The greatest myth of the hip-hop industry is that all rappers signed to record labels are rich. The truth of the matter is entirely different for most ‘bling’ cultured artists. The pressure to appear to be living a lifestyle of excess comes from the labels themselves and often misguided youth. Strip away the glamorous rented cars and cheap super-models and more often than not you will be left with an artist heavily in debt. For a rapper to reach the number one spot, it takes a large investment of cash which is used to buy up CD’s and put the artist in the spotlight. Essentially how it works is after signing to a major label an artist is given an advance. Depending on the percieved potential, this could be anywhere between 300,000 and three million dollars. However, the money is only loaned to the artist who is expected to pay it back through his record sales.
It’s around this time the rappers use the money to flaunt their lavish lifestyle in music videos hoping to appeal to a brain-washed majority of viewers. What people may be surprised to know is that a platinum record is far from the cash cow artists would like you to believe it is. If an LP retails upon it’s release at fifteen dollars, the rapper can expect to see, if lucky, one dollar per album. He is always the last to get paid after the marketing campaign, the execs, his legal team and managers. It is with this money that he has to pay off the record label’s advance and then his IRS taxes. While rappers often end up on the Forbes list, it is only the artists with career longevity that will make it to the big league.
These are also the people who are business minded and recognise the power within their brand image. Sean Combs, 50 Cent and Jay-Z are artists who have made vast fortunes from clothing lines, movies and television appearances. They represent the small amount of men who acquired vast wealth (on a global scale) from rap. And yet the music alone would never have reaped the rewards which their other business ventures produced. If you delve into the finances of 50 Cent he makes most of his earnings from investing in water companies and video games. The idea that a young black male can make a fortune from rapping is for the most part fantasy. For every Snoop Dogg there are thousands of talented artists who will never receive the corporate backing needed to reach the position at the top industry.
While many fans are fixated on how much their favourite rapper earns. A lot of artists are struggling to stay afloat financially. Rapper Young Buck formerly of G-Unit recently declared bankruptcy while the West Coast’s X-Zibit is believed to have debts of over half a million dollars. Since the labels are struggling to shift the units of old, it is believed the coming decade will see more artists going the independent road. At least this may bring about fairer competition in the market and a real income from their music.
Rappers may be less likely to find themselves on top of the billboard charts but at least they will have control on their profits. The crippling effects of a large advance coupled with low record sales are detrimental to the growth of the artist. The only true winner of the boom years were the label’s executives. If hip-hop can finally get over it’s obsession with money then the future will be brighter for music fans.