Why Patreon's Growing During COVID-19

Hey! Hope you had a good weekend. Tomorrow you'll get to listen to my latest Trapital Podcast with... Hannibal Buress! I'm excited for you to listen to it. He manages his businesses a lot like the biggest rappers do. Tons of relatable insights, and, of course, he's funny as hell. Make sure you subscribe wherever you listen to podcasts!

Today's update covers Patreon's boom during COVID-19, Issa Rae's expansion into gaming, and why XXL's Freshman Class is still relevant.

Patreon's growth is a silver lining

Patreon, the membership platform, had some impressive growth in March. From Patreon's blog:

Here are the main trends we’ve seen:

A large number of creators are launching on Patreon. More than 30,000 creators launched in the first 3 weeks of March 2020 alone, and these new creators are acquiring patrons faster than usual.

Creators have expanded their earnings on Patreon during this time period. This is driven by two factors:

- Patron acquisition: An unusually large number of fans are subscribing to creators on Patreon.

- Patron retention: We’ve seen slightly more pledge deletion, but not nearly enough to offset the increasing numbers of new pledges.

‍We began to see platform-wide behavior change on Friday, March 13th. Average new patron growth across the US, UK, Canada, Germany, Australia, and Italy is up 36.2% compared to February - an indication that fans are turning to Patreon to support creators during this tough time.

These stats are refreshing! From a consumer behavior perspective though, this will spark two trends.

First, creators with big audiences will add most of the new patrons. At the end of January, rapper M.I.A. launched on Patreon. She didn't launch with COVID-19 in mind, but the timing was perfect. She's now one of the biggest musicians on the platform. The Sri Lankan artist has four times as many Instagram followers as Amanda Palmer, who is Patreon's most well-known musician with over 15,000 patrons.

Now, social media following is a highly imperfect measure of success on Patreon, especially since Palmer became more famous as a crowdfunded musician (and M.I.A.'s patron count isn't public), but it's a helpful proxy.

Cherie Hu, who uses Patreon for Water & Music, wrote about the impact of large audience size in a recent post:

Can you grow a Patreon page without already having a large audience elsewhere? Based on my experience, the answer is no.

To be fair, Patreon's 30K increase in creators is not reflective of audience size or potential revenue. But the real impact will be measured by revenue, and most of Patreon's creator revenue comes from the top creators who earn much, much more than the rest. According to TechCrunch, 3.2% of creators (who all earn $1,000+ per month) account for 70% of revenue.

Second, consumers with the ability to pay are more willing to do so during these times. There's been heightened awareness and sympathy for COVID-19's impact on live performance revenue. Those who were on the cusp of giving may be much more willing to do so now.

That may not last forever though, for two reasons. First, many of these musicians will go back to their traditional business models after this virus passes. At that point, the livestreams and other virtual-friendly content on Patreon may diminish. Second, the fans who were willing to support during a tough time may cut back on giving once those funds have dried up.

These stats are promising and can hopefully help cover lost revenue during this uncertain time. But I'm skeptical of the long term impact post-COVID-19. I do think that we are entering a new normal and that virtual-first business models will be more popular once the virus is over. But not enough to offset the regained revenue once live entertainment comes back.

Issa Rae's Insecure Mobile Game Fills a Void

Speaking of Patreon, one of the most famous creators on the platform is Issa Rae. She still uses her Patreon page, which was started to promote her YouTube series Awkward Black Girl, which has since elevated her to Hollywood status. Last year I wrote an update on her upcoming HBO Max show Rap Shit and Issa's new record label, Raedio:

If we connect the logical dots here, the rap group in Rap Shit will get signed to Raedio at some point in the show. The songs they release during the show will be featured as standalone singles available to stream everywhere. It reminds me of Gimlet Media’s StartUp—the company’s first podcast, which focused on the process of starting Gimlet Media. Very meta, but effective when done right.

If we connect the logical dots here, the rap group in Rap Shit will get signed to Raedio at some point in the show. The songs they release during the show will be featured as standalone singles available to stream everywhere. It reminds me of Gimlet Media’s StartUp—the company’s first podcast, which focused on the process of starting Gimlet Media. Very meta, but effective when done right.

She's following a similar playbook with the upcoming Insecure: The Come Up Game.

From WIRED:

If Issa Rae's Insecure character, Issa Dee, were to have a favorite phone pastime, it would probably be The Come Up Game. Developed by indie firm Glow Up Games, it lets players rap, create their personal style, and interact with the kind of friends Issa would have. Actually, they're the exact friends Issa has—they were created to reflect her experience, something very few games have ever done before. 

That's exactly what Insecure: The Come Up Game was designed to do: be a game by, for, and about women of color... “The Come Up Game is a perfect, natural extension of Insecure," Rae said in a statement. "It was such a rewarding experience to create this game alongside an all-women-of-color-led team.”

This game accomplishes several goals. The 35-year-old's freestyle raps are a signature part of Insecure. She extends its popularity into gaming—a rapidly growing medium with a limited amount of diverse faces. As Insecure has proved, there's an audience for her content on premium television. There's likely an audience on mobile gaming.

Oddly, hip-hop and gaming joined forces on content IP in some time. Sure, NBA 2K and Fortnite have several hip-hop elements that enhance gameplay, but when was the last good game that directly converged the two? Grand Theft Auto: San Andreas? That was 15 years ago, but even that was more about life in 90s South Central Los Angeles. It was heavily aligned with hip-hop, but still not directly hip-hop.

I'm still skeptical of the massive stats reported on eSports specifically. But I am bullish the convergence between hip-hop and gaming more broadly.

Here's what I wrote in January:

Imagine a 2020 version of Grand Theft Auto but with the IP and rights to a classic hip-hop story? The setting could be Queensbridge in the 80s, Miami during the 2 Live Crew era, or Atlanta in the early 2000s. We already have vivid pictures of those eras from all the great hip-hop albums, documentaries, and podcasts. The licensing and IP might be a nightmare to sort through, but if this type of experience was done well, it would make a ton of money. 

We are past the days of games like Def Jam Vendetta. There’s a huge opportunity here. Gaming (as it relates to the business of hip-hop) is an area I will give more coverage to in 2020.

The opportunity is there. I bet that more will follow suit after Issa Rae's lead.

XXL Freshman Class Campaign Begins!

Damn, it's already time for another XXL Freshman Class? XXL's annual tradition has remained a benchmark of who will matter in hip-hop. The memorable magazine covers are the closest thing hip-hop has to an iconic NBA Draft Class photo (minus the ridiculous choice in suits).

XXL deserves credit here. The freshman classes started in the 2000s and are still relevant in 2020. That's rare. Most things that mattered in the 2000s, like the MTV VMAs or music countdown shows, don't mean as much as they once did. But XXL Freshman still draws attention no matter what.

For fans, the "quality" of the list is a perceived measure of popularity. Last year's class was as strong as the 1996 NBA Draft. It had Megan Thee Stallion, DaBaby, Roddy Ricch, YBN Cordae, Tierra Whack, and Gunna. That lineup is one of XXL's best since 2010, which included J. Cole, Big Sean, Wiz Khalifa, Nipsey Hussle, Freddie Gibbs, and Jay Rock. This year, we can almost guarantee that Lil' Tecca, NLE Choppa, D Smoke, and Jack Harlow have a spot reserved on the list.

XXL's class thrives in this era since artists can truly become stars in a short, short amount of time. Someone that the masses don't know today will likely be an obvious choice and get widespread acclaim before next year's 2021 list. Additionally, the segmented nature of today's culture makes it easier for rising artists to have strong followings by the time they are up for consideration. This was much harder to pull off when mainstream media controlled distribution. The lowered barriers to entry allowed those with star potential to reach it much sooner.

The fan voting also increases engagement. And the partnership with SoundCloud makes perfect sense since it's a primary platform to gain traction on. UnitedMasters may make sense down the road given the large number of hip-hop artists who use the platform, and the growing number of partnerships with the distribution service.

I'm sure that many of you follow these artists, so here's a link if you wanna cast your vote.