TEXT OF INTERVIEW
Kai Ryssdal: You’re probably not going to find the names Shawn Carter or Curtis Jackson on any list of Who’s Who in American Business. But if you look them up under their stage names, you might have more luck.
Jay-Z and 50 Cent are two of the better-known hip-hop artists out there. They’re also on the top of the new Forbes magazine list of hip hop’s cash kings.
Lea Goldman’s an associate editor at Forbes. Lea, good to have you with us.
Lea Goldman: Thanks for having me.
Ryssdal: Now, I’m not the biggest hip-hop fan in the world, but even I know that these guys have been topping the charts for awhile. Why is it so surprising that they’re making all this money?
Goldman: It’s not necessarily a pioneering or new thing, but what we found in recent years in particular is that the numbers keep growing in terms of their earnings, as the music industry in general is in a slump and is suffering with the, you know, with the digital world. So in general, the music industry is in this weird crisis moment, and yet hip-hop artists seem to be doing incredibly well nonetheless. So we thought it was worth looking at and taking a look at how much these guys were making.
Ryssdal: How much are they making, and more importantly, why?
Goldman: Well, in total, the 20 guys on our list — and they are all men — made $350 million. The top on the list is Jay-Z with $34 million. Why? Because they are smart enough to know that it’s not just about selling albums. That’ll keep you going for maybe two, three years tops. It’s about building an empire and plowing those earnings into lasting businesses that will generate income long after the music stops selling.
Ryssdal: How is it that these guys are so smart and, you know, country music stars and regular rockers aren’t?
Goldman: I have to say that in hip-hop, from all the rappers we’ve spoken to and industry insiders, we’ve spoken a lot of the, they all point to one person as being the pioneer of the business model, and that’s Russell Simmons. Years and years ago, Russell Simmons came out. Guy wasn’t even much of a rapper, though he was involved in the rap scene, and said you know what, you could sell music, that’ll only take you so far. It’s about selling a lifestyle. You wanna . . . if you wanna sell music, sell them a t-shirt. Sell them a sneaker, sell them a drink, sell them a car. You can sell all those things with the music. It’s not just about what you listen to, it’s about who you are.
And now, only now are we seeing the pop stars recognize that and take that same business model to the next level. So you have women like Hillary Duff, so now she’s selling clothes and apparel and make-up and all this other stuff. Justin Timberlake just a couple weeks ago came out and announced he had his own imprint. This made big headlines, even though in hip-hop, having your own imprint is de rigeur. You’re nobody unless you have an imprint.
Ryssdal: Snoop Dogg, you can see him on TV doing ads, I think it’s with Lee Iacocca, right?
Goldman: Now what does that tell you about the corporatization of hip-hop?
Ryssdal: Well exactly. What risks do the companies face, though? I mean, because let’s be honest here, hip-hoppers sometimes have, you know, less than stellar reputations, they do some maybe not-so-smart things. Are the companies worried about being associated with that bad-boy image?
Goldman: They’re about as worried about it as they are about being associated with a woman like Lindsay Lohan. Let’s make no mistake about it, hip-hop unfortunately still has that reputation as being filled with thugs and criminals and whatnot — and perhaps deservedly so, given its roots. But it’s way beyond that now. That’s kind of the history of hip-hop, but it’s not the present reality. If you can point Hollywood’s excesses far . . . these days, far more than you can to hip-hop’s. What are the risks? You know, the same risks to branding a Kobe Bryant.
Ryssdal: There’s an element of hip-hop that’s sort of . . . it’s all about street cred, right? At least in the beginning. And now, aren’t these guys sort of selling out to the man, as it were?
Goldman: You know, that’s a very interesting question. Because authenticity at this point means you got a Blue Chip endorsement deal with HP. Being, you know, being truly successful in this industry means you have your own imprint with Warner Music or Universal or what have you. Forget street cred — it’s about how much money I’m making at the end of the year, and these guys know it.
Ryssdal: Lea Goldman’s an editor at Forbes. Leah, thanks a lot.
Goldman: Thank you.