Dr Dre, Beats, and Hip Hop Wealth

Dr. Dre, Beats, and the Source* of Hip-Hop Wealth

By now you have heard of the alleged pending Beats by Apple deal. If not, here's what you've missed:

• Apple is set to purchase Beats by Dre for $3.2B
• Dr. Dre is rumored to get $800M-1B out of the deal
• Dr. Dre is set to become the richest rapper alive
• Apple has a LOT of cash
• Jimmy Iovine is set to become an Apple exec
• Pundits can't agree if the acquisition is a good move by Apple
• Pundits can't agree what part of Beats Apple wants the most
  • Hardware
  • Jimmy
  • Beats streaming service

Since all of these topics have been beat* to death over the past couple weeks, I'd like to take a look at a topic I haven't really heard mentioned. The source of wealth for 4 out of the top 5 richest rappers (according to Forbes).

Assuming the deal goes through, which I believe it will, here's the new list of the 5 richest rappers and the source of their wealth.

#1 - Dr. Dre

Net Worth: $800M - $1B

Source of wealth: Dr. Dre wasn't a poor guy before the Apple acquisition (if it happens). Beats by Dre owns 2/3rds of the premium ($100+) headphone market and Forbes already had him pegged at a healthy $550M days before the Apple deal hit the airwaves.

Beats rise to the top reads like a season of Game of Thrones. Originally a partner with Monster Audio, Beats has always focused on producing high-quality products (allegedly, I own some Audio Technicas). But that's not why everybody buys them. Dr. Dre & Jimmy leveraged their access to the Interscope talent pool and created an entourage of Beats-touting brand ambassadors. They leaned on this network of ambassadors to successfully create a lifestyle/fashion brand with Dr. Dre front and center.

#2 - Diddy

Net Worth: $700M

Source of wealth: Let's be frank. Diddy was never going to build such substantial wealth on his music alone. He's produced some nostalgic classics, but he's hardly what I would call a lyrical mastermind. With a hip hop vocabulary of only 4,429 words (that's $158,049/word), Diddy's vocab represents only 80% of Shakespeare's registered lexicon.

What Diddy lacks in hip hop vocab, he more than makes up for with in boardroom acumen. Diddy's wealth continues to pour in* from numerous business deals. He recently partnered with cable giant Comcast to launch his own TV channel REVOLT. Prior to that he cut a deal with the world's largest producer of sprits to serve as a brand ambassador for the stumbling vodka brand Ciroc. His ambassadorship earns him a healthy 8 figures a year, plus 9 figures if Ciroc is ever sold, money he arguably deserves. Prior to hiring the artist formally known as Puff, Ciroc was selling a meagre 40,000 cases a year. Diddy's endoresment has since pushed those numbers into the millions.

#3 - Jay-Z

Net Worth: $520M

Source of wealth: Spot the trend yet? Like the previous three rappers on this list, the majority of Hov's wealth has come from non-musical ventures and Hov has a lot of them. $200M+ came from the sale his of clothing brand Rocawear. Another $150M came from a deal he cut with Live Nation. Recently Jay's sports management company Roc Nation Sports has been netting* him some healthy returns.

#4 - 50 Cent

Net Worth: $150M

Source of wealth: Arguably one of the most commercially successful rappers of the 2000's, 50 cent originally rose to fame thanks to fellow rappers Dr. Dre and Eminem. Despite his commercial success as a musician, the majority of 50's wealth comes from a deal he cut with Vitamin Water during the height of his musical career.

Vitamin Water owner Glaceau approached 50 with an offer to partner on a new Vitamin water flavor, "Formula 50." 50 Cent, already a fan of the product, was on board. But 50 didn't want to cut a cash deal, he wanted equity. That decision paid out handsomely in 2007, when Glaceau was sold to Coca-Cola for $4.1B, earning 50 a rumored $100M+ (that's 10,000,000,000 cents).

#5 - Birdman

Net Worth: $150M

Source of wealth: Rap. Actually rap.

Hit it home

Although this list represents some of the most commercially successful rappers from the past couple decades, it highlights a key distinction that all marketers should pay close attention to.

The primary source of income for 4 out the 5 richest rappers on earth is as content marketers and brand ambassadors.

These savvy businessmen have created a lifestyle brand for themselves through the content they produce. Although they are paid well for their contributions as media producers, the majority of their income comes from their ability to align content and lifestyle with a product or service.

Like SEO professionals, they choose their words carefully. They work in partnerships and cross promote by featuring other artists on their albums.

As inbound marketers, they understand how to create value for the user through their content. You'll notice how infrequently Beats, Ciroc, Vitamin Water and Rocawear come up in their songs. The references are definitely present, but as a communications vehicle to tell the bigger story and not as a hard sell.

As referral marketers they know how to leverage their industry peers for financial gain. As the primary ambassadors for their products, they know what their peers need from them in order to endorse their products successfully. Beats knew it needed to create an exceptional product first. Identify their ideal brand ambassadors second, and then lean on endorsements and word of mouth referrals to sell that product.

It just so happens that their ideal brand ambassadors were signed to Interscope.

* See what I did there

You don't have to be a hip-hop mogul to leverage the power of brand ambassadors. Schedule a consultation with a member of our entourage to learn how you can increase your customers by 25% or more.