The hip-hop economy goes free trade

April 25, 2012: 10:39 AM ET

Rappers have long collaborated for artistic and aesthetic reasons. But over the past few years, a pattern of cross-pollination has become increasingly important to the bottom line.

By Daniel Roberts, reporter

kanye_jay-zFORTUNE -- One word appears repeatedly among the top-rated rap songs on iTunes and Spotify. It is not a piece of in-vogue argot or even a masked expletive; it's the word "featuring." Of the top 20 singles on Billboard's R&B/Hip-Hop chart, 10 have at least one guest vocalist. Two feature more than one guest, many of them with familiar names like Drake, Chris Brown, Rihanna, Young Jeezy and Tyga. "The biggest artist in the world right now is Featuring. That guy is on every record," jokes Peter Paterno, Dr. Dre's attorney.

Hip-hop and rap have long relied on collaboration, sampling and remixing. But the guest appearance has gone from simply a part of the artistic fabric of rap to a core feature of its commercial success. "Rap artists have become more entrepreneurial as a necessity, and they've realized a big part of them breaking is to get others on their songs," says Warner Music (TWX) co-CEO Todd Moscowitz, previously general manager at Def Jam Records. "It's not just about singles for radio, it's about ubiquity. They gain fans from each artist they do a record with."

Exhibit A: Kanye West's album My Beautiful Dark Twisted Fantasy, which was released in November 2010. It contained an astounding 22 guest vocalists including Nicki Minaj, Swizz Beatz, as well as Wu-Tang Clan members RZA and Raekwon. Bon Iver, Pusha T, and Rick Ross each appear on multiple tracks. One song, "All of the Lights," has vocals from John Legend, The-Dream, Tony Williams, Ryan Leslie, Charlie Wilson, Elly Jackson, Alicia Keys, Fergie, Kid Cudi, Rihanna and Elton John. And in the weeks leading up to the album's official release, West posted a new single every week online, calling them G.O.O.D. Friday tracks after his label. Each featured guest vocalists such as Justin Bieber and Lupe Fiasco.

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The economics have shifted along with the trend. Artists no longer necessarily get paid simply for appearing on a major release. "It's almost always just a trade now, where one artist will do a verse on someone's album for a guest verse on their own record," says Moscowitz. The prize is exposure, plus gains reaped down the line from new fans and opportunities like concerts or merchandising deals. When they are paid, compensation is often a flat fee, with bigger stars pulling as much as $100,000 per track. Advances against future royalties or copyright credits are also common.

Many agreements -- especially ones that have no financial component -- are made on a whim. Ryan Leslie, a producer and R&B singer, says there are so few big studios left in New York that artists will often find themselves in close proximity. "There's a studio video of me making a record for Fabolous, and Keri Hilson just happened to be in an adjacent room recording, so it turned into a single," he says. The same thing happened with the G.O.O.D. Friday song "Christian Dior Denim Flow." Leslie explains, "It just happened that the night I came by to see 'Ye, everybody was in the studio. He looked around and said, 'Man, we've got John Legend, Kid Cudi, Lloyd Banks, Ryan... We gotta do something.' I went over to the keys, the beat got laid, Banks and Cudi did their verses. It was a very open and collaborative vibe." When that happens, he adds, "I don't worry about the back end."

That can lead to problems, however. Tony Girakhoo, known as Tony G. and a scout for 50 Cent's label G-Unit, notes that the people on that "back end" usually do worry. "An artist like Nicki Minaj might be hanging out with another artist in the studio and say 'Hey, I'll jump on this song,' so they cut a record," he says. "But then management won't clear it. They'll say, 'Listen, we're putting out this or these two singles first, and we have all these marketing dollars behind it, we don't want to confuse the public with a feature right now.'" Thus there are a number of great collaborations that are never heard.

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That typically leads artists to leak songs onto the Internet. "If it's four marquee names and the song gets nixed by the label," Tony G. says, "often the artist will say 'I don't want to deal with this, it's not worth the headache, let's just leak it as a promo and move on.'" That doesn't necessarily mean the collaboration was a waste. "Unfortunately, says rap veteran Busta Rhymes, "the attention span is not as long as it used to be, thanks to the Internet. So you have to keep feeding the streets with your music." Tony G. concurs, "You're not just an artist anymore, you're a brand. You have to tie everything in: your social media, your whole crew, your features with other artists."

A decade ago, labels would make serious investments to get a verse from one big name on their client's single, especially when they thought it could become a hot radio track. But radio is no longer the goal, and often neither is a star guest. Having a number of fresh, young artists on a track, even if they are not well-known, can be the key to making a song go viral. Established artists like Jay-Z and Kanye West benefit from working with young rappers by staying relevant and expanding their brands. Younger artists, in turn, get more exposure. J. Cole, Kid Cudi, Wale and Big Sean made names for themselves by making cameos on tracks with an established mentor.

One element the trend has displaced is the old-school rap group. Increasingly, artists have allegiance to their label but continue to function chiefly as individuals. There are exceptions, but for the most part, the days of collective groups like Run DMC, De La Soul, or NWA appear to be fading. That isn't an entirely welcome phenomenon. Paterno believes that with the move away from groups, rap has lost something important: "People like Wu-Tang or NWA, they would sell without hits. They were a lifestyle. They mattered to people. I don't think most artists today matter to anybody as soon as they stop having hits."

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Do artists worry about overexposure? Stalley, a 25-year-old from Ohio who signed with Rick Ross's Maybach Music label last year, says he is cautious. "I don't jump on records with people just because they're hot right now. I want people to know my brand, and my music, and what I stand for, before I get to hoppin' on everybody's track." Busta doesn't see the same risk. For him, it's simple: "You can put out ten thousand features. If they're all good, then you're good."

Of course, only time can tell whether singles heavy with eight different vocalists are a permanent trend. "There ain't too many more 10-year veterans still poppin' in this game we call hip-hop and rap music," adds Busta Rhymes. "So, you know, after five albums, let's see where some of these hot dudes are. In five years we can revisit this, and we'll know who really stuck around. I for one will definitely be here still busting ass." And this from one of the most avid collaborators in the business.

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