Ways to Monetize Hip-Hop Music: Platforms for Rap-Artists!

Ways to Monetize Hip-Hop Music: Platforms for Rap-Artists!

Hip-Hop is on the rise: In 2018 Nielsen reported, that hip-hop has surpassed rock and pop as the most popular music genre in the US. This is partly due to the democratization of the music industry, which is making it easier for self-produced artists to gain a fan base.  “There are no gatekeepers”, Nick Holmsten of Spotify has told TIME Magazine:  ” When I grew up, you had to be in a band, know how to play the guitar. Now you need a touch of technological savvy to make the music-and access to a smartphone to find it.” [1]

But how do Hip-Hop artists actually make money? For most musicians it’s a combination of album sales, streaming payouts, live shows, YouTube ads and paid collaborations with brands. Other common income streams include synchronization rights, merchandize-sales and guest-appearances in other musician’s songs and live gigs.

PUSH HIP-HOP MUSIC INDEPENDENTLY

If all these options seem overwhelming at first, don’t worry: Just start by creating high quality music and putting it out there. As you build a larger following through your music, you can start looking into additional income streams like advertising and merchandize.  

But what platforms are available for getting your music out there, and what are their respective advantages and disadvantages?

In this article, we will walk you through the most common online streaming platforms for hip-hop artists…

Payment Structures and Rates At A Glance:

Platform Name

Payment Structure 

 

Pay per stream 

Spotify

Market Share

up to $0.00437 per stream

Apple Music

Market Share

$0.01 per stream on average 

YouTube / YouTube Music

Pay Per Ad View / Ad Click / Content ID 

$0.10 to $0.30 per ad view/ad click

Pandora Music

Per Play Royalty Rate

$0,00133 per play

Amazon 

Per Play Royalty Rate

An average of $0.001-0.0109 per stream or $0.7 per song

Bandcamp

Artists get to set their own prices and keep a percentage off the income generated with each sale

85% per music download and 90% per merch item sold

 

SoundCloud

Fan-based Royalty System 

approximately $0.0025 - $4 per stream

Tidal

Fan-based Royalty System /Direct Artist Payout

minimum of 0.012$ per stream

 

Napster

Market Share

Around $0.01682 per stream

 

The Most Common Streaming Platforms for Hip-Hop Artists: 

Spotify for hip-Hop Artists

No list of streaming platforms would be complete without Spotify: After all, the platform continues to hold the largest market share in the space of music streaming. If you post your songs on Spotify, any of the 406 million worldwide users can listen to it- at least in theory. One of its key advantages lies in its high compatibility with all kinds of devices and different social media platforms. This means that no matter where you post the link to your song, it is sure to run perfectly for most listeners. The Spotify-algorithm will help your music to reach new potential fans and if you are lucky enough to end up on a playlist like Spotify’s Rap Caviar, it can boost your number of streams and artistic profile. 

Of course, Spotify’s sheer size is also a disadvantage: with around 8 million artists sharing content on the platform, you are up against very big competition. Moreover, the platform has recently been receiving negative press due to its low pay-out-rates. As Spotify pays its artists based on market share rather than number of streams, you could be earning very little even if millions of people have streamed your songs. 

Spotify-Statistics:

  • 406 million monthly active users (180 million premium subscribers and 226 million ad-supported subscribers) 
  • Number of artists on platform: 8 million 
  • Most streamed artist of 2021: Bad Bunny 
  • Pay per stream: up to $0.00437 per stream

Advantages of Spotify: 

  • Large audience 
  • High compatibility with different computers, phones and social media platforms 
  • Hip-hop is the most listened-to genre on Spotify 
  • Getting on a playlist like “Rap Caviar” can help put you on the map 

Disadvantages of Spotify: 

  • Low pay-out rates 
  • As a lot of artists are contributing to the platform, competition is high
  • Depending on whether they have a membership or not, your fans may not be able to listen to your music without advertising 
  • You need to find (and pay) a distributor in order to upload music to Spotify (The platform has recently closed down the Beta-version of a program that allows artists to upload their music directly and without an intermediary) 

Apple Music for Hip-Hop Artists: 

While Spotify holds around 30 percent of the music streaming market share, Apple Music comes in second with a market share of 15 %. In contrast to Spotify, Apple Music doesn’t offer a free streaming option. While this reduces the number of potential listeners, it means that Apple Music can pay artists a slightly higher royalty, averaging at 1 penny per stream. It has also recently launched the playlist “Rap Life” in order to take on Spotify’s “Rap Caviar”. 

Apple Music-Statistics: 

  • More than 72 million subscribers 
  • Number of artists on platform: more than 5 million 
  • Most streamed artist: Ed Sheeran
  • Pay per stream: $0.01 on average [2]

Advantages of Apple Music: 

  • Option to create immersive, multidimensional songs using Dolby Atomos 
  • Apple Music pays the same headline rate of 52 % to all labels
  • “Apple Music for Artists” helps you collect data about your listeners
  • Has recently launched the “Rap Life” playlist to promote new hip-hop artists 
  • Higher (and more transparent) pay-per-stream than Spotify
  • Apple also gives you the option of selling (rather than streaming) your songs and albums

Disadvantages of Apple Music: 

  • Apple Music can only be accessed on Apple and Android devices.
  • You need to sign up to (and get your music approved by) a distributor like Tunecore, if you want to share your songs on Apple Music 

YouTube and Youtube Music for hip-hop artists: 

With 2 billion users and 5 billion videos being watched every single day, YouTube is by far the platform with the biggest outreach. YouTube provides artists with various options of monetizing their music: 

  • You can upload your music videos to YouTube and allow the platform to place pre-roll video ads, in-stream-ads or bumper ads in your video. Depending on the type of ad and how often your video (and the ad) is viewed, you will get an advertising pay-out. While there is no barrier to uploading your music videos on YouTube, you have to be part of YouTube’s Partner Program in order to start putting ads on your videos. To qualify for this, you must have accumulated 1000 subscribers and a minimum of 4000 watch-hours over the past year. 
  • For those who do not want to make their fans watch ads, there is another option: YouTube has also launched a platform called YouTube music, which allows users to listen to audio-only music by paying for a monthly subscription. With a per-stream pay-out rate of $0.008 YouTube music pays artists more than its competitor Spotify, but significantly less than some of the other streaming services. 
  • YouTube has also implemented a feature called Content ID that helps you track if somebody has uploaded a video featuring your music. You can then choose to either take down the video in question, or take a cut of any advertising revenue the video makes. 

YouTube Music and YouTube-Statistics: 

  • YouTube Music has 50 million subscribers while YouTube has around 2 billion users
  • Number of YouTube channels: 37 million
  • Most subscribed YouTube artist: Blackpink
  • Most viewed YouTube music video: Despasito (Luis Fonsi feat.Daddy Yankee) 
  • Pay per ad view: $0.10 to $0.30 (You also get around $0,003 per ad view for videos using your music, if you enable CONTENT ID)

Advantages of YouTube and YouTube Music:

  • Possibility of choosing between regular YouTube and YouTube music (or using both platforms) 
  • Musicians can benefit directly from the ads placed on their music videos 
  • You can upload your music (and videos) to YouTube for free

Disadvantages of YouTube and YouTube Music:

  • On “regular” YouTube, you do not get paid per stream, but for the advertising you put on your videos. This means if nobody watches (or clicks on) the ads on your video, you get nothing, even if your videos get viewed a lot. 
  • YouTube Music pays a relatively low per stream rate of $0.008. While this is higher than Spotify, it is still much lower than what some competitors pay. 
  • Due to the large number of video content uploaded to YouTube every minute, your videos (and music) are up against a lot of competition. This means that while YouTube sounds great in theory, it is in fact quite difficult to get exposure (and views) when you are just starting out. 

Pandora Music for hip-hop artists:

Pandora is a personalized radio service that allows listeners to let the algorithm know which kind of music they like, by using a “thumbs up” button. This helps listeners discover new music, while giving lesser-known artists exposure to new audiences.  

But Pandora is more than a radio station: It also boasts a paid subscription option, which allows users to listen to the songs of their choosing. In addition to being centered on connecting users to music they may like but not yet know, Pandora’s marketing platform AMP helps artists promote their music. The platform has also recently taken a huge step towards promoting hip-hop, by creating the radio station “Hip Hop Forever”. 

Pandora-Statistics: 

  • Pandora has around 200 million registered users, 70 million monthly listeners and 6,3 million paid subscribers 
  • Number of artists on platform: 100 000 
  • Most-thumbed song of 2021: WAP by Cardi B and Megan Thee Stallion
  • Pay per stream: $0.00133 

Advantages of Pandora:

  • Pandora accounts for 8 percent of all radio listening hours in the US, making it the number one radio station in most of the US
  • The algorithm is geared towards connecting listeners with artists they might like, but not yet know

Disadvantages of Pandora:

  • Pandora music is only available inside the United States
  • Pandora is a curated music services, which means they must approve your songs before you can publish them on the platform
  • Low pay per stream

Amazon Music for Hip-Hop Artists:

The internet giant Amazon has also entered the battle over music streaming. With over 55 million users, it holds the third-biggest share of the global music streaming market, right after Spotify and Apple. Amazon pays its artists in three different ways: If Amazon Prime listeners listen to your song, you get an average pay-out of about $0.001 per stream. It also gives you a pay-out of around 0,0109 per stream on Amazon Music Unlimited. Last but not least, you have the option of selling your music on Amazon by registering as an Amazon seller: If you do this, you will receive around $0.7 for every single bought, depending on the prices you have set. 

Amazon Music Statistics:

  • Amazon Music has over 50 million subscribers, while there are over 200 million Amazon Prime members (who also have access to Amazon Music) 
  • Number of artists on Amazon Music: 180 000
  • Top artist on Amazon Music: Taylor Swift
  • Pay per stream on Amazon Prime: $0.001
  • Pay per stream on Amazon Music:  $0.0109
  • Pay per song sold: $0.7

Advantages of Amazon Music: 

  • The platform has recently launched the app “Amazon Music for Artists”, which helps you better understand (and build) your audience
  • Amazon Music is integrated with Alexa. This means that you can connect to your audience via their smart home. 
  • You also have the option of selling your music on Amazon by registering as an Amazon seller 

Disadvantages of Amazon Music:

  • You need a music distributor to upload your songs to Amazon Music or sell your songs on Amazon 

Bandcamp for Hip-Hop Artists: 

Bandcamp is a platform that essentially lets you create your own web shop. You can use it to sell both physical and digital music, as well as merchandise to your fans. But Bandcamp is more than a store: It’s a community aimed at empowering artists and giving them a place of connecting directly to their existing fans. In addition, features like discover, tag hubs, artist recommendations, fan collections and music feeds also help you grow your fan base. A huge plus of Bandcamp is its payment structure: You can set your own pricing, and Bandcamp only charges you a 15% commission on downloads and a 10% commission on merchandise. Unsurprisingly, it has become the go-to place for many independent artists, who do not have a label or financial backing. 

Bandcamp statistics:

  • Bandcamp has 37 million monthly visitors 
  • 5 million albums sold in 2020 
  • Best-selling album: “The Vision Man” by David Kollar
  • Pay per music download: 85% of total price (you get to set your own prices)
  • Pay per merchandise item sold: 90% (you get to set your own prices) 

Advantages of Bandcamp:

  • You don’t need a music distributor
  • Bandcamp offers by far the most advantageous payment structure
  • You get to set your own prices and keep more than 80% of your revenue 
  • Bandcamp pays you instantly, rather than quarterly
  • Bandcamp has a reputation for undiscovered and underground music
  • You can offer your music for free and ask for donations instead of payment
  • Bandcamp also has a vinyl-pressing service, which allows fans to pre-order a vinyl record. This means you can sell vinyl-copies of your music without needing to pay anything upfront. 

Disadvantages of Bandcamp:

  • Their algorithm isn’t as developed, as the algorithms of Amazon, Spotify & Co 
  • The platform is comparatively small 

SoundCloud for Hip-Hop Artists:

SoundCloud is a platform that allows you to share your music without an intermediary. You don’t even need to pay a subscription fee to start sharing your music. While this is a huge advantage for artists who want to test the waters and start building a fan base, the low barrier to entry also makes it harder for you to gain a solid base of listeners: As there are 30 million content creators and only 76 million registered users, there are only 2,5 listeners to every artist. In short: A large chunk of content creators on SoundCloud get few or even no listeners at all. 

Despite this, SoundCloud is a platform worth paying attention to:  The company recently landed in the news for introducing a “fan powered” structure for royalty payments. Instead of throwing all the money gained via subscription fees (and ads) into a pot and distributing a percentage of it back to the artists based on market share, a percentage of the money from each subscriber goes directly to the artists they are actually listening to. This payment structure is likely to be very beneficial for artists with a small, but loyal fan base. 

SoundCloud Statistics: 

-Soundcloud has 76 million registered users and 175 million active monthly listeners 

- number of artists on SoundCloud: 30 million 

- most streamed song of 2021: “Rapstar” by Polo G

- top SoundCloud artist of 2021: YoungBoy

- pay per stream: approximately $0.0025 - $4

Advantages of SoundCloud: 

  • You do not need a music distributor or label to share your songs to SoundCloud 
  • SoundCloud has introduced a fan-powered royalty system, which means that each listeners' subscription revenue is distributed directly between the artists a particular user listens to. This can increase your revenue tremendously if you have a small but committed fan base.
  • Selected artists can also choose to let SoundCloud distribute their music to other platforms (like Apple Music) without losing the rights to their music
  • You don’t need to join a paid membership to start sharing your music 

Disadvantages of SoundCloud: 

  • Due to the large number of creators and relatively small number of active listeners, your music may never get listened to 
  • If you want to start making money with your music, you need to join SoundCloud Pro, which costs $4.99 per month 

TIDAL for Hip-Hop Artists: 

TIDAL was founded by Jay-Z and later acquired by the fintech company Square. Having been founded by a musician, it’s not a big surprise that it offers a better deal to artists than many of its competitors: While it’s average royalty payment has always been at around one $0,012 per song, TIDAL has recently introduced a fan-centered royalty system, wherein the money paid by each individual subscriber gets split among the artists that particular person is actually listening to. A second payment-feature worth nothing is the recently launched Direct Artists Payout program. The idea behind the Direct Artist Payout system is simple: TIDAL’s algorithm determines the most-listened-to-artist of a particular user and pays 10% of that user’s subscription fee directly to the artist. Another key advantage of TIDAL is its above average music and video quality, which enables your listeners to hear the track exactly in the quality you intended. Last but not least, TIDAL has launched TIDAL Rising, which is a program aimed at promoting up-and-coming artists. While all of this sounds good, TIDAL has experienced a fair bit of controversy: It has been criticized for its comparatively high subscription fee. Also, there has been some dispute over TIDAL’s claims surrounding their subscriber-numbers and audio quality. Some artists including Kanye West have also left or filed lawsuits against TIDAL over money disputes. 

TIDAL statistics:

  • Number of subscribers: 3 million in 2016 (more recent numbers are unknown) 
  • Most played song: In my Room (Yellow Claw, Mustard, Ty Dolla $ign, Tyga) 
  • Pay per stream: minimum of 0.012$ per stream 

Advantages of TIDAL:

  • The most hip-hop centric of all the platforms on this list 
  • Created by an artist for other artists 
  • Above average royalties for artists 
  • The Direct Artist Payout program and fan-centered royalty system help artists with smaller fan bases make money off their music 
  • You can share your songs and music videos on this platform 
  • Above average sound and video quality 
  • It offers a lot of exclusive content other platforms don’t, making it a go-to-place for hip-hop fans 
  • You can also sell concert tickets and exclusive access to meet and greets, livestreams and other content on TIDAL 

Disadvantages of TIDAL: 

  • The subscription fee is comparatively high
  • You cannot upload music to TIDAL without a distributor 
  • There has been a fair bit of controversy surrounding the platform 

Napster for Hip-Hop Artists:

While the music-piracy platform Napster has been credited with “nearly killing the music industry”, you may be surprised to learn that the company has not only turned legit, but also pay one of the highest per-stream-rates in the industry. While it only holds a comparatively small share of the music-streaming-market, this is definitely a platform worth looking into: 

Napster Statistics: 

-In December 2020 Napster had over 5 million users

-most popular artist: Drake 

Per stream pay: $0,01682

Advantages of Napster: 

  • Napster pays one of the highest royalties in the industry 
  • Good audio quality 

Disadvantages of Napster: 

  • You need a distributor to upload your music to Napster

Conclusion: 

As you can see from the examples above, each platform comes with its own advantages and disadvantages. If you want to gain exposure and increase the chances of people getting to know (and falling in love with) your music, it is definitely worth sharing your music on multiple platforms. While the platforms above are among the most popular among music artists, there is plenty more to discover: You may also consider looking into a platform like Reverb Nation, Deezer, Yandex, Slacker Radio, KKBox, GooglePlay and Pandora music. If you are looking to target the Asian market, Tencent Music (China) and Gaana Music (India) may also be of interest to you. We also highly recommend using TikTok and Instagram as a way of sharing and promoting your music. If you become popular on social media, it can help you secure advertising deals, sell more merchandise and  increase your music streams (and royalty income) on other platforms.  

Also, it’s important to remember that the royalty payment systems of most platforms are complicated. Depending on a platform’s payment structure and who owns the rights to your music, the money that ends up in your bank account at the end of the month may end up being much lower than hoped.  

As a rule of thumb, a fan-based royalty system is more likely to benefit you, as it allows you to make money with a smaller fan-base. Also keep in mind that only Bandcamp, SoundCloud and YouTube don’t require you to have a music distributor or label in order to start sharing your music.  

Feeling overwhelmed? 

Music Distributers like Amuse, Distrokid, CD Baby, LANDR or Tunecore can help you get your music distributed to several (or all) of these platforms. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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