Music Club
Jan. 21st, 2006 01:02 am![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
laynie.livejournal.com posting in ![[community profile]](https://www.dreamwidth.org/img/silk/identity/community.png){kind=small}
hh_clubsATTENTION MUSIC CLUB MEMBERS! Per the debate we just had...
Includes: Where does the money from a CD really go?
First, let me give you a preface to how the industry works. A record label functions much like a bank. And the band is like a person who goes to the bank for a loan. The record label approves the band for a "loan" and charges them interest for the use of their money. But unlike a bank...if the CD's don't sell well enough, the band does NOT have to pay back any money to the label (the label cuts their losses by dropping them and loses thousands/millions of dollars instead of more). This happens all the time.
So it may appear the the Record Label gets a LOT of money. But what in the world does the label do with all that money? Well here's a list of things.
Interesting Fact: In 2001, less that 1/2 of 1% (or simply 0.5%) of all releases, accounted for more than 50% of all units sold. That means, that alot of albums released turn out to be big flaming turds...and lose tons of money for both the artists and the label.
SO, do I even need to mention how many people work at an average record label? About 15 - 20. Now you take into account their salaries, benefits, rent and utilities, industry related costs, and most importantly, LAWYER FEES. For an actual label in Nashville (will remain unnamed...but these are real numbers from my secret source. Bwaha.), in 2001...all of this cost them $4,040,000!
Now some of you may say, "Those artists, they don't need my money, they're rich!" While I can understand why you may say this about a Record Label (I have some unresolved label issues), this is completely untrue of the artist!!
Now you may say: "The artist makes no money off of CD sales anyway." Also, untrue.
The artist gets a share of money from CD sales. With this money, they pay the label back for things like Recording and Video Costs. If the artists fails to pay the label back repeatedly (not enough CD's are sold), they are dropped. Bam, no more financial support from the label. It becomes hard to find their Albums and they struggle to make money. Once the artists sells enough albums to pay the label back, they DO profit from record sales.
So what can you do?
YES, I have bought many albums and then found I only liked one song on it. The labels know this is a problem. That's why ITunes and Napster have emerged.
The labels are also failing with piracy controls...and they know it. Be patient, and it will get better.
Want to preview songs? More artist websites are offering clips and trials. Also...get on MySpace Music!! Or Amazon.com.
In conclusion...when you download music, you're hurting more people than just the Record Label executives and the artists. You have no right to free music. That's why the idea of Copyright was invented. So that authors can exploit their own works. You have complete right to music in the public domain...that means that the Copyright has expired. (Right now, anything published before 1922 is in the Public Domain.) But in America, intellectual property is protected.
Source: Information I have gathered from Industry Experts and Professors. Some of this could be found in "Confessions of a Record Producer" by Moses Avalon . I assure you, these are all truthful statements.
Okay guys...I spent about 4 hours writing this because it's a subject I feel quite strongly about. Let me know what you think and if you learned anything! Good, bad, completely irrelevent comments...I don't care. Give them to me!
PS. Would any of you graphics-talented people be willing to make a banner for the Music Club? As you can see...I suck at graphics. ^_^
Brooke / Gryffindor
Includes: Where does the money from a CD really go?
First, let me give you a preface to how the industry works. A record label functions much like a bank. And the band is like a person who goes to the bank for a loan. The record label approves the band for a "loan" and charges them interest for the use of their money. But unlike a bank...if the CD's don't sell well enough, the band does NOT have to pay back any money to the label (the label cuts their losses by dropping them and loses thousands/millions of dollars instead of more). This happens all the time.
| The Numbers - Broken Down (Most Albums sell 100,000 copies...usually less.) |
Suggested Retail List Price (SRLP) - $16.99 CARD (Price the store buys CD for)- $11.99 Distribution- $1.95 per unit Manufacturing- $0.75 per unit (CD, booklet, jewel case, packaging, etc.) Mechanical (Songwriter) Royalties- $0.91 per unit (assuming there are only 10 songs on the album) (if there is a Controlled Comp clause, it’s $0.68 per unit) Artist Royalties- $1.38 (assuming there is a typical 12% artist royalty) Producer Royalties- $0.35 per unit (assuming there is a typical 3% producer royalty) Free Goods- $1.25 (assuming there is a 10% free goods rate) AFM/AFTRA Payments (Musician's Unions)- $0.07 per unit Obsolescence- $0.09 per unit Record Label Gets - $5.24 per unit |
| The Label Pays for 100% of: | ||||
Marketing. This is the largest expense for the Labels. The artist does not have to pay the label back for these costs. This includes showcases, advertising, promotional material, radio visits, publicity, and tons of other stuff. On a *very* small project for a major label, the marketing costs would be about $625,000. However, on larger acts, a couple million dollars are spent marketing the album.
|
Interesting Fact: In 2001, less that 1/2 of 1% (or simply 0.5%) of all releases, accounted for more than 50% of all units sold. That means, that alot of albums released turn out to be big flaming turds...and lose tons of money for both the artists and the label.
SO, do I even need to mention how many people work at an average record label? About 15 - 20. Now you take into account their salaries, benefits, rent and utilities, industry related costs, and most importantly, LAWYER FEES. For an actual label in Nashville (will remain unnamed...but these are real numbers from my secret source. Bwaha.), in 2001...all of this cost them $4,040,000!
Now some of you may say, "Those artists, they don't need my money, they're rich!" While I can understand why you may say this about a Record Label (I have some unresolved label issues), this is completely untrue of the artist!!
| Here's some people that the average artist has to pay: |
Personal Manager Business Manager Lawyer Booking Agent Publicist Tour Manager Road Crew (Sound and Lights companies, engineers, musicians etc.) Website Designer (if the label doesn't do it) Merchandise Manager Their Living and family's expenses. |
Now you may say: "The artist makes no money off of CD sales anyway." Also, untrue.
The artist gets a share of money from CD sales. With this money, they pay the label back for things like Recording and Video Costs. If the artists fails to pay the label back repeatedly (not enough CD's are sold), they are dropped. Bam, no more financial support from the label. It becomes hard to find their Albums and they struggle to make money. Once the artists sells enough albums to pay the label back, they DO profit from record sales.
So what can you do?
YES, I have bought many albums and then found I only liked one song on it. The labels know this is a problem. That's why ITunes and Napster have emerged.
The labels are also failing with piracy controls...and they know it. Be patient, and it will get better.
Want to preview songs? More artist websites are offering clips and trials. Also...get on MySpace Music!! Or Amazon.com.
In conclusion...when you download music, you're hurting more people than just the Record Label executives and the artists. You have no right to free music. That's why the idea of Copyright was invented. So that authors can exploit their own works. You have complete right to music in the public domain...that means that the Copyright has expired. (Right now, anything published before 1922 is in the Public Domain.) But in America, intellectual property is protected.
Source: Information I have gathered from Industry Experts and Professors. Some of this could be found in "Confessions of a Record Producer" by Moses Avalon . I assure you, these are all truthful statements.
Okay guys...I spent about 4 hours writing this because it's a subject I feel quite strongly about. Let me know what you think and if you learned anything! Good, bad, completely irrelevent comments...I don't care. Give them to me!
PS. Would any of you graphics-talented people be willing to make a banner for the Music Club? As you can see...I suck at graphics. ^_^
Brooke / Gryffindor
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no subject
Date: 2006-01-21 02:33 pm (UTC)no subject
Date: 2006-01-21 02:54 pm (UTC)Of course, this technically, according to many law people, had the mistaken result of this: It is now not illegal for Canadians to take a CD or tape from someone (with that person's permission, natch) and make a copy of it. And what is downloading music other than making a copy of music someone else has? So while I may not have any moral right to free music, I may just have a legal one. Weird, eh?
- Becker, Slytherin
no subject
Date: 2006-01-21 03:46 pm (UTC)no subject
Date: 2006-01-21 05:23 pm (UTC)no subject
Date: 2006-01-21 07:22 pm (UTC)Is there really a need to spend tht much on music videos? Besides it's not like MTV or VH1 actually plays those anymore. The days of "Video Killed The Radio Star" are over. Now, thanks to MTV *which USED to stand for Music Television*, it seems as if "Stupid Vapid Reality Shows Killed The Video Star".
no subject
Date: 2006-01-23 09:26 pm (UTC)