that wasn't hip-hop but like they're all becoming billionaires and and they're becoming billionaires not
necessarily on the sale of their music talk to me about that a little bit yeah one of the sayings that we started uh with Tramadol and really being a testament to a lot of the work you've done is calling out that artist become millionaires selling music but they've become billionaires selling product and
that product can be several things whether you look at Someone Like Jay-Z or you look at someone like Kanye West or Dr Dre they leverage their music millionaire platform of being this recognized name to have done so many successful things and they leveled that up into selling products where Jay-Z has bought and sold liquor companies he's
bought and sold streaming services and has had success in several of those different areas he has his own entertainment company as well you see Kanye West obviously a much more controversial person but we saw the success of Yeezy sales make him a billionaire and there was a product or slash Creator Market fit that
aligned with him where he always talked about fashion we saw how important it was so him having a successful sneaker line lined up with him and then you look at Dr Dre as well we know how important audio is and how much he thinks deeply about music and in the early 2000s both him and Jimmy Iovine think look at the
success of the iPod and they're like okay this device is great but these earphones are [ __ ] how could we actually get something good that we can hear this music on and that Sparks Beats by Dre and then they are able to grow that it becomes a phenomenon and then they sell it to Apple for several billion dollars
that is what a lot of the artists do have become billionaires have been able to do they leverage that platform that we had that they had to have success that we saw that with Rihanna as well where she has Fenty Beauty she has Savage Fenty and there's a few other products she has under her umbrella and she's continued to be so successful
where she was someone that earlier in her her career was releasing albums every year every summer there was a new Rihanna album she then focuses on this company it gives her all the success and she really hasn't made much new music in the past seven years now and we are not surprised why because now not only she
saw that as a family but she was building this success these two successful billion dollar companies there are of course their caveats with this where we have seen artists and vogels who've been extremely successful without this I wouldn't be surprised if someone by Taylor Swift becomes a billionaire off of Music itself just
giving a the success that she's had with these re-recorded albums which I think at least are the numbers I've seen it worked out to her Advantage did not have brought back her Masters but now make all the money from these new releases and everything else which could net her that plus how much she'll gross from
this tour that she's on now I think Beyonce could be on a similar path especially on a touring perspective but then we've also seen artists like Birdman um him and his brother co-founders of Cash Money Records and even though they may not be billionaires themselves they still have this cash cow
asset of one of the most recognizable record labels that has brought us to Drake and Lil Wayne and juvenile and all these other um legendary artists and they can take that and he said that hey these Masters earn us 40 to 30 million dollars a year and there's so many ways that we can use it that's the value of the music of
course it can make you a millionaire but it's up to the artists themselves because kind of like we're saying before that's part of that log tail mentality you may not want to reach the highest of heights levels to become this full-on local you don't necessarily need to do that but there's plenty of success to be
had elsewhere and that flexibility is one of the things that I think really makes this era cool and interesting so I know that people have had several frustrations about the way streaming's comp is the way streaming works from a compensation perspective but I do think it's opened up broader monetization opportunities and especially when we
look at the wave of Music catalog sales and Acquisitions over the past three four years that wouldn't have happened if it weren't for streaming and the ability to see songs continue to accrue Revenue beyond the initial purchase yeah and and so that that leads me to like three thoughts uh that I want your uh
you know Insight on the first is you know given the the tools given the platforms given all of those things how long is it going to be before the artists themselves else are just like I don't need a record company I I I'm I'm just gonna have my own label um and I don't need the intermediary so that's kind of question number one
question number two is uh Kanye is a great example of this well when when you are so highly uh Associated if if there's a single point of failure right and with an artist like Kanye with all artists really um you know if if Taylor Swift suddenly starts going crazy uh that might affect her sales and her other Enterprise so
there is that that um bigger risk if you will that's always implied because the artist could take a wrong turn right and and uh that that can evaporate support really quickly and then the third observation is are bully bonds gonna still be a thing and I'm referring to David Bowie who famously was one of the first that guy
was from a different planet as far as I'm concerned like if you see the 1989 interview with him and Jeremy Paxton of the BBC like he Nails the next 30 Years about the way everything's gonna do but are those sustainable or are we going to see different combat different remixes as as it were to all three of those
oh yeah wait remind me the first question again the first question is uh when are we gonna see the artists at least Mogul status what what are we just gonna say then they're gonna be like hey [ __ ] you record company I don't need you so this is something that I've thought a lot about and I think the challenge is that now I think
there's two things one even though there's more options than ever for artists to put their music out there there still is a bit of the challenge of getting and being able to break through the initial mold and the noise because like anything anytime a platform is democratized it creates opportunities
for everyone so even though someone may be an aspiring musician we think about that power law distribution where 80 of the people that are you know having and releasing music on Spotify of less than 15 monthly active listeners in the beginning even if you have the regardless of whether you know you may just be you know our cousin that's
randomly uploading a song or if you want to be the next Drake you're starting at that point and it's very hard to break through regardless so that's still a challenge and I think because of that it's one of those things where how comfortable are you shouting into the void and for everyone that's a slightly different
answer and because of that everyone wants to have some type of help everyone wants to have some type of benefit and the record labels themselves are getting more flexible whether it's a newer artist and they want to be able to at least see some traction and then maybe they could offer them some type of
partnership there's other short-term things that can be done where now you have all of these music distribution services that do enable you to release your music and they will offer you an advance for some portion of your future streaming Revenue but you then as the artist keep your master so there's flexible options there the thing is
though I'm glad you mentioned the Mogul piece because the record labels have shifted their model when working with those Moguls and those top tier Stars those top tier Stars no longer need they've just actually been de-risked and the record labels know that so because you've been de-risked it's very hard to
justify taking eighty percent of their future revenues after the advance has been cleared so now those agreements look more like licensing deals where they may license the master recording of the music to the record label for a short amount of time but it then reverts to the artist afterward and those splits
are much more favorable and that's why we've seen artists like Drake in the weekend and even more recently Taylor Swift when she was a free agent five years ago she decided to sign with Universal Music because they offered her a very favorable deal that it still made sense to use their resources because
they are you know one of the three companies that's in the best of the world of what they do and they were willing to offer a tailor hey we'll do this for you we know you have a strong team in-house but we can still like there's a right number for everything and I think that's what the record labels have found out and that's why
still at the end of the day people are still willing to do that it's it's a bit similar to people who may be writers and even though you can do well and have your own individual Nissan sub stack and others some people want to continue doing that they like the independence and they like doing all the other
non-writing things but some other people they just always dreamed of you know writing for the New York Times writing for the Wall Street Journal and there's still some artists out there that they do get a bit Star Struck where they walk through the record label artists they walk through the record label and they
want to be the next Mariah Carey they want to be the next Tony Braxton whoever the industry Dynamics may get a lot tougher for anyone to reach those Heights again but that dream is still being sold so that's the first question there why and why I still think it happens I think we did we have seen plenty of individual success stories but
to be frank we haven't seen any individual success story without a label that's performing at the Super Bowl that's create that's performing you know that's selling out football stadiums around the world and things like that so there still is a bit of that difference there um so and and and what about the idea of
uh the the the Bowie bonds are are those going to persist or are those going the way the dodo I think that I think that with Bowie bonds it was ingenious what it happened because it was a Bowie of course said hey I don't know how valuable this is I know how much my fans want to be able to buy into this or whoever wants to be
able to buy into this let me securitize this asset moving forward and it worked out quite well for him and I feel like in that era we saw people like him or even have Michael Jackson and The Beatles moved and others and Prince as well they were artists that saw the force of the trees that were like Hey
we're gonna do this our way we don't need to do it the other way what I think is cool now we're seeing many more options for our artists to explore different Financial opportunities I mentioned earlier about music distribution companies offering advances and offering things like that to our artists so they don't necessarily need
to um you know rely on a record label if they don't want to I think we've also seen deals where artists are selling their whether it's half of their ownership of their music or their publishing and their catalogs to these music investment firms which a lot more of them have popped up especially as
stream matured especially as interest rates um were lower for the time that they were and a lot of that also is recognizing how the environment shifted because it's no longer about trying to sell that initial album how do you get people to stream your music on a regular basis how do you find Opportunities to have your music
have placements in movies TV shows other sync opportunities that's where the log tail is that's where I think there is a lot of opportunity for not just the artists but also the investors who are smart with it and I think the Arbitrage in that space specifically are the investors that aren't as caught up in
the big names as others may be because I've seated myself just analyzing the space I think that there's certain companies that can end up in competitive bidding wars with others because there's a big name artist that is selling their catalog or selling their rights and everyone wants to be able to say oh we have so and so no different than a
record label that they want to sign so and so but there's other companies out there that ignore all of that they want to look purely at the numbers and don't care if you're a big name or not it's a bit of that um it's a bit of the analytics era of how the analytics and sports and other places have changed how we look at NBA
and NFL teams like that I think you're seeing a bit of that Moneyball mentality in music too and I think a lot of that is derivative from bully bonds yeah um I uh are we gonna see the end of the Superstar or I I mean like I was thinking about um The Beatles for example um like I think I asked you this in our
first chat like is is is there going to be someone who's 12 years old right now who's going to be as big as JC or Beyonce or any of those super Superstars or is the way the world is splintering making it gonna be much more I I think about like I'm fascinated by the move from broadcasting to narrow casting and
like I Love Lucy had at its height something like 65 million viewers and and the closest analog uh recently was Game of Thrones and they had 18. are we gonna are we gonna see that kind of splintering effect and so there won't be any more Jay-Z's or Beyonce's or or do you think they'll persist I think the splintering effect is true
because what it turns it into it turns it from a superstar to everyone in this model culture aspect to a superstar to me or Superstar to you where because of the bubbles we're in something can seem just as big as it was I think you and I both are in circles where a show like succession seems Larger than Life we see
the means we see everyone talking about it comes up in discussion often if you look at the numbers for succession it is not that high other shows like Yellowstone gets more viewers than succession even uh The Masked Singer and dancing with the stars and shows like that can still get more viewers in a show like succession but to us in our
circles we're talking through the jokes our Twitter algorithms are programmed to know that we are wanting to converse some like the type of people that would discuss this on a regular basis and I think that's how culture and Music Works in in the same way I don't think that we'll ever see another group of people
like the Beatles or another act reached that same level of beetle Mania even though Taylor Swift herself isn't reaching quote-unquote BL Mania numbers it still is as impressive as it gets for this era and for the people that are swifties that are interested it feels like Beetle Mania to them it feels like
beetlemania for this era another concept of this is people have often talked about a song of the summer or rather the song of the summer what is that and how that concept it used to start where it was this Universal thing where oh you could always remember that summer of this year when that was the only song
that you heard that played year in year out now the song of the summer can be very different things depending on who you talk to I asked this question on Twitter the other day I asked people I mentioned this artist earlier Morgan Wallen he has a song last night and I said this is if you look at the data in 2023 this is the song that has the most
on-demand audio streams in the US of any song so far and I said how many of you have heard this song or streamed this song 77 of the people that followed that responded to the poll said no and I think there are around 200 people that responded to it but I am more acid as a reflection of my audience my social
graph and the people that see it and I think if you ask that question 10 years ago five years ago I think that number that 77 would have been a lot lower but if you ask it five years from now it probably will be a lot smaller too because that's the way things seem even though a lot of people in my followers and my neck of the woods may
not listen to that song There's clearly a faction of that people that they drive out in their neighborhoods or they hear that song and that is their song of the summer even though for me it may not feel that way and that's what's changed Superstar to me it's song of the summer to me not necessarily in that Global or
even Nationwide perspective yeah I I think that's very insightful and a lot of that I was uh reading about the TV show Mad met and um so so mad men never had a big audience ever uh but the audience it had was the most desired demographic by advertisers right the the it was super Highly Educated scripture Bridge super
Urban you know all of these things but will that still work if if ad models start to collapse or do you think that we'll still see that kind of persistence around people wanting that highly targeted audience I think we'll still see it and I think it'll look even more fragmented in different ways I look at the
advertisements whenever I see a golf major that comes out right it's like all of these people have their you know tag um or their Hue blow or whatever uh watches that they have because they know that that golf audience is older it's richer these people have money right and I think you see this with podcasting too
where you listen to some of the ads that may be on a show like acquired or invest like the best in others there's only a certain number of people that are going to be like oh I want to go work with a company like tiny because I want to go acquire or sell a business not to go give a free ad to tidy but that is a
highlight of that right like that's you that's even more Niche where I don't think you would see tidy do an ad for the Masters but for this podcast and just the nature of who they listen to I think so so it looks different where you could probably even get more bang for your buck because of how fragmented things are so I think we'll still see that
it'll it'll look different though right I'm glad you mentioned Mad Men I loved that show and I think that applies to it and that was even more different because that was a cable show on AMC it had yeah I don't think AMC at the time was even known for having this highbrow content and having a HBO type of show but a lot
of people pass it on Mad Men and it worked to work to their advantage yeah and and it's as I outlined earlier my my thesis is that you're gonna probably see more mad men's not less because uh we now have a much smoother distribution uh Pipeline and let's shift gears to to that distribution pipeline you know the
you have written that the the three big players are Spotify YouTube and tick tock uh talk to me about the comparative advantages that you see in each one of those and like I hate turning things into a horse race because you know they can all do well right uh but um outline it because I I read you your piece and I found it fascinating so if
you would for our listeners and viewers that would be great for sure and I do think that all three of these companies can do well because even though they do compete they're slightly different Lanes Spotify is the most unique out of all them it does well because it's audio the audio specifically Works their advantage
because they've mastered what it means to have a passive listening experience it's very different to try to Master Video platform which is much more Active Audio itself a song Especially because now these songs are shorter or shorter It could only be two or three minutes so how are you gonna curate a playlist that
works to their advantage how are you going to create a UI that makes people want to stick around and something that they can play in the background I think the real comparative advantage for Spotify relative to the others is that it is this Standalone product that in many ways was built to do well and own audio in a way that I'll
be honest they do have maybe a slight disadvantage from here to uh Apple music or a Amazon where those sit under larger companies and YouTube to some extent too they sit under larger companies and they can leverage their resources they can use those music streaming services even though the economics of an audio based
subscription music streaming service we've yet to see one consistently show profitability at that scale I know some of the other smaller players have been able to hate it but you know Spotify has still been navigating that piece of it and we've seen some of the challenges with its own podcast uh podcasting
strategy which I do think can work well I think there were probably some specific things about the strategy in terms of the over indexing on Celebrity podcasts as opposed to a call her daddy and shows like that that really resonate with true listeners that want to hear podcasts content how that is different
than you know a YouTube show or trying to sell something like that so those are some of the challenges there but I still do think that Spotify clearly was able to be successful and have you know more than double the reach that uh Apple music or Amazon they have so they still work air YouTube of course differed because it is
much more of an active experience and with YouTube it's much more International you can largely access most of it for free the ads do feel less intrusive than they would feel in Spotify and you may even feel a bit less quote-unquote adoi while listening or while experiencing an ad because it is more of an active experience and usually
the ad itself has to be engaging in general to capture your attention but YouTube has been continuing to grow and similar to kind of how we talked about before you mentioned how them being able to have Google as the parent company help them fight and navigate all of the legal battles that they had and now they are the second
largest contributor of Revenue to the music industry right behind Spotify so it just shows how much has grown there and I think they'll continue to grow I think for YouTube they clearly want to do more which is why they've invested so much in their top of funnel with YouTube shorts which is a direct competitor
against tick tock tick tock does have a bit of a moat there because they are able to actually have a bit more of a culture that feels tapped into the younger audience it feels tapped into the type of content of the type of experiences and things that work on Tick Tock and that Tick Tock experience is a bit less transferable than others
because I know a lot of content creators that try to repurpose things in something that may work on YouTube shorts could also work on Instagram reels and vice versa and things that work on Tick Tock could work well on other platforms because we all could see viral tick tocks show up on other platforms but you rarely see the
opposite and that's because Tick Tock does just have a bit more of that stickiness a bit more of that unique culture that's there and it's proven itself to be the top of funnel for the music industry this is where so much music Discovery happens and rightfully so bike games which is Tick tock's
parent company is exploring its own music streaming service because it wants to be able to not just send that music Discovery audience that it creates elsewhere they want to be able to capture more of it themselves we'll see how well they'll be able to do that I think there's a number of reasons why
creating a Spotify style experience is so different than creating a tick tock style experience but we're seeing the same thing that we saw with social networks right everyone's trying to compete with each other Spotify is testing out Tick Tock style feeds for people to view its content because Tick Tock because Spotify wants to be more um
wants to have more of its offering that is top of funnel we clearly see Tick Tock trying to have it so streetly service so we've seen playing those challenges I think the one difference uh that Tick Tock is currently navigating that Spotify and YouTube have already solved is having the record labels
um feel like they're contributing their fair share to the industry there is one number that stuck out to me from a recent report that Goldman Sachs had put out they had this music um up in the airport they put out every year they reported that last year Peloton paid more money to the music industry and it's right holds rights holders then
Tick Tock did Peloton paid blood money then Tick Tock did and it's fascinating because of course that's just the nature of the current licensing agreements and anyone that's worked on any of these no's that it is like go went up to that because the industry for several reasons does have much of its protection and its
guard up when it's trying to work with any of these new platforms and Tick Tock has been the hardest one to navigate because it is a bit more unique these songs are Snippets and how do you work things out but we did see a new licensing deal that came through recently with water music I'm sure we'll
see others come through but that's the one that's lagging behind yeah so it stuck out to me that yeah Peloton is paid more money right now to the major label industry rights holders than tick tock that's amazing but the minute you said it I just kind of thought to myself well yeah that makes sense uh because
right I mean it that's uh the the music uh environment when you're exercising um I I also like your your point about um the way Spotify really went after audio right um and one of the things that we've been experimenting with is like I I I'm I am not a YouTube guy um I'm becoming one because uh I'm I'm trying to learn about it so for example
this podcast we never used to release on YouTube and now we do and what we've seen is there is a segment of our audience that vastly prefers to watch it they like to see your Expressions my Expressions when we're talking to each other um but it's a very different experience because it requires a lot more of their
attention right because you can have a podcast on when you're doing the dishes you can have a podcast on you know when you're exercising or whatever and just the it's it's so easy right oh this is a great podcast I'm commuting 45 minutes from Greenwich to Manhattan perfect I'll I'll listen to this podcast but when you
add video right that that's a whole different level of commitment and I was looking at um you know so I'm a Spotify guy right I all my music is on Spotify and like that they're making great lists for me and so I don't really when when I want to see what's being done that I find interesting visually obviously I go to
YouTube and watch the music videos but I was playing around last night in anticipation of our chat today with the with the uh YouTube music uh platform which I'd never really looked at honestly I when I was listening to music via YouTube it's just traditional YouTube and watching the the video and man it looks just like Spotify the way
that uh YouTube has has laid it out uh do you think that kind of CopyCat thing is going to work for them I think that what they offer is this bundle package which could be attractive where you have this YouTube premium that does give you the YouTube music and that also gives you the YouTube ad free experience for
the overall video and that is something unique where it's a recognition that offering the same thing straight up isn't going to work but what can we add to it that can make it attractive so you're essentially now trying to compete on costs by adding more features it's similar to that Apple One bundle where
Apple May realize that okay if we're trying to sell a apple music subscription for the same exact cost and offering it as a Spotify subscription some people may see that as a tougher offer it but if we can bundle apple one for whatever price it is right now and give you gaming and Apple TV and all this other stuff okay that's interesting
now you change the stakes of what it is and I think that is the way that it works because I've seen the YouTube music interface too similar Vibe and it does feel different from YouTube itself because it is that black screen with the writing and it's like okay this looks a lot like Spotify it does right I think I
think it can work from a packaging perspective I do think that rightfully so YouTube is trying to capture all of of it and do all of the things and when you do have that much money and that much of a war chest with Google behind you it's in your best interest to try these things right it's almost like you approach these things like I instead of
making a bet on another company why not do it yourself if it doesn't work out okay it may not work out but if you try five of these things and one of them works out then one of them pays off for the rest of them it's no different than in investing but you're treating it like investing in your own company so it
makes sense to try it I think it's still maybe a bit tough where I don't know if that bundle will necessarily pull in the person that is doing the commute from Greenwich to Manhattan or the person that wants to listen to podcasts while they're working out or whatever it is there still is a value for that audience but if you're
you're able to lock in someone in that younger generation now that values that YouTube premium experience and all of the great Rich content that's out there you could lock that person in for a while and that speaks to the fragmentation of the audience where you know you and I as podcasters thinking
about this similarly where okay I know that the core thing may still be the audio for the travel podcast but if I at least know that um having something that seems attractive to the people that may be valuable someday in this demographic then that's gonna make it more more um advantageous and more attractive for them
yeah and you said something there that uh made me think of the next question which is you know uh YouTube is the great example they're backed by Google they've got gobs of money they can try a bunch of different things and if it doesn't work out it doesn't work out how how how difficult does that make it for the the
new entrance into this Marketplace you know uh in we always say oh no they've got that market locked down and you always hear that right about the time that it's like iTunes great example right iTunes owned music they owned it and like everyone is like I remember I I love to read things that were written a
long time ago contemporaneously right because everyone was saying you'll never dislodge iTunes they have a strangle old and Along come Spotify so so kind of giving us the benefit of your deep domain knowledge if I was going to ask you to like with the broadest lens look at the future of the music industry the
the likelihood that someone can come and displace Spotify what do you think I do think that it would be tough but it's not impossible because with the iTunes argument that you made I've looked back at this one as well because what I too is solved temporarily was let's put a business model around what people are doing on Napster or Kazar or
live wire or whatever it is people are downloading these songs let's have them pay for the songs themselves and they don't have to worry about viruses they don't have to worry about you know messing up their computer or any of this other stuff let's make it easy for them what Spotify did was okay let's take a
step back as much as that solve the direct issue with Napster and piracy and file sharing it didn't solve this other aspect which is convenience how do we make it easy because there's still a subscription of oh I want to hear this song Let Me Go type it in let me go download it oh it's in my library now
let me go play it no that isn't as quick it easy as oh well let me go ahead and now I have access you're not selling me on ownership you're selling me access and that's what Spotify did they were able to do that in a way that felt native and felt unique and that's why it worked well for them and they've still
been able to sell it and improve the convenience that they're able to sell through the Improvement of the algorithms and things like that where I do think that the Spotify bottle of course has its challenges right now is in what profitability looks like in the long term figuring out what it's non-music audio strategy long term is
that it could depend on more shows than just you know Rogan and caller Daddy and others where they can earn enough money off of the music so they can essentially be the Lost leader that they hope it would I know they're still excited to navigate that with podcasting so that's one of the bigger question marks there
but I think to necessarily have the convenience of Spotify be beat by something else you would need to be reaching a demographic that they don't reach and you need to be doing it in a way that's better than they do and I think one of the areas that Spotify themselves and others have talked about is how do we get this gen Z audience to
stream him as much as Millennials did and stream as much as you know Baby Boomers and Gen X currently is streaming and it's been a tougher not for them to crack because this audience is on Tick Tock a lot of the more gamer and intense folks in the audience are on Discord and places like that and how does Spotify
enter that piece of it how do these music streaming platforms enter that area so if there is a platform that is more Centric in those areas that could be really attractive I still think that it would need to have some type of reach so it isn't just a live-in Discord or it doesn't just live in Tick Tock or things
like that but that's where or if there's any disruption that I see now that's where it could come from unless there's some further way to have it where you're disrupting the experience that someone has to really make it more attractive where you're doing that passive experience because that's where I think that that's why I
think Tick Tock works with Tick Tock even stands a bit different from Spotify because Spotify still requires some on-demand interface activity versus what Tick Tock does well it's just that endless scroll It's Entertainment you're able to just scroll through and experience it so is there some combination of what you take that
Tick-Tock experience plus where this Discord gen Z audience is and you look at that and what that amalgamation could look like I would bet money that that's where disruption comes from but it may take some time yeah and uh the other point you made I think is is very worthwhile and a lot of people don't necessarily automatically
think about it uh which is the business model coming up with a new business model that actually makes sense can be a game changer right that's that's what Apple did with uh with Napster right they they essentially said yep you don't have to worry about the all of the all of the viruses it's convenient it's very
easy to use and you you had a line which I loved and you were talking about somebody who works at Pandora but listens to Spotify because it's just so much easier so um you know you you the more profound Arthur Kessler had a great quote which is the more profound Discovery or an innovation more obvious it appears
afterward yeah um and and so like uh you know it's it's so easy to be an arm uh uh a Monday Morning Quarterback and say well of course Spotify look like that was obvious right no it it actually wasn't obvious which is why Spotify has done so well um so what else do you see on the horizon um you've mentioned podcasts several
times uh do you think that the streamers will get um a uh a uh more of a toe old there um like Spotify uh with Joe Rogan and and and others or do you think that that's a that's a ecosystem that is just going to be hard for them to to take over I do think that it will be still hard but I'm still bullish on podcasting
overall I just think the way that Spotify others had went about it wasn't the exact way that they should like let's say that more buddy was invested to Target and keep shows like Rogan or shows like caller daddy or I have a look at a show like Joe Budden that was quite successful on Spotify but he said himself that hey they didn't want to pay
me the money they wanted to pay you know shows to Amy Schumer and Kim Kardashian and the the Obamas and shows like that that just didn't quite take off in the same way and you know he since went independent as a podcaster himself that was a lost opportunity because he was someone that was doing and he had the
number one podcast on Spotify before that Rogan deal had happened so there still are opportunities out there and I think we still are early with that so we'll see but I do think that from an economic perspective one of the advantages comes when Spotify and the streaming services as well continue to raise the prices because one of the pain
points for the industry has been the record labels want Spotify and the other streaming services to raise the prices because Spotify at least in the US and several markets in Europe still costs 9.99 a month for an individual User it's the same price that it cost 12 years ago when it launched in the U.S
it's the same price that the nasin music streaming services costed 20 plus years ago and while everything else is increased in price whether you look at all the video streaming services which are now some of them then um maximum HD or 4K versions cost twenty dollars Spotify still charging ten dollars a month and it's this tension
between Spotify wants to continue to grow at all costs the record labels want to now continue to also get their revenue but because the rate of growth for paid subscribers for streaming services is starting to slow down we're starting to see more and more concerns we're starting to see more question
marks that didn't necessarily come up in that 2014 to 2019 run where it was just in this fast growth stage because even though the revenue shares were roughly the same the service was you know just growing at such a fast rate that the more money was coming in and that's not starting to be the case anymore I do
think that there's plenty of room for Spotify to increase the price that they wanted to increase to 13 14 15 a month even in its most developed markets I think they probably wouldn't lose too many um subscribers especially if the other streaming services follow suit so things like that can help the mark it can help
as well because even though even if the splits stay the same you could still fundamentally have a much healthier business but how does that look from a growth perspective I don't I don't know the specifics there but I do suspect that they have room to be able to um improve that so that's one thing and with that there's also negotiations
about okay well if they do raise the price how does that additional money get split because Spotify feels like it's entitled to some portion of it the major record labels feel like they're entitled to some portion of it and then there's all of these more inner debates about how money should get split who should
get more if you start a streaming session with one artist for another some of those um things can get a bit in the weeds but overall I do think that raising the price for the services could help both Spotify and the industry overall be even healthier yeah that uh that that's a very interesting uh idea normally uh in the
old again I said all the old playbooks were collapsing right and like the old Playbook was always starting at the highest price because you can only lower prices right and and I don't think that that's necessarily true in this environment because uh like just inertia right like maybe I'm not the greatest
example here but like if Spotify started costing me 14.99 like big deal right like I'm saying I'm not gonna make the effort because all of my music is there and and they have fine-tuned their their elgo on me to the point where it's making better selections and mixes for me than I am and it's like really
exciting you know when when I see the the most recent one I'm like man their hip ratio for me right for personalized for me is so perfect that's a big boat I think yeah um well listen Dan uh you your domain knowledge here and obviously I happen to uh have the similar nut at I certainly don't have your domain knowledge but a
certain uh a uh similar interest in in the intersection of music and and business um and and so uh what's next what's next for you what what's on the horizon for uh you and your company also a few things I mean I'm happy about all the work that we've been able to do so start a travel five years ago we've been able to expand it into the podcast
where we're sharing insights on a weekly basis we have our newsletter as well where we're sharing a lot of those insights as well and we're doing it on socials too and it's just been great to be able to continue to reach serve and truly be a service to the not just the people that work in this industry but
the investors the founders the people that are building companies off of the insights they learned in Chapel the investors that reached out plenty of times for do delicious wanting to get my perspective on deals that they're working on it a lot of that you know over the years expanded to my own Angel
Investing which then expanded into my own Investments through capitals funds so I'm excited about that I'm excited to continue to make an impact there and for me Mission would travel from the beginning has been to elevate the business of music media and and culture we've done that through years for through our content we're going to
continue doing that as well through our investing and having that media and Venture our work in tandem with each other so I'm excited about that and I think we're at a really interesting inflection point in this industry too with so many of those second order effects we're now seeming we're now seeing with streaming the introduction
of AI especially linking back to everything we talked about at the beginning of the conversation so to have this pull position to be able to not just hear the insights but back the next generation of successful companies is exciting yeah that's super exciting and you know I'm I I'm always I I get
sometimes too abusive but what a time to be alive I mean like there's so many cool new things coming down uh the uh pipeline that it's just like man if you're not really fascinated and interested in all the opportunities something's wrong because yeah like it certainly in my lifetime I've never seen this many
opportunities uh for a variety of people and it's I just think it's incredibly exciting well Dan you might remember from uh the first time you joined us uh we have the uh question that we ask all our guests at the end uh which is um we're gonna we're gonna wave a wand and make you the emperor of the world for a day you can't kill anybody you
can't put anyone in a re-education cap but you can't accept them we're gonna hand you a magical microphone and you can speak two things into it phrases whatever you want it to be and the next morning all the population of the entire world is going to wake up whenever their morning is and they're gonna they're
gonna say I just had two of the greatest ideas I'm gonna act on them what are you going to accept in the world's population uh well the first thing I'll say which is timing with this conversation is that music is what connects us it is what is universal whether times are good whether times are bad it has that connective
piece where we hear certain songs it brings us back to certain memories that we had and everyone has that everyone has that ability and think about how powerful that is think about how powerful that can be from what it can Inspire for you to want to do and Achieve different things what could that bring from being able to think about new
business opportunities what could it bring from oh let me go check in back with a friend or someone I haven't seen before it's Universal in that way and I think it creates both you know professional and personal opportunities there so that's the first thing that I would say bet on bet on that music and
its ability to connect people and then the second thing that I'll say thinking a bit more broadly with some of the things in this conversation is that the world out there is bigger bigger than people think and I say that because with the work that I've done at Tropical I get whether it's emails cold messages
quite often for people that will either say things to me about oh hey decided to launch this business or we decide it to do this or I just or I got this job or this promotion because of insights I learned from the work that you were doing or the work that you all were doing at trap at all so I said I share
that to say not necessarily as a self-promortion for anything we're doing but it's a reminder for all the founders and people out there the world is bigger than you think the corners of people that you're trying to reach are there and like you said earlier Jen that long tail has its quarters it has its pockets
and there's just board more opportunity there that people can think if you're willing to put the work in I do believe that you can find success in the areas that you want to love it there's gold in them their tails so uh you you we've never had this many opportunities for people who are creatives I think and so it's a really
exciting time uh Dan remind everyone uh where they can find you where they can find uh tropical Etc yeah so you could find me um pretty active on Twitter um Dan runcie but it's at runcy Dan so at r-u-n-c-i-e-d-a-n and then if you're listening to this you probably enjoy podcasts too so go ahead and check out
tropical we have episodes that release every Thursday and we're sharing insights and having conversations like this on the future of music media and culture yeah and it's a great podcast I I highly recommend taking it in well listen man always a pleasure to talk to you um and uh till next time thanks for coming on thanks for having me