Thread: Most rappers are broke...

Interesting video a fan posted on my FB wall.

Most rappers are broke ... Sidewalk!

I have a really good friend who is recording some premiere artists right now.

I probably shouldn't go into all the numbers but it's a joke. The things these
artists sign to become famous are ridiculous. Talking about 50% or even 75%
of the intellectual property.

Generating revenue is a different skillset than capital allocation and compounding wealth.

I think there's a lot of business lessons to be learned from rappers/other entertainers.

First of all, the labels know that they (again, most but not all) know NOTHING about business, so they completely screw them on their rights to their publishing, masters, record sales, etc. I bet they don't even tell them what percentages they will earn before they sign their deal unless forced to. I mean, to a young guy, if you come up and say, "hey, we'll sign you to be a rapper," most wouldn't even think, they would just say "Hell yeah, finally my big break! I'll take it!"

I think an even bigger lesson that you can learn is branding. I think being a rapper offers you a tremendous opportunity to create a strong and profitable brand for 2 reasons. First rap is all about show, living the high life, and flashing the newest and greatest things. Second, being a musician allows your voice to be heard by millions of people. People can hear your message on the radio, in a movie, on your CD, on a commercial, at sporting events (big audience there), and at the club (big audience there too). Once people get to know you, follow you, and look up to you, you can basically sell them anything (this is why Jay-Z gets endorsement deals from a huge variety of companies - HP, Budweiser). Not to mention, you can create luxury brands that align with the lifestyle - clothes, fragrances, alcoholic drinks, nightclubs, etc. Then, you can sell your stuff in your music and videos.

If you look at the successful rappers, business-wise (Jay-Z, 50 Cent, Diddy) they have all done this. But, they came into the music game to make money more so than just be a rapper (in Diddy's case, he isn't even a real rapper).