Chance The Rapper is having a great September.
A year ago, the Chicago rapper had built a steady local buzz in Chicago high schools on the strength of his debut tape 10 Day. But while the rest of the world reeled from the city’s provocative street rap scene, he remained a local star.
With the release of singles "Juice," "Acid Rain," and then his full tape Acid Rap earlier this year, however, he became one of the most buzzed-about artists in the country. The entire industry wants to sign him. As described in our recent cover story on the rapper, his manager, the 21-year-old Patrick Corcoran, is regularly fielding calls from folks like Lyor Cohen and Nigel Mack. Shady Records has shown interest. False rumors that he was signed over the summer led to speculation (based on his own tweets) that he was offered as much as $7 million.
Despite all the attention, Chance The Rapper has yet to sign with any label. He toured the country in an RV, opening for Mac Miller on his Space Migration Tour, and living on a budget. "Chance and Pat aren't after the quick buck," Andrew Barber of Fake Shore Drive told me. "People are currently dangling a lot of money in front of them, but they're in it for the long game. They want to control their own destiny and call their own shots." So far, this seems like a wise decision; months after Acid Rap was released, a bootleg of the free tape charted on Billboard, and the rapper’s career was still on the ascent. In mid-August, Chance revealed via Instagram that he was heading to Europe, opening for one of his idols, Eminem, as well as Kendrick Lamar.
But this month was his biggest look to date. Chance spent September opening up for Macklemore—easily hip-hop’s biggest new star, even if he’s not particularly popular on hip-hop radio—throughout Europe. He also appeared on Lil Wayne’s Dedication 5, with the scene-stealing "You Song." (In 2013, it takes a full-on song, from beat to hook to concept, to play the role a scene-stealing verse might have done a decade earlier.) And, of course, in September, Complex put Chance on our "Fast Forward" cover—a first for a completely unsigned artist and a major music magazine.
We're now entering a new era of the independent hip-hop star. Even as widespread downloading has undercut the amount of money artists can make from music as a physical product, it also enabled artists to reach out and interact directly with their fanbases.
While we here at Complex are clearly publication visionaries charting a new course for the entire industry by making such a bold, revolutionary move, there’s an element of this that feels like discovering the Mississippi River—it was going to happen eventually. Because we're now entering a new era of the independent hip-hop star. Even as widespread downloading has undercut the amount of money artists can make from music as a physical product, it also enabled artists to reach out and interact directly with their fanbases. Since that time, the industry has been shedding inessential jobs.
One only needs to look at Forbes magazine's latest "Cash Kings" list of the genre's top earners to see the shifting sands. Although old wealth reigns at the top of the list—Puffy and Jay Z are No.s 1 and 2, respectively—further down the list, independent stalwart Tech N9ne sits at No. 18, with revenues of $7.5 million. That's a $1.5 million increase from his income the previous year. It's also one place above 50 Cent, as clear of a symbol of the major label system's old hegemonic success as there ever was. 50, one of the most successful major label hip-hop stories of the early 2000s, made $7 million in 2013.
Of course, this is primarily of symbolic importance. Forbes measures a rapper's total income, and on 50 Cent's part, his income is more tied up in business than music these days anyway. What is amazing about Tech N9ne's story, though, is that his income is almost entirely music-related, and conducted without the blessing of the majors. In this accompanying story, published yesterday, he and his business partner Travis O'Guin explain how they made the rapper's Strange Music labels into a multi-million dollar (they claim $20 million in yearly revenues) independent business. Merchandise brings them $6.1 million. Music sales bring $6.5 million. And touring makes Strange Music $7 million.
Merchandise comes in directly from manufacturers, mostly in China, leading to astounding margins (the average cost of a t-shirt that retails for $25 is about $3). CDs and LPs are pressed independently through a distribution agreement with Fontana (giving Tech a cut that’s perhaps six or seven times as much as he would receive at a major label). Strange Music slices off another layer of cost by owning its own fleet of 23 tour vehicles, enough to take $1.7 million worth of merchandise on a recent tour (O’Guin says they refilled the trucks three times). And then there are the endorsements.
The label's successes, at this point, don't rest solely on Tech N9ne's shoulders. Earlier this month, Billboard reported that his Strange Music label has knocked more albums—eight—onto Billboard's rap chart than any other label, majors included. The only label to come close at the time was Cash Money Records with four. (Drake's latest album seems likely to nudge that number up to five.)
Tech N9ne isn't the only rapper to go independent in recent times and find considerable success. Macklemore, after all, has become one of the genre's biggest stars outside of the major label system. And independent artists aren't even new to hip-hop. Too $hort made a career selling tapes out the trunk in the '80s, and E-40 made a two-decade career doing it on his own. And labels like No Limit and Cash Money made landmark distribution deals that gave them considerably more control over their catalogs and revenues than had been true for previous generations of artists.
When we spoke with Chance and his manager, Patrick Corcoran, for this month's cover story, their hesitancy to sign seemed like it was more about keeping all their options open, rather than an antipathy to the major label system.
When we spoke with Chance and his manager, Patrick Corcoran, for this month's cover story, their hesitancy to sign seemed like it was more about keeping all their options open, rather than an antipathy to the major label system. There may come a time when it's smart for Chance to sign to a major label; after all, for a 20-year-old rapper and his 21-year-old manager, maximizing his potential—not even just financially, but when reaching for the widest possible audience—will require some kind of investment.
To get their work in stores, independent artists like Tech N9ne and Macklemore still rely upon major distributors like Fontana and American Distribution Alliance. But perhaps, should Chance and Pat decide to go it alone, they could look to Dom Kennedy, an independent rapper who has passed on offers from Interscope and MMG. (He once told Q104.7 that he wouldn't sign for less than $2 million.) Dom has established a direct deal with Best Buy to distribute his newest album, Get Home Safely, due out October 15, bypassing even the major distribution networks. In the words of the L.A. Weekly's Kris Ex, such a direct distribution deal is "unheard of."
Ex's argument is that deals like this, which remove the friction between the artists and fans, will only help artists who've been otherwise ignored by industry gatekeepers. But even for highly sought after artists like Chance, direct connection with fans has lessened the need for a major label to facilitate exposure to a wider audience. Chance has already opened for several of hip-hop's biggest names without being signed to even an independent.
Even if he does end up signing with a major label, it'll be on terms set in a new world, in which many of the middlemen are being cut out of the picture, and the services the labels can provide are narrower than ever before.