What is Drake's Net Worth? How do artists make money?

Since you are here, you are probably curious about Drake's net worth. In his recent song, Drake is rapping “Please don’t google my net worth, the numbers are way off”. We did our research anyways (sorry Drake) and found that his estimated worth is $250 million. Analyzing Drake’s record sales and business ventures we have to agree - his net worth seems, indeed, way off. It’s very possible that in 2022 Drake's net worth may be close to half a billion. Apparently a lot of articles that you can find in Google are far from the real numbers.

Let’s take a look at how much Drake could be making off his music and other extra curricular things.

Who is Drake?

Aubrey “Drake” Graham is a Canadian rapper, singer and songwriter. From “Starting From the Bottom” to Certified Lover Boy, Drake has certainly come a long way.

He was born on October 24, 1986. Before starting his music career, he gained attention from appearing in Degrassi: The Next Generation (2001-08). Drake released his first mixtape Room for Improvement in 2006 and his second mixtape So Far Gone (2009) before signing with Young Money Entertainment, under which he released most of his music projects.

Now he’s one of the most popular and streamed artists in the world. And he's certainly reaping huge profits off it.

What is Drake Estimated Net Worth?

As of 2022, Drake’s reported net worth stands at $250 million, but as we’ve already mentioned, this numbers should be taken with a grain of salt as he’s probably worth twice as much.

In 2019, Forbes estimated that Drake’s annual salary is $75 million in pretax earnings. On the other hand, Billboard estimates Drake's 2020 earnings in the following way:

Streaming: $11.7M

Sales: $635K

Publishing: $1.9M

Touring: $0

As you can see there's a huge discrepancy between the sources (Forbes 75M vs Billboard 14M). So who's closer to the truth?

How does Drake’s net worth compare to Jay-Z?

Drake was greatly influenced and inspired by rap icons such as Jay-Z who became successful as an independent artist. Jay-Z’s net worth is estimated to be around $1.3 billion in 2022. This means that Drake’s net worth falls below the fellow artist, but he has nothing to cry about: he is still one of the best earning rappers in the world. He has won more than 180 major awards including four Grammys and worked with dozens of the biggest stars in the music industry (including Jay-Z). In 2019, Forbes ranked Drake the fifth richest rapper in the world.

How does Drake make money?

Drake makes money in multiple ways: through streaming, concerts, brand endorsements and other business ventures. Let’s take a closer look into each.

Brand endorsements

Over the years Drake has endorsed many popular brands such as Sprite, Burger King, or Apple.

The Apple Music deal is especially interesting. It was signed in 2015 for an astounding amount of $19M. The deal involved Drake promoting Apple Music with some exclusivity (Drake appeared in Beats 1 and initially offered album sales and streaming of Views only on Apple Music). Even though Drake's album was available only on one streaming platform, he sold more than one million copies of it in less than a week. This guy is just bound for success, no matter what.

It's worth to mention that Drake is also a global ambassador for the Toronto Raptors (a NFL team).

Business ventures

Apart from lucrative deals and partnerships, Drake has launched a couple of his own projects: Virginia Black (a bourbon-based whisky), Better World Fragrance (candles), and Mod Champagne (Drake's handle on Instagram is @champagnepapi for a reason). He has also ventured into an e-gaming space by co-founding 100 Thieves. You’d think that’s a lot, but wait till you find out that he had formed his own record label- Ovo Sound - which is distributed by Warner Bros. When his contract with Young Money finally came to an end, he released his recent album “Certified Boy” under his own label.

In 2020, Drake and Nike announced their collaborative label, Nocta, which the Canadian rapper said would produce clothing. This was supposed to be one of the most lucrative deals of Drake, but so far the footwear didn’t drop anything.

Royalties

Let’s discuss music sales and royalties, which is a HUGE and complex topic.

A big part of Drake’s income source are royalties, which he earns when his music is either physically sold (CDs), downloaded (iTunes), or streamed (Spotify, Apple Music etc). Drake is one of the world-s best-selling music artists. He has sold more digital singles than any artist in history (over 170 million records sold).

Streaming royalties are also a big part of Drake’s earnings. In 2021, Drake was the number one most streamed artist of 2021 in the US on Spotify, with over 8.6 billion on-demand streams. Spotify pays an average of $0.00437 for each stream so if we do quick math, it turns out that Drake made over 37 million dollars last year on one streaming outlet. He is the first artist ever to surpass 50 billion streams on Spotify, which would generate over $218 million in royalties.

But this is a great oversimplification since Drake doesn’t get the whole bag. Record labels and distributors pay artists according to the individual agreements. They can keep a cut anywhere from 50 to even 90% of the music earnings. An artist will typically receive around 10-20% for record sales or streams. Kanye West once posted documents showing he received 14%-25% of the revenues sent back to his label from streaming.

Drake has released nearly every project of his under Young Money Cash Money Records, which is distributed by Republic Music Group, which is in turn distributed by Universal Music Group (yes, we know this sounds like a money scheme). Upon signing a four-year agreement, he received a $2M advance and had a standard 18% royalty fee. However, there’s been a legal battle and it seems that Drake might have never seen royalty from Cash Money Records (how crazy is that?) Seem that both small independent artists and big super stars get screwed by the music industry.

It's not of a big surprise that Drake decided to release his latest album - "Certified Lover Boy" - through his own label, OVO Sound. By owning his masters, he can get a bigger share of the royalties. OVO is the label Drake founded, however it is distributed through Warner Bros Records, so we expect the distribution fee could be around 25%. Drake “Certified Lover Boy” has now surpassed 2 billion streams on Spotify and if Drake's keeps 75% of the royalties, he earned around $5M on just one album on one streaming platform.

Real estate, private jets and all that jazz

Drake’s house in Toronto is supposed to be worth around $100M. He has also acquired three adjacent houses in Los Angeles which currently could be worth $65M. Traveling between his house in Toronto and Los Angeles is not a big deal, since Drake owns a private jet (worth $220 million) that he got for free in exchange for the buzz it’d bring to the aircraft’s brand.

Touring, merchandise

There’s definitely a better cut for the artists when it comes to touring and merchandise (around 60%) than record sales and streams (10-20%).

Drake gets paid up to $2M for a single big show. His 2016 “Summer Sixteen Tour” was the highest-grossing hip hop tour of all time, grossing more than $80M. The tour consisted of 54 shows, which gives an average of $1.5M per concert. Drake's Aubrey and the Three Migos tour grossed $79M off 43 shows. Add other tours (Boy Meets World, Assassination Vacation etc) and these numbers become massive.

Drake also does club appearances, for which he charges around $200,000 per hour. He’s ongoing residency at the XS Nightclub in Las Vegas brings him $500,000 for a show. Moreover, every year Drake also organizes a festival in Toronto called "OVO Fest".

Due to COVID Drake’s earnings (and all artists) have been much lower recently since touring was not possible. Although Drake took part in some events in 2021 such as AstroWorld Festival 2021, now he’s sued for $750m for the tragedy that happened at the venue.

Drake gets all the buck. What happens to the smaller artists?

Spotify and most major platforms use a so-called pro rata system of royalty distribution. This means that all the money collected from paid subscribers and ads goes into a single pot, which then is distributed to artists based by the number of their streams. In 2021, 1 out of every 131 streams on Spotify was a Drake song. So, Drake gets a huge part of that money pot. The business model of major streaming platforms tends to over-reward stars at the expense of smaller artists. We're starting to see some improvements though: TIDAL has recently announced a user-centered model, where a listener’s subscription go only to the music they listen to.

But is this money really going to the artist?

Spotify and other streaming platforms don't pay the artists, they pay **the music owners.**Artists rarely own their music - they sell music rights when they sign contracts with record companies. And these contracts are very unfavorable, leaving artists with a tiny fraction of the record sales & streaming revenue. It's well-known that record labels have been exploiting musicians in a dreadful way.

Spotify boast that it send around 67% of revenues from music back to music holders, paying 5 billion dollars to the "music industry". This seems great until you realize that artists actually never get the money. The revenue is paid to record companies who also happen to own large percentages of Spotify (Warner Music Group, Sony and Universal received a companies 18% ownership stake in Spotify). So they basically pay... themselves, while musicians get the leftovers.

Artists big and small complain on the revenue they receive off their music. Drake might have not seen royalties when he was signed under Money Cash and Kayne uploaded his contracts with Universal Music to Twitter, referring to music industry and "modern-day slavery".

The difference is that big stars have touring, merch and fame to fall on. Most artists however? They will struggle to make a living until big systemic changes are made.