We have all seen the rise of file sharing programs like Napster, Limewire, Kazaa, etc., over the last decade and the negative effects they have had on worldwide album sales, especially those of hip hop artists. However nowadays rappers don’t seem too caught up with how many CDs they sell, but instead are more focused on how much of themselves they can sell.
Don’t get me wrong, artists do make a substantial amount of money through legal digital downloads via iTunes or Amazon, but it’s hard to argue that a majority of our favorite rapper’s chains and cars are paid for by the ticket stubs that we all have stashed away somewhere.
For example, according to a LA Times articles by Randy Lewis, in 2011 Lil Wayne made about $43 million from album and singles sales. Compare that to the $44 million he made while touring and you can see that all that time on the road paid off.
The super team of Jay-Z and Kanye West, or The Throne, had a highly successful international tour that garnered about $48 million worldwide; nearly tripling the revenue they made from their joint album (17 million).
A huge reason why hip hop artists are bathing in the limelight more and more is that they actually receive a bigger cut of a bigger pie from touring. In an article on MinorityFortune.Com entitled “How Much Musicians Really Make in the Industry” , it shows that on average, musicians typically only receive about 13% of total album revenue, while the label and its distributers take the remaining 87%.
With tours, the money is split up by only the artist and the concert promoter (like Live Nation and AEG Live). The concert promoter is in charge of finding venues, marketing and advertising the tour and also the on-site staff. After all that is paid for, the artist takes their hefty percentage of the tour’s profit (sometimes up to 35% of the concerts ticket sales and even 50% of the merchandise) and take it straight to the bank.
So what have we learned from all this?
Don’t feel too bad when you hear about your favorite rapper’s new album being leaked. Odds are they don’t really mind because at the end of the day, all those people who have “illegally” downloaded their music will be the same people legally purchasing tickets to all their sold out shows.