Why Spotify's RapCaviar Playlist Can't Be Matched

As each digital streaming provider builds its own ‘RapCaviar,’ they will need to do more than just copy Spotify’s flagship playlist.

Both Apple Music and Amazon have recently upped their playlist games. ‘Rap Life’—formerly ‘A-List: Hip Hop’—is Apple’s rebranded flagship playlist. It’s led by Ebro Darden, head of global hip-hop and r&b at Apple Music, host on Hot 97, and creator of this suspect top 50 rappers list. Apple’s playlist debuted with a photo of J. Cole rockin’ a classic Nas shirt.

Last month, Amazon’s new ‘Rap Rotation’ playlist made a statement with a flashy, star-studded promo commercial and an active YouTube channel with interviews featuring rising rappers. Yet oddly enough, Amazon’s debut playlist used the same J. Cole photo in its initial picture! Come on. You’re tellin’ me there are no other stock photos to choose from?!

This lack of variety is yet another sign of the limited differentiation among these major hip-hop playlists. By design, most of these playlists will feature the same popular rap songs. But no one wins if they all pursue the same strategy.

The current gold standard in playlists is Spotify’s RapCaviar. The marquee playlist has proven its ability to acquire new subscribers, generate standalone revenue, and influence which artists break out. (Last fall I wrote that the playlist should be spun off from Spotify so it could earn more as a standalone entity.)

RapCaviar might be the frontrunner, but other playlists from competing services need to run their own game. Each company has its strengths and growth objectives. Its playlist strategy should reflect that.

RapCaviar is an economic moat

Spotify got several things right with RapCaviar. Its short-form interviews and exclusive video clips add a personal touch to the standard tracklist. Its RapCaviar Live concert series yields higher profit margins than streaming because of its standalone revenue earned outside the major record labels. And the playlist’s public display of its follower count (nearly 12 million) is a boastful flex. The only reason we count playlist followers is because Spotify wants to brag.

That power comes from Spotify’s freemium tier. Technically, RapCaviar could make these same moves if the service was paid-only like Apple Music, but the flex would be less impressive. RapCaviar has millions more followers because of its ad-supported tier. Some of those followers are subscribed to other music services —and therefore less likely to switch— but Spotify can still extract value from them via live events and merchandise.

It’s harder for Apple Music and Tidal to do the same. ‘Rap Life’ and Tidal’s ‘Thoro Hip Hop’ playlists need to help attract new subscribers and reduce churn. They can still do live events and sell merchandise as well, but the scope is limited when its outside audience is not exposed to the brand.

Spotify has built an economic moat with RapCaviar. The playlist’s size is an advantage that demonstrates power, which begets more features, bigger artists profiled, and richer data. It’s a competitive advantage that’s hard to match.

Going head-to-head with RapCaviar is a tall task. Instead, Apple Music, Tidal, and Amazon need to focus on their strengths.

Apple Music needs to expand past the iPhone

Apple Music is most prevalent with iPhone and Mac users in North America. It’s one of the reasons why Apple Music surpassed Spotify in paid U.S. subscribers.

But as iPhone growth slows and the U.S. market saturates, Apple Music needs to continue extending its global footprint. Here’s a segment of a recent Billboard feature on Oliver Schusser, head of Apple Music:

As VP of Apple Music and VP international content for Apple, Schusser took on an arduous task: running the company’s most important online service at a time when iPhone sales are slowing and the company’s online businesses are becoming increasingly important. (In addition to Apple Music, his purview includes iTunes, the App Store, Apple Books and podcasts.) At home in Apple’s culture, Schusser was expected to bring a global focus to the division, along with some much-needed structure. “We’re looking at this as a business,” he says, “and we look at our numbers in a serious way.”

Rap Life, which is geared toward American hip-hop fans, can help this goal by considering which artists trend well internationally. That doesn’t necessarily mean focusing on more international artists. Some American rappers are more popular in different regions.

According to Kworb, a data collection site that gathers streaming data from the major DSPs, Travis Scott is streamed quite often in North America and Eastern Europe, but not as much in South America. Meanwhile, Young Thug’s streams are constant across different parts of the world. Maybe Thugger’s ad-libs resonate more internationally? Who knows. These differences matter though, since Apple Music has become more targeted as it rolls out in different countries.

‘Thoro Hip Hop’ Needs to Attract Tidal’s Niche Customer

Last November, I wrote an article about Tidal’s core customer:

Tidal still needs to attract customers that are bought into Jay Z’s mentality. Consumers buy based on emotion and justify with logic. The ideal Tidal customers are inspired by the opportunity to support the artists, but rationalize their purchase because of the higher sound quality and other features.

Tidal’s most passionate supporters are those who vote with their dollars. The company is forward about its efforts in criminal justice reform and similar initiatives. With the wide range of promotions that Tidal offers, there’s enough data to further segment who these customers are. The Thoro Hip Hop playlist could lean more heavily toward conscious rap. Tidal can also bolster its existing conscious rap playlists so that they get more limelight and recognition.

Tidal, like Apple Music, has its own well-known music journalist at the helm. Elliott Wilson, co-host of the Rap Radar podcast, leads curation for Thoro Hip-Hop and #CRWN– his interview series with popular artists.

Unfortunately, Tidal currently splits its branding between #CRWN and Thoro Hip Hop, which makes no sense. Most of the artists interviewed on #CRWN get heavily featured on Thoro Hip Hop that same week. It makes more sense to combine these two brands into one.

Amazon’s ‘Rap Rotation’ Should Team Up with Alexa

In April, Amazon launched an ad-supported music tier. It will be instantly available on the 100+ million Alexa-powered devices that are now in households and vehicles across the world. Since Alexa already knows a lot about us—more than it should, honestly— Amazon can promote Rap Rotation with listeners who are most likely to tune in. And once they start listening, Rap Rotation can feature ads for products that Amazon knows these customers would be interested in. This engagement will also help funnel listeners to become paid subscribers.

Rap Rotation already acknowledges the cross-promotional opportunity with this recently-made launch video:

Rap Rotation, like RapCaviar, is available on both free and paid tiers. It’s similar to Spotify in that the playlist has other opportunities to monetize its free tier. But Amazon Prime subscribers and Alexa device owners are more prevalent in wealthier households, which may shift the strategy.

I’ve had countless conversations with friends who have Alexas and Echos set up but have yet to sync them with their Spotify, Pandora, or other accounts they subscribe to. Alexa can address this friction by suggesting its new playlist to anyone who asks to play hip-hop songs without an associated account set up.

There’s also plenty of low-hanging fruit opportunities to cross-promote with Amazon Prime. Rap Rotation can easily be shown to anyone who pre-orders the next NBA 2K video game. But Amazon has the data to dig deeper and be even more precise.

It’s impossible to completely avoid the overlap in songs featured on these flagship hip-hop playlists. Artists like DaBaby and YBN Cordae are having a moment and are heavily featured on everyone’s playlists. Avoiding cultural zeitgeist would be foolish.

But playlist curators and the companies they work for need to balance what’s ephemeral, what’s relevant to its company’s objectives, and still instill a personal touch. It’s not an easy job, but it’s the only way to come close to achieving what RapCaviar currently has.

This article was discussed on the Trapital Podcast: RapCaviar's Big Advantage

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Trapital is written by Dan Runcie: info [at] trapital.co