This was posted this morning to The Bottom Line by one of the moderators, Edwin Hurwitz. Pretty eye-opening, don't ya think? " For those of you out there that don't know how the music business works, it's well worth it to get educated on royalties and recoupables, etc. It's quite possible to sell a lot of records and not see a penny, while your record company execs all drive nice cars and boats and live in very comfortable houses. Basically, your 5c a record royalty pays for everything associated with the costs of making the album, while the company makes money from the first one sold (and sometimes from the first one pressed, even if it never gets sold, if you give away your mechanical rights). I heard a story of a band that was making their first major label recording, and their rep came by the studio to "hang with the boys" and brought some chips and a six pack. Later, when their accountant was going through everything, they discovered that they got billed $15 for the chips and $25 for the six pack. This they had to pay back with their royalties, so if they were getting even a dollar a CD, that would mean they would have to sell 35 CDs to pay for their chips and beer. Whereas, if they owned the album, 35 CDs would be worth $525 to them (at $15 apiece). Still want a record contract? At these rates, a $20,000 advance costs the band $300,000 to pay back. You are way better off just getting a bank loan and hiring a publicist yourself."