From: Hermit (hidden@lucifer.com)
Date: Fri Jul 25 2003 - 00:16:02 MDT
Further to nasty comments to athe nonrex by the vociferous "knownothing", I did some research on the US music industry and discovered the appended article, amongst many others, confirming athe nonrex's position. The highlighted bits are relevant to the conclusions.
This article, based on industry analysis, suggests that a successful 4 piece band will nett $161,909total income/$8,490,000 total sales or $40,477.25 individual income/$8,490,000 total sales. This calculates to 1.9% of the retail price or 28.6 cents per $15 CD sold, and 0.48% of the retail price or 7.1 cents per CD sold per musician.
So we see that contrary to the "knownothing's" bloviation, athe nonrex actually overstated the situation when he assumed the musicians would earn an effective $1/$ 15 CD sold. We also see that the band does in fact, as athe nonrex stated, pay the all the production costs (and then some).
I surmise that athe nonrex didn't address the income from tours and appearances, simpoly because we were discussing alternative distribution channels, specifically the CDs produced by the media distribution companies, vs some form of on-line distribution, and unlike the "knownothing", recognised that the other income would happen irrespective of the specific distribution channels carrying their work.
However, common sense suggests that the musicians will probably do significantly better with any accessible online distribution policy yielding a slightly better return than with conventional distribution networks. Even more interesting is the fact that it appears that simple file swapping networks, which should have the effect of increasing awareness of musician's work amongst the public (and thus boosting their tour income) will probably, at least based on the "knownothing's" assertions here (and contrary to the "knownothing's" prior assertions that this was "stealing" or "theft"), have the effect of dramatically increasing the musician's income; such that the musicians in question might do far better writing off their losses due to file sharing - or even giving their music away on-line - rather than signing inequitable contracts binding them to larcenous distribution companies which appear determined to alienate the musician's fans and restrict the musicians exposure and audiences for the "main sources o
f a musician's income".
[hr]
Source: NY Daily News (http://www.nydailynews.com/entertainment/story/60991p-57008c.html)
Authors: Not credited
Dated: 2003-02-19
A music industry case study
A look at a mythical rock band's earnings, with actual figures compiled from industry sources:
New York City's hottest new band is Grunthead, a four-piece hard rock group from Maspeth. Because they've got buzz, the band gets a 15% royalty rate, a few points above the usual amount for a new artist.[Hermit notes that royalties vary from a low of around 9% ("unproven") to a high of 22% (The very top few musicians in the world).
Its debut, "Gruntastic," goes gold – only 128 of more than 30,000 records reached that level in 2002.
The Gold Record Gross: 500,000 albums sell at $16.98 = $8,490,000 The Grunts' royalty is 15% of retail. That's $1,273,500.
But the Contract calls for "packaging deductions" of 25%, so the gross drops to $6,367,500. Then there's promotional albums and giveaways the labels give to wholesalers, retailers, radio and the press. That's a "free goods" charge of 15%, so the gross drops another to $5,094,000. So, the band's royalty is actually: $764,100. The record company keeps the packaging and "free goods" funds. After collecting a $9.99 wholesale price, it also reaps an additional $829,900. The $3,500,000 balance goes to retailers, assuming they sell the record for list price.
Because the band was hot, they got an advance from the record company of $300,000. They spent $200,000 of that recording the album, which included a $50,000 advance to the producer. They pocketed the remaining $100,000. Additionally, the label spent $100,000 making the band's first video, which got them played on MTV2. The band owes all of this money back to the label.
So the royalty drops to $364,100.
But the band's producer also earned a 4% royalty of $203,760, of which he already received $50,000. So the band has to pay him an additional $153,760, reducing their royalty to $210,340.
After pocketing $310,340 (which includes the remaining $100,000 of the advance), the band has to pay their manager 15%, or $46,551, and give 2% of the total deal, or $101,880, to the power lawyer who got them the deal in the first place. That takes the band down to $161,909.
That's not bad money, but it's split four ways, or $40,477.25 each, about the same as a city sanitation worker with two years' experience, without health benefits, vacation and retirement fund. But with, of course, groupies.
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