Lupe Fiasco’s Enemy Of The State Mixtape: A Study In Music Business Models

My daughter turned me onto Lupe Fiasco a couple weeks ago. When I start listening to a new artist, I often will go to the Hype Machine and listen to a stream of their music. In the process of doing that, I came across Lupe’s new Enemy Of The State mixtape which is the “artist of the weekend” on fredwilson.fm this weekend.

Enemy Of The State is a mixtape which means it is a bunch of tracks that Lupe remixed and put out for free on the Internet. Artists who Lupe remixed on Enemy Of The State include Radiohead, Lil Wayne and Jay-Z.

I don’t know what the economic relationship is between Lupe and all of these artists he remixed. Clearly that impacts the cost of putting out a mixtape. But the fact that a major recording artist like Lupe is putting out free music is pretty interesting to me. He plans to put out another mixtape called “Friend Of The People” later this month.

The last track on Enemy Of The State is called “HP Skit”.

HP Skit

Give that track a listen and then watch this HP advertisement which features Lupe and others.

So Lupe included an HP advertisement on the Enemy Of The State mixtape. Let’s say Enemy Of The State is downloaded a half million times. And let’s say that the average downloader listens to the mixtape all the way through five times. Then that HP ad would be listened to 2.5 million times. At a $10 cpm (high but not crazy high), that would be worth $25,000 as an audio ad buy. If Lupe could put out one of these mixtapes a month, then that’s $300,000 per year. 

I was in a board meeting last week and one of the company founders made a very interesting assertion about the difference between old media and new media. He asserted that old media is about how much money you can charge each viewer. New media is about how many viewers you can get.

Now that’s a gross oversimplification of his assertion, but the point is useful. The whole free mixtape movement is about getting as many listeners as possible, using existing music for the most part. The idea of monetizing it with lightweight advertising (nobody forces you to listen to HP Skit and it comes at the end) is very interesting to me.

It will be interesting to see if we get more of this kind of thing. I think we will.

Reblog this post [with Zemanta]