When Success Doesn't Guarantee Financial Stability

How the Music Industry Creates More Dawn Robinsons than Beyoncés 

Hard to believe an artist who has sold millions of records might need to live in their car? Let’s math the math.  Image credit: Dawn Robinson’s Official YouTube 

Dawn Robinson, formerly one-fourth of the multi-platinum-selling R&B group En Vogue and one-third of the short-lived trio Lucy Pearl, announced on social media she has been living out of her car for the past three years. The news sent shock waves through the Black community, leading Robinson to later insist she is not homeless.  

Many R&B fans assume our favorite artists are flush with cash and living in a palatial mansion with maids and a private chef. Record companies and artists want you to believe celebrity life is better than ordinary life. Hence, we aspire to be like celebrities. We buy their records, wear their clothes and eat the foods they eat.

Some artists do make a substantial amount of money, but they are the exception. The reality is many of our favorite recording artists are not rich. Often, the houses they live in, the cars they drive and the jewelry they wear is either rented, borrowed or fake. Even the designer clothes on their backs may be “gifts” from a record or clothing company. Beneath the glitz and glamour, many are living paycheck to paycheck.  

The problem with that is every penny the label spends on the artist comes out of the artist's end, like good old-fashioned sharecropping, where the sharecropper pays the cost of fertilizer, pesticide and tools. In the artist’s case this includes advances on recording and video costs, hair and make-up, wardrobe, hotel fees, transportation fees, food costs, tour support, production fees, marketing, promotions and every other cost the record incurs. 

Texas rapper, Slim Thug found Robinson’s predicament bewildering. 

"Never should she do that. Look at the hits she made," said Slim Thug, during an Instagram live session. "Off them hits, she should still be getting enough money to pay some rent around this b*tch. I get a monthly check, every month. If them people owned their sh*t, they would be able to pay for something with their check."  

As a member of En Vogue, Lucy Pearl, and as a solo artist, Robinson has sold a total of 20 million records. She owns a portion of the publishing to several songs, including, “My Lovin’ (You’re Never Gonna Get It), “Hold On,” and “Free Your Mind.” 

To an extent, Slim Thug is right. With 20 million albums sold plus publishing rights to some songs, an artist like Robinson should be able to afford a place to stay, but success in the music industry does not guarantee financial stability. An artist’s pay for records sold is determined by a point system with one point worth 1% of the net sales of a record. 

Most new artists only receive about eight points from each sold record. If they have an escalation clause in their contract, the number of points increases. A gold record may get the artist 12 points, but if it goes platinum, it could increase to 18. Robinson’s points would be split with her bandmates, so when En Vogue’s “Born to Sing” went platinum, it might get 18 points that then gets divided by four, with each member getting 4.5 points. Seems fair, right? Wrong. Most major record labels take up to 90% of the net profits, leaving about 20% for the artists and writers to share.   

The problem with that is every penny the label spends on the artist comes out of the artist's end, like good old-fashioned sharecropping, where the sharecropper pays the cost of fertilizer, pesticide and tools. In the artist’s case this includes advances on recording and video costs, hair and make-up, wardrobe, hotel fees, transportation fees, food costs, tour support, production fees, marketing, promotions and every other cost the record incurs. 

These expenses must be recouped before the artist receives a dime. If the artist’s first record doesn’t recoup the debt, it’s rolled over to the next record’s budget, which means you start the next record already in debt from the last one. Now you have the debt of two records you have to recoup. And the cycle of debt and interest continues with each record, making it virtually impossible for artists to get paid any substantial amount. Again, like sharecropping. Even worse, after the artist pays for absolutely everything the record company can still hold 35 percent of their royalties for three years — and they can add three years’ worth of inflation to it all after the fact. 

Publishing ownership can be lucrative, but the value of certain songs can diminish or increase depending on popularity. The more people sing a song, sample and play it, and/or place it in films and commercials the more publishing revenue it generates. But streaming services have drastically reduced artists’ portion of publishing revenues to a fraction of a penny per stream, even for music owners. And with more music being released than ever before, it has become nearly impossible for an artist who is not a star to earn a living wage. Meanwhile, major record labels are posting huge profits. 

The lion’s share of a song’s profits goes to the person or company that owns the masters to the recording. People or companies that legally sell or broadcast music in any format must seek permission from the owner of the masters. But Robinson doesn’t own the masters to any of En Vogue’s hit songs. 

Some artists can also earn money touring and selling merchandise, either at concerts or online, but that can still be a struggle. With the advent of the 360-record deal, a substantial portion of tour and merchandise revenue goes to the label.   

Consider the costs of one tour: If the artist uses a booking agent, they’ll pay the agent 10 to 15% of their total earnings from the tour. If they are with a major booking agent like William Morris or Roc Nation, the fees can get higher. Add to this the cost of renting a tour bus, hotels, salaries and per diems for musicians, roadies, security, the tour manager and the bus driver, and the artist is probably not going to see a lot of money unless they’re Taylor Swift or Beyonce. 

In fact, it’s not unusual for an artist to complete a national tour and still end up broke. Playing live is becoming financially unsustainable, says David Martin, CEO of the Featured Artists Coalition. Needless to say, Robinson’s solo career didn’t yield a lot of hits, so it’s unlikely she could drum up revenue with a major tour.  

Robinson had a luxurious lifestyle at the height of her career, but her net worth today might be closer to $10k, according to some dubious reports. And while you can’t believe everything you read, there’s plenty of reason to suspect how that could happen in an industry like this.