said by TechyDad:From »
www.music-law.com/contra ··· ics.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).