Raponomics, part II
original article from: RapStation.com
by Wendy Day from Rap Coalition

Since 1995, there have been between 470 and 500 rap records released each year (1995 saw 469 releases, 1997 saw 497 releases and 1998 saw 477 releases). Yet only such a small percentage of those releases sell at Gold or Platinum level (500,000 plus and 1,000,000 plus respectively). Last year, 1998, there were 477 rap records released. Of this amount, only 12 went Platinum and only 14 went Gold. That's only 5% of the rap records released - very ugly odds. In fact, only 57 sold above 250,000 units. That's only 12% of the records released. If the "average" rap record costs $1,000,000 to create, market and promote (and I could argue that this figure is low, but it's the average figure Craig Kallman at Atlantic gave me), then just to break even a label must sell 123,000 records. As I look at the records over the past two years that have gone platinum, I see artists with budgets of far more than one million dollars. So for the basis of this analysis, the figure of 250,000 records sold was chosen. Hopefully at this point an artist begins to see some royalties (royalties are paid after an artist pays back all of the recoupable expenses such as recording costs, half the video costs, half of the independent promotion costs, etc). If the artist makes money and the label makes money, then everyone should be happy.

		Rap Coalition, a not-for-profit organization, keeps rap artists from being unfairly exploited. Since rap music has become profitable, many artists are being taken advantage of, portrayed unfairly, and abused by the media, the industry, management, and record labels. Rap Coalition protects rappers from this hostile environment, and provides artists with a place to turn when they need help or support. Wendy Day, who founded Rap Coalition, has been an avid rap fan since the late 70's and brings a strong business background to the organization along with strength, commitment, and determination. With experience in media, advertising, marketing, and public relations, she has an irreverent take-no-prisoners approach to her role as organizer. The main priority is to make this a strong and supportive organization with a unified goal-- to support and protect rap artists! Rap Coalition is not-for-profit, and funded through its membership, its founder, and through donations from outside of the music industry.

Although we still have a month to go to finish out 1999, rap releases have jumped from 477 last year to 810 this year. The majors released less records than last year so far, but there are a slew of releases slated for December (majors released 203 rap records in 1998, and only 157 so far in 1999). But so far, they are making just as much money in sales as they did last year even though they released less titles (in 1999, 90% of all rap sales dollars went to a major label even though they only released 19% of the titles; and 91% in 1998 went to the majors as they released 43% of the titles). We better hope this trend upswings. Most people understand that rappers don't make money from their record deals, which leaves touring, appearances on the other artists' records and endorsements as the only way for an artist to really earn income. Due to the negative connotation of "violence" at rap shows and the expense of insuring rap tours, touring has become relegated to the more commercial rap acts or rap acts who can perform on R&B tours. Shows are becoming less and less frequent in rap, By appearing on too many other artists' records, an artist runs the risk of over exposing himself (or herself). There was a time last winter when Big Pun was slated to appear on 25 different songs, and more recently Cash Money appears to be placing their artists on songs with everyone in an attempt for other labels to cash in on the Cash Money phenomenon. aside from diluting the artist through over exposure, appearances on other records can also be a problem because technically the record label can take that appearance money and put it towards recouping the artist - in almost all cases, the label owns the right to the artist's performance (even on other artists' records). This leaves one last way for artists to earn income outside of the record deal: endorsements. And the only way for endorsements to be plentiful is to have rap, as a genre, reach a mass cross section of popular culture - and that means the masses who are actually perceived to spend money. Companies will only utilize rap artists and rap music so sell products as long as the main stream buying public reacts to it. And if the mainstream buying public reacts more positively to Ricky Martin, the Backstreet Boys, and Brittany Spears, then that is who marketers will employ to hawk their goods, instead of rap artists.

So the question remains, how do we keep rap from self-destructing economically? We need to be certain that the artists make money, but we also need to be certain it is profitable for record labels to release rap records, especially the ones that are able to influence and affect popular culture. And they are often their own worst enemies in terms of selling units and working projects properly to begin with. After making a list of all rap artists that have sold above 250,000 units per year since 1994, it is apparent that we in Rap music (Hip Hop is the culture, Rap is the musical form) must find a solution to this problem or all rap will go back underground serving a very small portion of the marketplace, making it very difficult for artists to squeeze out a living doing what they love most: making music.

I'd like to end this with a shout out to the 8 labels out of 40 who appear on the following chart with artists selling above 250,000 units consistently (the 8 labels out of 40 who made the chart not only sold more than 250,000 units, but had at least four artists who sold that in any one given year). These labels seem to get it, for the most part, and if their artists are getting paid, well then it's victory! Shouts out to the staffs from 1994 to 1999 at Priority, No Limit, Def Jam, Universal, Interscope, Jive, Bad Boy, and Death Row (prior to 1999).

LABELS WITH CONSISTENT SALES ABOVE 250,000 UNITS
	1994	1995	1996
Priority	2 of 35	1 of 34	3 of 45
No Limit	N/A	N/A	1 of 45
Def Jam	4 of 35	5 of 34	4 of 45
Universal	N/A	N/A	2 of 45
Interscope	0 of 35	1 of 34	1 of 45
Death Row	2 of 35	2 of 34	5 of 45
Jive	4 of 35	2 of 34	5 of 45
Bad Boy	2 of 35	1 of 34	0 of 45
	1997	1998	1999*
Priority	4 of 45	4 of 76	2 of 37
No Limit	5 of 45	14 of 76	3 of 37
Def Jam	7 of 45	12 of 76	11 of 37
Universal	2 of 45	1 of 76	5 of 37
Interscope	1 of 45	3 of 76	5 of 37
Death Row	2 of 35	3 of 76	1 of 37
Jive	4 of 35	5 of 76	3 of 37
Bad Boy	2 of 35	4 of 76	2 of 37

This chart is based on figures obtained from SoundScan as of 10/18/99 and is based on total sales within 6 months of an album's release, not total sales to date. It also measures sales from January through December of each SoundScan year which may not reflect accurate numbers depending on the month of record release (for example, an artist selling 250,000 within the last 3 months of one year and another 250,000 in the first 3 months of the following year would be counted twice). The chart does not take into consideration the amount of money spent on promoting the artist or how many rap records each label released in a given year (it is only taking into consideration how many records each label released compared to the total number of releases above 250,000 within 6 months). All releases are based solely on rap albums and do not include any R&B releases. This chart also separates No Limit and Priority even though Priority staff is responsible for promotion, sales, and distribution of No Limit, because No Limit is separate in the A&R, marketing, and publicity capacities for all No Limit artists. It also separates Death Row and Interscope, and RocAFella and Def Jam even though their respective staffs helped work some of the projects.

*1999 includes releases up to October 18, 1999 which is inconclusive for comparison sake since the year has not finished yet and because the releases have 6 months in which to sell more than 250,000 units.