Question about Profit...

[LikeDays]

Okay, so I was wondering if anyone knew how the music industry worked as far as profits for bands goes...

 

I know that of the record sales, very small amounts of that actually gets back to the band, so given that Paramore has sold somewhere around 500,000, what would that add up to//how does it break down after recording/videos/tours/all that kind of stuff??

 

Anyone know?...

[calciumwaste]

Okay, so I was wondering if anyone knew how the music industry worked as far as profits for bands goes...

 

I know that of the record sales, very small amounts of that actually gets back to the band, so given that Paramore has sold somewhere around 500,000, what would that add up to//how does it break down after recording/videos/tours/all that kind of stuff??

 

Anyone know?...

 

500,000? i wish. i think it's somewhere between 100,000 and 200,000. i know that bands make most of their money from touring, particularly merch sales, but i don't know how much that is.

[Parawhore815]

Well, Paramore hasn't even hit 100,000 yet. Anyway, I know bands get like... somewhere from 4 cents to a dollar I think for each album sold but any money they get has to be payed back for recording studio time. If the band doesn't make enough money to pay for the recording time, they aren't obligated to pay the rest of the money.

This is all I know. I hope this was of some help. : /

[Itsgettingcloser]

Heres a breakdown of cd cost

 

http://www.cnn.com/interactive/entertainment/0101/cd.price/frameset.exclude.html

[thebrowncoat]

Yeah...a lot of it depends on the deal the band has with the label, but basically, for a band like Paramore just starting out, they're making the majority, if not all, of their money from touring and merch sales.

 

However, that's not to say you shouldn't buy their CDs...because the record company has to get paid back for their investment in studio time and all that good stuff...so you're still supporting them by buying the album.

[sofa9053]

Ah yes, again my college education will pay off.

 

Okay so here's how it works. The record company gives the band either an advance or a budget (depending on the status of the band in the public eye.) If the artist gets a budget, they usually are very careful with the price of production and videos. Usually, a budget is given to a band that is just being signed or small independent labels that don't have enough money to just hand out to their artists. In Paramore's case, they have been signed for a couple of years and have enough status to get an advance (I could be wrong though.) Plus, Fueled By Ramen is a pretty big independent label. With an advance, the band is given an amount usually ranging from 100,000 with a new artist to upwards of 1,000,000 or more for the higher profile artists. The band takes the advance, picks out all of their staff to make the record, finds a recording studio they want to work in, pick a single, make a video, and pay all of the members of the band. In the case of a single artist, they keep whatever is not used from the advance. After the album is made and the video is made, when the artist/band begins collecting royalties, the initial profit made from the album and/or video is recouped for the advance. Essentially, the beginning profits are taken back by the record label to pay for the advance, breakage, and various other things. After the advance is paid off, the royalties begin going to the artist.

For CD sales, there is a statutory rate paid to the artist for the albums. That rate is 8 cents per song. That ends up being 80 cents per 10 song album. So if Paramore has sold 100,000 CDs, that comes out to $80,000. Minus their advance which is unknown. Most people know that bands make most of their money from touring anyway. The way that is broken down is whatever ticket sales are, the profit from that is spread out to venue fees, crew fees, props, and other various costs. After those costs are paid, the band collects.

 

Again, I have managed to write an entire essay on the topic of the music business. I hope this helps...if you read it all the way through anyway.

[Trevor]

Word, sofa is correct. CD sales nowadays arent what they use to be in terms of revenue. With the internet and the whole piracy ordeal bands now have to heavily rely on things like merch touring and other sorts of exclusive media to fans.

 

and recording albums is not cheap either... My band's tab for our album (and we're IN with the producer) is going to range around 2000-3000$ per song. 30,000$ album is REALLY cheap, mix and mastered. Some of the bigtime names that spend months in the studio can rack up an astronomical bill.

[renk]

For some reason I always thought that bands signed to indie labels made a lot more than that off of their cd sales, and basically they had moreso a distribution deal with the label than anything else

[LikeDays]

500,000? i wish. i think it's somewhere between 100,000 and 200,000. i know that bands make most of their money from touring, particularly merch sales, but i don't know how much that is.

 

oops, lol.... 100,000.... 500,000... Same thing... I definately knew that was wrong, too... Oooops.

 

 

And Sophia, yeah, thanks... That actually did help... Yesssss more useless information for me to puke out to people at random! Wooo

[calciumwaste]

Well, Paramore hasn't even hit 100,000 yet.

yeah i know, but that's just the soundscan results, so it's US only. they've sold another 25,000 in the UK and probably smaller amounts in other countries too.

 

Paramore's pretty big for an indie band, so my gys is that they are probably bringing in some money. a lot of smaller bands essentially don't make any money. if you only have like 20 people at a show and four bands, then that comes out to only one ticket cost per band member, and for a small band that's probably no more than $10. and then they have to pay the venue and buy gas.

[sofa9053]

For some reason I always thought that bands signed to indie labels made a lot more than that off of their cd sales, and basically they had moreso a distribution deal with the label than anything else

That would be cool but there is a set statutory rate at 8 cents per song. Distribution deals could go into another essay but for times sake (and everyone getting bored of me spewing out useless info), distribution deals through indie labels can vary. Sometime an indie can have their own distribution company (which is unlikely) but most of the time, they will go through a major record labels distribution company.

[Itsgettingcloser]

That would be cool but there is a set statutory rate at 8 cents per song. Distribution deals could go into another essay but for times sake (and everyone getting bored of me spewing out useless info), distribution deals through indie labels can vary. Sometime an indie can have their own distribution company (which is unlikely) but most of the time, they will go through a major record labels distribution company.

 

Of all the price breakdowns I have seen, I have always seen somewhere between 1-2 dollars goes to the artist from every cd.

[sofa9053]

Of all the price breakdowns I have seen, I have always seen somewhere between 1-2 dollars goes to the artist from every cd.

 

Most CDs do get somewhere between 1-2 dollars because most albums have 12-14 songs (or more). That comes out to .96-1.12 per album sold at 8 cents per song.

[blu]

That's interesting.

 

That'll change my mind now when I'm trying to get a CD at the cheapest price possible.

[renk]

That would be cool but there is a set statutory rate at 8 cents per song. Distribution deals could go into another essay but for times sake (and everyone getting bored of me spewing out useless info), distribution deals through indie labels can vary. Sometime an indie can have their own distribution company (which is unlikely) but most of the time, they will go through a major record labels distribution company.

 

 

so basically the main difference bet. a major deal and indie deal is how hands on the staff is with the band. What I mean is with an indie deal a band is given more of a chance to grow, or am I still missing something monetary wise

[sofa9053]

so basically the main difference bet. a major deal and indie deal is how hands on the staff is with the band. What I mean is with an indie deal a band is given more of a chance to grow, or am I still missing something monetary wise

That and the majors have more money.

[exit_152]

That's interesting.

 

That'll change my mind now when I'm trying to get a CD at the cheapest price possible.

I might be wrong but it doesn't always make a difference what the actual consumer pays for it 'cause there's a set trade price for the record stores to buy it, then they pick the price they want to sell it at to you and me. The artists recieve their money from the stores that've bought it off the distributours at trade price. Saying that, sometimes they do lower the trade price to encourage stores to sell it cheaper so then more people will buy it but with that logic, although they're taking a pay cut they're selling more CD's so it doesn't really matter.