Hip-hop contributes over $15 billion to the US economy every year, but few artists are able to create generational wealth from it due to modern streaming breakdowns and overreaching contracts. Despite the genre’s popularity, streaming platforms like Spotify and Apple Music only pay out micro percentages, leaving artists struggling to find financial security. To create more financial equity, Black artists need strong and knowledgeable teams that believe in their goals and can help make them a reality. To build a long-lasting career, artists should continue to focus on their greater goals and invest the money they make back into themselves.
Hip-hop has been the rhythm of Black America for 50 years, speaking truth to power, even as anti-Blackness seeks to mute its message. Yet rap’s shining stars often have their light dimmed by an exploitative music industry that gets rich off of Black creativity.
Indeed, in the decades since the Sugar Hill Gang’s 1979 single “Rapper’s Delight” became the first rap song to be played on the radio, the genre’s become an economic juggernaut.
Hip-hop contributes over $15 billion to the U.S. economy every year through merch and music sales as well as concert revenue. And some artists — Drake, Nicki Minaj, Kanye, and Jay Z — have raked in big bucks. Jay Z’s net worth soared to $2.5 billion in 2023, according to Forbes, making him the wealthiest rapper on the planet.
So there is no question that hip-hop makes an impact and makes money, but few artists are able to create generational wealth from it. For the average artist, modern streaming breakdowns and overreaching contracts leave them struggling to find financial security.
“There are different avenues for getting paid, but you have to understand what you’re doing and what you want out of it,” says Papa Fall. Fall has been producing since 2012, working with popular artists like 42 Dugg and Roddy Rich. He currently serves as the executive producer for rap star 2 Chainz.
“With these companies controlling the platform that you stream music on, they control the money,” Fall says. “And they have complete control over how much money they give you for your money being played on their platform.”
How Streaming Payouts Hurt Black Artists
The days of CDs and radio dominating the music scene are long gone. Now, streaming platforms like Spotify and Apple Music are how people hear their favorite artists. However, while streaming makes accessing music possible from anywhere, Fall says it has also contributed to the exploitation of Black artists.
I’m nowhere near being able to be stable and sustain myself through making music.JADE WHALEY, RAPPER
“It’s really one-sided. Spotify and Apple Music only pay out micro percentages, which is crazy compared to the money they’re pulling in. There wasn’t enough representation for artists when streaming came about,” Fall says.
Spotify currently pays artists between $0.003 and $0.005 per stream on average. It takes roughly 315 streams of a song on Spotify to make just $1. As a result, an artist could have tens of thousands of monthly listeners and fans, and still not be able to survive based on streaming income.
Artists Have to Eat
Many aspiring hip-hop artists invest tons of money into their careers without knowing if they are ever going to gain the recognition and payouts they seek. Studio time alone can cost artists anywhere from $30 to over $200 per hour. Add in the cost of paying producers, featured artists, and marketing, and hip-hop artists can spend thousands of dollars to release just one song.
Jade Whaley, an up-and-coming rapper based in Los Angeles, California, goes by the stage name Mistress of Rap. She says high production costs and low streaming payouts have made pursuing her music career much more difficult.
“I get more than 300 streams on most of my songs, but I haven’t made that much money off of my music. I’m nowhere near being able to be stable and sustain myself through making music. I have to have another job, a full-time job,” Whaley says. “It makes things a lot harder because I’m putting a lot more money in than I’m getting out of it.”
It can take years, if it ever happens, before hip-hop artists receive mainstream recognition. Without funding, many cannot afford to take the long journey.
“I think for many artists, it can make you question how passionate you are about this and how much you really want this. A lot of artists get discouraged because they don’t have that support monetarily,” Whaley says.
Black Hip-Hop Artists Need Good Representation
Only a lucky few are able to prosper with current streaming payouts and attract the attention of major music labels. But predatory contracts and fear of losing the chance to make it big leaves artists vulnerable to exploitation.
Even well-established artists like Lil Uzi Vert and Chuck D have had to fight against exploitation. In 2014, rapper Lil Wayne infamously had to tweet an apology to his fans for the delay of his album “Carter V” due to contract disputes with his former label Cash Money.
“To all my fans, I want u to know that my album won’t and hasn’t been released bekuz Baby & Cash Money Rec. refuse to release it,” Wayne’s post read.
Uwonda S. Carter is a 23-year entertainment lawyer for hip-hop stars like Metro Boomin and Lil Yachty and co-founder of Carter + Woodard, Georgia’s first Black-owned entertainment and corporate law firm. She says that to create more financial equity, Black artists need strong and knowledgeable teams that believe in their goals and can help make them a reality.
I really want the artist to understand their value.UWONDA S. CARTER, ENTERTAINMENT LAWYER
“Find an experienced entertainment attorney,” Carter says. “And not someone who has six other areas of practice on their website that has nothing to do with entertainment. I’m not disparaging anybody who’s trying to break into the industry, but when you’re dealing with these agreements, the difference in not making it exploitive is having someone who knows what to push back on. A lot of attorneys who don’t do this regularly, they’re reading the contract, but they don’t understand the practical way the language is going to work.”
Uwonda says many artists are overly eager to sign the first deals they are presented with, even if those deals are not always in their best interest.
“I really want the artist to understand their value. Hip-hop surpassed [country music] as the number one-selling genre of music. There’s a lot to be said about that. When you have that much cachet and that much cultural relevance, you have to understand what your value is and be comfortable with demanding it,” she says.
Knowledge Is Power
For artists who may be unable to afford or find an experienced entertainment lawyer, studying the business side of the music industry is crucial to sustaining success.
“You can’t just know the music side. If you only know the music side, you’re going to get screwed on the business side,” Whaley says. She says having financial literacy about the music business is essential because the goal of the label “is to make money off of you.” That means, “if you’re not aware of the systems that are in place, they can easily take advantage of you.”
Whaley recommends that aspiring artists read “All You Need to Know About the Music Business” to get caught up on the basics of the music industry.
As for Fall, he says being attentive to the mistakes and triumphs of those around him — and seeking out opportunities to learn — helped him turn producing from a hobby into a lucrative career.
“Go to seminars, go to panels,” Fall advises. “The music industry is very exclusive. You have to be involved to know what’s going on, but there are people that will show you the way. There are good people. You just have to be attentive and always study.”
To build a long-lasting career, Carter says artists should continue to focus on their greater goals and invest the money they make back into themselves.
“Stop making it seem about all the things you’re clout chasing,” Carter says. “It’s great to be on a private jet with designer clothes and all that, but if you want to own your masters and you want to be a boss, then make boss moves.”
Written by: Nadira Jamerson
Writer and content creator Nadira Jamerson is the Digital Editor for Word In Black. Her focus is to create space for Black individuals to express the complexities of their communities and identities through an honest and inspiring lens. More by Nadira Jamerson