A Graphic Look At Who Got Paid What In The Old School Record Industry
The traditional record deal may or may not help make an artist become a star, but it certainly does not make most of them rich. We like to think that things are changing – and certainly there are more alternative paths than ever – but the new record industry's 360 deals may well net even less revenue to the artist than the chart below.
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The thing that’s missing here is that the Label has all of the costs to sell that $1000 dollars in music. This graph would be much more interesting to me if it looked at percentage of profit rather than gross revenue. There is no mention of any of the cost of manufacturing or marketing.
Further to Frank’s point, however, it also doesn’t take into account what $1,000 this refers to – if it’s before the advance and recording costs are recouped then it’s a lot easier – artist = 0% (but the producer is still being accounted to for 3-4%, even if not paid until after recoupment). Only after that (and accounting for a share of independent promotion or other recoupable costs) would the artist get a piece of a $1,000 pie, and recoupment doesn’t happen often.
I would argue that 13% is extremely high even at that – while the base rate for the typical deal may be 12-15% of retail, the actual rate after reductions/deductions even for top-line sales is probably more like 7-10%.
And if it’s a 360, you’re damn certain it’s going to be less; not less of this particular pie but those other revenue streams will be reduced.
I thought that it was interesting this is model has come out now and is getting publicity. Something like this was far more relevant in the past, and both Love and Albini covered the numbers, albeit but without the cool graphic.
Most artists aren’t even getting offered these kinds of deals anymore, so we are looking more at a view of the past than of the present.
It’s probably more of a talking point for people outside the music industry, rather than for those within it. It’s like seeing the numbers from a typical movie deal when you’re an outsider.
Interesting chart – but I would also be interested to see what portion of the label revenue goes to the writer/composer side. I think it would expose nicely the issue of “controlled composition” if the artist and the composer is the same. Then also the difference between first cut and mechanicals. My guess is that at the lowest end of mechanical, $1,000 would represent 100 cd’s with an average of 12 songs. If they were all covers (1200x$.091) then the publisher would get $109 of which $54.50 would go to the writer, or be split with a co-writer. One conclusion is that creatives were exploited in the old model. There are now starting to be tools (like LicenseQuote to allow composers and artists to avoid that level of exploitation.
Bands make most of their money from merchandise, record sales are to pay back the label for the money they loaned to make the album