Kanye owns 100% of Yeezy. Adidas produces & distributes them. He gets royalties of 15% of the sales and it’s closer to 10-11% after expenses. Basically, Kanye makes 10c for every $1 in Yeezy sales.
Being a great artist doesn’t mean you have the business element on lock. Meg the Stallion received a $10k signing bonus and the label negotiated 60% of all royalties ++ exclusive rights to her music!! If she decided to feature in a track, her label took a 30% commission.
Large brands & record labels play an important role in production, marketing, distribution & sales. They have the route to market which are the arteries for your product/ music to travel.
Truth is, most artists in the game will never “own their Masters” thanks to lock-in deals. Most artists barely scrape a living from streaming revenues. Tour revenues are where it’s at.
Spotify pays the average artist 56 cents per stream. YouTube pays 24 cents. That’s in South African Rand terms! Universal, Sony & Warner music run the most of the industry.
Bruno Mars breakdown of the $40.7m he earns
Ed Sheeran’s breakdown of the $31.3m he earns
Your favourite rapper may already be struggling financially. Sure there’s the hired cars, massive mortgage payments & expensive bling. Revenue streams are drying up & it’s hard to stay relevant. Bad management makes it worse.
The business of music is bigger than making music.
If you’re new money securing the bag (most of us) you have to keep your crew tight. Advisors, hanger- ons & agents will hurt you. Forget about verbal contracts.
Look at Allen Iverson, Mike Tyson & Diego Maradona. Rockstars with terrible management.
You see the SAME thing happen to start-ups. They sacrifice huge pieces of equity for minimum funding because they desperately need it. Each round of funding ends up with the founders being diluted down. If you can help it, never source funding for a business with no track record.
Before unleashing the hottest SoundCloud diss track against Rich dad/ poor dad Twitter – get the right advisors, have a financial game plan & keep the paperwork tight.