Throughout history, the image of the rapper flashing his wealth, stacks of cash, and expensive rides has been inextricably linked to the art of rapping. As Rappers, we want people to think they make money, so we expose it ostensibly.
But how do rappers make money? Rappers make their living through record sales, live performances, and tours. Third parties also pay them royalties when their music is sold, published, broadcast, or monetized.
Rappers can also raise money by selling their own merchandise or promoting products. Video music sites and YouTube will also reward hip-hop artists for promoting their songs in addition to these traditional distribution channels.
1. Album Sales
This may surprise you, especially given the dramatic decline in physical CD and digital album sales over the last decade. The top-earning rappers still rely heavily on album sales to make a living.
2. Copyright Royalties
Rappers are paid fees due to their ownership of the copyrights to their songs and all intellectual property associated with them.
Rappers receive royalties for each sale, publication, or replication of their tracks in other publications.
Composition Vs. Sound Recording Copyrights
When it comes to music, things get a little more complicated. Every piece of music has two different copies rights. On the one hand, there are the writing copyrights that belong to the individuals who wrote the song’s lyrics and melody.
On the other hand, sound recording copyrights are a different matter. Records belong to record companies and recording artists. They preserve the audio recordings of songs.
It may or may not be the same person or individuals who own both the writing and recording rights to an album. This can also cause problems.
3. Tours And Live Performances
In the last few years, consumers have had more access to their favorite artists through on-demand streaming apps than ever before.
There is a good chance that this has affected both live concerts and record sales. However, it could not be further from the truth. A record number of tickets are being sold for live performances.
4. YouTube Monetization And Brand Sponsorships
There seems to be a YouTuber out there for everyone and their dog these days. Today, hip-hop stars are creating and running monetized YouTube platforms just like everyone else in the industry. Learn more about how to get sponsored on Youtube.
According to reports, Psy, a South Korean musician, rapper, and songwriter, earned over $2 million from his viral hit Gangnam Style, which has received over 2 billion views.
YouTube monetization will be an excellent source of extra revenue. In addition, anyone who has access to the internet can monetize YouTube.
YouTube can be an invaluable revenue source for rappers, whether they are experienced, inexperienced, or less-known.
With a low entrance barrier and a primarily merit-based scheme, YouTube is a great place to start. So how does YouTube earn money exactly? It works like this:
YouTubers get paid for the ads that appear on their videos. You can embed three types of advertising on a video:
Pre-Roll Video Ads
Videos usually begin with these about 30 seconds before the video begins. Since channel owners are paying per click, brands would pay for how many times viewers clicked on the commercial, rather than the total number of clicks.
During the first five seconds of the video, audience members can miss in-stream advertisements. This kind of advertisement is paid for by advertisers.
It is a six-second advertisement that cannot be skipped. Even before the film, they play, and you’ll be compensated for each time you watch.
5. On-Demand Streaming Services
Putting their songs on the internet for download will also benefit rappers. However, it can be difficult for artists to earn a living.
As of June 2019, Spotify charged musicians an average of $0.0032 per stream. Deezer was down at $0.00436 while Apple Music and Google Play both increased marginally. Learn more about how much artists get paid per stream.
According to the scheme, the biggest singers will earn millions of dollars, while smaller artists will get pitiful amounts.
A high number of middlemen is another reason for the small profits earned by streaming services. In addition, there is a tax black box: an estimated $2.5 billion in outstanding royalties, according to analysts.
Because of obscure technical factors such as server miscommunication and faulty metadata, the number of streams is underreported.
Up to this point, we have only discussed how rappers could profit from their music. In contrast, hip-hop stars will use advertisements to monetize their songs and popularity.
Labels have traditionally been reluctant to promote or support rock stars. The assumption was that they would appear to be selling out.
While things are quite different in hip-hop, a large majority of rappers are eager to embrace brand sponsorships.
This could be due to hip-hop culture’s money-oriented, hustling mentality. Being successful and making a lot of money is expected.
Brands seized the opportunity as well. Furthermore, they have developed marketing strategies specific to their industry that are very inventive.
In favor of more discreet messaging, such as naming brands in rap lyrics, traditional overt messaging has largely been abandoned.
English-language music lyrics include the term Gucci more than 6,000 times. Occasionally, hip-hop artists have used brand names in song titles (e.g., Gucci Bandana by Soulja Boy).
Gucci Mane, for example, has also integrated it into his artistic persona.
7. Selling Merchandise
Having made a name for yourself as a rapper, you can start selling your branded goods. In addition to the perfume and product collections of many prominent hip-hop artists, there are other types of merchandise to be remembered.
You may also sell digital products such as limited song and album downloads, email subscriptions, and other exclusive content.
In addition, you don’t even need to be a chart-topping artist to sell merchandise these days: as long as your YouTube page is moderately successful, you can advertise your stuff to your subscribers.
8. Reproduction Rights
It is legal to sell and distribute CDs and multimedia files with reproduction rights. Because of this, when you buy a CD or an album from a digital store like iTunes or Google Play, the copyright owners receive a portion of the sale.
Many independent musicians receive compensation when their music is played on streaming sites, in stores, and in other commercial settings.
There are several factors that determine payout amounts, including the terms agreed upon by the label and seller, as well as all other parties concerned.
9. Sync Rights
Sync rights allow a song to be used in film, television, advertisements, and other media. It is also called synchronization, and it can be very profitable.
There is a premium for copyright owners up front, and royalties are paid after the film or television program is released.
Rappers and hip-hop artists with lesser-known names will be able to break into the industry and land lucrative deals thanks to sync licenses.
Filmmakers and TV directors prefer music that appeals to them or that fits their artistic vision over chart-topping classics.
To get their foot in the door, independent rappers may use crowdfunding projects on sites such as Kickstarter and GoFundMe.
Crowdfunding will help you collect funds if you have a small but devoted following and a creative vision.
Likewise, it’s effective: Chilli and T-Boz raised over $400k to finance their final album. Their 2015 Kickstarter campaign raised over $600,000 for their new album. De La Soul is another wildly successful example.
The campaign raised $180,974 in the first 24 hours after it launched.
Despite hip-hop’s popularity surpassing rock as America’s most popular music genre, it is still difficult to make a living as a rapper, especially if you are just starting out.
Your business will require raw talent, diligent work, market savvy, and a willingness to tap into every revenue source. However, you should never give up on yourself or your art.
Your income will increase if you work to improve your skills. Because of this, we created our Rap Masterclass to help you become a great rapper and leave your mark.
Learn more about how much money rappers usually make.