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‍‍Hey! It’s great to be back after taking a few weeks off.

Since my last memo, I’ve relaxed, dropped the two most downloaded Trapital Podcast interviews yet with Issa Rae and Master P, and ran a 5K race yesterday morning that my body is recovering from.

Next Wednesday, January 19, 2pm ET, I am co-hosting a webinar on the creator economy trends with Zoe Scaman, who wrote the New Creator Manifesto report in collaboration with Mighty Networks. When I shared the report in this newsletter, people liked it so much they referenced it in the weekly memo feedback! That was a great sign to double down and bring that conversation to life.

I’m excited for this. Join us! You can sign up here.

‍Today’s memo is about one topic: ownership. It was inspired by themes from the Issa and P interviews, and how many artists and creatives can evaluate their own decisions.

How Creators Balance Ownership and Partnership

When I prepared to interview Issa, I couldn’t wait to talk about ownership. For her record label, Raedio, she made sure that the artists signed will own their masters. But the ownership dynamic is different in TV. Issa doesn’t own Insecure, HBO does. And with her new deal at WarnerMedia, the company will likely own the content created under that deal. Issa does have her own production company, HOORAE, so I knew she would have a nuanced take on this.

She gave an honest answer here in this short clip from the interview, but here’s a summary:

- She made a tradeoff for the money and distribution that WarnerMedia and HBO offer in exchange for her content. At this stage in her career, she’s fine with that decision.

- She has a great relationship with HBO and Warner. She trusts them, they trust her.

- She loves what Oprah Winfrey built with OWN. The billionaire owns her distribution, calls the shots, and can chill in her garden with Stedman Graham. Issa often asks herself if she wants to follow that path and do all the work that’s required to get there.

Her answer was real and relatable. It’s why people love following her journey! In her answer, she also laid out a framework on how these decisions get made.

Ownership is often seen as an economic move, but it’s also based on trust and personal goals. Let’s break each of those down.

Economics: business partners deserve compensation, but terms matter

If a business partner offers resources to help talent develop and distribute their work, the partner should be paid for that. But how much? For how long? And will the compensation change after the talent proves that they are no longer a risk?

For instance, Taylor Swift, Drake, and Rihanna all have better deals today than earlier in their careers. They built their leverage, rightfully so. But there was still a time gap between when they de-risked themselves as superstars, and when the better deals eventually came.

By the time Rihanna dropped “Umbrella,” there was nothing left to prove. No more sizing her up against “the young princess of the Roc” Teairra Mari. No more questions about her global reach. But despite Rihanna’s leverage, she still waited almost a decade to attain her masters. Yes, Def Jam deserved a return on its investment for developing Rihanna at an early stage, but the terms should line up with the artist’s current stage.

There are several new platforms out there that want to improve long-term economics for creators. Most are focused on the technology to enable creation and distribution. They will help, but again, it’s only part of the equation.

Trust: good leaders prove that they have your best interest in mind

Many creators are cautious to give up ownership due to the countless bad stories of regrettable deals. TLC, Paramore, numerous Cash Money artists, the list goes on. If I had a dollar for every time I saw a headline that said, “fuck my label, I want out,” I could have bought Bruce Springsteen’s masters.

The ownership push is especially relatable for Black creators. Here’s what I wrote in The Overlooked Levels of the Creator Economy:

“...many Black creators have struggled to achieve the same backing and validation as their non-Black peers at different points in their careers. If those creators don’t believe that the system works in their best interest, they’re more likely to take matters into their own hands.”

But that said, does the fear of being screwed over outweigh the relative likelihood of being screwed over? Potentially. If an artist says, “I love my record label! They got my back,” that won’t go viral on Twitter. It won’t generate clicks for advertising-based news outlets. And it won’t drum up support from fans who are always ready to stan their favorite artists against The Man.

In today’s media culture, negative stories have an over-indexed influence on our perception of reality.

We also rarely hear about the good leadership that influences trust. Issa spoke about her great relationship with WarnerMedia and the desire to keep that going. In my interview with Roy Wood, Jr, he said the same thing for why he signed his overall deal with Comedy Central.

Bouncing around from team to team may work for unhappy NBA superstars, but it lacks the human elements that impact decisions in music and media.

Personal preference: decide how you want to live your life

The ownership route isn’t for everyone. It has its tradeoffs. My interview with Master P was a reminder of why he’s on that Mount Rushmore of hip-hop moguls (it’s him, Jay Z, Diddy, and Russell Simmons).

But P chose a different path than they did. P’s net worth may not be as high as Kanye West, Dr. Dre, or Rihanna. But those folks have more business partners to answer to than P does. Master P also has more control over his business decisions. His path to a billion is much longer, and arguably tougher, but that’s his tradeoff.

Similarly, most successful creators make tradeoffs all the time. Many artists want to be the biggest star in the world. Their odds of success are low to begin with, but not impossible. But if they try to get there without any support from a record label, the odds are much lower. It would be like if Coinbase tried to bootstrap its way to its $86 billion exit. Could it still have debuted on the Nasdaq as a bootstrapped company? It’s not impossible. But would it have been the biggest public listing of 2021 without outside capital? No.

In music, like tech, there are more options for artists who want to bypass major companies. Some artists are more than happy to earn a good living and leverage the quasi self-service tools and business support to make a decent living, run their business, and level up on their terms. That matters more to them than the fame and impact of being the biggest star in the world.

Russ may never be the biggest rapper, but he seems he’s content with that. He earns $100,000 per week via TuneCore, controls his destiny, and proves that there’s another way to approach his business. That’s $5 million annually from streaming alone. He may not top the Hip-Hop Cash List, but he’s still in the 0.1% of Americans and lives a more than comfortable life.

I love writing about this topic because it’s relevant for me and Trapital. I’ve been offered opportunities by well-respected venture capital firms, major podcast networks, big media companies, and plenty more. It can be flattering, but the opportunity has to line up with my goals, the trust I see in that partner, and the numbers have to be favorable.

That’s what’s normalizes the creator economy. Whether you’re Issa Rae, Percy Miller, or a full-time creator on your way to becoming a star, we’re all figuring it out. Some of us are further along that journey, but once we have a framework, the questions we ask ourselves and our potential business partners are largely the same.