Pay-Per-Beat: Inside the Underground Market Shaping Soundcloud Rap

This story appears in VICE magazine and Noisey's 2017 Music Issue. Click HERE to subscribe to VICE magazine.

Soon after, Taylor pawned his belongings and outfitted his room with monitors, mixers, and all the trappings of a basic studio, devouring instructional videos and discussions in online production forums to hone his craft, and churning out tracks until sunrise.

His early beats, by his own admission, weren't very good. But his knack for marketing them to aspiring rappers online, for anywhere from $20 to $200 a pop, was. Six months later, the middle school dropout had earned about $12,000, money made from tracks posted at night and purchased by a steadily growing following by morning.

"I got tired of people telling me I wouldn't be shit," Taylor said. "So me making money off something I wanted to do, I am going to go hard with this. It's the only option I got."

Now 25, Taylor says he earned more than $500,000 last year from online beat leases and sales; his latest placements include tracks with Gucci Mane, Kodak Black, and Big Sean. In August, Taylor took his mom to LA to ink a substantial publishing deal with Warner/Chappell's Artist Publishing Group that will also allow him to continue independently selling beats through his Internet Money channel to his nearly 80,000 followers online. It's among the first deals of its kind.

Taylor belongs to a growing crop of internet producers leading an evolving underground economy, born from a democratized music landscape in which anyone with access to software, an internet connection, and a PayPal account can hawk their digital wares. At a moment when producers have ascended from background players to name-brand stars in their own right, Taylor, his peers, and the digital marketplaces that cater to them seem to have figured out what much of the traditional music industry has struggled to do over the past 15 years: Pay the bills with music.

Where mainstream producers must divide profits, wait months on payments, and may never see their beats used at all, internet producers like Taylor argue that their business model cuts out the middlemen, allowing them to sell whatever they want, to whomever they want, on whatever terms they see fit—and see an immediate payday.

As music creation adopts the one-click convenience of the internet, beats are just one example of prefab song elements available for anyone to purchase and piece together, alongside voice tags, instrument kits, and vocal features. The web also fosters collaboration in an unprecedented way, connecting creators across continents and exposing them to wider audiences. The result is a new industry frontier, somewhere between anarchy and globalization.

The beat market is nothing new: the creation, exchange, and modification of sounds between producers and artists is hip-hop history. Years before Napster and digital piracy upended the industry, rappers and beatmakers were convening in AOL chat rooms and on sites like SoundClick, an early social platform where users could host and stream RealAudio files of one another's work.

By the late 00s, SoundClick led the pack, evolving into a kind of Myspace for producers and other musicians, complete with profile pages and a chart system that helped give underground producers wider exposure. As social media came to the fore, other sites and platforms, like BeatStars and MyFlashStore (now known as Airbit), emerged to help consolidate and capitalize on the rapidly growing market. By the time YouTube was embraced as a go-to hosting platform, online-production exchange had become its own thriving economy.

As Taylor quickly learned, the beat-selling process is fairly straightforward: A producer uploads an instrumental track to YouTube, a personal website, or social music marketplaces like BeatStars, where aspiring rappers and others can preview a track. If an artist likes it, he or she can buy it outright (referred to as an "exclusive license") for a few hundred dollars, or, for the more accessible price points of $15 to $150, get a limited use "lease" that allows the producer to sell the beat multiple times to multiple artists.

As technology further democratizes the production process, and the market floods with new competition, these tracks are increasingly marketed as "type beats"—as in "Drake-type beat" or "'Bad and Boujee'–type beat." The idea is to help increase a track's visibility by aligning with the sound of a popular artist, song, or producer for which a prospective buyer might be searching. For some producers, it's no more than a marketing tactic to help their original music find kindred ears; for others, it's an opportunity to capitalize on trends.

Today, leasing beats is becoming a standard entry point for fledging rappers and rising talent in hip-hop, helping buoy a generation of SoundCloud artists, and now making its way into the mainstream. Fetty Wap, Joey Bada$$, Bryson Tiller, and Young M.A have all scored hits using web-culled beats. A$AP Rocky admitted that he discovered the track for one of his songs by searching "A$AP Rocky–type beat" on YouTube. Perhaps most famously, Desiigner leased and then bought the beat for "Panda" (sold as a "Meek Mill–Ace Hood–type beat") for $200, landing the then unknown rapper a number one hit and record deal with Kanye West's G.O.O.D. Music, while the beat's producer, Menace, signed a lucrative publishing deal.

But others say the success stories of those like Taz Taylor and Menace are the exception to the rule in a market saturated by bedroom producers looking to make a quick buck by mimicking the styles of others. It's a sentiment that even Menace himself shares.

"Because of cases like mine, everybody thinks they can become successful," said the 23-year-old Manchester native, who has seen two mainstream production credits since "Panda" blew up in April 2016. "What I'd probably advise producers who really want to make it in the industry is that they have to brand themselves. You have to be in the room with the big people. A few producers just get lucky." The result of the type beat-leasing economy, critics say, is akin to that of fast fashion: The market is saturated with mediocre output as price points drop and producers vie for customers with flash sales and buy-one-get-one specials.

"There's definitely a misconception that this is a path to discovery," said Illmind, the Brooklyn-based producer who has worked with artists including Drake, Kanye West, and J. Cole. "It's almost like having a lottery ticket printer at home. I'm just printing up tickets. The more tickets I print up, the higher my percentage is…[But] I think that factor goes into, how much time are you putting into this? Part-time work, part-time result… Making that many beats coming up and then selling them off to indie rappers, that was just training for me."

Illmind has his own stake in the production market, creating and selling drum kits online. Called Blap Kits, these instrument packs have become a go-to source for drum sounds, kits, and sample loops for underground and mainstream producers alike.

"[Type beat leasing] also immediately brands you in a way that people associate with you not being special," Illmind said. "What this does is open you up to the kind of artists who are looking for 'Drake-type beats,' rather than doing something original." His problem, he said, is with the cheapened, transactional nature of the craft, which homogenizes sounds and holds producers with mainstream ambitions back.

"I think they're just closing themselves off. If I'm a producer and I'm just selling a beat to someone, at that moment it becomes just a business transaction," he said. "I haven't even heard your music yet; I don't know if you're good or bad. I might love it, or I might hate it. But I've already committed to fulfilling your needs. And the only need that's being met for me is that you're giving me money. And not even that much."

Illmind and others, like veteran producer 9th Wonder, have sparked intense debate on Twitter after voicing concerns that the online-production model cheapens the sound and process, a stance that Taylor and others have refuted as misinformed. Taylor, who launched his Internet Money channel and collective in part as a means to support and educate other online producers, argues that the work of internet producers bears little difference from that of their mainstream counterparts, who craft beats for the artists with whom they'd like to work. The difference, he said, is their independence gives producers a fair shake in the game.

"Anybody can be where I am if they bust their ass and focus on marketing. It's not how good the beats are; it's your branding," Taylor said. "I'm not an exception to the rule. I can name over 30 people who make over six figures online. All come from nothing."

Underlying the debate are the growing pains of an unregulated market, where contracts and terms of use aren't always legally sound—when there are contracts at all—and exchanges can go untaxed. Even Taylor admitted that he didn't learn how the game worked until he was two years into it, and ended up having to pay back taxes. While leasing is a common option, those with formal industry experience say the practice is questionable, the term itself a bastardized form of traditional industry licensing agreements, which are vulnerable to gaps and loopholes. These agreements generally hold up only if you've landed on the right website or consulted with the right lawyers—which, if you're a 16-year-old kid selling beats for extra weed money, you probably haven't.

But the market is starting to catch up. Many deals now feature use agreements, generally divided into "limited lease" and "exclusive," but legitimacy varies; while there are contracts that have been vetted by lawyers, some are copied and pasted from other user agreements, while others are compiled from Google searches.

"A regular SoundCloud producer will be leasing their beat, and none of these producers really have contracts," said Chicago producer Icytwat, member of rap collective and internet sensation Divine Council. "So if someone puts it on a streaming site, the artist is gonna make way more. Then there's gonna be a rift between the producer and the artist. A lot of the artists leasing them don't know legal shit and that [the producers] are supposed to be getting paid off the front end and the back end."

BeatStars founder Abe Batshon hopes to change this. The social music marketplace, launched in 2008, was the first platform of its kind to introduce formal contracts, licensing agreements, and pay structures, evolving into a kind of one-stop shop for the online-production world. Today, its services are expanding to cover many of the gaps in the unregulated beat-leasing market, including revenue distribution between collaborators, SoundCloud and YouTube monetization, and even an in-house label. Batshon said he wants the Austin-based BeatStars to become "the eBay or Amazon of beats."

"The game has changed, right?" he said. "No one is waiting for A&Rs. No one is waiting for their publishers anymore. Right now is like the beginning of our golden age—of beat discovery and producer movements and empowerment for producers. It's exciting."

A former musician himself, Batshon left the world of underground hip-hop to work at global distribution and marketing group INgrooves, where he said he helped discover and represent artists like Killer Mike and Macklemore, and gained the knowledge he applied to the passion project that became BeatStars.

This year, BeatStars is on track to see $12 million in sales across its 600,000 registered users; the site receives about 3 million unique visitors each month. Thanks to its built-in membership model, Batshon said, the company has remained financially sound from the get-go—no small feat, as platforms like SoundCloud and Spotify, which have considerably larger audiences, struggle to stay viable.

"I still think there's a big education gap of what we're doing with a lot of producers," Batshon said. "A lot of producers just want to make beats. They don't care about selling, they just want to put it up on SoundCloud and they're happy, right? There's still, I think, a huge segment of the community that don't [sell] their content online, and there's a lot of artists that still are stuck in the traditional ways, where they don't even know that you can buy beats online." But money is only part of making it. Some who have crossed over to mainstream industry success have faced a steep learning curve upon arrival.

"I'll be completely honest, it was more of a hit and miss type record, which obviously hit at the right time," the Manchester-based Menace said of "Panda." "After 'Panda,' the problem was that I was left to swim with the sharks."

Well before the track went quadruple platinum and earned a Grammy nod, Menace said he was already making around $50,000 per year leasing and selling beats. But he said the grassroots marketing savvy that worked to his advantage in that space doesn't necessarily translate once you're in the room with major players. So he's starting from scratch—learning the rules and strategy of the game, how to build relationships, and above all, to be patient.

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It's still early days, but the beat-leasing game continues to evolve. And as more players get in on the market, competition grows fiercer. "Jealousy is at an all-time high," Taylor said, explaining that producers' online spats are becoming real-life beefs, with rivals purchasing "dislikes" on one another's YouTube videos to diminish their clout, and leaking one another's production kits and other paid assets.

Others say this is perhaps why the practice is shortsighted, shifting the focus from quality to quantity, and away from innovation and creativity. "There are no rules, no contracts," Illmind said. "We're in the era of swipe—I like this, I don't like this. I think that's a direct reason why beat leasing has become such a big thing now. Because it's like, I want it now! It's just regurgitation. It's two complete strangers in this middle point, and a lot of the shit in it is just straight up trash. Not all of it though. The beauty of technology is that some of that stuff could be magic. The cream will rise to the top."

What's lost and gained from this new economy, and the paradox of music as both a commodity and community, extends well beyond the beat production world and into the industry as a whole. It's at the heart of debates surrounding Spotify's licensing of royalty free audio, and the struggles of grassroots platforms like Soundcloud to stay afloat. And for those like Taz Taylor, that's the beauty of it.

"Does Louis Vuitton worry about what deal Walmart's shit got? People have kids and bills to pay. I'm not here to tell another man how to get money," he said. "Since when are there rules on this shit? That's the whole point of being online. There are no rules."

Andrea Domanick is Noisey's West Coast Editor. Follow her on Twitter.