Chance the Rapper vs. The Music Industry

Chance the Rapper isn’t actually some sort of messiah. He is major independent artist without the backing of a major record label. Chance the Rapper’s career is introducing a new way of playing ball in the music industry in a way that gives him way more control, protects his long term earnings, and doesn’t allow his likeness to be used for a post-mortem hologram tour. Chance the Rapper has accomplished a lot including, being the only rapper to win a Grammy without a physical release after helping convince the Academy to change requirements on nominations. He got Apple to release Surf for free on iTunes and got half a million for temporary exclusivity, and has made $6 millions on hats, all while being unsigned. Typically, an artist needs a huge backing to sustain a career at this scale and it has always been like this. However, Chance’s career has effectively disrupted pre-conceived notions on how to navigate a career in music. Chance’s success should prompt musicians to look at the process differently. I feel many artists don’t think about scale or don’t know how. Even if you don’t feel the need to win Grammy’s or play on live TV there is still much to learn from Chance and Co. about how to do business and brand as an artist to sustain a career.

Before the insight from Chance’s career, let me introduce how signing can work for artists. Artists want to eat and deals help artists do so. It is tempting to sign with the major uncertainty of sustaining a career in the long term. For example: After a while of doing it yourself, getting some press and building a fanbase, a scout or A&R might reach out and ask for a meeting. Maybe at this point you have a small team of friends helping, but no lawyer yet. Your excited because you hear about how labels can help get your music out there and take care of you. You don’t understand business and don’t have the means to so. You are excited that the label can take care of it. You take the meeting. They like your sound and want you to have a successful future, get you where you want to go. They audit your strategy and goals for the future: where do you want to go, how are you making money, are you protected legally. You and your team admit you haven’t thought that far ahead, but the label reps and A&R assure you it is fine after signing with them. You won’t have to worry about doing anything, but making good music. After the meeting you and your small camp discuss signing to this label and almost without hesitation decide to pursue.

You did it! Locked in for two albums. You sign over publishing and they own your masters. Non-negotiable, you tried to contest, but they only give you an exit cause if the first record completely completely flops, which it doesn’t. It’s met with critical and commercial success: access to bigger venues, more fans, and you and friends aren’t starving anymore. Prior to the tour you moved out into a place of your own with the advance. You aren’t super big so you can’t pay off all of your parent debt, but you can now truly help out. You go on your first big tour and although the tour life is not easy you get through it. You meet old and new internet supporters in person including some famous folks. People buy a lot merch so you don’t have to repay a lot of money. You don’t need all of the advance to record because you still get to use DIY methods. The label is very happy about the first release and you actually are in the black with them and don’t have to pay back anything. After touring you get to take a break and live life on your terms before the deadline is close. This is exactly what you wanted.

Months prior to the second record deadline, the label tell you they want to change your sound and lean heavier into P.R and videos, which isn’t cheap. Although the logical conclusion to a follow up is a change in sound, or an evolution, the label wants to lean into a pop-friendlier sound and branding in order to reach more people. You contest, but the label-appointed lawyer reminds you of your deal and you are obligated to give another record. Painfully, you craft the album with the label to come up with a more appealing sound and image. You aren’t completely dead inside due to the decision to sign yet, but being forced to make an album this way isn’t what you had in mind at the initial meeting. You also knowledge this is the only album you are required to make and those options are just that. After delivering this album and touring you would make peace with the label and do it yourself. You craft the album semi-passionately, but you unexpected earn a radio hit. Everyone in your camp (you included) are overjoyed, you have even more fans and you finally hear yourself on the radio. The single is selling like hotcakes. However, you only have a tiny percentage of the publishing and the label still has your masters. You tour even bigger, going around the world and being able to take your camp with you. You still haven’t made any money after the album and tour after recoupment. You are in the red with the label, will never see the radio again or huge acclaim again, you leave and decide to do it yourself.

One of the two main components in revealed within Chance’s career is his business strategy. Now by no means does a musician have to follow the exact same business model, but it is essential have long term goals and to work to those goals. Many musicians fear business and some assume it affects the creative process somehow. For some that might be the case, but if you want to earn money making music, you need a system and you or someone on your team need to understand how business works. For Chance he has always had a small team that allows more to get done then by himself, but small enough to be agile. Chance doesn’t get everything done by himself, but within his company he trusts a couple of people to work with him like Pat the Manager, his manager and Brandon Breaux, who designed the covers of all of Chance’s mixtapes. Keeping control and small also allows you to move fast, unlike Rich the Kid’s label who delayed one of his mixtapes and delayed the release of Migos’ Culture I. Teams are debatably necessary for scaling past the DIY scene to fulfill the larger demand for your brand.

Chance releases his music for free. Like you can go to DatPiff and download his music right now. Generally speaking this is a bad idea, how are you going to eat now? Especially at the lower level. Sometimes the reason an artist signs is for immediate financial reasons. The thought of an artist not collecting money for music downloads, is wild. How the hell do you make money? Streaming? With the rise of self-serve distribution online with services like TuneCore and Distrokid. You can keep all royalties and publishing, but streaming music does not play well at all, unless of course you are a big artist or can maintain music being rotated in playlists, college radio, or other influencer spaces. Additionally, for some sample clearing becomes simple. The concept of sample clearing comes from music copyright or in Chance’s words: wack shit. A copyright is a intellectual property in which the owner of has complete rights of usage for said property. When someone creates a song by themselves the song has two copyrights: master recording and composition. Master recording is the actual track as an MP3 and the composition is arrangement, lyrics, and melody. It’s really confusing to get into the nitty gritty, but when you hear artists talking about not signing away your publishing its because if a song hits big, you need to earn that money. Also, if the owner of the copyright of a song finds a sample is used its up to them to figure out what to do. Notoriously, though Frank Ocean released Nostalgia, Ultra for free and The Eagles wanted his legs. Also, In a video, Pat the Manager talks about how Chance wanted to sell Acid Rap after it came out, but their lawyers said it was a bad idea because there were uncleared samples. Putting it out for free can sometimes protect you from copyright owners, but I wouldn’t advise sampling a large body of work and just releasing it. Giving your music out for free also decreases the friction between you and a new audience member. But, just releasing music and asking for purchases is harder because people want to stream stream stream. I personally think free downloads are the wave. Get your music out there and as far out there as possible to peak the interests of sell something else. What most don’t know is that the music industry has been like that for a while now. This is what Will I Am spills about making money in the music industry in a interview with Wall Street Journal in 2014. And Chance knew this in 2013:

The main way Chance makes money now is touring, merch, and brand deals. To be able to make the first major tour, Chance and Co. got Red Bull to give them $20,000 and they brought a used van to tour with Mac Miller. Before that a big break for Chance was Donald and having him on tour (which got him some dough) and a spot on Royalty (see music advertisement). They met via a publicist after a Kids These Days show he opened for. I definitely think Donald’s push helped Chance and Co. go even further. Arming yourself with knowledge and striking at opportunities when possible will put you at the best position to win. When you tour do not tour alone and tour strategically. Chance wouldn’t be where he is without help of other artists and his fans. If you don’t have access to the biggest artists, go look around in the area for some popping artists and see if they would be interested in splitting the bill also use analytics data from streaming services to see where your fans might be. Additionally, festivals and schools might get you a pretty penny at the beginning of your career as opposed to smaller DIY shows.

Merch is an amazing way to make additional direct money at shows or passive income. I don’t believe that there is a magic formula to the success of merch, but I imagine shirts selling better than pens. When people buy merch they want to rep the brand. What the brand stands for, who is involved, and any feelings associated. Chance did a pretty cool thing with a college tour in 2014. He had made custom shirts for each stop from ojhays (an collaborator), limited run for the tour. Merch can also be very cheap to produce yourself like shirts, CDs (like Chance did) and USB drives. Buy somethings in bulk and get some supplies. More recently and famously Chance made the ‘Chance 3’ hats in preparation for Coloring Book’s release. A beautiful marriage of brand and business, instead of going to The White Sox, Chance did it himself making six million dollars on hats and claims others can do it too. Not his fault mostly because his was going to work with The White Sox, but they didn’t want to. Also, another new way to produce merch is drop shipping which becoming more accessible to artists themselves, in which you create the design and the dropshipper prints and fulfills. All in all, merch is a great way for an audience to connect with an artist and Chance shows that merch is an excellent way to make money and connect to fans.

Brand deals are another way of making money. This is where a lot of shakiness has come from for fans as they feel partnerships doesn’t make you independent. In my opinion, independence is majority stake in your brand and company. If you own your masters, if you own your publishing, if you have the right to work whoever you want, you are independent. Chance has said something similar. So, when Chance works with Kit Kat, Red Bull, and Apple Music he still has his masters he just is lending his brand temporarily to earn some money. However, record deals and brand deals are extremely similar. Each are bound by a contract that lays out the terms, definitions, and context of the relationship. Therefore each should be read and revised depending on the which each party wants. For example: a record deal could be $5,000 advance on a single release with the label splitting the publishing (you automatically get 50% and the label acts as publishing), but you own masters. Anytime you sell a song, you get the money for it, but when it’s streamed you only get a portion. Now, this is usually not negotiable unless you have some sort of clout. A brand deal is similar, but typically brands don’t use music copyright as collateral. A deal can look like: star in a online campaign of for Kit Kat for $30,000 for your likeness used (no music). You don’t have any ‘additional rights’ and sometimes there is a NDA before the campaign airs and you can’t say bad things about the brand online. You still have your music, you just can’t legally say anything bad about the brand. You have a lot less to lose in brand deals seems like a better deal than getting a platinum charting song on radio and not getting a penny. Chance and Co.’s business strategy taught me to own majority stake in myself and my company. For musicians, your music is everything and combined with new interneting efforts there other ways to make money ‘from’ your craft than signing or just selling music. Though business strategy is very important, without branding you strategy means nothing.

Branding is super important. Making sure your have some sort of a presence online is necessary even if your business model doesn’t need a number of fans to pay for things. Branding is a lot of things: it is the efforts you make to show your audience who and what you are and (typically more importantly) what your audience thinks about you. Now, branding even more than just business is different, like finding Christ won’t work for everyone, so don’t do that. First impressions are super important and continuing your story after your debut needs to be logical. Re-branding is sometimes necessary to move into different territories, but if you don’t transition properly you may leave your fans confused. When Chance announced Coloring Book and it was shown to be way different (the polar opposite) from Acid Rap, people were confused. Why and how did Chance change? People were lost and if you don’t answer that in a timely fashion, you can lose fans (not usually core fans, but skeptics and potential converts). Chance eventually addressed the change: seeing a friend die, overcoming Xanex addiction and having a child (Kensli) with his partner brought him closer to god. I think a lot of fans put themselves into others branding (it happens). Add that on top of a postmodern skepticism and healthy dose of agnosticism and you can understand a little bit on why people who fans before Acid Rap were critical of the rebranding. That situation reveals the need to know your audience before making brand decision like that. Of course, transparency is helpful, but I think protecting yourself over spilling everything is important and talking when it’s time. Not mentioned is the fact that being an artist is hard and requires a lot from you. Balance what you need to share and you’ll have energy for the interacting you’ll be doing with your audience.

Being able to answer questions and share updates to your audience is very important in maintaining connection to an audience. Without maintenance it is, not impossible to keep, but that method typically requires stand out work and the mysterious persona already established. Promotion is super important to all artists because if you aren’t establishing yourself inside the minds of your audience you won’t be heard. There are millions of ways to promote your brand and depending on your goals be ongoing or a campaign for a new project. Chance has been involved with a few, but I have two favorites tied to his music. First, is his 3 hat which has been seen with him so many times it is tied to his identity. Second was his poster campaign before Chance 3 dropped. Chance retweeted people who took pictures of the posters on Twitter. Although, these methods of promotion will not peak everyone’s interest, it will get people talking and activate fan’s as brand evangelists. Some fan’s might try to get their friends on of people will just be curious enough to check out Chance’s new music. Through Chance, I learned that branding is a matter of standing out against every single thing on the internet and trying to make sure people always choose you.

Chance is a superstar at this point and apparently isn’t even finished. Not all artists need or want that fame, but it’s still possible to learn a thing or two. Additionally, literally none of Chance’s money came from selling his music. I’ll repeat: none of Chance’s money came from selling his music. Chance knew the music was a advertisement for his brand and the rest of the money-making opportunities he has. Understanding the business and how to brand yourself can get you to your goals of having a career in music. Not everything is compatible with everyone, but business favors experimenting and disruption. At it most basic, business is just having fans and branding is getting people to talk about you. There are other ways to make money with your music that don’t directly involve selling or signing to a label. Borrow ideas from other industries. Patreon could enable a prolific producer like Knx to release music for free or selling your own tickets. Building your audience is a matter of reaching people: talk directly with people with influence, try Instagram Ads, blogs still work. The internet has open a ton of avenues for your own success mostly untouched by anyone else’s prerogative. Even though Pat the Manager admitted it was hard to do what Chance and Co. did but imagine being able to make music on your own terms, making more money, and opportunities in other fields. Depending on your deal, record labels can try to change what makes you, you and you could be one of the many stories of artists who were super jaded by working with a label.

However, if you smart, pull a Frank Ocean. negotiate a record deal, when you are rising and built a bit of a fanbase, let them pump money into a record you don’t care about, tour the record and get even more famous and put on to more fans and industry people, jump ship or get dropped, make another album and release using the press momentum, to sustain the rest of your music career, you build so big you buy your masters. This is obviously a hypothetical, but if you wanted to play the majors game, here’s a way.

But, what do I know: Chance is out here making $6 million dollars on just hats because of the way he built himself.

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