So how much goes to the author / artist?

[Atticus_Finch]

My housemate and I were wondering what proportion of the cover price of a popular fiction book or pop music CD ends up in the author / artist’s pocket.

I realise that these things vary depending on the specific terms of contracts etc, but can you give me ballpark figures for a typical author and a typical recording artist.

Let’s say the book’s a fiction paperback, a bestseller ala The Da Vinci Code. Let’s say the CD’s the latest full-length album from a popular musician, working largely alone, eg Eminem. If these examples are atypical, please let me know and substitute a more suitable example…

Can you help us out?

[Hal_Briston]

For authors, sorry, no idea.

For music artists, I cannot offer a cite, but I remember reading up on this about 10 years ago. The standard artist take was roughly $1-2 per CD, depending on how sweet their contract was.

It’s concert ticket sales, and the resulting merchandise, where the big money is made.

[Primaflora]

Usually a contract will have a percentage which goes up higher once a certain number of books are sold.

You get different percentages for book club sales, and for different territories.

I don’t know what sort of percentages are standard for general fiction for bigselling authors though. We get 10% on RRP with most of our children’s books and a much lower percentage for book club sales. The lower percentage is covered by increased sales though.

[Exapno_Mapcase]

Book contracts almost invariably work on a percentage of the cover price, a sliding scale that increases as the number of copies sold goes up.

A standard hardcover book contract may be, say, 10% on the first 5,000 copies, 12.5% on the next 5,000 and 15% after that. (Paperback book contracts are similar but with lower percentages.)

A superbestseller like Dan Brown may be able to command higher percentages, but I would be stunned if anyone got even 20%. usually just the sheer number of books makes up for the lack of increase in percentage.

The money comes in as royalties against the advance. That means that if Brown gets a million dollars up front, he sees nothing again until the percentages of sales equals more than a million dollars.

In the real world, contracts are much more complex than this. A big name author would make money, with different percentages, on book club sales, audio book sales, movie options, foreign sales, and a dozen other categories.

Authors can also lose money, in a sense. Mass market paperbacks are returnable by bookstores for a full cost refund. So if 1,000,000 books are sold to bookstores perhaps 500,000 of them will come back as unsold. Most publishers hold back royalties on paperbacks to accommodate this, but it’s possible for a specific royalty period to end up in the red. The author does not have to give back any money, of course, but any negatives have to be made up in future royalties before any more money is sent out.

More than you wanted probably.

[mack]

@Hal Briston

For music artists, I cannot offer a cite, but I remember reading up on this about 10 years ago. The standard artist take was roughly $1-2 per CD, depending on how sweet their contract was.

Here’s a couple paragraphs from a music law website:

In many contracts, the financial terms will run over 15 pages. The rule in record contracts is what the record company gives you with one hand, it takes away with the other. The fundamental touchstone of record contracts are “points.” Points refer to how many percentage points a band will receive as their royalty rate. On a major label, this will run between 10 and 15 percent and typically 9 to 12 percent on a smaller label. The percent royalty rate is just the beginning however. The first question you should ask is, “a percentage of what?”

Generally, the royalty rate is based on a percentage of the standard retail selling price. You will get your full royalty rate for each full price CD or tape you sell through normal retail channels. Normal retail channels are usually record stores like Tower Records or Sam Goody. What about other places you sell your CD’s? Record companies will pay you a fraction of your royalty rate for sales not through normal retail channels. For example, you may receive 75% of your royalty rate for sales outside the United States, 60% of your royalty rate for CD’s sold below standard retail price (i.e. albums sold at a discount) and 50% of your royalty rate for sales through record clubs. In fact, most of your CD’s will not be sold through normal retail channels. Although you may have a 12% royalty rate, you will only get a 6% royalty rate on record club sales. Confused yet?

So yeah, say 12% of $17 is $2.04. That would be for a CD sold at full price. Like the cite says, though, most CDs aren’t sold at full retail. Record club sales royalties are half that, so Hal Briston’s $1-$2 is a good place to start.

But wait:

First, you get no royalties on records given away free for promotional purposes. A large deduction is the so-called “packaging” deduction. The theory behind this deduction is that the band pays for the packaging of the CD and tape. Typically, these deductions range from 15 to 30 percent of your royalty rate. In effect, a 12% royalty rate and a 25% packaging deduction lowers your rate to 9%. In addition, your royalty rate is often an “all-in” royalty rate which means that you must pay the producer out of your royalties. Typically, a producer will take 3 points (3%) which lowers your royalty rate even further. Your royalty rate is meaningless unless it is viewed in the context of all the deductions. A band can expect an average of $1.00 in royalties for each full-priced ($16.98) CD sold through normal retail channels.

Did I say the band was going to actually receive royalties? Not so fast. The other major concept involved in record contracts is the term “recoupment”. Recoupment is a fancy word for pay back. Record companies expend a lot of money on bands. They pay for all the studio time, give the band an advance, promote the band, etc. All of this money is a loan to the band which the band must pay back. This is recoupment. The band pays back the record label out of their royalties. For example, if a major label spends $250,000 to record an album, the band must make over $250,000 in royalties until they receive their first royalty check. Once a band sells enough records to pay back the amount to the record label, the band has recouped and will receive royalties on future record sales. Approximately 80% of albums never reach this point which means that most bands NEVER receive any royalty checks.

So I guess how much actually ends up ‘in an artist’s pocket’ varies.