Hip-Hop's Rise in India. Streaming Lawsuits on Lawsuits. Audiomack Partners with Warner Music Group.

Hey! Three quick things before we get to today's update:

• This week's Death Row article has gotten shared and read A LOT. Everyone loves them some Suge Knight huh?
• I just released a new podcast episode. It's an interview with Moody Jones, head of digital at EMPIRE. We talked about his experience marketing for Snoop Dogg, Iggy Azalea, Tyga, and why he wants to work with Childish Gambino. Check it out here.
• This Jay Z / NFL story might never end. At this point, I'm less interested in he said / she said. Let's hear from Jay himself.

Today's update covers hip-hop's growing influence in India, the wave of lawsuits in the streaming era, and Audiomack's partnership with Warner Music Group.

Hip-Hop's Rise in India

This was a big week for Indian hip-hop. From Universal Music Group:

"Mass Appeal, the urban culture-focused entertainment company, and Universal Music Group (UMG), the world leader in music-based entertainment, today announced the launch of Mass Appeal India – an innovative new label dedicated to amplifying India’s burgeoning hip-hop culture on a global scale...To coincide with its launch, the label has announced the marquee signing of India’s most popular and acclaimed rapper DIVINE...

In announcing the launch of Mass Appeal India, Nas said, 'I was first introduced to DIVINE’s music through the brilliant film Gully Boy. I’m proud to announce the launch of Mass Appeal India with DIVINE as the first artist on our roster. Hip-hop is the world’s most influential culture – it’s only right to share what we do at Mass Appeal on a global level.'"

India is a massive market. Hip-hop is the country's fastest-growing genre of music. Artists like DIVINE—who left his indie life to team up with Mass Appeal—have gained momentum in a scene once reserved for Bollywood music. Both Spotify and Apple Music have entered the market with low prices to catch up with Indian-based digital streaming providers Saavn and Gaana.

But there are plenty of challenges too. According to Music Ally, just 1% of the monthly active users of music streaming services pay for their service. Spotify has boasted about its subscriber growth in India, but a majority of those users are likely on free trials and heavily-subsidized promotional offers. Music piracy is also a huge challenge in India. It's nearly twice as high as in other countries. And YouTube—which pays artists much less than competing DSPs—is a primary tool for music discovery.

If that sounds familiar, like something you've read in Trapital before, it should! Here's a segment from my June article, Why Latin Hip-Hop is Still Undervalued:

"Latin music’s YouTube dominance is well-documented, but its financial implications are seldom discussed. Music streaming is already a loss leader for most artists, but it’s an even stronger one in urbano music. In 2018, ad-supported streaming accounted for 24% of Latin music revenue, compared to just 8% for the U.S. market.

For better or worse, most Latin artists have adjusted their strategy and expectations accordingly. But the most successful companies that enter this space can address pain points and capture more value both for Latin artists and companies themselves."

Latin artists tour often, but touring is a challenge in India. As Music Ally reported, a large number of India's hip-hop fans are under 21. This is a challenge because concerts without alcohol are far less lucrative. But it's a great opportunity for Indian rappers to grow with this generation of hip-hop fans.

Currently, the optimal monetization opportunities for Indian rappers is to license their music via other forms of media and pursue branding deals. One of DIVINE's songs was recently featured on a Netflix original series. This approach is similar to a key point from Trapital's Latin hip-hop article:

"There are two ways for Latin artists to earn more meaningful money: extract money from fans, or get paid by those who want access to fans."

The same is true in India. It will be difficult to extract money directly from fans. As DSPs continue to slash prices, it will be tougher to monetize or recoup costs. But licensing, advertising, and partnerships are all ways to get paid by those who want access to the fans who follow Indian rappers.

This flips the traditional value chain in today's music landscape. In India, publishers and branded partners have more power. Meanwhile, DSPs are loss-leaders--even moreso than in than in other markets. The DSPs are clearly in this market long-term opportunity, but it will take some time for that dynamic to flip—if it does at all.

Lawsuits on Lawsuits in the streaming era

Another week, another slate of streaming lawsuits! Here's two examples:‍

Tidal Threatens to Sue the Entire Country of Norway. From Digital Music News:

"Tidal, the music streaming platform part-owned by the famed entertainer, is now threatening legal action against the government of Norway. Officials in the country have been investigating whether the company had manipulated listening statistics for a pair of albums that Tidal held exclusive rights over."

Eminem Publisher Sues Spotify Claiming Massive Copyright Breach. From The Hollywood Reporter:

"In a suit filed Wednesday in federal court in Nashville, Eight Mile accuses Spotify of willful copyright infringement by reproducing "Lose Yourself" and about 250 of the rapper's songs on its service to the tune of potentially billions of dollars in alleged damages."

These lawsuits are unique, but they're also connected. Music and entertainment attorneys have always had a healthy career. That's why Billboard has an annual list of top music lawyers. But in the streaming era especially, DSP attorneys have been eating pretty well.

There are a few reasons why:

• Early stages - Music streaming is still a relatively new sector. There are new laws and rules introduced often. DSPs need attorneys who can follow, understand, and lobby for the rules they want to see passed. Just because the industry is past Napster doesn't mean that adjacent problems have all went away.
• International growth - DSPs expand to new markets often. Attorneys need to meet with local labels, incumbents, and others. A rushed launch that's poorly executed is a nightmare waiting to happen.
• New laws - the Music Modernization Act was signed into law in October 2018. This copyright bill has been required reading for any DSP who wants to operate a smooth business. In turn, it's created legal job opportunities for the entire industry.

I don't see this ending anytime soon. The industry is young and constantly evolving.

Should there be music attorney bootcamps like there are coding bootcamps? No, that's excessive. But just because it's excessive, doesn't mean that some company won't try to make it happen.

Audiomack Partners with Warner Music Group

From Rolling Stone:

"The streaming service Audiomack announced its first partnership with a major label, Warner Music Group, on Thursday.

In an interview, Audiomack co-founders Dave Macli and David Ponte said the partnership reflected shared priorities: Both the streaming service and WMG are interested in identifying talent early and helping it reach a mainstream audience. The new deal makes sense at a time when the listening space is increasingly splintered. Momentum can come from anywhere; labels are focusing more on ferreting out potential fans in every niche. That means trying to gain traction on Triller, Audiomack, and other smaller platforms, aside from the usual campaigns on massive services like Spotify."

This is a big move for Audiomack, which will now have access to the growing number of young artists on Warner's roster.

Based on the referenced interview with co-founders Macli and Ponte, Audiomack will have access to the younger artists on the catalog, but not the big names on Warner like Cardi B or David Guetta.

This makes sense from an alignment perspective, but it seems temporary. It's still early, as Audiomack is still a niche DSP in the ecosystem. But Audiomack may gain steam and set up similar deals with Universal and Sony. It's only a matter of time before the larger artists make their way onto the platform too.

Content From Elsewhere:

• The Vince Staples Show: Official Trailer - YouTube
• Let Bygones Be Bygones - a new Snoop Dogg song where he addresses his past beef with Suge Knight (a plug from Trapitalist Chris Carella)

Questions for y'all:​

• How will the Indian hip-hop ecosystem look five years from now?
• When was a better time to be a music industry lawyer? Twenty years ago--at the height of Napster-Metallica--or today?
• Do you use Audiomack? How does it fit in your music listening rotation?

Let's discuss in the Trapital discussion forum. If you don't have access, reply to this email and let me know!