Monday, July 03, 2006
Give Me My 1.3% ?????
We have been looking for an interesting diagram that shows how much an artist makes with a traditional record label contract. The premise is the artist sells 200,000 albums at $17 each. The artist/group receives roughly $45,500 from the sale of the albums.
Who else gets a chunk of the $3.4 million gross sales?
So why does the artist only get $45,000 when you show $344,000 in the calculation. Oh, we forgot to tell you that there are ‘recoupable costs’ of approximately $250,000; Managers need their money too (15% of what the Artist’s net); business manager commission of 5% of the Artist’s net.
Wow… someone created something in this hypothetical situation that the consumer was willing to pay $3,400,000 for… and they only got to keep 1.3% of it… one word – AWESOME!!! Awesome if you are a label, or marketer, or retailer, or maybe even a business manager. But is sucks if you are an artist.
The full article from which this chart and figures is based can be found at Performing Songwriter.
Who else gets a chunk of the $3.4 million gross sales?
- Best Buy, Wal-Mart, Amazon (retailer) – $1.275 million (37.5%)
- Distributor (owned by record label, if major) – $340,000 (10.0%)
- Record Label’s portion
- Manufacturing – $150,000 (4.4%)
- Marketing – $600,000 (17.6%)
- Additional – $528,000 (15.5%)
- Mechanicals (split between songwriter & publisher) – $160,000 (4.7%)
- Artist – $344,000 (10.1%)
So why does the artist only get $45,000 when you show $344,000 in the calculation. Oh, we forgot to tell you that there are ‘recoupable costs’ of approximately $250,000; Managers need their money too (15% of what the Artist’s net); business manager commission of 5% of the Artist’s net.
Wow… someone created something in this hypothetical situation that the consumer was willing to pay $3,400,000 for… and they only got to keep 1.3% of it… one word – AWESOME!!! Awesome if you are a label, or marketer, or retailer, or maybe even a business manager. But is sucks if you are an artist.
The full article from which this chart and figures is based can be found at Performing Songwriter.
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