Hip Hop's 3 Wealthiest Artists Didn't Get Rich From Their Music
How did the once small art form of hip-hop become music's most consumed genre?
According to Forbes, hip-hop helped generate $26 billion in live music, $6 billion in publishing, and $30 billion in recorded songs just in a single year.
You never thought hip-hop would take it this far.
This is a look at three of its greatest artists who took the success they found in the industry and parlayed it into something bigger and better.
The Origins and Rapid Growth of Hip Hop Music
Hip-hop originated in the Bronx, NY in the late 70s. At the time, DJs like DJ Kool Herc would spin records at parties in apartment buildings.
People wanted to dance, so funk and R&B records were used.
Artists like James Brown were always a big hit because his songs featured several musical breaks.
The break is the portion of the song where the lyrics and most instruments drop out and just the bass and drums remain.
These moments would be the most popular at the parties as everyone enjoyed dancing to the breakbeats.
But these breaks were only a few seconds long. DJ Kool Herc realized if he got two copies of the same record, he could switch back and forth between the breakbeats and extend it for several minutes.
People loved this, and these extended breaks appealed to a specific type of dancers who later called themselves breakdancers.
The B-boys and B-girls would wait for the breaks in the music to showcase their best moves.
As these parties became bigger and bigger, the master of ceremonies — or MC — would announce when the next events would take place.
Instead of having to talk over a song with lyrics, the DJ would extend those breakbeats so everything the MC said could be heard.
From there, the MCs would start to use that time to elaborate on how great the party would be, or how great the DJ was.
This lead to bragging, which led to rehearsed lines, which lead to rhyming — and the birth of a new art form.
It didn’t take long for this new musical style to spread through the other boroughs of New York, then throughout America, and eventually the rest of the world.
The Best Artists Are Not Always the Wealthiest
The greatest artists in hip hop are not necessarily the wealthiest.
Some all-time greats include Rakim, Nas, The Notorious B.I.G., 2pac, Black Thought, and Andre 3000 among many others.
But the net worth of many of these artists is minimal compared to some of their peers.
Eminem is one of the most successful modern rappers with a reported net worth of around $230 million.
This is significant, as it’s mostly based on his music and recordings. But Marshall Mathers has not reached the level of some of his fellow cohorts.
Here’s a look at three of hip hop's wealthiest artists, how they continued to market themselves, and how they built their fortune away from the music.
Andre Ronelle Young, known as Dr. Dre, is the self-appointed first billionaire of hip hop.
He may not actually be a billionaire, but Forbes has his net worth listed at around $770 million.
Dr. Dre started as part of the infamous N.W.A. before branching off into a solo career.
His early earnings were through music including his own record label Aftermath, which brought us artists such as Eminem and 50 Cent.
Dr. Dre’s first investments away from music included buying several luxury properties around Los Angeles.
Dr. Dre — along with record executive and entrepreneur Jimmy Iovine — also donated $70 million to create the Jimmy Iovine and Andre Young Academy for Arts, Technology, and the Business of Innovation.
In 2006, Dre and Iovine teamed up to launch Beats Electronics.
Dre had constantly been receiving endorsement deals over the decades, but rarely took any.
A sneaker company approached him and he mentioned it to Iovine. Iovine was looking for a new project and said speakers would be a better way to go than sneakers.
The first Beats by Dre headphones were released in 2008 and became a pop culture phenomenon.
Endorsed by pro athletes and celebrities, Beats by Dre headphones were the ultimate accessory.
They also came up with the idea of a streaming music service — but it was slow to catch on.
In May 2014, Apple acquired Beats Electronics. For $3 billion, Apple got the headphones, Beats Music, and the streaming service which would go on to become Apple Music.
Dr. Dre now became one of the wealthiest artists in the world.
If you’re an entrepreneur at any level, please watch the documentary The Defiant Ones.
This 4-part series is a look at the similar career trajectories of Dr. Dre and Jimmy Iovine.
It is definitely NSFW but is a must-watch to see what the relentless pursuit of a goal really looks like.
If you think you know what hard work looks like, this documentary will actually show you.
Dr. Dre claimed himself to be the first hip-hop billionaire, but that title appears to belong to Shawn Corey Carter, known as Jay-Z.
Carter famously started dealing "illegal substances" in his younger days but also had an affinity for hip-hop.
After recording his first songs, he used the same approach he learned selling illegal susbstances so that he could sell his music.
I sold kilos of coke, I’m guessin’ I can sell CDs. I’m not a businessman; I’m a business, man.
Jay-Z is one of the most famous rappers of all time, combining legitimate talent, street credibility, and remarkable success.
Nearly three decades of music have allowed him to invest his money in other enterprises which would build his real wealth.
As of 2019, Business Insider has his net worth valued at 1 billion. Here’s how he did it.
1. A clothing line
Rocawear Clothing was one of Jay-Z’s first big investments with the money he made from hip-hop. He co-founded the start-up business in 1999, and it was sold for $204 million in 2007.
Jay-Z bought a small percentage of the New Jersey Nets in 2003. When they were moved to Brooklyn in 2012, his influence helped to rebrand the entire image of the team.
Even though it was just a small percentage, he sold his portion of the team in 2013 for a half-million dollars.
3. Tidal music
The streaming service has been the bread and butter of Jay-Z’s wealth. The rapper bought it in 2015 for $56 million.
They launched the platform as an artist-owned service that had higher streaming quality than competitors.
In 2017, Sprint bought 33% of the company for $200 million. Today, Tidal is worth $600 million.
In 2014, he bought Armand de Brignac. He is also part owner of D’Usse, which is a brand of cognac made by Bacardi.
The champagne goes for $125 a glass, and according to Forbes, he’s made an estimated $310 million from it. D’Usse also gets him a paltry $100 million.
As I’m editing this, Jay-Z has just sold 50% of the company to LVMH who owns Dom Perignon and Moet & Chandon.
Here are a few more things Jay-Z has invested in:
- $70 million investment in Uber
- Roc Nation Entertainment
- a $70 million art collection
- Real estate holdings of $75 million
Jay-Z may be the investment example of the future. Back in 2010, Jay-Z met with Warren Buffett for lunch.
The then 40-year-old Jay-Z and 80-year-old Buffet had much more in common than they realized.
Buffet saw the potential with Jay-Z, even though the hip-hop legend was just getting started in the business world.
Buffet said that Jay-Z was teaching in a much bigger classroom than he ever had to teach in.
Buffet also said that for any young person growing up, Jay-Z was the guy to look to.
Puff Daddy? P. Diddy? Diddy? Whatever Sean Combs now calls himself, he’s been successful.
The hip-hop artist and producer took the money earned through his music — and Bad Boy Records — and turned that into a $740 million empire.
One big way he did this was through beverage companies. It seems that every celebrity now has some kind of liquor associated with them — but Combs was one of the first.
He started with Ciroc Vodka, which has become a sizeable piece of his fortune.
At its peak, Ciroc was selling 2.6 million 9-liter cases a year. He also has ownership in DeLeón Tequila and Aquahydrate alkaline water.
Clothing has been a big part of Combs’ wealth as he started the Sean Jean clothing line. Some of his other holdings include the Revolt cable network.
Forbes considered him one of the world's greatest business minds. Combs does this by giving his customers his best but servicing them differently.
He says it doesn’t matter if it’s music, clothing, or the vodka — he plans to get a return on his hard work.
This goes back to when he was 12 years old and started a paper route.
Once he saw how to service people, how to do a good job, and get paid for it, he wanted to be the best in whatever he did.
The interesting thing here is that Dr. Dre and Sean Combs never confessed to being elite-level rappers.
They knew they were mediocre at best, but made up for that with hard work.
Jay-Z is one of the greatest of all time, but that didn’t prevent him from working hard either.
What these three have done is taken that work ethic they developed in music and applied it to the entrepreneurial world.
The key takeaway is about leveraging what you have into something bigger — even if it’s on a smaller scale.
It’s also about not being afraid to venture into unfamiliar territory.
As simple as it is, the three hip-hop legends speak about how hard work is the determining factor behind success.
We have to be willing to work for what we want, look out for opportunities, and be able to adapt when needed. As Jay Z once said:
Momma ain't raised no fool. Put me anywhere on God’s green earth, I’ll triple my worth.