We all know how much certain rappers like to brag about the money they have. At times, it can even become tiresome. Do rappers really make as much money as they say they do? And if they do, how do rappers make money? Aside from Jay Z, Eminem, Nas, or somebody like Kanye West, I can’t imagine many rappers with as much money as flaunted in the average mainstream rap song. Let’s calculate:
Album Sales | How do Rappers Make Money?
According to a list by popular hip hop website, hiphopdx.com, the top selling hip hop albums of early 2013 averaged 304,400 units with Kendrick Lamar’s Good Kid Maad City on top (746,000 units sold) and Trinidad James’ Don’t Be Safe selling the least (11,000).
If we assume that a well-respected, mainstream rapper sells about 300,000 units on an album, and that an album costs anywhere from 8 to 20 dollars, we can say that a rapper makes between 2.4 & 6 million dollars in album sales. The only problem is that rappers rarely make 100% of the money that an album costs. Artists have contracts with their labels. In these contracts, artists usually agree to give up a large percentage of their money for the record label, the distributor, the manufacturer, the retailer, and all studio/production costs. Because of this, many artists end up making less than a dollar for every copy of the album sold.
Now let’s see how much this well respected, mainstream rapper makes from record sales:
This artist sells 300,000 units and sells his album for 10 dollars apiece.
His record deal gives him 6.6% on an album sale, which is the average percentage most artists make on an album (thanks to bandzoogle.com).
This means that the rapper will make 0.66 dollars for every album sold.
In total, he will make 198,000 dollars from his album sales.
This may seem like a lot of money but you must realize that artists still have to pay studio fees and pay their manager (who may demand up to 20% in commission).
All in all, this means my dad makes more money than certain rappers when comparing his annual revenue to only album sales. By the way, my dad is the director of marketing at an aerospace software firm. Still want to be rich by becoming a rapper?
Touring | How do Rappers Make Money?
Luckily for rappers, touring is where all the money is! The average concert attendance this year has gone up to 9,109 people. If the same well respected, mainstream rapper sells tickets for $25, and assuming that he has an attendance of about 9000 fans, he will make $225,000. It is impossible to tell exactly how many concerts a rapper will do, with cancellations and all, but I am assuming around 30. This means that the average rapper will make 6.75 million dollars from touring. The only problem with this is that touring costs money. On tour, he will need to pay for food, gas, drink, hotels, equipment, transportation, and a roadie crew. Some tours (for bands like U2) can cost tens of MILLIONS of dollars. For our purposes, let’s say the tour costs about a million dollars. What is left? 5.75 million dollars. Then, there are all of the other rappers that are on the tour. They need to be paid as well. For example, artist Mac Miller is currently on tour with 4 other rappers (Chance the Rapper, Earl Sweatshirt, Action Bronson, Vince Staples). When you buy a ticket, you’re paying to see all of them. So, the 5.75 million dollars are split in 5. This means each artist makes 1.15 million dollars.
Hopefully, we’ve answered the question “how do rappers make money?” and “how much do they really make?”
Leave us a comment if you have any questions, and we’ll get back to you.