Jo Dee Messina

A love song from Jo Dee Messina just in time for the most romantic day of the year.......makes sense to me.  

I found the following blog interesting and educational......a friend of mine in the music biz wrote this so I know for a fact it is definately not a bunch of hog wash. 

So your ready to be a big star, huh? And it just makes sense that your gonna be a rich big star, right? And a major label deal will make all your dreams come true? Maybe, maybe not. Here is some basic, yet general, information for you.

A label will usually give an artist an advance to record an album. This is normally anywhere from $50,000-$350,000.  Once the record is made and sold then of course hopefully the money starts coming in. But before the artist receives ANY payments they must pay back recoupables. Recoupables are items deducted from the artist royalties to make up for expenses. It costs an average of $200,000 to record an album. You have recording costs. Producers fees (3-6%), Standard Free Goods (5-10% free promotional items).  

Here is some basic math for you.

14% royalty -3% royalty for the producer fees
That leaves 11% paid to the artist
X $12.05 (wholesale price)
That makes $1.32 per unit sold
But then we need to take 10% out for the promotional items
So that leaves a grand total of $1.19 for each CD to the artist.

Additional Recoupables
The label may offer additional support. But this is also recoupable

Tour Support 100% recoupable
Independant Radio Promotion   50-100% recoupable
Video Production  50% recoupable

Let's look at what it really looks like when it's all put together.

$300,000  Total Recording Fund
+
$100,000 (50% of the video cost)
+
$50,000 (100% of tour support)
+
$100,000 (50% of Independent Radio Promotion)
=
$550,000 in total recoupables due to the label


IF your record goes gold

Record label math:

$12.05
x
11% (artist royalty)
=
$1.32 per unit sold
X
500,000 units sold
=
$660,000 (artists cut for records sold)
-
$550,000 (total recoupable due to the label)
=
$50,000 due to artist vs. $6 Million for the label

Now if the record does NOT go gold the defecit may be taken from future records. It depends on the contract.

A record must go at least gold in order to break even.