![]() The company also paid $750,000 in music publishing royalties. Plus there were $1 million in video costs, $300,000 in radio promotion and $200,000 in tour support. It costs $500,000 to manufacture the CDs and they advanced the band $1 million. Two million dollars in royalties minus $2 million in recoupable expenses equals … zero! If all of the million records are sold at full price with no discounts or record clubs, the band earns $2 million in royalties, since their 20 percent royalty works out to $2 a record. Since the original million-dollar advance is also recoupable, the band owes $2 million to the record company. You have to pay independent promotion to get your song on the radio independent promotion is a system where the record companies use middlemen so they can pretend not to know that radio stations - the unified broadcast system - are getting paid to play their records.Īll of those independent promotion costs are charged to the band. The record company spends $300,000 on independent radio promotion. The band gets $200,000 in tour support, which is 100 percent recoupable. The two videos cost a million dollars to make and 50 percent of the video production costs are recouped out of the band’s royalties. So, this band releases two singles and makes two videos. Put simply, the antitrust laws in this country are basically a joke, protecting us just enough to not have to re-name our park service the Phillip Morris National Park Service.) (How a bidding-war band sells a million copies of its debut record is another rant entirely, but it’s based on any basic civics-class knowledge that any of us have about cartels. The record is a big hit and sells a million copies. That’s $45,000 to live on for a year until the record gets released. That leaves $350,000 for the four band members to split. They pay $25,000 each to their lawyer and business manager. They pay $100,000 to their manager for 20 percent commission. ![]() They spend half a million to record their album. It starts off with a band getting a massive $1 million advance, and then you follow the money: Going back ten years ago, Courtney Love famously laid out the details of recording economics, where the label can make $11 million… and the actual artists make absolutely nothing. Of course, it’s actually even more ridiculous than this report makes it out to be. Here’s the chart that the article shows, though you should read the whole article for all of the details: That report suggests that for every $1,000 sold, the average musician gets $23.40. Reader Jay pointed out in the comments an article from The Root that goes through who gets paid what for music sales, and the basic answer is not the musician. ![]() So how about the recording industry? Well, they’re pretty famous for doing something quite similar. We recently had a fun post about Hollywood accounting, about how the movie industry makes sure even big hit movies “lose money” on paper. ![]() Tue, Jul 13th 2010 09:06am - Mike Masnick ![]()
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