Master P's Rap Snacks Ups its Distribution, Follow-up on Shea Serrano Podcast and Book Publishing, Why Content is a Loss Leader for Complex

Hey! Make sure you check out the latest Trapital podcast with Shea Serrano, staff writer for The Ringer and New York Times best-selling author! Listen and share!

This update covers Rap Snacks distribution strategy, a follow-up on publishing economics from the podcast with Shea Serrano, and why content is a loss leader for Complex.

Master P's Rap Snacks Ups its Distribution

Rap Snacks, the rapper endorsed potato chip brand, stepped up its distribution. It's now in 4,200 Walmart stores across the United States.

Melber is known for droppin' hip-hop references throughout his coverage. He ended the interview with "There's an old saying in the newsroom Mark, I don't know if you know it. If you're bout it bout it, then say you're bout it." Ha! It's a reference to Master P's 1995 hit "I'm Bout It, Bout It." I enjoy a good hip-hop reference, but Melber is on another level, y'all. Wild.

Rap Snacks was initially launched in 1994 by Master P with a $40,000 investment. The brand had quiet but steady success, but started to see a revival in the social media era after it's "Dab Ranch" flavor with the Migos. In 2017, Rap Snacks relaunched and has been on a distribution push ever since. In April it secured a deal to get in 690 Spencer's Gift stores. It's also teamed up with Slutty Vegan—the plant-based burger joint in Atlanta—for vegan flavors. Rap Snacks plans to be available in over 100,000 stores by December.

Things are heading where they should be, but I expect Rap Snacks will still face challenges.

Here's CEO James Lindsay in a 2018 interview with Billboard:

"As far as the business goes, Lindsay says each flavor is a partnership with the artist. "I told these guys, 'You make what I make,'" he says. "The new version of Rap Snacks is something just to teach these guys the power of their brand. Years ago they needed a lot of these big companies to pay them to do X, Y and Z, now they're becoming the brand where they can sell through all their social media followers and they don't really need those big companies anymore. They can make a lot of money just promoting their own brand."

Relying on an artist's social media account is a difficult game. Not just because of the algorithms, but because artists are in constant promotion mode. Most of the Rap Snacks partners/artists have numerous business interests. Rap Snacks is likely further down their list of things to plug on social media. It's a low margin/high volume business, which further disincentivizes the frequent promotion and awareness that's needed to drive retail sales.

I had to scroll back to September 2017 to find an Instagram post of the Migos promoting Rap Snacks! I couldn't find a single post on Cardi B's Instagram either. The mass distribution will help, but it won't solve everything. Shelf placement, point of sale, and advertising are all critical factors in retail distribution.

Publishing Tradeoffs (follow-up Shea Serrano podcast)

On the podcast I did with Shea Serrano, he broke down the difference between self-publishing a book vs going through a major publisher. This tradeoff is highly relevant to the decisions that artists make to stay independent or sign a major record label deal (or something in the middle).

Here's a breakdown:

• 2018 - Shea self-released Conference Room, Five Minutes, a digital PDF of illustrations about The Office. He distributed it through email and promoted it on social media. The price is $20. Shea took home $19 from each sale. The host website earned $1 per sale. That's a 95% revenue split.
• 2019 - Shea released Movies (And Other Things) via a major publisher. The price is $15. Shea said he took home $2-3 from each book. Let's call is $2.50. That's 17% revenue share.

From a pure numbers perspective, Shea has to sell nearly 8x as many books via publisher to match what he earns independently.

But Shea's goals weren't solely profit-driven. He wanted to top the New York Times bestsellers list for the third time. It's hard to do that with a self-released book—even with 300,000+ followers on Twitter. His book publishers, The Ringer, and others boosted his promo to get his book to top the charts.

It reminds me of my article on Chance the Rapper. His latest album The Big Day didn't top the Billboard charts. Michigan rapper NF outsold him that week. Some blamed the album's performance on its mixed reception. That's surely a factor, but it's simpler than that. A rapper as popular as Chance would have sold more with major label backing.

Hers's what I wrote on Chance:

"At a certain level, superstars want to work with the best in the game. Beyonce, Ariana Grande, Post Malone, Drake, and Taylor Swift are all tied to the major record labels for a reason. Despite their massive social media followings and strength of their standalone brands, they still want access to distribution that will maximize their reach.

This is where the music and tech are similar. Is it possible to build a successful tech company without VC funding? Yes, MailChimp is a bootstrapped company that’s on track to hit $700 million in annual revenue this year. But there’s a difference between MailChimp’s $700 million and Uber’s $11 billion revenue. It’s incredibly hard to build a tech company that earns Uber’s revenue without venture capital funding."

Shea Serrano's last two books speak to both approached. He made healthy margins on his PDF about The Office, but he becomes a NYT bestseller with major publisher backing. Those two goals can often be synonymous, but not always.

Why Content is a Loss Leader for Complex

This past weekend was ComplexCon, Complex's marquee event in Long Beach, California. Complex is one of several major media companies with ticketed events, but the company's massive social media presence makes ComplexCon seem grander.

It reminded me of the recent Recode Media podcast episode I listened to with Complex CEO Rich Antoniello. If you haven't listened yet, check it out.

Antoniello broke down the company's business model:

• Advertising: < 50% of revenue
• Events, products, and licensing: 50%+ revenue
  • Events: ComplexCon - 30K attendees in Chicago, 65K in Long Beach. $175/ticket
    • Ticket revenue: $16M+
  • Products: merchandise, hot sauce. (e.g. according to Antoniello - over $20M top-line gross revenue in hot sauce alone)
  • Licensing - Complex sells and syndicates content to both Hulu and Netflix, Go90 (10-12% of revenue)

Content has become the loss leader. Complex's primary customer is the 18-24-year-olds who grew up in an era where they don't want to pay for content. But when Antoniello was asked about whether a subscription model for Complex, Antoniello had an interesting take.

He's considering a lifestyle subscription offering with several plays: first look at content, early access to ComplexCon tix, disproportionate deals for additional merchandise, products, or content. Barstool Sports has something similar with Barstool Gold.

Here's a quote from Antoniello:

"If you're gonna run subscription media business and you're not Disney, I think you need to have a deep connection with your audience and the offering needs to add value across multiple outlets."

I understand why he thinks this, but I disagree. There are plenty of subscription media companies that succeed with pure content strategies. Substack's model is built on this premise. The Wall Street Journal seems to be doing fine on this front too.

Antoniello's mentality is far more applicable to a Complex, Barstool, Revolt, and media companies involved directly in the business of culture.