It Pays to be independent!

IT PAY$ TO BE INDEPENDENT: By J-PRINCE (POTC)

In the past 10 years Hip Hop has become a huge financial powerhouse. In 2006 Hip Hop grosses and astounding 500 million dollars in revenue. Record labels and large corporations are cashing in on the success. A big part of the success comes from Hip Hop artist establishing their own companies and investing in lucrative business ventures. The current trend today in Hip Hop is owning your own label. Its kind of like somebody asking you do u want to rent an apartment or own a house? ..It’s really a no brainier. There are different Kind of label deals . . . for example in the late 90’s Rap mogul Master P was able to work out an 80/20 split with Universal. This meant that universal handled all of the promotions/ Marketing and distribution of all cd’s. This was a power move because Universal is the biggest distribution imprint in Music. This deal seems lop sided, but everybody ultimately wins . . . For example. Universal agreed to this deal with Master P, because Prior to the Mass distribution deal Master P sold over 500,000 copies on the street alone. Distribution companies will easily take that risk, because they know that Master P has a huge fan base and that without major promotion. Once the marketing muscle of a Universal gets behind you than the possibilities are endless and the were as Master P’s first album sold millions of records. Artist today are truly maximizing their potential by independent ownership of companies. The artist wants to keep the labels out of their pocket. It was reported in the early 90’s that the hit R&B act TLC was only getting cents on each cd sold. TLC sold millions of records during their run, but still ended up going bankrupt. Artist today are learning from the financial pitfalls of the industry. They have living testimony from artists like Mc Hammer and TLC.

Ths second and most popular form of the independent route is signing to independent labels. The most notable Independent label is Koch entertainment. Independent labels like Koch or TVT records will allow the artist to have full creative control of their projects. Koch is the ideal label for artist who may not be as popular to the mainstream audience. Artists like “BG,” jim Jones, and the LOX are signed to Koch. Independent labels generally don’t promote their artist as well as major labels. Promotions and marketing is generally handled by the artist. Some labels will only pay a certain percentage toward video shoots our marketing. Record labels usually will pay artist five cents to a dollar per cd . . . In dependent labels pay their artist 5-8 dollars per cd now do u get it? . Most labels invest millions of dollars in marketing and promotions and the cd only sells 500,000 copies, they lose money on that project. In the independent market an artist can recoup money spent with one week sales. For example Lil Johns Classic cd “Crunk Juice” sold over 2 million records independently. Now multiply that by 8 dollars per cd….that’s insane money! Even established acts are taking the independent route, because they to want that big return on their cd. There is no pressure to move a large amount of units, If an artist can move about 200-500,000 on a cd, that’s a huge success. So now with this knowledge learned would you go with a label or go independent . . . I think I know your answer. Record labels are like cooperate pimps . . . Please don’t become their Ho!

 

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