I remember a few years back the Dixie Chicks interviewing on 60 Minutes and fussing about how little money they were making and how big of a cut the record company was taking.
And we’ve all heard stories of record companies “exploiting” their “talent”, pushing artists for songs, taking big cuts, etc. etc.
Is this all overblown? How big of a cut does the label (or the RIAA, for that matter) get out of each record sale? Have we been starving our artists and feeding the corporate giants?
And in turn, do people feel less guilty about stealing music because they know that most of their money isn’t going to the artist?
Depends on the artist - older, successful artists on their second recording contract can demand a lot more than a new group. A new group usually makes about 8% off the royalty base, really successful groups can make up to 25%.
The royalty base is calculated off of the suggested retail price of the album, less 25% packaging fees. So, a new artist who sells 1 million records at $17 a pop would receive about $1,020,000. Of course, that doesn’t add in the recoupable costs that come out of the artist’s royalties. Out of that $900,000, the artist would likely have to pay back recording costs, promotional costs, music video production, etc. Let’s say they do all that stuff on the ultra-cheap and it only costs about $500,000 (which is abnormally low for most bands). The musician now has about $520,000 left.
He probably has a manager that gets a 20% cut, down to $416,000. Plus, he’ll have to pay the producer, plus any band members or studio musicians. Let’s say that knocks out another $100,000. So, the artist made about $300,000 off of a million album sales.
Think about how few artists make an album that sells a million copies.
The songwriter is also the one who stands to make the most out of the deal when it comes the the royalties. So that’s also why you see a lot of bands do really well and then fall apart (say like the Police with Sting going solo), because if the abdn has just one songwriter the income disparity gets annoying unless the band has drafted some kind of agreement that divvies things up well.
Neurotik – to your list I’d like to add all the piddly thing sthat also get taken out of the artists share… like the shrinkwrapping! The cost of packaging gets chipped out of the artists share too. And if they don’t go over their contract carefully they may still find “breakage fees” form back in the pre-vinyl days when records could be shattered easily on the way to the store. Sometimes you will still find this clause (it started getting phased out only ridiculously recently) – the percentage may still be withheld from the artist’s royalites “just in case”. Though it’s getting phased out, new contract language has been intoduced to find another way of witholding that same percentage for something or other (don’t remember, would have to grab a contract to look it up.)
When you see how much get’s chipped away from the artist royalties (from tour buses to little stickers that say “caution, the f-word is in this album”) you’d wonder why any artist bothers.
Similar: Do the musicians have to pay for all/part of any touring? I imagine that they get a cut of ticket sales, but how much of a cut? Or does whatever record label they are with cover traveling expenses?
Maybe not the majority, but certainly many of them. So often, a band has a breakthrough first album, because they’ve been saving up all their best songs all their lives. The company sends them out on tour to promote it (at the band’s cost). They’re on the road for a year and then it’s time for a second album. Except that they haven’t written it yet. So they have to dash off a bunch of songs that aren’t so great, the album doesn’t sell well or get much airplay - but the band still owes the company the money they were advanced to record it, before they see a dime of profit. They go out on the road to make the money to pay back the company, but their songs aren’t going over too well. Then it’s time for a third album, and it isn’t written, either. This is usually the point where tensions break up the band, and they are still in the hole. They can be prevented from recording for any other label, and the company can (and often does) put them on ice and won’t record them itself. I know people that this has happened to, and I’ve read of scores more of them. It’s not as much fun as people think.
I included that. The packaging is generally 25% of the retail price.
The majority? Hmmm…I’m not sure, but I do believe that a sizable chunk end up in that exact situation. Especially if they’re not popular enough to be able to make it up on tour.
Actually yes, it is quite common for the artist to end up owing the record company. It depends on how hefty the advance is and how much was invested in things like publicity and touring. (Tour bus rentals come out of your pocket etc.) If they end up pressing 200,000 CDs and only sell 60,000, who do you think is going to cover the cost? Stuff like that. Getting signed can be a Very Bad Thing for a lot of bands who don’t have good business sense and a pitbull of lawyer.
Usually when disaster strikes it around the second album which is why you see so many bands make it big then implode with a lousy softmore album.
A really hilarous read is Moses Avalon’s book Secrets of Negotiating a Record Contract: The Musician’s Guide to Understanding and Avoiding Sneaky Lawyer Tricks in which Avalon dissects an actual recording contract, paragraph by paragraph. He splits his page vertically in half: On the left is the “real” recording contract, on the right, the same paragraph translated into understable English, with additional explanations in the margin column and generous footnotes.
Note, Avalon can be a bit of a d**khead sometimes, and there is occasionally some dispute on musicians’ sites about his credentials (and quasi-feud thing with CD Baby it seems). However, after seeing a few recording contracts, his analysis is pretty accurate.
If you’re a musician you should consider it an essential book, though it may depress you enough to want to quit.
Oh, and Sgt. Pepper another thing that affect whether or not an artist ends up in the red or the balck is if it’s a multi-album deal, because sometimes it works out that they’ll hold any losses of your first album against any gains of your second album… stuff like that. It really varies per contract and the record label.
I always wonder aoubt those record breaking “most expensive albums ever made” like Rob Zombie’s (?), Hole’s, and one of Michael Jackson’s, getting up into the millions of dollars – I can’t imagine how they’d recoup!
That’s assuming the record company pays the musicians at all. A friend of my was involved in producing a CD under to Global Village label. Several years ago Global Village simply decided to stop paying any royalities to the musicians. The amount of money is not enough to pay for legal assistance. So, Global Village is getting away with theft.
(Might be a seriese of dumb questions) Does all this have an impact on the actual kind of music that is promoted? All the really big singers or groups of a given time period seem to produce very similar songs. You can always pick out a song from the 80’s or 70’s from a group of current songs. I always figured this was the artists working off of inpiration from their contemporaries, growing up under similar influences and whatnot so similar songs follow, and a hefty amount of consumer-demand direction. But, could it be that bands modify their music in order to satisfy record label companies? Because they know that they company won’t lift a finger to help them unless the company thinks they can produce winning album after winning album? And what basis does the record label company use to judge what songs might be popular? I’ve heard of radio companies being paid to promote certain songs into popularity, but I thought that was frowned upon, if not outright illegal. In short: Are songs similar because the public demands simlar artits to produce them, or are the artists similar because the record labels demand it to meet a mythical public demand?
Yes. Well, the bands not so much but the producers that get hired by the record company, yes. They are influenced in the same way that directors are told to change the endings of their movies because test audiences didn’t like it (eg/ True Romance). Or that film directors are told they can’t do anything that will get an NC-17 rating no matter how brilliant it may be, because it will affect distribution agreements with Blockbuster. Music works the same way. Producers will influence a band’s sound to be closer to what is currently making the biggest wad of cash.
Ouija board, I would guess.
Payola is illegal, but here are weasely ways around it. If you Google “payola” and “still exists” you’ll likely find articles about it.
Remember too that with all the mergers going on with media corporations, you’ll find that the record labels are owned by the same parent companies as the radio stations and TV shows. And so…
Eg/ At the end of Smallville WB TV show, you’ll get the “music in this episode was by…” and it will a list of emerging WB artists.
The big lables have also been cannibalizing many of the indy labels. So indy labels tha make it big with some band, suddenly become affiliated with one of the big 3 (used to be the Big 5, is it down to three now?), as a lesser division.
So, if you wanna know why all the crap on mainstream radio sounds the same it’s because the industry is heavily influenced by studio execs who have been playing the same game for eons. Picture Mr. Burns and Satan working together.
They’re popular enough that they can finagle better royalty agreements, usually. Instead of the usual 8%, they might get 15-20% Michael Jackson probably gets 25% or so.
Plus, they’re enough of a guaranteed draw on the road that they don’t have to worry about that aspect too much.
Oh, I know that with the HUUUUGE bands like that they’d be pretty much covered (heck, Michael Jackson practically self-financed his ultra-expensive album). But just on principal I think “Holy, crap! How the hell will they ever recoup!” Four million to produce just hte album – that figure seems so astronomical. Da-amn I would love to see the details in their contracts.
Hey! I was gonna ask a similar question a while back, but never quite got around to it. My question was: Is there any way to guesstimate what musicians are making per year off of their older material? As an example, what’s Peter Murphy making these days – I know some of his solo stuff is still in print, and Bauhaus must be selling pretty regularly. So how much does Peter make a year? $300? $3000? $30,000? $300,000? Any way to tell?