Have you even read what BlinkingArrow and I wrote? Contrary to what the
content industry repeats, your musician does not earn a dime on your CD. That
is no exaggeration. BlinkingArrow already gave you some links. Here are some
more with some quotes. Please, read them:
By somebody who "used to run big record companies":
Artists who have a relatively small audience, say under 50,000 albums,
clearly make no money for themselves or their record companies in the
major-label game, so it really doesn't matter how their royalties are
calculated or what their rate is. (...) So let's take our mid-level artist,
and say that she managed to sell 200,000 copies of her latest CD. How does
the artist make out? Based on a royalty rate of $1.40 per album, 200,000 CDs
sold results in earned income of $280,000. However, before the artist buys
her mom a car (or pays off her college loans), she first needs to deal with
the dreaded recoupment. If our artist received a $25,000 advance and spent
another $115,000 making the record, this $140,000 is deemed recoupable, which
means that the label can collect that amount against royalties. Also, let's
assume the artist received $70,000 in tour support (recoupable) and another
$70,000 in recoupable video and promotional support (this is usually split
between the label and artist). That adds up to $280,000 in recoupable
advances, thereby canceling out the $280,000 earned by the artist on points
from her CD sales. Royalty-wise, it's a wash.
By Lee Ann Obringer:
Let's say a CD sells for $15. Right away we deduct 25% from that for
packaging, which makes the royalty base $11.25. Now let's say our artist has
a 10% royalty rate and that his CD sells one million copies. That sounds
great! The artist would earn $1,125,000! Except 10% of those were actually
freebies, so we really have to calculate that royalty based on 900,000, which
makes the royalty $1,012,500, and of course, there are few costs we haven't
talked about yet. (...) Suppose the recording costs were $300,000 (100%
recoupable), promotion costs were $200,000 (100% recoupable), tour costs were
$200,000 (50% recoupable), and a music video cost $400,000 (50% recoupable).
That comes out to: $300,000 + $200,000 + $100,000 + $200,000 = $800,000.
Suddenly our artist isn't making a million plus, he's making $212,500. But
don't forget there is also a manager to be paid (usually 20%), as well as a
producer and possibly several band members. The artist won't see any royalty
money until all of these expenses are paid.
By a record producer (in Maximum Rock ‘n’ Roll magazine):
They sold a quarter million copies! Here is the math that will explain just
how fucked they are: These figures are representative of amounts that appear
in record contracts daily. There's no need to skew the figures to make the
scenario look bad, since real-life examples more than abound. (... the math
...) 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.
By Courtney Love (singer):
This story is about a bidding-war band that gets a huge deal with a 20
percent royalty rate and a million-dollar advance. (No bidding-war band ever
got a 20 percent royalty, but whatever.) This is my “funny” math based on
some reality and I just want to qualify it by saying I’m positive it’s
better math than what Edgar Bronfman Jr. [the president and CEO of Seagram,
which owns Polygram] would provide. (... the math ...) Two million dollars in
royalties minus $2 million in recoupable expenses equals … zero! How much
does the record company make? They grossed $11 million.
