Thread: CD Sales
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Old 02-16-2010, 09:45 PM
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Default Re: CD Sales

Actually, CD sales have always paid the bands who make the albums poorly.

This is why so many big name bands try to get off their record lables.
This is why Metallica sued their record company, and why Prince said he was a slave to his record company.

The albums are a means to tour, the tour hopefully pays, and then the band picks up extra sales from t-shirts, and such.

From the book "Bumping into Genius" by Danny Goldberg (who headed three different record lable, once managed Nirvana and Steve Nicks, and got his start doing PR for LEd Zepplin).

Page 47-48
Quote:
"So in the mid-eighties, when CD's sold for $10, a new artist who got a 12 percent royatly would be credited with around $.60 per sale. Foreign sales in those days paid at a 50 percent of the US rate. By the late ninties, the international rate to US ratio was much higher.

So if a 12 percent artist got $50,000 to sign, and spent $275,000 to record, and sold one million copies in the US, and one million outside the US, they would have a gross royalty rate of $900,000. Record producers...typical got 3 percent, which in this example would be worth $225,000. After deduction of of the advance and recording costs, that would leave $350,000 in artists royalties paid to the band. Assuming a 4 member group, who paid a manager, lawyers, and a business manager a total of 25 percent, this would mean around $72,000 per member"
So yeah, a band sells 2 million copies, and nets roughly $72,000 for guy. And this is using 1980's numbers. Royalty rates were as low as 3% in the 60's to 14 to 20% in more modern times.

The real money is in publishing rights to the songs. ASCAP and BMI collect from the record companies, radio stations, TV, song books, and anywhere the songs are played and pays that to the song writer (or who ever owns the rights to the publishing).

Per the same book, the song writer(s) of the above album would make roughly another million in publishing fees from the sale of the album, and then what ever from radio, music books, etc.

Fighting over publishing money tends to be the biggest issue with bands and labels.

The Beatles famously signed away all their publishing rights when they were young, and didn't know better, which is why so many Beatles songs are used in advertisements. However, they fortunate to sell enough albums they became rich anyway.

This is (in part) why Pete Townshed of the Who never had money troubles, but the rest of the band often did.

Van Halen songs are always credited to all members even though everyone knows Eddie writes 99% of the material so as to divide the publishing equally. Other bands break up because of the inequality of the division of publishing.

And this is why so many older artists are ticked off over file sharing. Not only do the bands lose their royalties for playing on the song, but the song writers lose tons of money in publishing fees.

And if you read "Hit Men: Power Brokers and Fast Money Inside the Music Business" by Fredric Dannen, you'll read how many other costs are charged against that royalty rate, giving the people who play on the albums even less money than the above scenario.

And yet despite all this, so many of us darn near kill ourselves to become part of it. :-P
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