Chance the Rapper: A Case Study in Streaming Success

The transition from physical media and digital downloads to streaming music has not been without speedbumps. Artists have been reluctant to give up royalties from sales for the much less lucrative streaming royalties, but the fight seems to be nearing an end. Physical sales are nearly non-existent and the new benchmark of success is number of streams, but that doesn’t mean everyone in the industry is falling in line. Artists like Taylor Swift have been adamant about seeking fair streaming deals and Thom Yorke has pulled his solo albums from streaming altogether, but there is a new kid on the block who is rewriting the monetization playbook in this streaming-first era.

Chance the Rapper came onto the hip-hop scene in 2011 with the release of his self-published mixtape 10 Day. By making his first foray into music freely available via the mixtape-sharing platform Datpiff, Chance was able to catch the interest of Complex and Forbes magazine purely on word of mouth. From that popularity Chance had two options: the first was to take a record deal and be subsumed into the machinery of the established music industry, and the second was to build upon his grassroots popularity and continue working independently. Chance chose to work independent of a music label and made it his mission to make his music freely available to his fans. To date, Chance has not sold any of his music in a traditional physical or downloadable form—his music is available for free across most streaming services.

How does an artist make a living with this streaming-only model when we know the typical royalty is somewhere in the neighborhood of $0.005 per play? Rather than simply selling recorded music, Chance sells experiences and lifestyle. He leverages the popularity that he was able to quickly build through his music to continuously sell out live shows in seconds. On top of touring, Chance has positioned himself as a budding hip-hop fashion icon. Following in the footsteps of his mentor Kanye West, Chance has developed a line of very sought-after streetwear.

This model of giving music away for free and using it as a marketing tool for more tangible sources of revenue appears to be working and the industry is paying attention. Apple recently payed $500,000 for one week of streaming exclusivity of Chance’s newest project, Coloring Book, and he and his army of loyal followers nearly single-handedly forced the Grammys to accommodate streaming-only artists, where he won the Best New Artist award this year.

Of course, this isn’t to say that album sales don’t matter anymore but rather to say that the target audience matters. Hip-hop is consumed largely by a younger demographic, a group of people that you might call digital natives. This group has grown up with the expectation that music should be free, initially via unauthorized sharing and then through the explosion of streaming services of the late aughts. Chance and other up-and-coming artists have recognized the need to adapt to meet the appetite for streaming music, and we can expect to see further development of more creative and diverse models for success in the future.

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