Nelly Owes The IRS Over $2 Million. Fans Call For More Streaming, But It Won’t Work
Earlier this week, TMZ reported that rap star Nelly owes the IRS $2,412,283 in federal taxes and, as of 2013, $149,511 to the state of Missouri. Fans immediately called for all Nelly fans to go and stream his music on Spotify to help him out.
It won’t work. According to Spin magazine, based on Spotify’s publicly announced royalty rates of artists getting paid $0.006 and $0.0084 per single stream, that he’d need 287,176,547 streams of his 2002 hit single “Hot in Herre” if he’s lucky enough to be on the high end of the payout system. On the low end, he’d need 402,880,500 streams.
According to USA Today, “Spotify is reporting that streams of Nelly’s songs … have increased by 200% this week over peak hours compared to last week.”
But even if his fans are able to produce, they forgot one thing. The royalties don’t all go to Nelly. Nelly is not an independent artist, so the record label, manager, any other contracted representative, co-writers, producers, sampled artists, etc.—to collect that streaming payout without giving away a good portion of it. Even if Nelly got the best deal in music history, he’s still giving up a portion of those fractions of a cent.
Nelly would only take home about 18% of the proceeds from Spotify. “The general rule of thumb is for every million streams you get, you make about $4,000 or $5,000 of actual cash, and that’s divvied up,” says Andrew Farrior, Marketing Director of Street Execs, the management company of rappers such as 2 Chainz and Young Dolph.
With “Hot in Herre,” Nelly also has three co-writers: The Neptunes, the production duo of Pharrell Williams and Chad Hugo, and go-go artist Chuck Brown, whose 1979 single “Bustin’ Loose” was sampled throughout. “Best-case scenario, he maybe gets 25%,” says Farrior of Nelly’s payout for being a writer on the song.
“The best thing fools could do for Nelly is buy his stuff off iTunes,” says rapper and writer Kool A.D., formerly of the group Das Racist. “That still gets the artist the most money.”
