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Saint Paul, MN

Making more money?

How much money does a band make per CD?

Internet distribution is the way to go. Earth friendly, no plastic or paper. Low distribution costs, minimal storage and bandwidth. MP3 and DRM free is about the biggest plus.
How hard does DRM have to bite before business abandon it?

Lisle, IL

3 edits

said by Kilroy:

How much money does a band make per CD?
I thought I heard once it was something like $0.07 per cd sold. (through regular channels) not sure about selling it themselves.
Could be wrong though.

Jason Levine

1 recommendation

From »www.music-law.com/contractbasics.html :

A band can expect an average of $1.00 in royalties for each full-priced ($16.98) CD sold through normal retail channels.

Did I say the band was going to actually receive royalties? Not so fast. The other major concept involved in record contracts is the term "recoupment". Recoupment is a fancy word for pay back. Record companies expend a lot of money on bands. They pay for all the studio time, give the band an advance, promote the band, etc. All of this money is a loan to the band which the band must pay back. This is recoupment. The band pays back the record label out of their royalties. For example, if a major label spends $250,000 to record an album, the band must make over $250,000 in royalties until they receive their first royalty check. Once a band sells enough records to pay back the amount to the record label, the band has recouped and will receive royalties on future record sales. Approximately 80% of albums never reach this point which means that most bands NEVER receive any royalty checks. Do the math yourself, if you owe the record company $250,000 and you make $1.00 per CD, that is a quarter of a million CD's you must sell before you collect royalties. The one redeeming feature is if the band does not sell enough CD's to recoup, they don't have to pay the record company back. It does not come out of the band's personal pocketbook.
So given that most bands won't see any royalties at all, the artist's take is really $0 per CD.


That's the typical contract. That's middle-men expanding beyond any reasonable role and ripping off the public on one side and artists on the other. Many people form opinions on these issues without realizing that the industry works that way, and believing the dishonest rhetoric that RIAA represents artists. As they say on Slashdot, mod parent up.

But if artists can avoid that kind of contract and just hire the record company for distribution and maybe some promotion, it will be possible to confine them to their proper role, and the small share they deserve. If a record company provides distribution on terms favorable to the artist and the public, they should end up with, say, a few percent, and no copyrights.

That could be a viable model for the future. It could really rectify the situation. It would put artists in control, lower prices, expand the variety of music for sale, remove the DRM madness, and get the greedy, legislation-buying control freaks out of the industry.

All it takes is for bands to reject the old-style deals and deal with the record companies on very limited terms.

So it's not necessarily a bad thing that Radiohead are still dealing with the label. It depends on what kind of deal they make.


Suffern, NY
reply to Jason Levine

said by Jason Levine:

From »www.music-law.com/contractbasics.html :

The band pays back the record label out of their royalties. For example, if a major label spends $250,000 to record an album, the band must make over $250,000 in royalties until they receive their first royalty check.
How much of that $250K is "funny money"? That is money that the record company "pays" itself (as oppose to others) by playing right-pocket/left-pocket and thus does not actually spend? Are the rates that they claim to charge to record the record (ie: Studio Charges) the same as if the band did the recording themself at an non-company studio or are they inflating the costs? How much of the charges are actual and how much is pure profit? Much of that $250K is phony or inflated charges not real actual out of pocket costs (plus a reasonable profit).


Pensacola, FL
reply to Jason Levine

The music industry is basically a bunch of loan sharks except they don't sit in an old bar that also has a bookie stitting in the booth next to him.

Geffen, he got richer than 99% of the artists and became a multi-billionaire.

Funny the call it Virgin Records. Labels take a singer or bands virginity and prostitutes them.

Def Leppard's Pyromania sold over 10 million and they were 2 million pounds in the hole before Hysteria came out.
Saving the world keeps me busy. However, I find Earth very primitive from my home planet of Krypton.

Imperial, MO
reply to Jason Levine

said by Jason Levine:

given that most bands won't see any royalties at all, the artist's take is really $0 per CD.
I saw an interview with Kevin Cronan (sp) years ago where he claimed REO Speedwagon never made a dime until their 8th album. Up until then they still owed money to the record label.
What's certain about Darwinism is that it would take less time for (1) a single-celled organism to evolve into a human being through mutation and natural selection than for (2) Darwinists to admit they have no proof of (1) - Ann Coulter


Beaverton, MI
reply to RARPSL

Absolutely, they grossly over charge for studio time, I remember hearing Aaron Lewis lead singer of the band Staind doing a interview on a local radio station complaining about the evils of piracy and how it cost them either $250,000 or maybe it was even a million dollars to record whatever album they had coming out at that time. Unless a lot of that was their bonus, I really don't see why it should cost a band so much to record an album unless they're paying for over priced studio time and an over priced producer among others. Either that or they just really suck and needed a lot of work and "production magic".


Beaverton, MI
reply to swhx7

I believe Kid Rock has a contract similar to what you mention. At least according to my brother, who worked at Atlantic many years ago around the time Kid Rock was big. Be basically does everything but lets Atlantic do the promotion and distribution.