Wednesday, July 14, 2010

Who's Getting Paid In The Music Business

There's a big disconnect when it comes to musicians and where they think the money for their efforts comes from. Although in the Music 3.0 world the view has changed somewhat, artists and bands always believed that if they sold a lot of records (meaning CD's, vinyl, digital downloads and recorded music in general) that they'd make a lot of money in return in a major label deal. Well, not from the sales of music they won't.

In the chart above from high-power industry attorney Don Passman, author of the excellent book All You Need To Know About The Music Business, we see just where the money goes and it's not pretty.

I think that the figure on the bottom says it all - "For every $1,000 of music sold, the average musician makes $23.40!"

But this isn't all that different in the grand scheme of musical things than it ever was. Another high-power attorney, Ken Hertz (who handles Beyonce, No Doubt, Christina Aquilera and Alanis Morrisette among others), once told me that it was an acknowledged industry insider fact that bands and artists have always made 95% of their money on the road, not from records. Records are the engine that make everything go, but not the real breadwinner, as we see from the chart.

There's a nice article about this chart at the Root.

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F said...

And don't forget these two facts: #1: the 360 deal now takes a big chunk of touring and merch and #2 the artist is required to pay the label back for any money spent making and promoting the album. This is why TLC had to declare bankruptcy a year after they had the biggest album and single in world in '93: they owed a ton of money to the label and only netted $36k to split between the three of them. I'm looking forward to seeing the end of the labels on Feb 23rd.

Anonymous said...

What happens on Feb 23? Sorry, I am out of the loop, but found this interesting.


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