Show notes
Best-selling author Zack O’Malley Greenburg and I took a break for a new Dad-girl duties to talk about the latest headlines in the music industry — namely Irv Gotti selling a 50-percent ownership stake in Murder Inc.’s past music recordings. He got $100 million from Iconoclast for the deal, plus another $200-million credit line to fund future media endeavors Irv has planned. After the sale, Irv did an interview with Billboard and quipped that monetary-wise, the music industry is the “lowest form” in entertainment compared to film and television. Zack and I debated that during our episode comparing top-line revenues for each entertainment vertical, plus how Irv’s deal compares to other splashy catalog sales in the past two years. We also dived into a guest post on Zack’s Substack about how “moods” has become the new classification for music, not genres anymore. Discovery algorithms deployed by streaming services have pushed listeners toward moods — and away from regionalism (e.g. Houston-style “chopped and screwed”) and loyalty to particular record labels. It’s also another tell-tale sign that Gen Z is more fluid, less rigid than prior generations with their labels. Below are all the music-industry topics Zack and I covered throughout the episode, plus a special segment on becoming Dad’s in the past two months:[0:55] Baby Duties For Zack & Dan[4:11] Irv Gotti Calls Music Industry “Lowest Form” In Entertainment [6:09] Zack Still Gets Royalties for “Lorenzo’s Oil”[7:52] Top-Line Revenues: Music vs. Movie Industry[8:59] New Artist Perspective Skewing Perception Of Music Business[11:04] Did Irv Gotti’s Deal Get Made Before Market Correction? [13:08] Irv’s Deal Was For Masters, Not Publishing[13:50] Crowning Jewel of Murder Inc’s Catalog[18:23] Why Mood Is The New Musical Genre[19:26] Gen Z Uses Labels Less Than Prior Generations[25:53] Post Malone The Genre-Agnostic Artist[27:10] Did Streaming End Regionalism In Music? [29:53] Fan Attachment To Record Labels Has Disappeared[32:30] Stories From Two New Girl Dads[38:21] First Music Show For The New Babies?Tiffany Ng’s article on music being categorized by moods, not genre: https://zogblog.substack.com/p/why-mood-is-the-new-musical-genreListen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSSHost: Dan Runcie, @RuncieDan, trapital.coGuests: Zack O’Malley Greenburg, @zogblogSponsors:MoonPay is the leader in web3 infrastructure. They have partnered with Timbaland, Snoop Dogg, and many more. To learn more, visit moonpay.com/trapitalEnjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapitalTrapital is home for the business of hip-hop. Gain the latest insights from hip-hop’s biggest players by readingTrapital’s free weekly memo. TRANSCRIPTION[00:00:00] Zack O'Malley Greenburg: Our generation, in general, is pretty hung up on labels. You know, everything from music to sexuality, to whatever, you know, it's like things have to be classified and, you know, there's kind of an obsession over putting things in buckets. Whereas I think Gen Z has a lot more about fluidity and sort of like, you know, questioning why we need these labels at all to begin with, or at least, like, maybe we should just loosen up a little bit about them, which I think makes a ton of sense, you know? [00:00:34] Dan Runcie:Hey, welcome to The Trapital podcast. I'm your host and the founder of Trapital, Dan Runcie. This podcast is your place to gain insights from executives in music, media, entertainment, and more, who are taking hip-hop culture to the next level. [00:00:55] Dan Runcie: This episode is the first one I'd done in a little bit, took a quick break from recording. My wife and I welcomed our first child into the world last month, so took some time, focused on family, and finally, ready to get back into the swing of things. And there's no better person to do it with than my friend, Zack O'Malley Greenburg, who recently is coming back from paternity to leave himself. Him and his wife just had a kid in May, and the past couple of months, Zack and I have been talking about our journeys, both leading up to this moment and after. So, and given what we cover in both music and entertainment, it was a good time to catch up on a few recent headlines. First, we talked about Irv Gotti and the $300 million deal he did for selling his Murder Inc. Catalog, doing a deal with Iconoclast for further stuff in media, TV, and film. And this statement that Irv Gotti made about music being the lowest-monetized form of entertainment. Zack and I had some thoughts, so we broke that down. We also talked about one of the articles that was a guest post in Zack's ZOGBLOG that he had published that was about moods in music and how moods and music are definitely taking over genres, especially in streaming, and how that may shape the future of how music's released and monetized. We're getting away from these genre legacy terms like country, rap, and pop and moving more so into chill vibes, or other things that are named by hyperspecific Spotify playlists. And Zack and I saves a little bit of time at the end for Girl Dad Life, where we chatted about some of our mutual experiences and some funny moments that we've experienced so far with having kids and what's that's been like with newborns specifically, so hope you enjoy this episode. Here's my chat with Zack. [00:02:42] Dan Runcie: All right. We're back with another episode. And I'm joined by my guy who is also probably with limited sleep, fresh off of paternity leave himself, Zack, how are you holding up these days, man?[00:02:54] Zack O'Malley Greenburg: Not too bad. I think we got eight hours last night out of Riley, little Riley. So life is definitely getting a little bit more normal but it's, it's all good. sleep or no sleep. It's just a blast. [00:03:06] Dan Runcie: Ah, love to hear it. I'll hopefully be at that eight-hour stretch soon, a couple of weeks behind you with a newborn, but we'll save some time at the end to catch up on Girl Dad Life. [00:03:16] Zack O'Malley Greenburg: All right.[00:03:17] Dan Runcie: Let's start things at the top though. We got some big topics we want to dive into, but this first one that caught my eye, and it sounds like it caught your eye, too. This quote is from Irv Gotti, who just did this huge deal. Of course, Irv Gotti, CEO, one of the founders of Murder Inc. He was able to do a $300 million deal recently with Iconoclast, where he was able to sell his share, his 50% share of Murder Inc.'s masters for $100 million. And plus he also got a $200 million line of credit. That's going to be specifically used for future TV and film projects that are likely going to be based off of some of the Murder Inc. IP or other things. But in an interview that he did talking about this deal with Billboard, he said this quote, and I've been thinking a lot about it.[00:04:11] Dan Runcie: He said, "Entertainment industry is music, TV, and film," right? "The music business is the lowest form, and I just bagged a hundred million dollars for some shit I did 20 years ago." And the interviewer then follows up and it's like, you know, can you say more? And he says, "It's just the facts. More money is made in TV and with movies than music. It’s a non-disputable fact. We love the music industry and I love the music industry. There’s money to be made. But [it’s dwarfed by] the money made from TV and film. If I have 100 episodes of television and I own it, they’ll probably put a worth on it at $300 or $400 million. With $300 or $400 million, I could sell it at a 10 to 20 multiple. That’s three to six billion. This is why Tyler Perry is a billionaire. That’s why I sold my masters and did this deal with Iconoclast." So I pause and, although I get what he's saying and I think there is some interesting discussion there, I think there's a lot of nuances there. And I'm not quite sure if I'm completely on board with him on this. That said, I think Irv Gotti is great. I always loved what Murder Inc. did, but I think that this particular statement is a bit more nuanced, especially with what we've seen happening in music the past few years. [00:05:29] Zack O'Malley Greenburg: Yeah, I absolutely agree with that. I mean, you know, and I think he got into some fuzzy math there at the end. I mean, I don't know, you know, to multiply what by 10? And we're talking how many billion dollars? Like, when Disney pay a billion for the entire Star Wars library, so, I know that was a great deal for them and it's worth a lot more now. I think the math might be a little bit off, but I would kind of flip it and say, you know, sure. You know, there are movies that gross billions of dollars or, you know, hundreds of millions or into the billions, low billions. But like, there aren't albums that do that. Okay, but, you know, in terms of libraries, I mean, we just saw Bruce Springsteen get half a billion dollars for his.[00:06:09] Zack O'Malley Greenburg: I mean, we're seeing, you know, masters in publishing go for hundreds of millions of dollars. The fact that Irv Gotti got a hundred million dollars for half of the Murder Inc. catalog. I mean, that's a wild number. No, not to sort of sleep on the Murder Inc. catalog, but, you know, it's not Bruce Springsteen. So, you know, I think that actually, the fact that he was able to get a hundred million dollars shows that the music industry is actually alive and well, right, in terms of the valuations. So yeah, I'm not, I'm not sure how much I, I, I agree with that, especially when you look at, you know, like for example, I was in a movie when I was a kid. The movie's called Lorenzo's Oil and I played Lorenzo. It's a, a big role, and I still get checks for 60 bucks, you know, every few months. And that's nice. And I'm sure that Nick Nolte and Susan Sarandon who were in it get much bigger checks, but, you know, they can't really go and, like, sell that catalog. You know, you don't have masters as an actor. I suppose you could go and sell the royalty streams or companies let you do that now, but it's not the same in terms of intellectual property. There's not like an equivalent to, you know, songwriting you know, like the sort of, the same kind of IP that, you know, at least, if you are an actor or an artist, or, you know, you would have access into your, to your masters in a way that you wouldn't as an actor unless maybe you're Tom Cruise and you negotiate some crazy backend deal. So, I think the grass is a little bit greener on the music side than Irv is, is giving credit for. [00:07:42] Dan Runcie: Yeah. I think the difference that you're highlighting is that it's not so much the top-line number. It's more so just how the business model under that number is distributed between who owns the underlying content and who doesn't. And I think if you're Irv and you're trying to compare this from this perspective of, if you're in music and you're trying to do a deal with Universal, whether you're an artist or you were an indie label at the time, trying to do a distribution deal or some type of joint venture. I forget exactly what Murder Inc. had at the time. But comparing that isn't the same to comparing what Tyler Perry is doing because even what Tyler Perry's doing, he is very much a unicorn in that right. There's not that many actors that are owning the underlying IP of the work that they're doing. Tyler Perry is the writer, the director, the producer for all of these things. That's why he is getting those things. And that is a very unique use case because in most cases, those are all different people in television. And I think, to be honest, TV is likely getting even murkier now because so much of the money that was going into these projects was based on this concept that these video streaming services could just have infinite growth and just keep growing and growing.[00:08:59] Dan Runcie: And now we're kind of reaching this point where people are like, okay, Netflix had 220 billion people paying $10, $15, almost $20 a month. Maybe that was as high as it could potentially go. I mean, I think there's plenties to break down there, but if those dollars aren't going to be as high as they may have been in that perspective, then we're going to see the shift. I did look at some top-line numbers, which are, I think, a good way to kind of balance things out. The music industry almost made $30 billion last year. I think it was around $28 billion last year for recorded music overall. So that does not include concerts or any of those things. I know that Irv isn't referring to that, but then if you look at the box office, I mean, that's more money than the global box office made, granted last year was a pandemic year so I know it's a bit tough to compare these things. And there's a lot more other things there, but it's not so much that this industry itself doesn't make as much money 'cause, yeah, you mentioned Bruce just got half a billion for all of his stuff. He owns this stuff and you know, that, you know, Born in the U.S.A. is going to be playing for decades, at least with, you know, as long as your Baby Boomers, and Gen X, and I guess even Millennials that are big Springsteen fans continue to listen. But I think that's different than how Irv might be looking at it. The thing is though it's not just Irv. I think that has its perspective. I think a lot of other folks have that perspective too, but I think it stems from when you are at the lowest rung of being the talent in the particular industry, I think music at that stage is likely a bit less advantageous than it may be for, you know, an actor per se. And maybe that's a bit of the difference where if you're a musician that's just signing on for a deal, it's going to take a lot longer for you to maybe recoup that money than an actor would, you know, signing on for an equivalent level size of something. But that's definitely very different than putting that as a global claim about the broader industry. [00:11:04] Zack O'Malley Greenburg: That's true, but I, I would still argue that if you are an artist getting into the game as a, as a musician, the default would be that you would probably have shared ownership of your masters. If you were an actor getting into the acting game, the default is like you get an okay chunk of money for one movie, you know. It doesn't come with IP in the way that it would. And so it's not until later in your career that you can start to say, Hey, I want to be a director. I want to be a producer. Until you start to get, or, you know, or maybe you're kind of DIY from the beginning and, and you're doing it, all of it yourself, but that's, that's so unusual. You know, I don't know. I mean, I, I think the other thing too, is that like, and maybe this is part of what Irv was alluding to, I mean, that a hundred million dollars that he got, that to me seemed like a number that was more along the lines of the stuff we were seeing, you know, six months to a year ago before interest rates doubled. And we kind of stopped hearing about these big deals. So I wonder if that deal, and I kind of asked around a little bit and I couldn't get a, a firm answer, but I would suspect that that deal, you know, was agreed upon you know, like last fall or something before the economic environment changed and, you know, and it just didn't close until now 'cause these, these deals can take six mon…
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