Russell Simmons - Rapper and Business mogul. |
HIP HOP BUSINESS ECONOMICS
Capitalism is met with incessant hatred within the Hip-Hop
community. This hatred is potentially derived from the poor economic conditions
most rappers are born into and from the fallacy that the country’s economic
system resembles anything near a free-market. Regardless, to put it lightly,
capitalism has developed into a “dirty” concept, both in the Hip-Hop community
and beyond. Those who are labeled capitalists, or those who support
capitalistic ideas, are labeled as greedy and materialistic people who focus on
an immoral economic system which hurts all but the economic elite. The
overwhelming majority of conscious Hip-Hop echoes socialist theory. Rappers
give the disguise of rebellion and anarchy when in reality they defend the
status-quo they claim to detest.
People are corrupt
and therefore the government, made up of more corrupt people, will somehow
“fix” this mess. Hip-hop is undergoing a crisis right now: a
corporate-controlled, centrally planned catastrophe that is effectively
lowering the quality of music and angering loyal fan bases. The past few years
have seen massive record companies aim to control their artists by only
allowing them to release music accepted by the executives. When that did not
materialize, major record labels got frustrated.
Proverb South Africa's successful rapper |
Gallo shut down their Hip Hop division which was home for
Skwatta Kamp, Pro, ProVerb and Mr. Selwyn, Sheer Music shut down Sheer Hip Hop
which had Hidden Force, Zulu Mobb and Blindfold, many rappers got dropped by
CCP/EMI. Native Rhythms dropped F Eezy and didn't renew Zuluboy's contract but
instead replaced him with Zakwe hoping for better results.
Outrageous Records had the best strategy of all record
labels, Rage had TV shows (most notably Street Journal), magazines and other
businesses that sustained Outrageous Records so there was no pressure on
artists to do a bubble gum rap for sales. It was a huge loss to SA Hip Hop when
the company got liquidated. Buttabing Entertainment had to learn the hard way
with the financial loss they incurred on My Man, but Slikour is still standing.
Ghetto Ruff also had successful Hip Hop artists, but DJ Sbu,
DJ Cleo, Zola and others parted ways with Lance Stehr crying foul play.
The spontaneous order and creative forces which built the
Hip-Hop model have been destroyed and replaced by the horrors of central
planning and corporate control. The Hip-Hop culture, specifically rap music, is
in desperate need of free-market reform.
The creation and expansion of Hip-Hop is the result of
free-market tendencies. There was local demand for a new type of music that
listeners could dance to and enjoy. Listeners sought new types of beats and
entertaining MCs to take their minds off the terrible living conditions.
Individuality was traded in for the cookie-cutter rapper image as originality
gave way to repetition. Fans constantly hear reports of artists being forced to
make certain songs the label wants or mimic sounds that are currently popular.
Presently, there is an overwhelming sense of stagnation in rap music. Record
labels try to control artists from their clothing to the choruses of their
songs. Decentralization of the industry is what is so heavily needed right now.
Hymphatic Thabs - SA Rapper with a potential but struggling... |
Corporate record labels serve as government while rappers
and fans serve as the subjects. These massive labels operate as central
planners that attempt to get around the (musical) fatal conceit, “The curious
task of economics is to demonstrate to men how little they really know about
what they imagine they can design.” How many stories must we hear about artists
being told they were not good enough by record companies only to have their
songs and albums flourish when released to the general public?
Every rapper that is big and successful right now, locally
or internationally, was once turned down by a record company or by a radio
station at some point in their lives.
Despite these record companies don’t use force to dictate
what their artists should produce, they do use the idea of central planning and
coercion to make decisions that should be left to the creative market. Art, the
most creatively liberating entities in the world, has been suffocated by the
fatal conceit.
That also didn't work because you cannot run Hip Hop from
the office. Now, this is how majors sign rappers in South Africa: Record your
own music, shoot a video, get airplay, create a buzz, have a fanbase, then they
can negotiate.
That's how Universal Records signed Pro and ProVerb, and
Sony signed iFani. As talented as they are, those record companies wouldn't
give them a chance if they came straight from the streets. A&R's don't have
the time to scout for raw talent that they can groom anymore. Artists must be
well established on their before they can get the record company's attention.
The truth is it's the survival of the smartest, not the most talented.
Record executives, in this analogy, are our central
planners; they lack the knowledge of all actors in the market, the ability to
marry the correct beats to the lyrics, and produce the magic that is music.
This comes from artists, from trial and error, from determination and drive. Hip-hop
rewards courageous entrepreneurs who put their money and reputations on the
line. It is calculated risks which bring forth massive returns, whether those
returns are expressed in financial profit, respect, or notoriety.
Artists have a natural incentive to create the best possible
music while many record companies (not all) have the incentive to produce the
most wealth possible, at the expense of quality music. Critics may cite this as
the best example of pure capitalism and its promotion of profit as the ultimate
goal. This is not a sound argument because profit is a subjective term.
Although profit is traditionally money, any benefit one gets out of something
is essentially a profit. As stated above, artists consider respect, notoriety,
and celebrity when dealing with profit. Artists, like all people, are
self-interested and have the incentive to make the exact type of music they
feel is right at any given time.
The profit of that music may be the love and
admiration of fans. The profit of music may be the creation of a sonic sound
unheard to the general public or a track about something dear to the artist’s
emotions. The profit may be anything desired by the artist, whether it be
reputation or money. The artists know what type of profit they wish to acquire
and have the incentive to create the type of music most valuable to them. The
monopoly effect comes when radio stations only play the music of record
executives they are in bed with. This is why “radio friendly” records focus on
degrading women, materialism, drugs, and elementary rhymes.
Why are record executives trying to limit those who refuse
to abide by normal limits? Artists are special, brilliant people, and the
industry is doing its best job to put chains on them and stifle their creative
skills and wit. These are word-smiths, poets, singers, preachers, and teachers.
People don’t deserve chains that limit their expression, and musical artists
are most at home when they have complete creative control. This is liberty!
This is the free market. This is the entrepreneurial spirit. An artist is most
prosperous in times of most creative liberty.
The artist, performer, and producer’s artistic success are
directly proportional to their level of creative freedom they enjoy. Similarly,
an economy is most prosperous in times of more economic liberty. A consumer, a
producer, and an entrepreneur’s financial success are directly connected to the
level of economic freedom they enjoy. Regulation, constriction, and strain on
economic freedom injure an economy’s ability to prosper most vibrantly. The
music industry behaves similarly. No record executive could determine what
songs, which hooks, or what instruments would be best for an artist, song, or
album. Markets decide things better than central planners. The artist, or
entrepreneur, is motivated by their self-interests. Liberty and creative
freedom should remain at the forefront of any decision within music.
Just because artists are given back creative control does not
mean all music will be perfect. Failure is needed. If artists do not learn how
to fail, they will never learn how to succeed. In the market process, the rap
world, and in the classroom, failure can be considered as more important, even
more important, than success. Economics is all about signals, and failure gives
the necessary signals to an artist that what they are doing is not connected
with the audience. By giving artists total control over their music, the artist
regains the incentive structure to create quality music. Coercion by record
companies restricts options, while incentives increase options. The more
options and freedom given to the artist, the most authentic and enjoyable the
music will be.
When I was doing research for a Hip Hop documentary
"FEDE FOKOL" we wanted to use Prokid's song of the same title
"Fede Fokol" then I discovered he doesn't own the rights to the song,
it's Gallo's intellectual property. So Pro can't perform his own songs from his
1st album "Headz N Talez" without Gallo's permission. When you sign with a major, you become a slave and
"Slaves don't own their masters".
In South Africa, Gold is selling 20 000 units. Selling 20
000 CDs at R50 each amounts to R1million, hence "striking gold". If
the artist contracts for 10%, it means the artist gets only R100 000 (Gold
sales) which will also be deducted for tax purposes. Record companies, like any
other company, make more money off their employees (artists).
Hip-hop culture has demanded websites for the newest in fashion,
music, and art and that demand has been supplied. This is a gloriously free
market that enables the consumer to “purchase” any type of music through
downloading or sharing with friends. Distribution through a corporate entity is
no longer needed for some. Many artists have decided to remain “independent”
from major labels and instead release music through their own label, where they
hold creative control. Physical sales of CDs are dropping and the Internet has
been instrumental in giving choice to the Hip-Hop consumer while the record
companies and radio stations are trying to tell people what they should be
listening to. Remaining independent allows an artist to flourish as they do
exactly what their heart desires.
Record companies and radio stations manipulate listeners and
produce artificial results. The radio system in promoting illegitimate rap
music and an inauthentic reality of Hip-Hop culture. The market has been
greatly distorted. Songs with the rhyme scheme of a first grader make up the majority
of radio songs. Rap fans who want legitimate rap music find themselves
downloading songs from the internet. The radio has distorted the market which
throws off signals to young and established rappers alike. Young rappers now
see this first grade rhyme structure and substance-less lyrics as the
ingredients for a successful rap career. The same can be said when artists
decide to follow the direction of a record company that encourages them to
portray a false image that is incongruent with who they really are. Rap is now
run by authenticity.
Hip-hop must live by the rules of supply and demand just
like any other service or goods.
Rap music, at its most natural and untouched form, is the
most glorious example of a free market. One of the more fascinating components
of the Hip-Hop world is the dress and slang.
Critics will cite the pursuit of capitalistic profit as the
driving force behind rap deterioration. They claim Hip-Hop should be for the
fun, the lyrics, the music, and not the profit. They argue that somehow a
profit scheme will lower the quality level of music. What they don’t realize is
rap’s profit incentive is the reason why it is what it is today. Hip-hop was
brought to the forefront of music when the early Hip Hop was found to be profitable.
Music needs to become anarchic. Anarchy, contrary to popular
belief, does not mean chaos. Anarchy simply means lack of a central authority.
This means the industry is organized bottom up, not top down. If a charity
fails to begin at home, do “Die Antwoord”. The world is too big and once you
make it big abroad, everyone will pay attention to you even those who initially
rejected you.
Rappers have the innate and incredible ability to tell
stories using complex language over robust beats. These artists should not be
controlled, their albums should not be centrally planned, and their careers
should not be crammed into a one-size fits all policy for rap music. The rap
market is heavily distorted and needs an urgent correction. Economics is about
signals. Record companies and radio stations have thrown off the incentives,
mucked up the signals, and are hurting the consumers. The rappers, too, should
be blamed! They continually make status-quo records purporting the same
unoriginal claims they say they stand against.
The false sense of rapper rebellion leads young listeners
nowhere. When rap first appeared on the scene it attacked conventional music,
shot back at politicians, called out authority, and told messages about life,
passion, culture, and love; but the fact is that early Hip-Hop took off because
profit was possible. It represented the best of both worlds: a good paying
income and a position of notoriety and respect.
Right now, the income stream has trumped individuality,
respect, and talent. The market is asking for something else. The demand for
rap with substance, or even rap with a more complex rhyme scheme, is large and
growing as more fans are becoming sick of radio music.
The rap revolution can
only come from a powerful connection between the rappers and the fans
overthrowing this new rap identity as we decentralize the industry. Freedom
must be returned to the artist. Freedom and liberty are hard to maintain:
politically, economically, and musically. We must fight for liberty today in
order to preserve it for tomorrow.
Initiatives like Ritual Stores, Hype Magazine, Back To The
City, Masters of Rhythm, Butan Wear, Party People, to name but a few, are
classic examples of how you can make money off Hip Hop without being a rapper.
Every second advert on TV has a Hip Hop element and rappers
are the most endorsed artists of all genres.
In case you thought Hip Hop is not BIG in South Africa.
FOR THE LOVE OF HIP HOP!
Health, Wealth and Wisdom.
By Rashid Kay | @rashid_kay