July 15, 2024
Episode

Can New Superstars Ever Surpass Current Superstars?

Can New Superstars Ever Surpass Current Superstars?
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This is the last Trapital episode of the year. We answered a crucial question for the soul of the business: Can today’s new stars ever surpass the existing superstars?

To break it all down, I was joined by Tati Cirisano from MIDiA Research. You can listen here or read a few highlights below!

Which young artists have the best shot?

This episode’s topic kicked off with a text exchange. I shared this tweet with Tati about how Dua Lipa’s song “Houdini” dropped in the charts after its initial release. It’s a good song that Dua did a bunch of press for, but the moment came and went. It was like a viral video that everyone in the group chat saw once or twice, said how much they liked it, but moved on to the next thing soon after.

In a prior era, Dua Lipa would have been the biggest artist in the world after Future Nostalgia and “Cold Heart” with Elton John. But today, she’s a hit-to-hit star. Dua is one of a dozen big stars who are commercially successful. Still, the current fragmented landscape makes it nearly impossible for them to be as big as the superstars who came decades before them, like Taylor Swift, Beyonce, Drake, or Adele.

Some of these younger stars have better shots than others. Bad Bunny is arguably already there. The Puerto Rican rapper is Spotify’s most-streamed artist of the year four times in a row. Artists like Bad Bunny, Burna Boy, and Karol G reach global audiences that are far less saturated than the US and UK. Unfortunately, the streams from those markets don’t pay nearly as well as the streams from regions where streaming service subscriptions cost more money. Latin music generates $1.10 around 1,000 streams compared to 3-4x higher for other genres.

But the current landscape makes it even tougher for the newer US and UK acts to reach that same level. Billie Eilish, Doja Cat, Morgan Wallen, SZA, and Olivia Rodrigo are all major stars, but this year they competed for attention in a year that was dominated by (relatively) older superstars who have been hitmakers longer than some of them were born. It’s music’s version of LeBron James and Tom Brady dominating competition that’s closer in age to their children.

This dynamic is even stronger given the growing demand for superstar tours. It takes time for an artist to build a fanbase that warrants a global stadium tour in the biggest venues in the world. It’s a much longer timeline than getting billions of streams.

Several of the stars we discussed plan to upgrade to stadium-level tours soon, which is great. But even if they sell out, it takes several tours to get to the frenzy we saw from Taylor Swift and Beyonce this past year (and likely will for years to come).

You can listen to the full episode here or read below for more highlights.

How this shifts industry economics

It’s in a company’s best interest to attract and retain the current superstars on their roster, even for artist-friendly terms. The proven stars have leverage since most newer stars can’t reach the proven star’s level. Proven stars are a finite resource. It’s not because the newer stars aren’t less talented. Many of them are more talented than the proven stars if we’re keeping it real. But today is a different era.

But how favorable is too favorable? In 2022, former Warner Music Group CEO Stephen Cooper shared skeptical thoughts on Taylor Swift’s licensing and distribution deal with Republic Records and Universal Music Group.

“[Taylor Swift] got a monster check and she got a very, very skinny distribution charge. We don’t do those deals; there’s not, from our perspective, the right side of economics. We don’t chase big names to get a little bit of revenue and not make any money.”


The logic is easy to follow. The major record labels have supplier power because of their valuable back catalogs. If they no longer own those assets moving forward, then that power erodes over time.

For Taylor Swift though, it’s hard to call her commercial success “a little bit of revenue.” She had five of the top eleven best-selling albums of 2023! Would a major record label rather receive a skinny distribution charge from the estimated $400 million value of Swift’s music released since 2019 (and count her sales toward their year-end market share) or own the masters of some viral TikTok sensation who’s lucky if they recoup their $4 million advance?

Plus, newer stars are signing artist-friendly deals too. Olivia Rodrigo reportedly maintains control of her masters in her current deal with Geffen Records.

In the same talk, Cooper did say that Warner (at the time), had reduced its financial dependency on superstars. The term “superstar” can be subjective, but sentiment makes sense especially since advances are getting larger and talent acquisition costs are rising.

It’s unrealistic to expect a new star to be as big as Taylor Swift. But can a new star be as big as Doja Cat? And if so, how much is that worth paying for since a lot has changed since her career took off? That’s a more realistic conversation.

The grand slam hits may be harder to come by, but the homerun hits are still out there.

The mighty indie model

In Hollywood, the A24 model is praised and beloved. Its quirky movies have a brand, an audience, and budgets that align with expected outcomes. They don’t make Marvel Cinematic Universe-levels of box office revenue (but to be fair, even MCU movies haven’t made MCU money in a while).

Music has several models like this. EMPIRE and Create Music Group both have their lane and serve it well, whether through individual releases, short-term deals, or online creator-centric resources. These are businesses built for the modern, digital-first, fragmented era of music. They can break through in a crowded landscape. Companies like AWAL and The Orchard are the in-house versions of these. They sit under the major labels but can tap into their resources when needed.

Every industry has its version of this. Music is arguably the most challenging since there’s more “noise” than ever, but there are also more success stories from both artists and companies. Several of them were ahead of the curve and built viable businesses in the long tails and areas that the majors and superstars were less focused on.

If you enjoyed the highlights, listen to the rest of the episode for more on:

– similarities in gaming with Grand Theft Auto 6’s $1B+ budget
– where artists like Lizzo, Cardi B, and Post Malone stack up

Listen to the episode here.

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Dan Runcie
Founder of Trapital
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Read what the industry leaders read

Hip-hop mirrors the business world in a lot of ways. While I’ve always thought and known that, it’s great to see those ideas brought to life by someone so knowledgeable about both of those things. Huge fan of Trapital.
PPLS CHAMP
Looking forward to future episodes of Trapital. I’ve been following the newsletters for awhile and always learn something new that’s relevant to hip hop and business. Great job getting the nuggets of info from Matthew Knowles on the 1st episode, can’t wait until the next one!
Cburns08
If you’re looking for a podcast with a wealth of info on the business of hip hop, then Trapital is your new home. Dan is an excellent host who has a myriad of of experienced guests to talk their role in the business of hip hop. Check it out!
RoyalSkegee
If you work in — or have an interest in — the music business, Trapital is a must.
Samu Rast
A good friend of mine put me on this podcast and it took me some time to tap in, but once I did, I couldn’t stop listening! Dan has a talent for pulling out the narratives between lines, connecting it to the culture and then making it make sense. I’m a loyal subscriber and am thankful for the podcast!
Zealous Advocate
I am a real estate investor and came across this podcast after a recommendation from a friend who shares my loves for both hip hop and business. Often, those two interests have such polar opposite “voices” - but Dan’s podcast brings those two together for me. The result is magical. Great guests, too!
Gabriel Blue
As a guy who came up in NYC during the late 90s / early 2000s rap scene, I appreciate the history revisited by Dan, who obviously has an authentic and unique perspective on the culture. But he’s not only a hip hop historian; he’s also a visionary of art, technology and culture who curates other trend setters from across the globe. Salute!
Mrkamal
I love Dan’s ability to bring diverse and timely perspectives to the show while asking deeply insightful questions that engage the audience on so many interesting levels. I’ve learned so much in just a short period of listening. Excited for what Dan has in store for the show in the future!
Greg0188
I stumbled upon this podcast by learning about Dan / Trapital via LinkedIn. I listen to A LOT of podcasts and I decided to give it a listen. First, Dan has a calm and authentic demeanor, which are great qualities. When he’s talking to his guests it’s very conversational and easy flowing. I’m a former music industry vet so the topics are right up my alley.
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