The Label, The Agent, The Artist, The A&R Rep, The mess of it.
I will be doing a blog on Monday in attempt to explain the Music Industry in Layman's terms. What happens when an Artist is signed to a recording label? Essentially, they themselves become a Business. In order for a recording artist to be successful there are a lot of pieces to the puzzle. I've been following music careers of other idols for several years now, and it's very frustrating. Here is a breakdown of what the artist will pay and to who after they are signed. This is based on if they manage to sell 200,000-250,000 thousand albums. Last years winner Lee Dewyze hasn't broken 200,000 and either has Crystal. Kris Allen isn't doing that well either. David Archuleta recently LEFT his label and management team. The numbers aren't pretty. Actually it's pretty sad. The label advances to the artist MONEY, but then everybody takes a piece of the pie. Get ready to be shocked. Here ya go...
| Advance: | $ 250,000 |
| Manager's cut: | $ 37,500 |
| Legal fees: | $ 10,000 |
| Recording Budget: | $ 150,000 |
| Producer's advance: | $ 50,000 |
| Studio fee: | $ 52,500 |
| Drum Amp, Mic and Phase "Doctors": | $ 3,000 |
| Recording tape: | $ 8,000 |
| Equipment rental: | $ 5,000 |
| Cartage and Transportation: | $ 5,000 |
| Lodgings while in studio: | $ 10,000 |
| Catering: | $ 3,000 |
| Mastering: | $ 10,000 |
| Tape copies, reference CDs, shipping tapes, misc. expenses: | $ 2,000 |
| Video budget: | $ 30,000 |
| Cameras: | $ 8,000 |
| Crew: | $ 5,000 |
| Processing and transfers: | $ 3,000 |
| Off-line: | $ 2,000 |
| On-line editing: | $ 3,000 |
| Catering: | $ 1,000 |
| Stage and construction: | $ 3,000 |
| Copies, couriers, transportation: | $ 2,000 |
| Director's fee: | $ 3,000 |
| Album Artwork: | $ 5,000 |
| Promotional photo shoot and duplication: | $ 2,000 |
| Band fund: | $ 15,000 |
| New fancy professional drum kit: | $ 5,000 |
| New fancy professional guitars [2]: | $ 3,000 |
| New fancy professional guitar amp rigs [2]: | $ 4,000 |
| New fancy potato-shaped bass guitar: | $ 1,000 |
| New fancy rack of lights bass amp: | $ 1,000 |
| Rehearsal space rental: | $ 500 |
| Big blowout party for their friends: | $ 500 |
| Tour expense [5 weeks]: | $ 50,875 |
| Bus: | $ 25,000 |
| Crew [3]: | $ 7,500 |
| Food and per diems: | $ 7,875 |
| Fuel: | $ 3,000 |
| Consumable supplies: | $ 3,500 |
| Wardrobe: | $ 1,000 |
| Promotion: | $ 3,000 |
| Tour gross income: | $ 50,000 |
| Agent's cut: | $ 7,500 |
| Manager's cut: | $ 7,500 |
| Merchandising advance: | $ 20,000 |
| Manager's cut: | $ 3,000 |
| Lawyer's fee: | $ 1,000 |
| Publishing advance: | $ 20,000 |
| Manager's cut: | $ 3,000 |
| Lawyer's fee: | $ 1,000 |
| Record sales: | 250,000 @ $12 =
$3,000,000 |
| Gross retail revenue Royalty: | [13% of 90% of retail]:
$ 351,000 |
| Less advance: | $ 250,000 |
| Producer's points: | [3% less $50,000 advance]:
$ 40,000 |
| Promotional budget: | $ 25,000 |
| Recoupable buyout from previous label: | $ 50,000 |
<><><> | Net royalty: | $ -14,000 |
Record company income:
|
| Record wholesale price: | $6.50 x 250,000 =
$1,625,000 gross income |
| Artist Royalties: | $ 351,000 |
| Deficit from royalties: | $ 14,000 |
| Manufacturing, packaging and distribution: | @ $2.20 per record: $ 550,000 |
| Gross profit: | $ 7l0,000 |
The Balance Sheet: This is how much each player got paid at the end of the game.
|
| Record company: | $ 710,000 |
| Producer: | $ 90,000 |
| Manager: | $ 51,000 |
| Studio: | $ 52,500 |
| Previous label: | $ 50,000 |
| Agent: | $ 7,500 |
| Lawyer: | $ 12,000 |
| Band member net income each: | |
The band is now 1/4 of the way through its contract, has made the music industry more than 3 million dollars richer, but is in the hole $14,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month. The next album will be about the same, except that the record company will insist they spend more time and money on it. Since the previous one never "recouped," the band will have no leverage, and will oblige. The next tour will be about the same, except the merchandising advance will have already been paid, and the band, strangely enough, won't have earned any royalties from their T-shirts yet. Maybe the T-shirt guys have figured out how to count money like record company guys.
Steve Albini is an independent and corporate rock record
