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The company Spotify is a very interesting case study. The amount that Spotify pays the creators, by way of the record companies, for the licensing of the recordings for streaming, as well as the publishers– the people who license the public performance of the song– amounts to about 70% of their revenue that they generate from selling advertising, or from their subscriptions. And they are continuing to increase the number of paid subscribers.
So as they make more strides for attracting more paid subscribers for their services, it’s creating a situation where they are making more money, but can they survive and become profitable on the 30% that they are left with? The margin just isn’t big enough. So what Spotify has decided to do, and just did recently, was renegotiated their agreements with all of the major record labels.
The record labels used to get about 58%– I mean, we talked about 70%. 12 of that would go to the publishers. 58% would go to the record companies for those recordings, to license the recordings for the streaming services. And Spotify decided to, and did, renegotiate all of their agreements with the three major record labels, and even the association of independent labels– Merlin– where they reduced those payments, based on the initial payments that they’re paying now. So they went from about 58%– it’s been said, these are confidential agreements– down to almost maybe 52% with some of the labels. However, the labels have agreed, and Spotify has agreed, that the more subscribers they get, the royalty rates will come up, because the more money they are going to be able to make.
Which is a very, very interesting development. Another interesting development is that Spotify is finding that there are many, many artists, independent artists, that they feel that they can do direct deals with, and may not have to pay that 52% or 58%. The major labels demand it, and they have to pay it. But if there are some independent artists– Chance the Rapper, or other independent artists– that they can make a deal directly with them.
They could possibly play those artists less. Why? Because the artist, if they’re signed to a major label, the major label is making 58% of the revenue, and they’re paying the artist on the artist’s royalty rate of 15%, which is what? Maybe 7% of that? So Spotify feels that they can go directly to the artists, have them license their recordings to them, they could pay the artists maybe 40%, rather than the 50% they’re paying to the major labels.
So that they’re going to be able to benefit more. Spotify has done that on occasion, although they don’t want to create any problems with the major labels, or they they’re really trying to not do that on a broad level at this point. But you have to figure there’s more and more independent artists that may not even be interested in signing with a major label, might be interested because streaming is really taking over, and doing deals directly with Spotify.
So the future for Spotify and streaming is going to continue to grow, and it’s going to be a very fascinating subject for years to come. .
Tiffany Ballard: Let’s say an artist blows up and has a song on the radio or a song that goes viral or whatever. One of the good things is being able to say, “Okay, I’m going to go to this label. I’m going to see what they have to say. I’m going to go to this label. I may try to do something with this company, Apple Music, directly, however it goes.” But it’s good that you have those options, you know what I mean? If these people start getting together and making these major corporations, it’s kind of like, would I really benefit the artist or would I harm the artist because now they can’t use their leverage to actually play these labels against each other or whatever the situation may be, you know? Rob Markman: Sounds messy. Rob Markman: What’s up, Geniuses? Welcome back to For the Record. I’m your host, Rob Markman. Now today’s show is a very important one. As much as we talk about the creation of music, to artists about how music is made, and how it gets delivered to us, the music business is really just as important.
Rob Markman: Now last week, I was pretty shocked, man. I read a Business Insider article which revealed that musicians only get 12 percent of the 43 billion dollars the music generated in 2017. I reacted crazy. I saw a lot of artists react crazy, a lot of industry people react crazy. And so I decided to bring a panel here to discuss this, alright? Rob Markman: First up, we have John Lynch. He actually wrote the article for Business Insider, which is based on the Citigroup. He’s the entertainment editor over at Business Insider. John, welcome to For the Record. John Lynch: Welcome. Thanks for having me. Rob Markman: Now next up we have an entertainment attorney. She is one of the stars of the We TV show ‘Money, Power, Respect’ Actually, the only reason that I watch ‘Money, Power, Respect’ is to see Tiffany Ballard. Tiffany Ballard: Thanks for having me. Rob Markman: Thank you. And one of my favorite MCs from Brooklyn. Maybe I’m a little biased, but he just released his new album called ‘Crown Fried.’ Sitting right next to me is my man Dyme-A-Duzin.
Dyme, welcome to the Genius for the Record. Dyme-A-Duzin: Thank you for having me. Rob Markman: Thank you for coming. I wanted to get because everybody has different expertise. John, you know, you work at Business Insider. You really kind of synthesized the Citigroup report that blew this up and made it go viral. Tiffany, you represent so many artists, producers, and songwriters that work with big artists, like Beyonce and Drake and Kendrick Lamar. So you’re in here crafting these deals and fighting for your artists to get their fair share. And Dyme, you’re just out here on your independent grind and hustle. You’re actually a musician. You live, you don’t have a 9-to-5, this is not a side hustle for you.
Music is what you do. So I wanted to get all these three perspectives. Rob Markman: John, I wanted to start with you. The article that you wrote for Business Insider. Can you give us a summary of what it was about? John Lynch: Yeah, so I wrote the Citigroup report that you’re talking about, and I was taken aback to see 12 percent was what artists were making of this 43 billion that the music industry was generating in total. Basically that 12 percent is up from past years, but it’s mostly due to touring. So artists are nowadays mostly making their money off of touring as opposed to purchased music, which is down quite a bit, and streaming. Rob Markman: Right. What we’re being told every time you look around, that Drake is breaking streaming records. Bruno, Taylor Swift, is like keeping her thing off streaming, really selling real well and then going back to streaming. But we keep getting these stories that in the streaming era it’s really a good time, they brought the money back to music. John Lynch: Right. Rob Markman: And, which is cool, but it’s like, Tiffany, where does the money go? Tiffany Ballard: Well, I wonder, too.
No, I’m kidding. A part of it, I would say, there are multiple people and entities that have their hands in the pie. You have to pay a personal manager, business managers, you have labels. You have publishers. You have accountants, you have attorneys, so I would need to know the exact methodology behind, I don’t know enough of what went into- Tiffany Ballard: Even when I think about artists, I think from what I read in the article they’re talking about performing artists, but all performing artists don’t write their music, so sometimes some of that income may go to songwriters. They may go to producers. I’m not really sure exactly what all went into the article and the data they used, but there are a lot of hands in the pie before the artists get paid. Makeup artists, barbers. There’s a lot. Drivers. Rob Markman: And operating costs. The labels have operating costs.
The streaming services, the retailers, the DSPs all have operating costs that have to get recouped before any creatives get to see a dime. John, just going back to you, was it clear in that Citigroup report, it said musicians received 12 percent of 43 billion. Was that all musicians, or was this just recording artists, like your Beyonce’s, your Bruno mars, and not necessarily the songwriters, producers, and session musicians who played on the album? John Lynch: It seemed to me like it was all-encompassing. I think producers were included in it, too. One of the things the Citigroup report got criticized for overgeneralizing a bit, so I’d be interested to hear what that 12 percent was a part of, who is getting that money, necessarily? Rob Markman: And we’re going to get into that, too, because Billboard just recently published an article as a rebuttal to the Citigroup report and the headlines that are out there. I know the RIAA is asking people to look at it differently, but Dyme, man, I want to get to you.
One thing, Business Insider, you guys use is the image of Kanye West as the thumbnail image, as the lead image for this. And with all due respect, Kanye’s going to be fine. Financially, Kanye, your Beyonces of the world, your Bruno Mars, your Jay-Z’s, these artists aren’t starving at all. Dyme, I want to talk to you because you’re an indie artist from Brooklyn. You just released your album, ‘Crown Fried.’ Dyme-A-Duzin: ‘Crown Fried.’ Now serving. Rob Markman: There you go. I just wanted to know, first of all, for me for example, I work here at Genius, and I released an album. Tiffany helped me construct the contracts for and get my legal thing. Music is my side thing. I still gotta maintain a 9-to-5. Music is all you do. Music is the only way that you work, the only way that you eat, the only way that you get fed, correct? Dyme-A-Duzin: Yeah.
I’m an artist first. Artist, MC. That’s my passion. But at the same time, like you said, living the life. You gotta live. But that kind of forced me, not forced me. I enjoy doing jingles. I did something for Domino’s, like jingles and other songwriting opportunities and things like that, so when I first saw the article, I thought 12 percent. Damn. What would Kool Herc, these guys from back in the day think about this? And then knowing the fact that it’s all because the bulk of the artists, what they’re generalizing that 12 percent to be, artists, producers, the fact that it’s touring shows that this is a change in time. The digital age is more about the connection to the artist and the fans besides this big, everybody hands in the pot type. Dyme-A-Duzin: We need teams, but at the same time I feel like the consumption is different nowadays. We’re directly connected to the people that want to hear us. Tiffany Ballard: Can I? Rob Markman: Yeah, yeah. Tiffany Ballard: A couple of points. I know in the article it mentioned, though, which I thought was interesting, was that the 12 percent was actually an increase and back in 2000 it was actually seven percent.
Rob Markman: Seven percent. Tiffany Ballard: And I know they did say it was from touring but mostly from touring because now they tour, but I didn’t understand it fully only because now there’s also 360 deals which didn’t exist back in the day, so now they’re actually participating in touring income, where they would not have in the past, they being labels. So I’m a little bit confused as to why. Because artists have always toured.
We go back to, I don’t say back to Mariah because she’s still relevant, but Whitney, so many people. Michael Jackson. When didn’t they tour? So I don’t know why they would say that now it’s increased because of tours especially when now labels eat off of tour income, too, whereas they didn’t in the past. It was mostly sales. John Lynch: They were saying that artists were touring more, too, to get more revenue.
Just the growth of tours has skyrocketed. I was looking at this graph, and it was like the past five years or so it was a lot of money. Rob Markman: It goes back to this thing. There’s these general reports, I hate these articles. Millennials kill Applebee’s. But one of the things that’s important to this generation that is seen through reports is experiences, right? This generation would much rather pay for experiences, so while we technically aren’t paying for music, if you’re streaming, you’re paying for the access to listen to music, but you’re not paying to own music, that it seems that fans are willing to go out more and pay a little more for a concert ticket. Rob Markman: Drake and the Migos will be coming to New York in a couple of weeks, and I think they got about six or seven dates, like four dates in MSG alone. Those will run into Billy Joel numbers and things that we used to see from these touring giants. Rob Markman: Tiffany, I want to go back to you because a lot of the clients that you represent are songwriters and producers.
Tiffany Ballard: Yes. Rob Markman: Musicians who can’t tour, who aren’t able to make any of this touring revenue, this touring boom that we so hear about. How do you navigate that with your clients, how do you make sure that they get their fair share? Tiffany Ballard: That’s a good question. One thing I will say is the name of the game of course is leverage. One thing I try to do is, how do I go without being so technical? In terms of producers, let’s say, all right? You have these things that are called producer decks, where you sign. You say, “Okay, you can use my song. I’ll get half now and the other half of the advance later. We’ll work out the technicalities later.” One thing I try to do is say, “Okay, let’s not do a deck. Let’s go straight to the long-form agreement. That way, you have leverage because once you sign this deck, we can argue back and forth about points all day long. About what the splits are going to be, who is going to actually, how the sample is gonna be allocated, whether or not the artist is actually, whatever it is.” Tiffany Ballard: One of the things I try to do is to go past the producer deck aspect and go straight to a long-form that we can agree to negotiate the actual points.
But a lot of it is leverage. What’s your last hot track? Who have you worked with? This client is not going to take, he’s not willing to take this percentage because x, y, z. He got this percentage on a different deal with an artist who’s must bigger than the artist that you’re talking about right now, so why would he be willing to take just 10 percent from you when he got 50 percent from a Grammy-winning artist, you know what I mean? Tiffany Ballard: So really it’s looking at the facts, looking at the leverage and actually being willing to forgo the producer deck, which gives you more leverage and to just stick it through. Rob Markman: Negotiate the front is what you’re saying? Sign it out up front. Tiffany Ballard: I’m saying don’t do the deck. Don’t do the upfront because some people need that first half of the advance.
Forgo that first half of the advance and get the entire advance once the long form is done because then you still have the leverage. They can’t put that song on that album until you finish that long form, whereas if you sign that producer deck, they can use that song on the album, and you guys can fight for the next year about the second half of your advance and what the terms are going to be of the competition. Why do that? John Lynch: Sounds messy. Tiffany Ballard: (laughs) Rob Markman: John, I want to get with you because the Citigroup report has, and we mentioned it a little bit, faced criticism. I know Billboard wrote a couple of articles, the RIAA. People are questioning how did they get to this accounting, how did you get to this number, and that they may not be looking at things the right way because essentially they’re an investment firm and may not have the expertise or the ins and outs of the music industry.
What’s your take on all that? John Lynch: Yeah. They had a couple bullet points of things that they took issue with it it. One thing was the Citigroup report was saying a lot of consolidation in the industry could help young artists, up-and-coming artists, and they took issue with that, saying that Sirius XM, for example, they’ve got crazy profits, but it’s not necessarily going down to the artists. So consolidating of, if Spotify, as the Citigroup was saying, if Spotify started to act as a music label for emerging artists, it might not necessarily be good for those artists because who’s to say that the profits will go on to the musicians. John Lynch: There were a couple of other things. They took issue with just numbers, overgeneralizing, too. Yeah. Rob Markman: It’s interesting because, Tiffany, maybe you can speak to this, the consolidations of streaming services, partnering with Live Nation and kind of, then you get to this point of almost a 360 situation where it’s like every aspect of where artists eat forms under one umbrella.
Can artists truly benefit from that? Some may say that the leverage of this consolidation will allow more money to come in from the marketplace because you have a more powerful entity negotiating on your behalf, but in reality is this really a good thing for artists? Tiffany Ballard: It’s kind of hard to say because theoretically, if you’re cutting out the middle man. Well, the label isn’t necessarily the middle man, but if you’re cutting the label out, then theoretically you would think there is more of the pie to split between the Spotifys, and the Live Nations, and the artists.
Tiffany Ballard: Theoretically. But we know that doesn’t necessarily happen. That’s if you are an employee of a company and the company merges with another conglomerate, to form a conglomerate, does that mean your paycheck is going to change? Not necessarily. They may keep whatever is shared, they were keeping, and just split it amongst the partners. So it’s just, it could go either way. Theoretically, you know I could see someone arguing that cutting a label out would increase the pie for the artists below, but in reality I’m just not sure how that would work.
Tiffany Ballard: And I think even having these conglomerates and these mergers I don’t think is necessarily a good thing because part of an artist, let’s say an artist blows up and has a song on the radio or a song that goes viral or whatever. One of the good things is being able to say, “Okay, I’m going to go to this label. I’m going to see what they have to say. I’m going to go to this label. I may try to do something with this company, Apple Music, directly, however it goes.” But it’s good that you have those options, you know what I mean? If these people start getting together and making these major corporations, it’s kind of like, would I really benefit the artist or would I harm the artist because now they can’t use their leverage to actually play these labels against each other or whatever the situation may be, you know? Rob Markman: Key word again coming up, leverage.
Dyme, I want to speak to you. I want to get more insight. If you can paint a picture of what you have to plan for financially. How do you handle your business? You just put out this album, and there’s costs to create the album before you put it out. You have to plan to recoup and then pay yourself and somehow profit so you can maintain a living and a lifestyle.
Rob Markman: Outside of the work that goes in the studio, how hands-on are you with the business and balancing your own books and making sure that you get to eat and keep the lights on at the end of the day? Dyme-A-Duzin: As much as this is an ever changing game, the game plan and the strategies also adjust within that. Like I said earlier, it’s a changing game. It’s a digital age. A lot of effort goes into my merch, putting out merch and with that assisting with the music, I get a lot of people who take the ‘Ghetto Olympics,’ the ‘Crown Fried,’ so I put out projects with that attached to it, and that really helps me navigate. Rob Markman: So it’s telling the story, not just through the music but through the merch that you put out.
Again, with the experiences that you’re able to create. We can’t touch the album if you’re streaming it, but merch you can touch, you can touch it, you can feel it, you can, it’s ranked within real life. Dyme-A-Duzin: I’ve yet to tour as a solo artist myself. I was in a band a few years ago, and through that I learned a lot just touring with them and seeing how you can keep it going with getting on the road. That’s why I can understand why touring is so important and why it’s the bulk. But I look at that, too, like, damn, 360 and the tour is, too. So shit, that’s the most we’re getting, and they’ve got their hands in there, too? It’s like, sheesh! Rob Markman: Let me ask you a question just for the fans listening.
Usually we have artists up here talking about their music and it’s the fandom around the artist. And we know you have very passionate fans, but to the people out there, and anybody can jump in for the fans, watching the fans here, for them, they’re like, “Man, I just want to listen to the artist that I love.” Dyme-A-Duzin: Even looking at that article, that quote. Damn, I was disappointed as a fan. Rob Markman: Right. Dyme-A-Duzin: People go and they say, “Hey, I’m supporting my favorite artists when I’m streaming, so I’m buying this.” At the end of the day, is it going to them? Like you said earlier, who is it going to? Tiffany Ballard: That’s a good point.
If I was looking at it purely from a fan standpoint, and I thought I was supporting one of my favorite artist growing up. Let’s say it was Lil’ Kim or something like that. I was too young to be bumping hardcore. (laughs) I was definitely bumping hardcore. Dyme-A-Duzin: There you go. Tiffany Ballard: Thank you! So let’s say that I was younger, I’m bumping Lil’ Kim, and I bought hardcore, but let’s say an article came out that said Lil’ Kim was getting 12 percent or whatever. I’m like, “Well, I’m just going to illegally download it. I’m not going to, no.” I’m going to be upset, you know what I mean? Tiffany Ballard: But on the flip side, the incentive. It could also give more incentive to fans to go purchase tickets for tours and to purchase merchandise. So I guess that’s the flip side because I would probably say I might download the music illegally, but I’m going to go to her concert, and I’m going to buy whatever merchandise she puts out because I know she’s making more on that side.
So now I want to make sure Lil’ Kim is eating off of what it is that I’m buying. You know what I mean? Rob Markman: But you do find that these fan armies are really invested in the artist. First of all, you can’t tell Lil’ Kim fans nothing. (laughs) I like this new , y’all, I’m gonna have a couple of Lil’ Kim fans in my mentions. You say you like Kim, you got the Nicky fans. You can’t tell these fan armies nothing. They will go to hell and back for their favorite artists and to support their favorite artists. Rob Markman: John, I wanted to pick your brain on the music monetization act and what you knew about that because that’s a bill that’s in front of Congress which they’re promising will ensure that the digital music services or the streamers will pay fair royalties to the right holders and also give the streaming companies certain leverage and legal wiggle room to protect their business so their not losing out.
How can this potentially help the music industry? John Lynch: It’s supposed to streamline the whole process. The music industry is working at still the old-school model when we’re selling physical copies and stuff like. So it’s like, hopefully updating that to boost royalties and, yeah. I know it’s like, supposedly passed the House, but Congress is a mess, so who knows? Trump’s gotta sign it, too, which I’m kind of dismayed about, right? (laughs) Who knows? It could help people out, though. Tiffany Ballard: They’re gonna have to put it in Russian if they want him to sign it. I’m kidding. (laughs) Rob Markman: Put it in Russian if they want him to sign it.
I like that. (laughs) Just closing remarks. Look, the truth is we wanted to do this episode to educate the fans. I know a lot of fans were upset when they saw this. A lot of artists was upset, the artist community. We wanted to have the discussion. We don’t necessarily have all the answers, but it’s really interesting. Rob Markman: We consume more music than ever. If you’re on YouTube, chances are you’re listening to music. If you have Spotify or Apple or Tidal, damn near every song created is at your fingertips, as people, as fans are consuming more music than ever. And it’s important to understand the business and where is it going.
Just closing remarks, things that you think is important, especially for the people to know. Rob Markman: Dyme, man, let’s start with you. Dyme-A-Duzin: I was just thinking about the MMA. It’s about to be passed, I mean, hopefully. I’ve been looking into it, and it was like, oh, dude, what was the question. I had a question in there, but I wanted to keep the conversation going, so should I just close it? Rob Markman: Keep going! If you’ve got the answer to the question, yeah, yeah, yeah. Dyme-A-Duzin: Okay, so the MMA passes. So that allows us to receive more from streaming through all the companies, Spotifys. Rob Markman: In theory, yeah. There’s a lot of paperwork that goes on with who gets the royalties, and it just really, like John was saying, streamlines the whole process and frees up a lot more money or a portion of more money.
I don’t exactly know how much but musicians of all kinds, artists, recording artists, producers, songwriters, get a bigger split of the pie is what the promise of this bill, what this act is. Tiffany Ballard: I think this will move some of the bureaucracy. People have catalogs, they don’t want to license stuff or whatever the situation may be, and I believe it’s like a panel that oversees it, that are like publishers and actual music people, you know? So they supposedly have more, you know, insight. Actually, songwriters, artists, songwriters are like, “Yes, let’s do it.” And a lot of publishers are like, “Yes, let’s do it.” Which is actually rare because usually their interests are opposed, they have opposing interests, but if you can get publishers and songwriters on the same page, it seems like it should be something that they should at least attempt.
Dyme-A-Duzin: The creatives, the creatives that y’all hate, man. Creatives, we’re here, it’s a new town, man. (laughs) Rob Markman: John, what should we look out for just going forward in the future as this bill is about to get passed and a lot of information is coming. I think a lot of sides, like Citigroup is one side, and they’ve got their own interests. The RIAA has their own interests, and you’re seeing a lot of back and forth.
What’s the most important things that we should be looking out for, you think? John Lynch: I think some of the alternative stuff, I was talking to Lupe Fiasco earlier this year, and he was really excited about blockchain technology. Through raising money through Blockchain it goes right to you, it’s direct, and that’s something that seems super-exciting as an up-and-coming technology and stuff. And I saw Grammatik, this DJ from Slovenia, he raised million dollars for his music off of that. Some of that intrigues me, but artists aren’t making enough off of streaming. There’s got to be alternate revenues and avenues to find that. Dyme-A-Duzin: Write jingles for Domino’s man. It’s a good hustle! Rob Markman: I’d like to thank all of my guests, John, man.
Tiffany, thank you. Dyme-A-Duzin, man, ‘Crown Fried’ is in stores now. Thank you for being a guest today, thank you for the information, thank you for sharing. Tiffany Ballard: Let me add one thing. You didn’t ask about my closing remarks. Rob Markman: Go ahead. Did I ask you about them? I’m sorry. Tiffany Ballard: I butted in. I butted in and gave my two cents. What I do want to say is something that is important, no matter what, is for artists. Whether the day, if the aspiration, because all artists don’t want to go major. If an artist knows that at some point they want to get in bed with a major, I think to do as much groundwork and as much hustle as much possible because, like you mentioned, the word leverage, word of the day, leverage. No matter what, even though it’s not gonna be fair, it’s just a system, it’s set up how it is, you know, an artist is not going to ever get 100% of their income generated, not even 50% but at least if there’s a certain amount of leverage going in because you have a song that’s or you have fans that are committed to you, you can demonstrate, look, I have people who are checking for me.
At least you can get the best terms possible for you, as opposed to going through just with a catalog of music that no one’s ever heard. Tiffany Ballard: And maybe go to the A&R guy that’s gonna sign you, but that A&R guy is not going to be able to get the book opened up or get certain things for you, make a deal situated a certain way if you can’t demonstrate that you’re a good, you know, that you’re worth the investment.
You know what I mean? So I think it is important for people to put in the ground work. If they need a 9-to-5, they gotta work at McDonald’s in order to pay for studio time, to pay for some decent quality mixing and masters, whatever it is. I think it is important for people to invest in their product before they even try to make that step and go to pursue a major record deal. Rob Markman: And that’s a good word. Thank you. I know we’ve got a lot of fans that watch this show that are actually musicians or aspiring musicians, and they’re commenting all the time, so hopefully you guys got a jewel out of this for real.
But again, I’d like to thank everybody for joining us. This was a very different episode of For the Record, but an important one, so I hope you guys learned something. .
– On this episode we (dial tone) do it again. (upbeat hip hop music) – You ask questions, and I answer them. This is The #AskGaryVee Show. – Hey everybody, this is Gary Vay-ner-chuk and this is episode 202 of the The #AskGaryVee Show. I have some new kicks. Get in here Staphon. Feeling’ pretty good about these. Went with the blue shirt along with it. India is here. – Hi. – And we are very focused on a 202 call-in show. We’re bringing it right back. All of you hated on it. We made some adjustments. We think we got something, India. – Yep. – Are you ready to get into the call-in– – Show? – I am although– – No, no. We weren’t done yet. – It’s been like outsourced to robots. You know? It’s the future. – Oh you got very upset and what happened in 200, huh? – No, it’s actually kind of nice. – Or you just so busy with the in– – Yeah, I have so many meetings the schedule. It’s kind of a relief. – Alright, let’s do it one more time. Are you ready for the– – Show? – Very good.
Andy, this is on you. Are you ready to take responsibility if this is glitchy? They didn’t like the cadence. They didn’t like the chop. We think we got it. – I’m ready to add operator to the resume. – Alright, operator. Let’s do it. Episode 202 of The #AskGaryVee Show, Facebook Live you are the backbone of the call-in and live episodes. 949-793-7611, call in the show. And we’ll get to the first caller in one second but if you are not following me on Facebook, Staphon, let’s do a nice little edit here.
Let Zak or Andrew design something here. Not like your font. Get something pretty here that says Facebook.com/Gary, please and link those links up on YouTube and Facebook when we post it. On Facebook that’s kind of weird but anyway on YouTube. Make sure you’re following ’cause Facebook Live will be the backbone of me doing this show. Oh by the way, I have an idea, this is ad hoc even though we’re filming it will be in the show this is not really for the show, give me one second. Actually, you know what? Black-and-white this out. You don’t usually do that, do that for me right now.
I think we should do a commercial. Something screwed up? – Spinning wheel of death on Aircall. – Yes. You’re in deep trouble, right? I love it. (laughter) While you crash that out, while you panic, I’ll tell these guys. Are you dead? – Andy, Force quit. – Yeah. Spinning wheel of death. Everything I can do but if I go here– – So force quit. – I love it. – I don’t think it’s going to fix it. Right before I was talking to the guy and he was like I was talking with the tech team, how many exactly do you think are going to be calling in? I was like a lot. It’s going to be a lot of calls in a short amount of time. He’s like alright, when’s the day for the show? 10 minutes. Oh, wow wow wow. Wow wow. (laughter) – Alright, so what’s gonna happen now? – I’m gonna quit. – I’m going to stall here while you do this. India, find a question. – We’re going to go to old-school way. We have a new number. – No, we can’t do the old-school way. I think that thing was really working well.
– It’s broken. We broke it. – We didn’t break it yet. You give up so easily. – I can’t even, I have to shut down my computer. – Let me show how you do it. It’s very easy. You go hmmmm, you hold it, you hold it. Good. What the problem going to lose stuff? – I mean cool but then all right. – But what? – We can still use the Google Voice number. – I don’t want to. I want to use this thing. – I have questions. – Google Voice works. – India, you ask a question.
I’m not using Google Voice, I want to use that thing. Is that the guy calling? – Yeah. – I love it, good hustle. Way to watch. You keep doing your thing, we’ll do our thing. – Want to talk about what you would do if you were the CEO of Yahoo. – Yeah, let’s talk about it. – If you woke up and you are the CEO of Yahoo what would you revitalize the company? From Robert. – I think what I would do is truthfully a lot of M&A, mergers and acquisition. I would go and look at the Anchors and the Musically’s and the after schools and the things that are emerging in the marketplace and realize what I have is a business model that is cold or not working as well and not rolling so that’s what I have an issue in and when I have an advantage in is that I have dollars and assets and money from Alibaba and other places that I can deploy and so I think when your core business is not driving upward mobility in growth in your company.
The thing you do is you leverage that asset to try and build up your future. And so my answer would be M&A. I think to Marissa’s credit, the current CEO, and I have a lot of respect for her and I think it was a tough gig that she jumped into. She went out and did that and bought Tumblr for a big nut. And to me in hindsight if she would have been able to buy Instagram instead of Facebook buying it though I’m sure Kevin wouldn’t have sold to Yahoo that he would have to Facebook. There was definitely other, I do believe that when Marissa became the CEO there was probably a moment where she could have bought Snapchat for 1 billion or two but then the question becomes when you buy these hot things on the way up do they stop becoming those hot things once they go and get cashed out and there’s not the same energy. The other thing I would have thought about is hardware.
I’m very obsessed right now with the notion of hardware. I think Facebook should absolutely, don’t worry about the cost I think that Facebook should absolutely make a television for example. I think Yahoo could have made a television, could have made a Netflix competitor. I didn’t like your reaction there Andy. Worry about the cost. (laughter) And so the biggest thing I would say to all of you to make this a little more relevant to so many that watch why don’t you focus on the following. If you’re in a business that has a situation where it’s not growing as well, you need to kind of disrupt yourself and try to make new revenue angles and try to do different things. If you stay the course and try to do incremental things that grow your business that becomes a vulnerability.
So if you’re in a 3 to 4 your year funk where your business is flat, you have to really change the business not just do what you’re doing a little bit better. For example, Wine Library one thing I’ve always debated that if we capped out our growth on the wine stuff is to really build out Gourmet Library and become like a supermarket and sell cheese and gourmet meats and things of that nature.
That’s a big change than just doing wine selling a little bit better. Doing a little bit better on email service to adding a couple more selections or changing the pricing strategy on the core business so if I was Yahoo CEO a year ago and just trying to grow the business, not taking any of the Wall Street dynamics into play which Marissa had to, I would’ve done very drastic things in hardware would have been on the forefront. I think phones are too hard. I think televisions are easier and so I would have done is made a Yahoo television that was unbelievable. Would have bought a TV producing company that makes TVs and put Yahoo at the forefront of the brand and then build an over-the-top Netflix like business and produce original content that would have driven into there because Amazon and Netflix are now making some of the best television in the world. That means anybody can. Facebook, Snapchat, anybody can and that’s what I’d done. I probably would’ve reached out to this guy named GaryVee and give him a late night show. That would’ve worked.
Andy? – Yo. – You ready to go? – Yep. – Same number? – Same number? – Same number. – Good. 949-793-7611. (phone rings) Here we go. Alright. – Call from unknown caller. To accept press one. – Pedro? – Yes. – This is Gary Vaynerchuk you’re on The #AskGaryVee Show episode 202. How are you? – Oh my god, I’m good now. You’re my man, my Jesus. What is going on? – I appreciate it, man. Pedro, what can I help you with? Where are you from and what’s your question? – I am from Portland, Oregon. I am the social media specialist of MotoCorsa Ducati. My question is about live streaming. – Okay. – As far as preparation for live streaming if you are going to do Periscope or Snapchat how much do you need to be prepared for that? – I think that and thanks of the question it makes a lot of sense obviously when you’re an entrepreneur or personal brand, I actually think the more ghetto the better.
The more real there are so many other platforms, your Instagram photos your Facebook posts, there’s a lot of places to go to polished. I actually think live streaming’s big upside is actually just the real and the raw and the lack of preparation is really attractive and has been the reason people loved reality TV and the reason they would love Periscope. Now when you work in a big company like you and others, you need to be careful. Is there something in the background? Is there a document on the desk that people can see? You got all these things you have to worry about that big companies worry about so you need some level of preparation but I think that’s awareness to what could happen versus actually prepping. You know what I mean? – Right, yeah, perfect.
Pretty much all of our good stuff if on-the-fly. – Always man. – No preparation. – Pedro, always. I’m going to go next call. I appreciate you watching, brother. I love you. Thank you for that. The bottom line is that people are always going to be more attracted to the authentic. There is an absolute place for the polished movies, TV. I think YouTube’s an incredible, look were doing DailyVee polished because I believe in the strategy. In a world where now I believe YouTube videos are going to be very easily consumed on televisions all across America I think it’s a good strategy. You got a call coming Andy? How’s it going? – I had it and then right when– – It’s all right. Here we go. I think it is super important to recognize that real and authentic is just as potentially important as polished. I think way too many creators and videographers and people that make videos always overthink that.
They don’t understand that the raw (phone rings) can be just as good as the glossy. It’s like fashion, India. Like a great suit is great a little bit of swag in the T-shirt is great too. Let’s go to the next one. That’s right. – Call from unknown caller. To accept– – This is Gary Vaynerchuk you’re on episode 202 of The #AskGaryVee Show. Who’s calling and where you calling from? Hello? – Hello? Gary? – Yes. – Hey, what’s up Gary? This is Alex Schwartz. How are you doing, man? – I’m doing super well, Alex. Where you from? – I’m from San Diego. – Love it. Everybody’s very lazy in San Diego.
Don’t you agree Alex? – Totally agree. It’s a bunch of party people and pot heads. Hard to do business here. – I agree man. You need to move to New York. – I wish but it’s too cold for me. I’m originally from Brazil. (laughter) – Respect. Alex, what’s your question? What can I answer for you? – I’m an IT consultant and I’m kind of struggling on going to the next level of just being me, the IT consultant, to actually creating a business and a brand. Unfortunately, I’m usually known as the IT guy. – Yep. – The PC Guy, and it sucks but I don’t care because it’s good money. – Yep. – How do I move from being the PC guy to actually having a business, a name and grow. – What do you want? Alex, what you want the business to be? What do you want to sell? – It’s IT consulting and IT support and IT management.
– Got it. You want your own gig and you want to build a personal brand so that clients then come to you and you can build employees underneath you. At first you’ll do your own work and then you’ll get other people and you’ll build a firm like I did with VaynerMedia, right? – Correct. – You gotta put… Go ahead. – I’m putting the work but it just me and my name and I’m kind of struggling– – Well that’s because– – It’s actually business, not just me. – Yeah, I get it. The way you gotta do that first of all is produce content. Become bigger of a name. Put out all your best advice. Blog on Medium, put out Instagram tips, do white papers on Slideshare, do Facebook Lives, Periscopes, make content, make content, make content. Show your expertise, have inbound business and just like with VaynerMedia, people want to hire Gary Vaynerchuk but Gary Vaynerchuk’s not available. It’s VaynerMedia. But guess what, Gary Vaynerchuk was available in 2009, ’10, ’11 and ’12 and then I made enough money to hire other people and Gary Vaynerchuk wasn’t available.
Right now, don’t stress about the semantics whether they want you or your business you don’t have the money or the need to hire a bunch of people yet. Create such demand that you take those dollars and hire people and then just tell new clients it’s my expertise delivered to my employees but you don’t need me to physically fix your PC, got it? – Got it. Now, real quick question you always say that Facebook is doing much better for ads than Google ads, do you still believe that? Do you think I should, if I were to run some ads should I go– – You should do both.
I think Google search is great for the business you’re in. I do think Facebook is better for content and branding. You should do both but my first start making a lot of content. I need you blogging on Medium.com about your thoughts on PC and your thoughts on IT and your thoughts on tech in today’s society over and over and over again content, content, content video, written form, audio, Soundcloud, Anchor. All of it. It’s all about the content, Alex. Thank you brother. Thanks for being on the show.
Let’s get onto to the next call Andy. I don’t know if you got it figured out yet. (phone rings) Oh my God. (laughter) I’m getting excited. – Call from unknown caller. – Kyle. Kyle, turn down your audio. How are you? Oh, we lost him. We didn’t figure out the hack. Kyle gave up and hung up. – Kyle! – Kyle. Listen, Kyle is making your game look bad, Andy. India, actually I found a new thing for you. – Oh really? – Yeah, good news. Computers have not taken over your life yet. – I’m cool with that too. – No, I know you are. But what’s really cool is that we can, in these in-between moments where funny things like what’s going on with Andy (upbeat hip hop music) questions and things of that nature. It a whole new little thing for us. – A mini show in the show. – A mini show in the show. – Cool. – Yeah.
Like it. Andy what’s going on? Go ahead, India. (phone rings) Oh here we go. Vancouver. – Call from unknown caller. To accept… – Hello this is Gary Vaynerchuk you’re on episode 202 of The #AskGaryVee Show. Who’s this and where you from? – Hi Gary. This is Sylvia I’m from Vancouver, Canada. – Hey, how are you? – Good. I have a question for you and my question is I’m breaking into the online market. I have made courses before but I took some time away and now it’s… – Darn it, I’m so sorry.
I’m so sorry. It was too choppy. She was breaking it online courses I could hear it but she was also breaking up. And I’m so sorry. I hate this but I have to navigate the cadence and the flow of the show and it was just too choppy. Andy can’t figure out the choppiness? I know we’re not doing is the way, we’re not screening calls and I think we should continue not to screen calls.
I know a lot of you are like, screen calls and do this I get it this is how we’re gonna do it. (phone rings) You know? That’s the way it’s going to be. – Call from unknown caller. – Hey this is Gary Vaynerchuk you’re on #AskGaryVee 202. Who’s this and where you from? And please turn down your computer or what have you. – Hey. – Hey. – Hey, this is Cam. – Cam what’s up, baby? Is his Cam Newton? – I can’t believe I got on.
No, Cam Herald. I wish it was Cam Newton. – Cam, where you from? – Oklahoma City. – Love it, brother. What can I help you with? – I’m currently working on a book and I’m interviewing different entrepreneurs. What advice would you give to someone that is trying to get a hold of influencers and stuff like that? – Twitter, Twitter, Twitter, Twitter, Twitter, Twitter, Twitter, Twitter, Twitter. Period. Twitter. No LinkedIn, no cold emailing, it’s not gonna work. Go figure out the 500 people you want to interview, go see what they’re tweeting about. If you want to interview Cam Newton go look at Cam Newton’s last 10 tweets try to jump on the last thing he’s talking about and add value to the conversation. Say like “Yeah” or “Disagree” or “No way” or whatever you want to go with it. Create some context so don’t ask for the interview right away, get in to a little banter build up a little rapport. This takes a lot of work, Cam. This is five, seven, 10 hours a day every day for a month but you get, then you go in for the ask, you get a little context of those people you ask them to interview you.
They’ve been talking to you about sports or wine or candy or sailing or surfing or raising children over the last month now they got a little context for Cam on Twitter and then Cam goes in for the ask one of the very 80 of those unbelievable people will say yes so if you think about 80 people getting one to say yes and you needing 20 people that’s an unbelievable amount of people that you need in your ecosystem, right? You’re talking about 1600 people that you are hitting up which is going to take you months but it’s putting in the work and that’s how you’ll actually get them. Got it? – Yeah, appreciate it. – No worries, brother. Cam from Oklahoma City. Let’s go to the next one. – Call from– – Roberto this is Gary Vaynerchuk from The #AskGaryVee Show episode 202.
Roberto Blake always a big fan, always supported me. I appreciate you. I’m glad you’re on. How are you doing? – I appreciate it man. I missed you at Big South yesterday. I wanted to ask a super important question about a business decision I’m trying to make. – Let’s do it. – You’re the person that can answer. – Well, here we are episode 202 of The #AskGaryVee Show coming through in the clutch. – Right on. I am working on a YouTube video SEO video guide to help some of my audience who are struggling with this.
And a lot of my friends are giving me advice that I should presell it. – Okay. – I feel awkward about selling something that I haven’t made because I feel awkward about I want to just deliver on something, deliver the value. I feel like why should I sell it if I haven’t made it yet. What are your thoughts on that? – I think a lot of people that watch me and hear me and feel they know where I’m going to go with this answer may be confused by this.
I’m very comfortable with you preselling it as long as you feel like you’re actually going to deliver on it. If you feel like it’s actually going to happen and you’re not taking people’s money, I think pre-selling something and then not delivering in two ways, one, not delivering and being a criminal and stealing people’s money, I don’t think you’re going to do that. And I actually think it’s unacceptable to also even return the money because you not a god damn bank and it would’ve been much better for them to have it in your bank account than you. You just have to hundred percent make sure that you’re going to deliver and the big vulnerability because I know you little bit and I know you’ll deliver on that too the problem is if you lose energy or some other amazing opportunity happens tomorrow, right? If I email you tomorrow and say I want to be the new official cohost of The #AskGaryVee Show with me but you have to work 10 hours a day when we’re not filming doing X, Y, and Z but you got to go deliver on this guide what’s going to happen Roberto is going to bullshit the guide over the next month or two ’cause your not going to have time and it’s not going to be the thing you actually thought it was going to be because you still finish your word.
The vulnerability of pre-selling is not delivering to the capability that you have set in your mind because you don’t know what’s going to happen tomorrow. Got it? – Got it. That is exactly what my concerns were and you are really good at figuring that out and yeah you do know me a little bit so that was perfect, thanks so much. – You got it brother. Thanks watching the show. – I know what I need to do now. – Good brother. Take care. Alright. Changing lives Andy K on episode 202. See what I did there. The mouth was the zero. The mouth, DRock, the mouth. Actually, I gotta find a good cadence in-between these calls while Andy struggles and makes episodes awkward.
You know what we could actually do? We could do the quick little topics. Quick hits. – Quick hits. The player they got hacked yesterday right before he got drafted. I like how people were confused and thought that he posted that. People were like “Yeah, hacked.” I’m like “Yes, hacked.” Yeah hacked being cynical of somebody getting hacked is when you say something racist or inappropriate and then you’re like no no I didn’t do that Andy you can send a call in anytime. No, I didn’t do that my intern, (phone rings) oh nice job Andy. My intern did that. You don’t get hacked when you post something that cost you $8 million in 40 minutes. Silly. – Call from unknown caller. – Hey this is Gary Vaynerchuk and #AskGaryVee episode 202. What’s your name and where you from? – Hey is Calvin Laymen from the San Diego event Social Media Marketing World. – Hey Calvin, how are you? – Doing well, brother.
My question is my question is after you have come off this super successful book number four launch at what point do you now set your sights on book number five? – That’s a great question. – The next big thing? – And why are you asking that? I think that’s the more interesting part of this question for me. – I’m just interested in the minds of successful people. How long they bask in their own success or when they go to the next thing. – Cool. Well, that’s a great question Calvin. I would tell you and these guys can say this especially when they all kind of maybe India really was in the Vayner world more than the rest of the gang. Calvin, I’ll tell you it was crazy what happened inside of my body when you said “basked in the success.” I have zero capability of basking in the success. I wish the camera was 360 right now because all of my team except for Andy who is worried about screwing up the show the three of the rest them were all shaking their head because they know way more than anyone that’s watching right now that there wasn’t even a remote moment, not a celebration, we didn’t have a dinner. We didn’t get together– – You suck at celebration.
– I suck at celebration, man. I don’t have my eyes set up five right now. I’ve got my eyes set on making VaynerMedia huge, building more businesses, making smart investments, helping my investments build their businesses. Getting credibility as a great businessman while I’m out of GaryVee mode for a little bit. Putting out good content, continuously upping my game in my distribution of my content, so there’s no book 5 but what I’ll tell you, and Calvin thanks for calling, what I’ll tell you is that I am always, always onto the next thing.
As a matter of fact, I would actually argue this is a slight vulnerability of mine. I actually think it would’ve probably been smart to have a dinner with all of us especially Andy and Alex, you know all of us really. To just be like hey that was a nice launch. No, we don’t have that. As a matter of fact, let’s make it really intense today is AJ’s last day at VaynerMedia. I was at a business meeting at a breakfast spot this morning with a client, I looked over and AJ was there was Yudkin and Nate and Tyler and everybody was celebrating AJ’s, Tyler get in here real quick. This is perfect timing. Why wasn’t I invited to AJ’s celebration breakfast this morning? – ‘Cause you were busy. – Okay great, get out of here. What’s really interesting about that there wasn’t even consideration, Tyler, AJ’s former assistant my current team mate with India assistant.
There wasn’t even consideration. Think about this: this is my cofounder little brother’s last day at Vayner they have a symbol. This wasn’t a one week trip. This was a simple 90 minute sendoff breakfast and we didn’t even consider for me to be a part of it. Yeah. It’s funny, we don’t celebrate it’s a celebration by the way. It’s not like a sad thing. Now I’ll be with AJ tonight which is great, second day of the draft but even when we sold a piece of the business we forced ourselves a year later we went to Atlantis in the Bahamas.
We thought we were really going to celebrate but we just became degenerates and gambled for 39 straight hours only barely even talked about it. I’m just not good at celebrating Calvin and by the way I’m not so sold that’s a good idea. As a matter of fact, I guarantee that you’ll see a blog post from me whether it’s on Medium or whatever it is of the day six years from now of finding celebration. That’s what it’s going to be called. Finding celebration and it will talk about me not being happy that I was so extreme to the non-celebrating aspects of business. I think you should celebrate the good things in life. I think it is a miss on the way that I navigate the world.
It still doesn’t come natural to me it still doesn’t, even though I know this, I’m trying to sell myself right now but I still can’t get there and I’m always following this over this. This says celebrate. This, that’s heart and gut, this is still not saying celebrate. And so I can’t celebrate. And honestly if this never says celebrate and I take last breath and I think about it for a second I won’t regret it because I always listen to this. But this understands that it’s not necessarily the best move. And I think it would’ve been really nice if we had a nice dinner and talked war stories, “Oh remember that time the “person canceled the order at the end. “Ah ha-ha-ah!” You got one or no? – Yeah. – Where is it? You need to reset? – Not reset.
– What are they saying? – They’re loving it. (phone rings) – They’re loving it? – Yeah. – Alright, good. – Call from unknown caller. – Hey, this is Gary Vaynerchuk and you’re on The #AskGaryVee Show episode 202. What’s your name and where you from? – Daniel from Miami Florida. How are you? – I’m great Daniel. – Happy Passover. – Thank you, brother, you too. Thanks for being on the show. – I’m always on the show virtually. I’m not in tech. I’m actually a songwriter. I’m releasing an album and I’m trying to avoid spending money in ways like hiring publicists so on and so forth.
– Yes. – I’m trying to really ramp up my social side. What I’ve been doing is I’ve invested in several giveaway items to try and accumulate a street team which has worked and I was just going to find out if you had any additional ideas because you will hear about me sooner or later because this record will get heard. – Good for you man. – I just wanted to ask your opinion.
– Well, thanks and I’ll give you some opinions and I’ll even throw out there something that we’ll give you. If you want and you might’ve noticed in the last DailyVee we featured Ron Gilmore Jr.’s music if you want to reach out to DRock and talk about some of your music if you want to have some of your music featured in an upcoming DailyVee, I’m not sure what kind of music it is or what DRock and Andy’s ears are for that kind of stuff. – Arabic rap. – Great. I think you’re really cool. – I’m kidding. – Got it. (laughter) The craziest is part I was actually fucking pumped.
I was like yes Arabic rap I know exactly with the kind intensity. Anyway, one I’d love to offer you that because fan of the show, I’d love to be some exposure so speak to them and let’s see if that’s a fit. Here’s my big plug: Influencers, influencers, influencers. I think you took a very smart tactic of street teams. I think books and albums when they do that do quite well. I think the biggest arbitrage for attention at the lowest possible cost right now are influencers. If you can get people to do skits or other things on Instagram with your music I think you would crush. And so I think if you spent two hours a day just reaching out to people based on hashtags on Instagram. So you go to Instagram you search hashtags and then you engage with people that are putting out stuff around thematics of either the names of the songs or the genre of music or things of that nature I think you could really have a major impact by getting some influencers on board to give you some awareness and exposure to your music.
– What about TweetDeck? Do you think I should continue doing that ’cause I am engaging with people through hashtags? – Yes but I think Instagram is a better push platform than Twitter which is why I’m pushing you that way. I would also document the journey of releasing an album. I would write at least 2 to 4 articles of the journey of releasing an album on Medium.com because their editors there pick some articles and they populate them to the top and I think there could be some real opportunity for you there as well.
I would also reach out to places like HuffPo, Forbes, Business Insider cold. Send them an email and say would you like me to write a piece original for you on one musician’s point of view on releasing an album in 2016, 2017? All of them are always looking for content and I believe that’s a very inexpensive quick way for you to get exposure to a crowd that might be reading for business or other things but everyone loves music and you’re getting awareness, got it? – Got it totally. How can I get in touch with DRock regarding– – It’s DRock@VaynerMedia.com.
– Okay and would it be okay if I send you a signed copy of my album and maybe a poster. – That would be amazing. Work with DRock he’ll figure everything out and I wish you well Daniel. Thanks for listening and watching. Thanks brother. Awesome, good show I think we got better. We made a quantum leap from 200 to 202 but that’s actually up to you. That’s the question of the day we need feedback as we go into this new frontier so please leave your two cents on the show. You keep asking questions, especially if you call, and I’ll keep answering them. happens we can do fun little banter and you can do little .