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when you buy a cd how much money does the actual band get?

Discussion in 'Miscellaneous [BG]' started by heckheckheck, Aug 15, 2002.

  1. when you buy a cd how much money does the actual band get? When you go buy a cd for 17 bucks at the store... how much does the store get? how much does the record label get?
  2. mans0n


    Jun 15, 2002
    it varies depending on artists, but i think ive heard some get 30cents per album? i could be wrong... i would think 30cents is a little MUCH even....

    (oh and 100% of it at www.cdbaby.com )
  3. Christopher


    Apr 28, 2000
    New York, NY
    Artist might get 10% of retail, minus price deductions for packaging costs and volume deductions for reserves and free goods.

    30 cents is low; a buck is more like it.

    Of course, the royalty only kicks in after the advance, recording costs and producer fees are recouped. Translation: unless you're a panty-moistening superstar, you get nothing, at least for a good while.
  4. A buck to $1.25 is probably about right in most cases. You gotta remember that the record companies tack on as many deductions as they can, and that ALL the recording costs are recouped not out of gross wholesale sales but out of the band's share. So if you spend $50,000 of the record company's money (in the form of an advance) to record a record, you have to sell 35,000 to 50,000 just to break even on that. And that's not even counting the packaging deduction and the other stuff Christopher mentioned.

    Now, those are artist royalties. There are also mechanical royalties, or publishing royalties, which are paid to the people who own the publishing rights to the compositions performed on the recording. If the band, or members thereof, still control (i.e., own) these compositions, they get paid for every recording sold. The rate is something like 6 or 7 cents per song per copy sold now, I forget exactly. If the band sold the rights to the songs to somebody else, that somebody gets the publishing money. If the band owns some and somebody else owns some, the money is split.

    Publishing money can be a bigger deal than artist royalties, because unless someone has given you substantial publishing advance, there's nothing to recoup and you start going into the black right away. Imagine you wrote 10 songs on an album that sold 3 million copies. 60 cents times 3 million is 1.8 million dollars. Of course, one song on a record that selss 300 copies ... well, you do the math.

    As for sales of CDs, the store gets everything over wholesale. Things have probably changed since I was on an indie label, but my guess is wholesale is probably about 6 or 7 bucks, maybe more for huge artists.
  5. Well remember the TLC Behind The Music how selling 10 million records put them in the red???

    What I understand is they get 7 or 8% of the CD price. The artists have to relinquish the rights to the songs, so the recording company owns the song.

    Now, of that 7 or 8% they have to pay managers, lawyers, accountants, the videos themselves sometimes, etc., etc. ... what is left is $#!*.

    And let's not forget the wonderful advances!!! Until the advance payment is covered by CD sales the artist gets NADA NOTHING! Yeah they give you 50 grand but they will get it back dude...

    That's why Sheryl Crow, Don Henley and others are sooooooooo mad at the industry.

  6. I have heard that recording artists make most of the money from live gigs.
  7. Boplicity

    Boplicity Supporting Member

    Speaking of what recording artists earn...I find it amazing that Elvis Presley earned $35 million last year, twenty-five years after his death! Now that is what I call staying power.
  8. Go Elvis!

    I have also read that the Doors sell more albums today then when Morrison was alive.

  9. Craig Garfinkel

    Craig Garfinkel

    Aug 25, 2000
    Hartford, CT
    Endorsing Artist: Sadowsky Guitars
    There's alot of misinformation here. What an "artist" makes for "royalties" on the sale of a CD vary dramatically and are affected by many factors. Was the artist also the songwriter? Does the songwriter own more or less than 50% of publishing, or none at all? I highly recommend that everyone read "All You Need to Know About the Music Business" by Donald S. Passman. Passman is a big-time intellectual property attorney in LA and represents both artists and record companies. The book is a great read as well as being very informative.

    A couple of very primary examples:

    A new artist signing with an indie (small) label can expect 9-13% of sales. 12-14% if signing to a major label. A mid-level artist (somewhat established, good prior sales) can expect 16-18%, and the super stars get 18-20%.

    Okay, but a percentage of what? Typically, 20% is deducted from the retail price for packaging. So for a CD that sells for $15, the royalty rate is applied to $12 (15-20%=12). So a new indepent artist would get $1.08 per CD and a super star would get $2.40.

    But hold on. 15% is now deducted from the totals by the record company as "free goods"...promo copies and giveaways. Even if nowhere near that amount are given away, that's what's deducted, standard operating procedure. Now, out of what's left the record company will deduct all recording costs, whatever advance you got for signing, 50% of independant promotion costs AND 50% of video production costs, if you make one. Here's Passman's example of a new artist's deal (he uses a cassette retail cost of $10.98, but adjust the numbers for a CD and you get the idea):

    Cassette (suggested retail price) $10.98
    Less: Packaging (20%) - 2.19

    Royalty base $ 8.79
    Royalty Rate (14% -3% producer) x 11%

    Gross Royalty (11% of 8.79) $ 0.96
    x 500,000 units sold x 500,000
    Less 15% "free goods" - 72,000
    Less: Recording costs -200,000
    Less: 50% of promo costs - 75,000
    Less: 50% of video costs - 75,000
    Total $58,000

    Oh but wait!!! You got a $50,000 advance! After 500,000 slaes you've got $8,000!!!!!

    Welcome to show biz!
  10. Good point about the songwriters.

    They get more. And the bandmates sometimes don't know it...

    That's why many bands break-up.

    Also, even if it's not the reason for the break-up, it could make the aftermath real nasty. That's why say Bruce Foxton and The Jam's drummer (forgot name) sued Paul Weller after The Jam broke up. Weller eventually settled and bought out the rights to the band's songs.

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