How Do Rappers Make Money


That seem to be a big question- everyone, fans and haters alike want to know how this rapper or that rapper is making money ...Or how much one rapper or the other is worth. If you have wondered this for the longest time, without a satisfactory answer, i would try my best to answer that question for  you. The first thing you should know is that not all rappers are as rich as you think. I do believe every popular rapper out there has a potential to be rich, but it all depends on what deals they signed while coming into the hip hop scene Or whether they have signed any deals at all. Some rappers are more or less slaves to the Major labels they are signed to; the people that sign them make sure they look good to the public eye , but really, they ain't making much money.



I can remember seeing a youtube video of Lloyd Banks driving to his crib, and then i noticed he was in a normal looking Chevrolet S.U.V. I guess he was caught unaware, cos he was trying to make the video crew believe that the car was bullet proof and this and that...just trying to pump up his image. Then i wondered where all the cars i hear about in his music are. I later found out that they are all owned by G-Unit Records. What that means is that Banks can drive the Ferrari and the Porsches' and all that all he wants, but they remain G-Unit property...50 Cent's property. So, mostly what you see is show-money. I can also remember watching an interview of Tony Yayo where he was talking about how good a boss and friend 50 Cent was, and that he could call up 50 rigth now and borrow 5 million dollars from him. That made me wonder- does this dude have anything asides from what 50 Cent gives him?



That asides, rappers do make some cool cash. And the ways through which they can make money keeps increasing. But bassically, the means through which rappers make money are through Royalties from their music; Shows and Concert; Merchandising (selling of clothes/gear that have their logo on it), Ring-tones; Guest appearance on other artists songs; Endorsement money; Ghost writing for other artists; Television appearances and so on. From this list, you can see that there are a lot of ways through which rappers make money. But most of all i have listed, except a few, depend on the deal the artist signs. If the artist singed a 360 deal with a major label, he would have very limited ability with all i have listed above. He would more or less be like a slave to the label. But if he is on an Indie (Independent) label, then he has more power over his properties and what he can do, but he might not have access to big funds for promotion of his album like if he were with a Major Label.



I don't want to go to deep into the technicalities; i think i am being a bore already. Let me just stick to what you really want to know. Let's start with Royalties. When an artist signs a recording deal, he agrees to a percentage of his album sales that gets to him on each CD sold. I think that is the simple explanation of what Royalty money is. If he is signed to a Major label, he gets between 10- 15% on each CD sold, but in most cases 10%. So, lets say his CD sells for $10 in the store, he would get $1 on each CD, or lower because the retailers selling it for that price have put a little untop to make their gain...so he would probably get around 70 cents or so on a CD. But, if we work with a dollar on a CD, and he manages to sell 500,000 copies at the end of the day, then he has $500,000 to his name.



But that is not alway the case, cos he has to pay up how much the label spent on him and making that album. He owes the Label for the Advance (like a loan) he was given to live on while recording the album; some artist get up to $1 million dollars in advance money. But some can get just about $100,000; it all depends on how big of a name he is in the public already. So, lets say an artist got $200,000 advance money, and his first video cost the label about $250,000, and production, promotion and marketing his CD cost the label say $100,000- we are up to a total of $550,000. This means he is owing the company $500,000. And the thing is that you don't get paid Royalties until you recoup the money the label spent on you. So, with his first album, he didn't even recoup for the label off his album sales; he is still owing the label $50,000. This could probably get paid off through other means like ringtone sales, singles sales, endorsement deal or any other means the artist generates money for the label. Or it can get rolled over till a new budget is opened for the artists new album.



This is why rappers do a lot of shows, because that is a sure way to get money to live the kind of Flambouyant lifestyles they live. Before i go on about show and tour money, i would like to speak on an artist that signs with an Indie label instead of aMajor label. By the way, examples of a Major label is Universal Records, EMI Records, Sony/BMG and Warner Records. Example of an Indie label is E1 Records (former Koch Records). Indie Labels don't have large fond like the major, so most of the artist on indie labels (rappers like Tech N9ne, Sheek Louch, Mack Miller) make their own moves, the label just helps with distribution, They pay for their own studio time, shoot their own videos, do their own promotion, but they have more power over their materials. And instead of the 10% artist on major labels get, they can get between 50- 70%. I can remember when Fat Joe first got on an Indie label and released his album (Elephant In The Room- 2008), he was making $8 dollars off a CD. He sold 50,000 copies first week, which is considered low, but if you times that by 8, you would get $400,000...instead of the $50,000 or less he would get on a major label.



You can see that album sales can't really sustain the kind of life most rappers/celebrities live, so there has got to be another way right? Yes, there is another way. In fact there are many other ways as i earlier listed above But the medium common to most rappers, whether signed or not is doing shows. Once a rapper has a following, or a little buzz surrounding him, it means there are thousands of people that want to see him perform, and that equals money. Rappers get between $5,000 to a million dollars to perform at a show or a concert. So, lets say a rapper is not that popular, but he can still make $5,000 per show; If he can get like 6 shows a month, thats $30k that month. I think that's good money for just showing up and performing your own song for about an hour or so. This is just the bearest minimum. You have heavy earners like Kanye West making a cool Million dollars to perform at a sweet sixteen party. But on a regular, heavy earners like Jay-Z, 50 Cent, Kanye West, Eminem, and Lil Wayne make between 500k to a million dollars per show. You know shows or concerst like that don't come everyday, but even one in two months is good money for them. I was even surprised to hear that a rapper like Nas makes between 200-500k per show. I guess that is solely on the strength of his catalogue (9 albums), cos he doesn't have a heavy buzz ike the rest right now. But i remember reading about the Angola incidence where he didn't turn up for a concert, and he was meant to have been paid $300,000 to perform.



So, now you know how the rappers can afford the Bentleys and Phantoms they buy. Game has fallen off hard considering the fact that his last album (The R.E.D Album) hasn't totalled what his first album (The Documentary) sold in its first week, but he is still getting 65k a show. 4 shows in a month and he can probably afford to buy himself the latest Range Rover with no stress. But there is not the only way rappers make money, they also make money from endorsement deals. Drake did the sprite thing. I don't know howmuch he made, but it most have been huge. Nas did the Fila deal in 2008. Diddy partners with Vodka for the Ciroc deal. You also have the clothing line money, although this is not as hot as it once was. By the way, a couple of years ago, Jay-Z sold his share of Roca Wear for $200,000,000. But, even regular rappers can sell t-Shirts with their name or logo on it at their shows for up to $100...a t-Shirt that probably cost $10 to make.



And alo, there are rappers who sell more ring tones than actuall albums...example of this is Soulja Boy who made millions from his 2007 song, Crank That. Or you have someone like Flo Rida who sells millions with every single he releases, but has never gone platinum with any album. There is also the money rappers make from appearing on other rappers or artists tracks. Sometimes, they do it for free, or ask the rappers to appeaar on their own track as a swap deal; but when they get paid, they make a killing. There was a time i knew Lil Wayne was making between 50- $100k dollars for every feature.

24 comments:

  1. True , Everything was legit and true

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  2. your shits ridiculous go interview people because this is smack

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  3. I don't get u...are u praising me, or dissing me?

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  4. Yaaaa ohhhh yaaa im a butterfly in the land of hocus pocus

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  5. First...rap isn't music. A "ghost writer" is a musician that composes the music that the rappers rap over. However, most of the time producers, such as Kayne West, steal the music tracks online and mix them up to rap over. The publishing royalties that belong to the companies come from the music track itself. So what happens to the musicians who have their work stolen? Often they are murdered or in other ways become a victim of crime usually though internet hacking. Rap is a destroyer of real music. Who cares what these idiots talk about. It's all the same, tired rap anyway, mostly false self-engrandizement.

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    1. i think rap is the best kind of music out there better than the stupid shit you hear so why dont you just shut the fuck up and eat your moms cock u cock eating fag ja rule you and irv gotti are cock eating fags oh and so is rick ross

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  6. Hey! Don't get too negative on the matter. I am sure samples are cleared, and the composers of the original music get paid. If rap wasn't relevant, why are other musicians like Pink, Mariah Carey, Linkin Park, maroon 5 featuring rappers on their songs

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  7. I see how it works now, makes sense logically. Thanks for taking' the time to clarify this!

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  8. Okay still doesnt explain how they can make it rain in the club off of just a mixtape ..., like Waka or Pusha T

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  9. They making like 30k a show...just 7 shows a month equals 210k...making it rain with 1% of this amount us still cool.

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  10. yahhh actually tsa pleasure 2 b praised

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  11. Nothing but facts here. Major labels are slave masters. The artist does all of the work but gets paid last & the least out of the deal. Look how TLC got raped after selling 10 million copies. They didn't even get a million a piece off of the album. Most rappers only get show Money. They only get cents on the dollar per album.

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  12. Good info thx. I wondered how 2 chains's music vid called "Spend It" Has huge amounts of cash. I think it's all counterfeit. I think most music vids with huge stacks/ suitcases fulla cash is counterfeit.

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  13. Great article! Let's network if you like... I think rappers should rather stay independent. Another good way for rappers to make money is through blogging. I'm founder of the "Badass Hustlers" community and support rappers in their business. You may find us on facebook...

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  14. A few of your numbers are off here, especially with the performance money. But apart from that it's not a bad article

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  15. Great information my guy

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