By Caroline Banton GOBankingRates.com
WWR Article Summary (tl;dr) Great article about how musician Macklemore's approach to business has paid off. By building partnerships, using social media and re-investing in himself, Macklemore is every bit the entrepreneur as he is an artist.
Millionaire musician Macklemore is a great example of how smart business habits, unconventional approaches and thriftiness can really pay off, particularly when other factors align.
"Macklemore's rise to fame was a perfect storm," said Julian Cordero, an entertainment lawyer in New York. "While Macklemore is very talented and appeals to different cultures, the direction of the music industry allowed him to propel himself into fame. An artist that can generate a buzz via social media, can bypass the music label and offer music directly to the consumer. ... (But) you do still have to be talented, and Macklemore is."
Ben Haggerty, aka Macklemore, was born on June 19, 1983, in Seattle. Since early childhood, he had a love for hip-hop. He was inspired after hearing Digital Underground for the first time at age 7, according to Billboard. By middle school, Haggerty was composing and penning his own songs, and his first EP was released when he was just 17 years old, according to Celebrity Net Worth.
The star has taken a frugal, unconventional and smart approach to business and money, earning a net worth of $18 million along the way. Here's how:
CHOOSE AN UNCONVENTIONAL PATH TO WEALTH Macklemore and fellow musician Ryan Lewis made a fortune in the music industry together by not following convention. The pair refused to succumb to the allure of a big record label and self-produced their own first album, "The Heist." Between 2009 and 2011, the duo released self-produced singles and mixtapes onto iTunes and social media outlets. On the West Coast, according to Celebrity Net Worth, they established a small cult following by playing any venue they could.
When they released "The Heist," the album sold almost 80,000 copies within a week and has sold over 1.2 million since then.
The video for the album's hit single, "Thrift Shop," has been viewed close to 500 million times on YouTube, making it the 14th-most-viewed video, according to Celebrity Net Worth, and the duo did it all without signing a record deal with a major label.
REINVEST IN YOURSELF REGULARLY Macklemore formed his own company, Macklemore LLC, and released "The Heist" using his own skill and technology savvy. Miller beer's use of the song "Can't Hold Us" in a European commercial provided the artist with some much needed financing. And instead of splurging, Macklemore and Lewis sensibly poured 100 percent of the money from Miller into producing "The Heist" and a video for "Thrift Shop," according to Celebrity Net Worth.
The duo constantly reinvest in themselves like this. "We're constantly putting money back into the product," Macklemore told The Seattle Times. "Whether that's buying a thousand T-shirts for ... shows, a new microphone, renting a van. There's always tons of expenses, and we're forced to put money back into what we're doing. That's the biggest difference between what we're doing and what a major label would provide."
BUILD PARTNERSHIPS Later on, Macklemore and Lewis realized that they needed help distributing albums, a role that a traditional record conglomerate would have performed but at significant cost. Instead, they wisely partnered with the Alternative Distribution Alliance, which ships records for a fee but doesn't take any of the profits from album sales, The Wall Street Journal reported. This also helped them get more radio play, which took "Thrift Shop" to No. 1.
DON'T LET SETBACKS DERAIL YOU The path to financial success can be fraught with obstacles. Substance abuse was a problem for Macklemore and in 2008 he sought rehab to overcome his addiction to OxyContin, according to an interview with The Seattle Times. He recovered, and his subsequent collaboration with Lewis paid off when the duo's first studio-produced album was released in October 2012. "The Heist" was quickly No. 1 on the iTunes charts and No. 2 on the Billboard charts.
WORK HARD Macklemore embodies a strong work ethic. Early on, he worked at a youth correctional facility as a security guard and at the Seattle zoo, according to Celebrity Net Worth, and he has conveyed his work ethic in novel ways. He follows the theory Malcolm Gladwell detailed in Gladwell's bestselling book "Outliers." In it, Gladwell states that to become expert at anything, be it golfing or playing guitar, 10,000 hours of practice is required; success takes lots of hard work.
The first song on the Macklemore album "The Heist" is called "Ten Thousand Hours," and the star also has a tattoo with the same words, perhaps to remind him how far he's come and how hard he's worked.
GET THRIFTY Early on, record companies rejected Macklemore and Lewis. This forced the pair to find ways to release and market their music independently, which they did with amazing results. Moreover, in addition to creating unique songs, the duo told The Seattle Times that they also design and sell their own shirts and other merchandise online and at their shows to save more money.
USE SOCIAL MEDIA Macklemore and Lewis have exploited social media to their financial advantage, too. The pair built a strong fan base by posting on Facebook, Twitter, YouTube and Tumblr. For example, according to The Seattle Times, fans were asked to submit YouTube videos of themselves singing to Macklemore songs, which they did in return for a pizza party.
PLAN FOR THE FUTURE AND SAVE MONEY Macklemore and Lewis have recently begun working with a manager and a booking agency. Macklemore told The Seattle Times they're "starting to think about the next six months, nine months, a year down the road, whereas, before, it was making moves to get weed within the next hour."
The duo's income is mainly from iTunes; a check comes in every 45 days. Songs are sold for $1, and the pair make 60 to 70 cents per song, which they split. Macklemore tours are another source of revenue, as are their T-shirts and merchandise.
Plus, Macklemore actually does shop at thrift stores. "You know, I love thrift shopping," he told Celeste Headlee of NPR. "It is something that has been a part of my life since I was a young kid, and it's outside of the box. ... I also have a bunch of clothes from thrift shops and it's about, you know, just saving money. And I think that that's something that's rare in hip-hop culture. It's usually about spending money."