THE FINANCIAL REALITIES OF RAP (OR WHY RAP HAS BECOME

BORING)
By, Wendy Day from Rap Coalition (www.rapcoalition.org)
Rap music has hit a dull spot. It has lacked creativity for a couple of years now except for the random
album here and there to break up the monotony. Im more than just a fan of the music: I study the industry--
under a microscope. One of the reasons it is so borin riht now is because no one is takin any risks.
!here is nothin new--just recycled formulas of what labels think will continue to sell. !his is a justifiably
sensible business decision" but a horrendous artistic decision. #istory shows us that boredom is what has
killed musical art forms in the past. Remember disco$ Remember the watered-down" commercial R%& of
the late '(s$ Rap emered due to an outcry for an alternative form of popular music in the late '(s and
early )(s" brinin a new and excitin answer to borin and redundant music of the day.
Independent labels spran up overniht in reaction to the music. *any were based upstairs from the local
club" in the local +,s apartment" or at the fans collee dorm room pressin up the hottest club hits and
sellin them locally. -abels clamored to sin the hottest acts who performed the sons that packed the
dance floors or who kept fans attention the lonest at the outdoor .ark ,ams" oriinally in !he &ronx /012.
3hen the major labels saw the financial value of rap ten years later /provin once and for all it wasnt 4just
a fad52" the industry chaned. 6one were the independent labels that scooped up the best talent on the
streets who had invested their own limited dollars into the records. !he majors were a step further away
from the streets and played with other peoples money. !hey relied on an employees opinion of what was
hot--an employee who collected a paycheck to make the record" not mortaed his own house to make the
record.
7ince most label 8%R staff were not connoisseurs of rap" or even people of color /remember it was a
predominantly &lack art form2" they relied heavily on someone elses opinion--perhaps a friend of a friend"
but someone elses opinion" nonetheless. 8nd that someone usually had no accountability for failure.
.erhaps the 8%R person ot lucky and had a cousins uncles best friends neihbors friend who knew
somebody who went to the clubs in the &ronx where rap was born. -ess lyrically ifted artists bean to
enter the marketplace while weak production emered on wax. 9mployees at the *ajors became the
atekeepers and trendsetters while the smaller labels run by fans /the +ef ,ams and !ommy &oys2 and true
opportunists /the 7uar#ill Records and :old :hillins of the world who spotted a trend and capitali;ed on
it2 took back seats. !he deep pockets were here. Records that once cost <=>"((( to make bean to cost
<>(("((( due to inflated costs. 7ome records that shouldnt have been made bean to o into mass
production to end up rejected by the final consumers as not authentic. ?or every one hit the majors had" ten
failures followed@ fickle consumers were blamed. .eople who didnt listen to it" but were profitin from it"
were controllin rap.
In the =A)(s" most of the rap acts had their own producers" most of which were often the +,. In the =AA(s"
the +, was made irrelevant and *:s became vehicles for reat productions at the behest of the labels. !his
flipped the industry from an artist driven industry to a producer driven industry" while it also took control
out of the hands of the artists and into the hands of the label who not only felt they understood the market
better" but also had the access to the super producers. !he value of the producer soared based on hits.
-abels also outbid each other to ive 4production5 deals to the .latinum producers" not so much to have
them brin talent to the label" but more so to uarantee access and fair pricin when they needed production
work at a reduced rate. !his increased the producers prices and importance.
!he cost to market a record bean to climb as the majors raced to outspend each other. Radio costs soared
sky hih as labels reali;ed the importance" and bouht radio. :osts in the =A)(s of <=("((( for minimal
club and radio play" rew to <B(("((( in the late A(s just to reionally test a son at radio" and upwards of a
million dollars if it is to become a radio hit. :lub and street team 4maximum exposure5 rew from a few
thousand dollars per =B inch in the mid-)(s" to a multi-million dollar industry almost overniht in the A(s.
8 hot video" in =AA(" uaranteed to air on Cncle Ralphs Dideo *usic &ox in 01 or 1o *-!D Raps" cost
<B>"(((" compared to <>(("((( today directed by a superstar director with no uarantee of showin on *-
!D or &9!.
!he risin costs didnt matter. It became a 4*ajors5 ame" meanin deep pockets. 8ll the hot labels were
backed by a major" with major distribution" with a full staff" with a real budet. It became a producer driven
industry where at least two radio sinles had to be name brand produced by one of the few platinum flavors
of the moment. !hats an extra <=>("((( on the budet" and aain at the discounted 4I know you5 price.
8dd the reEuisite .latinum side artist to show the new artist in the liht of other successful rappers: <)("(((
each. If the label has a ood relationship with the other major who owns the side artist" maybe they will
allow the use of their artist. If not" they will chare a fee too. 7ample clearance could add another <>("(((
to <=>("(((. !om 7ilverman said it best: 4&ack in the day" our variable marketin expense was '> cents per
record sold /net2. !oday" it costs us <F.>( per :+ to market a record. 8 major label cant put out a record
that isnt uaranteed to sell at least a million copies" or they dont make any money. *ajors cant take a full
shot for under <G *illion.5
&ut what is the real price to pay$ 8rtists arent recoupin--their share of the pie has become unreachable.
Instead of ivin away all their rihts in a bad contract like ten or fifteen years ao" they are now spendin
away all of their possible profits to ain only illusive fame. !heres more pressure to create hits--radio
friendly hits. !heres more pressure to sell records" and to sell records fast--first week sales are a key
measurin stick of an artists value at a label. !heres more pressure on the artist to build his" or her" own
bu;; before the label will even commit to sinkin the necessary competitive dollars into the project. !he
artist is forced to take less risk with creativity" and make a son that is proven to sell.
!he heads of the fleetin 4urban5 or 4&lack music5 departments started to et pressure from above. !he
employment door bean to revolve. In order to protect ones job" the records had to sell. 7ince it is
impossible to spend less in this incredibly competitive marketplace" the record has to sell more units to
offset the hiher cost to make and promote it !he Euality of music oes down in direct proportion to the
need to sell more records. !he labels dont want to spend upwards of <G million on a rap record to take a
risk@ they want a sure thin. !he stockholders demand it. !he value of a company is based on the price of
that stock which fluctuates due to market demand for the stock" not demand for the music. !he most recent
risk reduction policy at the majors is to step in and scoop up projects that have been released on an
independent level reionally" but are showin promise at retail and at commercial radio. !he majors still
pick a loser every now and aain because these variables can be bouht or altered to appear better than they
really are" and because the 8%R employees are still a step away from the streets of these reions that are
movin units.
7o while the majors are outbiddin each other to sin the safest records with the most leveraed risk" based
on a formula for sales" what are we supposed to listen to$ 3hen will rap become aain what it once was:
excitin" passionate" and new$H 7ome chanes will need to occur for rap music to take chances aain:
IJ labels will have to stop spendin hue amounts of money and start takin risks aain
IJlabels need to hire 8%R people who understand the streets and know what will sell and what consumers
want to hear
IJ the industry will have to rein in the hue costs associated with sellin a record /expensive radio
promotion" exorbitant video costs" costly retail promotions" etc2
IJ artists will have to oversee budets and make certain less money is spent so there is a chance of
recoupin
IJ artists will have to make records worthy of spendin <B( to purchase
*y biest concern is that if some chanes arent made" rap is in daner of becomin extinct. 8t the very
least" it will o back underround. If it does" once it loses its current place in modern culture" many
opportunities for the artists will leave with it" such as endorsement deals" actin opportunities" television
shows" concerts" commercials" etc. 3hen it is no loner deemed financially feasible to be a rapper" many
talented artists will seek job opportunities elsewhere. !he world could miss out on somethin very special
because it was more lucrative for an artist to et a job than to make an album.