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Music: Can someone explain music's financial system to me?

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      CommentAuthorPaladine
    • CommentTimeJun 24th 2009
     (6220.1)
    I just read in a comment by Mr. Ellis that Amanda (f) Palmer didn't make any money from her 30,000 CD sales, and I'm wondering how on earth that is possible.

    So, is there anyone here who can explain to me how that works, in general or specifically with regards to AP? I mean, how much does an artist normally earn from a sold CD? Surely more than 0.00, am I right?
  2.  (6220.2)
    Record contracts sometimes require new musicians to pay back all costs associated with an album before receiving royalties, and usually cover seven years or seven albums. The musician also has to give the record company the publishing rights to the songs (making no money when the songs are used anywhere but the album). And the musician’s cut of the album sales is usually pretty awful, the old figure that always got passed around was .85¢ an album. So if the record company spent $50,000 to produce and promote the album and the artist only brings in $25,500 in royalties, the musician gets fucked, even if the record company still made a profit. And then the musician is under contract to a record company that might not want to release another album but won’t release him from the contract, either. It’s really fucking ugly, and it can lead to musicians who sell millions of albums making no money because they can’t control how the record company wastes money on promotions. The most famous example is probably CrazySexyCool by TLC, which sold over fifteen million copies, for which the group made almost no money because the record company forced them to pay for the outrageously expensive music video Waterfalls. Tom Petty got so screwed by this early on that he established a technique of filing for bankruptcy to get out of the record contract; many other musicians have either done so or threatened to do so since (Metallica, Eminem). Watch old episodes of Behind the Music for lots of horror stories about horrible record contracts.
  3.  (6220.3)
    The Problem With Music by Steve Albini: http://www.negativland.com/albini.html
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      CommentAuthorPaladine
    • CommentTimeJun 24th 2009
     (6220.4)
    Thanks. From writer's contracts I suspected it was bad, but...
  5.  (6220.5)
    simple version: you sign a record contract, you owe everything they spend on you back.

    answer: fuck the record industry. you can make more money on MUCH lower sales and touring if you dont deal with shady corporate folks.

    im more confused about the hows of amanda palmer making 19,000 dollars from being on twitter. how the hell does that work?
    • CommentAuthorDC
    • CommentTimeJun 24th 2009
     (6220.6)
    The answer is here.
    Basically she used twitter to advertise things that sold really fast.
  7.  (6220.7)
    ah, i assumed that was the likely answer, but i wasnt sure if there was some monetized aspect of "the twitter" that i was unaware of.
    • CommentAuthorsacredchao
    • CommentTimeJun 24th 2009
     (6220.8)
    First, that's BS. Those record companies wouldn't exist without the musicians, and they should remember that.

    Second, it puts a whole new light on P2P music sharing, at least for me. Since the record company is the one making all the money, you're not actually taking anything from the artist anyway. Interesting.
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      CommentAuthorrickiep00h
    • CommentTimeJun 24th 2009
     (6220.9)
    James has it mostly covered. There are other fun loopholes like the thousands of albums and singles that go out to radio stations are exempt from royalties, as are CDs sold through record clubs like BMG and Columbia House. And the 10% "breakage" deduction, from when vinyl records were more popular. Basically, the company figures ten percent of the records shipped will arrive broken, so they take that cut out, whether it happens or not.

    Every expense made by an artist, whether it's touring or recording, comes out of the artists' royalties, not out of the cost of the CD. So, that $.85 an artist makes per CD? That goes back to the record producer, studio musicians, tour support, the artist's management, all sorts of costs that are necessary to the actual production and promotion of the album, and to the artist last. Artists generally sell off their publishing rights, or rights to their master recordings, but if they don't, they're pretty much indentured servants to the labels. Basically, think of getting a "typical" record contract as taking out a loan with the worst possible repayment structure.

    And tour support... if an artist can get it, and the label will pay what for what the artist wants, that's great. But a lot of the time they won't. I know both Pink Floyd and NIN have had to fund tours out of their own pocket (like 100%... the label wouldn't even give them a budget), because the label wouldn't pay for it. AFP, I believe, has run into the same problem, and she's not nearly on scale that those tours are.

    As a contrast, Britney Spears is currently touring with 50 dancers, 200 staff members, 30 trucks, and a ton of buses for all those people. And the label is paying for it all. If even a fraction of those costs went to developing new artists, I think we'd have a lot more diversity. But that's a different discussion altogether...

    And, since we brought up Metallica, they make around $2.00 per CD. But, as James mentioned, there was a huge legal battle that allowed that to occur. Which is pretty par for the course if you become successful. It's a pretty stupid cycle: you have to earn a ton of money to get the lawyers to get a decent royalty.

    Anyway, I'm rambling. There's more I could probably say, but this is the quick version.
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      CommentAuthorjoe.distort
    • CommentTimeJun 24th 2009 edited
     (6220.10)
    First, that's BS. Those record companies wouldn't exist without the musicians, and they should remember that.


    no multi million dollar corporation would exist without the poor/middle class that fuel it. sorry. just be happy about the collapse of that model?
  11.  (6220.11)
    Now I feel less bad for torrenting Who Killed Amanda Palmer, cheers!
  12.  (6220.12)
    First, that's BS. Those record companies wouldn't exist without the musicians, and they should remember that.

    Why? There’s no shortage of musicians and performers waiting to be the next person to take a gamble at being the next Katy Perry. Musicians have had decades to get their shit together and come up with a better solution, and instead they just keep going back to the labels, and now Livenation. The problem here is not the labels, it’s all the musicians who want to be famous and wealthy and have limitless access to coke and whores and have someone else deal with all the bullshit. Musicians line up to get fucked by the lables. They beg for it!

    If more musicians did what Ani DiFranco did—treat being a rock musician as a serious job—they could have worked out great ways to make a healthy income and broken the labels’ hold on the industry. The cost of entry is lower now than ever. Instead they keep chasing after the same stupid dream no matter how many times its pointed out that their chances of hitting it big are astronomically low.
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      CommentAuthorTF
    • CommentTimeJun 24th 2009
     (6220.13)
    Second, it puts a whole new light on P2P music sharing, at least for me. Since the record company is the one making all the money, you're not actually taking anything from the artist anyway.


    My album's been downloaded several thousand times this way and I'm not with a record company so.........

    I know some people wouldn't pirate from an indi - but most people just want free music.

    Remember - the sooner an artist pays back the record company and delivers the required amount of album's the sooner they can renegotiate and use their now branded name to hopefully make some money for themselves.

    it’s all the musicians who want to be famous and wealthy and have limitless access to coke and whores and have someone else deal with all the bullshit


    This is a problem that kind of burns itself out - loads of bands act like rock stars before they're rock stars and end up no where. Their band to them is really just a social thing - like other guys would go play football one night of the week.

    The ultimate appeal of a record label is job security (or as close to it as you can get in the music industry) not to mention the things a big label can do that even a medium sized Indi-label can't.

    Having said that - I don't want to sign with a major label (or if I do I just want some sort of distribution deal).

    The 360 deals Livenation pioneered are insane - and I think a musician would want to be very desperate or very naive to sign one.
  14.  (6220.14)
    The 360 deals Livenation pioneered are insane - and I think a musician would want to be very desperate or very naive to sign one.


    i figure that with the majority (that i know of) of artists that have signed those, they are already so ridiculously rich that they make more off of their high dollar investments anyway. kind of the "oh, i dont want to be bothered with this" mindset. but who knows, im just kind of guessing at that one.
  15.  (6220.15)
    The 360 deals Livenation pioneered are insane - and I think a musician would want to be very desperate or very naive to sign one.

    They’re great deals if you’re U2 or Madonna and you want someone else to handle all shit that your personal staff, manager, and PR people used to do with less overhead.
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      CommentAuthorTF
    • CommentTimeJun 24th 2009
     (6220.16)
    That's true actually - I should have said "established and wealthy or desperate and naive" :-)

    They are being offered to new artists though
  17.  (6220.17)
    ^which IS totally ridiculous!
  18.  (6220.18)
    The ownership of music is going away. Jeff Tweedy said it years ago, "A song is not a loaf of bread". Artists are going to make money off of subscriptions, concerts, experiences. Thea Gilmore is doing something very interesting along these lines.

    Basically, if you're good, or good to enough people, and get noticed, you can make money. Actual money, not pretend loans from record companies to record albums they don't promote and dump in Latvia as food products.

    Every piece of music I've bought in the past, god, 7 or 8 years has come from hearing it online. And if I heard it or got it free, I usually ended up spending money on the artist in some other way.
  19.  (6220.19)
    Are there any other industries out there that where such one-sided deals are still common? Even people working in mainstream comics get paid something up front, right? I’m trying to think of some other industry where people walk into terribly abusive deals even when it’s common knowledge that the other party is going to screw them. I feel bad about dumping on the musicians like I did, but I just can’t think of any other group of people who have consistently signed themselves up for this kind of lopsided exploitation (at least not in developed nations).
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      CommentAuthorPaladine
    • CommentTimeJun 24th 2009
     (6220.20)
    Writers get not-so-good deals, other than that I don't know.

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