Thread: CD Sales
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Old 02-18-2010, 06:49 AM
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Default Re: CD Sales

Originally Posted by rogue_drummer View Post
Rogue are they saying they don't make money from CD sales because they don't sell enough CD's or are they saying they don't make a large enough percentage of the CD sales.? That's two different issues and has to do with how the contracts are signed.

I'm not sure, the article didn't get that specific but I would imagine in Rush's case it would be not making a large enough percentage of the CD sales, but Rush?!? That is a good question GRUNTERSDAD. It seems like there is something else working here that wasn't mentioned in the article. I can't imagine that as long as Rush has been around and as many of their records, CDs, and the like are on the market and sold, and as much clout as they have, it's hard to imagine they couldn't get a better contract and negotiate better terms. I don't know, I'm probably missing something here.... .
Rush was signed in the 1970's, when record royalty payments were still low. They were stuck in the same contract until the late 80's when they left Polygram for Atlantic.

Keep in mind, their first three albums bombed sales wise, and the band didn't make a profit until their 4th album. Rush didn't break through and become mega starts until their 8th studio album (Moving Pictures). So from the record company perspective, when the band became mega starts, from the business perspective, that was finally pay back for all the years the label supported the band with poor to mediocre sales. So Polydor had little incentive to renegotiate.

When Rush did negotiate a new deal with Atlantic, they could only negotiate based on future sales, not re-negotiate past sales. And once on a new label, the new label doesn't get the benefit of back catalog sales, so clout becomes relative.

For the most part, Rush is a legend based on their combined sales over time. While every Rush album has gone gold or platinum, most of their back catalog has only done well based on new fans in the 80's and 90's then going backwards and buying their past albums. Even their best selling album, Moving Pictures, didn't go 4 times platinum until 1995, 14 years after it was released.

Rush are legends in USA and Canada, as well as England and a few spots in Europe. But outside of those core areas, they're not like a band like Iron Maiden who are popular all over the world more than they are in the USA.

While Rush have sold some 35-40 millions albums, that's small compared to the Eagles, Aerosmith, Fleetwood Mac, an others who have 60 to 100 millions albums to their credit.

But mostly, as you'll read in those books I mentioned, the major record labels are owned by mega corporations for whom selling records is only one small part of their core business. Altantic is part of the Warner Brother's family of record labels, who are in turn owned by Time-Warner, who are more concerned about their cable TV, movie and such business that generate far more revenue than any one band.

Part of where Rush kind of got screwed was they moved to Atlantic in the late 80's. Then in the 1990's, Atlantic and their parent company Warner Brother records when through numerous changes and mergers, and all all of the executives who were music people were fired and replaced with executives who were more about shareholder profit than band development.

I had a buddy who's band got signed to a big money deal with Warner Brothers, and when the label head firing's came, the band found themselves without an AR person, or anyone at the label who cared about them. Despite the investment of the recording costs of the album and two videos, the new label management dropped the band without a thought.

So, per Wikipedia, Rush has sold 25 million albums in the USA, and roughly 40 million internationally over the course of their career.

Per the info from the book I quoted, they got probably less than 10% royalty on their 1st deal, and well over 10% on their 2nd deal, averaging roughly 10% for their career.

So if they sold 40 million copies, and an average of $10 (far less in the 70's, more now, but we'll keep the math simple), that's $400,000,000 gross. At 10% royalty rate, that's $40,000,000. Minus producer costs of 3%, and managers and lawyers taking another 25% of the bands profits. Leaving the band band with $28,000,000

Also deducted are recording costs, video costs, promotions, ads, discounts for breakage, etc. What this is, I don't know. So I'll ignore it for now, but keep in mind that's significant.

So the bands $28,000,000 sounds nice, but divided that over the course from the 1st album to their latest album, (1973 to 2008) of 35 years, and now we're talking the band has made an average of $822,857.14 per year.

Divide that by three members (never mind John Rusty was on the 1st album) and Rush is now averaging $274,285.71 per man, per year BEFORE significant expenses BEFORE taxes.

For music legends with 40 million records sold, their average take home pay just from album sales isn't all that significant. Better than what most of us make at our day jobs, but nothing compared to the $400,000,000 in gross album sales.

Which is why they tour, sell t-shits, posters, music books, videos, and what ever else.

I think I read Neil Peart was quoted as saying future recordings may not even be on a formal album. And it's easy to see why.

If they could DYI themselves on CD Baby, they'd make a ton more money.
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