How much does artist earn (re: radiohead)?

[slaveern]

You guys probably know about the upcoming Radiohead album distribution thing. My question is, how much does artist earn from their album released by a major label? I'm sure it totally varies from up-and-coming artist to established ones, but I keep reading stuff like 'a few cents per song', or 'if you're multi-platinum you get max ~30% on revenue'. Basically I wanna know in reality does label gives a fair share back to artists.

[Sean Sullivan]

If you are a HUGE star (Tim McGraw level) you probably get 15% of the profit from the sale of albums...I'd the majority of artist is around 8% or less. It actually very complicated because you don't earn anything until you recoup expenses (90% of albums don't) so the majority of the money an artist makes is through publishing and live performances.

An artist like Radiohead...I have no idea. Their music is synchronized to many commercials/film and they don't get a ton of radio play, but they probably roll in the bills when they play live.

[c.gymer]

A few (maybe 15-20) years ago that would be on the money, but deals are for the most part much better now. 15% would be about right for a lot of deals these days with larger labels (in the UK at least). Some smaller labels will strike far better deals with bands (my old label did a 50/50 split with us!).


Radiohead on the other hand are now without a label so stand to do very well out of the new record which comes out in about a week.

[AMIEL]

You have to make huge sales to make bif money!!! but if you reach a certain level of popularity you can make great money on shows...now the labels want also 20% of the shows income.......

[Stevil]

in reality does label gives a fair share back to artists.

for the most part, no.
all depends on the contract/label/artist/budget/shenanigans/ect. everything is a variable.

for most larger bands it's the promotional tool that affords them the opportunity to make money off live gigs. so why not give it away & let the die hard fans pay for deluxe packaging.

cool stunt. i hope it gets a good reaction & inspires other artists to deviate from the traditional formula.

[numrologst]

We've got a 70/30 deal with our label(indie). That is 70% to us, 30% to them. They don't own our masters...

However, they don't give us big budgets to work with. Since I own a studio and production company, we don't have to pay for recording expenses... And we have made enough money and make enough money that we don't need any advance to make it on the road.

That being said, the deal is pretty okay. We control our own destiny and the label provides us with some pretty great opportunities and connections. It's a bit slower paced, but it really pays off for us.

[dbbubba]

There are really no "standard" contracts.
Each "deal" is negotiated by the band's attorney, but there are general guidelines and precidents that can be expected.

Also, remember that every member of a band may not be included in the record contract.
Some members may be employees of the band's buisiness.
Some members may not share in the songwriting revenue either.

In many cases the front guy or key personall are signed by the label and the other guys are employees.

It has always surprised me who was an wasn't part of many deals.

Most record contracts I have seen are kinda; like the "boat" story...
The happpiest day is the day you are signed and the next happiest is the day you are released.

This has been proven true by most people I known who were signed to a major label.

It's like this:
Be carefull what you ask for... you might actually get it!

[Mike Caffrey]

Originally Posted by slaveern

You guys probably know about the upcoming Radiohead album distribution thing. My question is, how much does artist earn from their album released by a major label? I'm sure it totally varies from up-and-coming artist to established ones, but I keep reading stuff like 'a few cents per song', or 'if you're multi-platinum you get max ~30% on revenue'. Basically I wanna know in reality does label gives a fair share back to artists.

In most cases the artist gets nothing.

Does the label give back a fair share, no. When a label takes 90% of the revenue, the label is getting ripped off. When you understand why that is, the solution the probelms with the current business model becomes clear.

In short, a label is a venture capital company, but they recoup from the smallest revenue stream that their investment creates. Both sides would benefit from changing this. Not so much currently estabilshed artists, but new ones for sure.

[allencollins]

Merchandise is big$$$$ for many bands. Most Metal bands do well since every 15 year old on earth has a slayer or metallica shirt. Think about it, 12000 people at a show. Say even 10% buy a $25 shirt at $20 profit thats $24000 1 show.
do 100 shows a year that 2.4 mil on t-shirts alone. What about Ticket sales? 12000 seats X $50. Say the band gets 1/3. Thats $20 mil for 100 shows. Add 3% for the record sales. BMI/ASCAP is megabucks too. If your manager didn't bend you over a band can do well. Add a few 100k for endorsments. Jeez i wish I was rockstar

[dbbubba]

"Can do well."

Is a relative term.
Most I have known have been or were living pretty shitty lives.

The spurts of money didn't really make the whole thing worthwhile in my eyes.
I was in the middle of it, too.

In debt
Broke
Dope
dead...
take your pick

The guys that escaped the "machine" are quite thankfull!

[ramona]

Very very little.
Record contracts aren't figured in %, they are figured in points. A new artist on a major label might get 20 points if they have a good lawyer. That will in no way translate to 20%.

This is, I'm sure, remedial to many here, but many musicians don't understand that whatever is recoupable in your contract will be paid back out of your tiny portion of the profits, not from gross receipts.

Also, the record company is loathe to write any royalty checks, so even if you are lucky enough to recoup, when that moment arrives, count on the record company to re-press your CD.
An example, completely dumbed down to make the math easier:

Record company spends $100,000 to record your CD. You have negotiated 19 points. The CD sells for $10.

Some record companies still immediately deduct a fee for CDs that might break in shipping (holdover from the days of LPs), or eventually be returned. The standard deduction is 10-25%! Now, at best, you are looking at possible $9 profit from CD sales.

But, you must first deduct manufacturing costs. Minus $2. We are now at $7 per CD.

Now they deduct dozens of small amounts based on things like, "we might have to sell this CD at a reduction through Columbia House", "we don't make as much profit from overseas sales". These little things make up the bulk of your 60 page contract. Minus $2. We are now at $5 per CD.

You might expect to earn $.95 per CD at this point, but you have forgotten that your producer has negotiated for 4 points. You stand to make $.75 per CD.

The initial $100,000 has to be paid from your $.75 portion of the profit. At $10 per CD, that means you will have to sell at least 133,000 CDs to recoup.

What about independent promotion, the cost of the video, the dinners with Clear Channel executives? Add another $50,000 to your bill. You will now have to sell over 200,000 copies to recoup.

By the time you see your first penny, the record company will have grossed $2,000,000.

There are many, many other ways the record company will squeeze the blood out of you. This is a best case scenario.

[Pohaku]

The Kinks - Moneygoround

Robert owes half to Grenville
Who in turn gave half to Larry
Who adored my instrumentals
And so he gave half to a foreign publisher
She took half the money that was earned in some far distant land
Gave back half to Larry and I end up with half of goodness knows what
Oh can somebody explain why things go on this way
I thought they were my friends I can't believe it's me, I can't believe that I'm so green

Eyes down round and round let's all sit and watch the moneygoround
Everyone take a little bit here and a little bit there
Do they all deserve money from a song that they've never heard
They don't know the tune and they don't know the words
But they don't give a damn
Theres no end to it I'm in a pit and I'm stuck in it
The money goes round and around and around
And it comes out here when they've all taken their share

I went to see a solicitor and my story was heard and the writs were served
On the verge of a nervous breakdown I decided to fight right to the end
But if I ever get my money I'll be too old and grey to spend it
Oh, but life goes on and on and no one ever wins
And time goes quickly by just like the moneygoround
I only hope that I'll survive

[kafka]

Originally Posted by slaveern

You guys probably know about the upcoming Radiohead album distribution thing. My question is, how much does artist earn from their album released by a major label?

My guess is not enough to make it worth their while, given that Radiohead is releasing their latest without a major label.

[Mike Caffrey]

They took a year off at their peak. I doub much of what they do is motivated primarily by money.

This album will make it on to 10 million ipods at least, maybe far more.


I think it would be pretty easy to make a lot of money from those people who've been listening to that album over an over. Obviously not by selling it, but can you sell somethign for $10 to each of those fans in a year? Or, could you sell something for $100, like a concert ticket to 10% of them? Either way that's $100 million bucks.

How about a $100 ticket, a $35 t-shirt, a $6 beer, a $4 pretzel, $30 for parking at the venue, a $30 DVD of a show form the tour, maybe a prorgam, a t-shirt for a friend who didn't go, a little publishing money, a little sync money and they're well over $250 million for the year.

It's interesting how "devaluaing" music by giving it away can certianly generate a lot of income.

What do you think their first advance was? $500k? Probably less, but let's call it $1 million when you add in the video and the tour suppor and the radio promtions for ther first album - Pablo Honey, which got how much airplay, none?

How about another $1 million for The Bends and let's imagine that the label didn't need to spend any money for OK Computer.

So now the label put up $2 million and made a bunch of those albums. None were diamond, so fewer than 30 million copies were sold, probably fewer than 10 million - that's three albums. Lets say the label took 100%. That's still less income over the course of three albums than Radiohead can make in a year giving their music away (which is practically what a record deal is). So if we estimate that the sales of the first three albums totaled 25 million at $10, Radiohead can make, per album the give away, the same that a label can make in the cumulative sales of three albums.

Why can Radiohead make that much money giving away their albums? Becuase they're a great band with great songs, but why is it taht we've ever heard of them in the first place? It's because of that initial $2 million. Who's gettign screwed by these absurd deals? It's the label not the artist?

Certainly the deals screw al ot of artist, but there are a ton who go dropped and didn't get a cahnce to make another album becuase they fell a little short. They would have been profitable for the label if the label had taken 50% of everything rather than 90% of the smallest revenue stream.

Both sides have always gotten screwed by the bad structure of the traditional record deal.

[Tibbon]

Radiohead will make the sum of whatever people pay them for the new album of course! That's the whole idea. They are getting it. No label, etc.

They are probably going to make out like bandits on this one. I haven't met ANYONE yet that has said, "I'm gonna pay only a dollar for the new Radiohead album". If anything, i'll pay more for their album just out of principal than I have for any other album this year. It's like tipping a waitress poorly, you just suck if you do it.

On average however... Well actually on average the musicians get jack from an album. The top 2% make out rather well however. Just like the rest of life. It ranges from losing money, to being Paul McCartney.

I can't remember the figures, but generally after they recoup, when counting publishing AND the recording, they get a dollar or two per album sold.

[bunnerabb]

How about a $100 ticket, a $35 t-shirt, a $6 beer, a $4 pretzel, $30 for parking at the venue, a $30 DVD of a show form the tour, maybe a prorgam, a t-shirt for a friend who didn't go, a little publishing money, a little sync money and they're well over $250 million for the year.

I never knew that they owned their own venues, merch stands and food vendors in every stadium ever built.

Wait. They do not.

Mea culpa.

If you try and tell me that I beat my brains out to manufacture a 12 song disc and it's nothing but an ad for my tour, because, you know.. "P2P, man", I will happily kick your ass around your shoulder blades.

Stop stealing IP.

[headwerkn]

Originally Posted by Tibbon

They are probably going to make out like bandits on this one. I haven't met ANYONE yet that has said, "I'm gonna pay only a dollar for the new Radiohead album". If anything, i'll pay more for their album just out of principal than I have for any other album this year. It's like tipping a waitress poorly, you just suck if you do it.

I totally agree... after all, they got 40 quid out of me this morning when I found out about the new album... "5 cents for the digital download or £40 and I get 2 LPs, a CD and the digital download? hmmm! where's my credit card...."... and they say music on physical media is dead. Radiohead have always taken album art and packaging to a new level (I became a graphic designer because the OK Computer artwork inspired me to the core), and bravo to them for actually putting some value back into the buying of a record.

shame i won't see it until Xmas though...

I'm sure Radiohead are at a point in their careers where they could care less about making massive amounts of money off their new album... I doubt they're hurting for cash, and as others have said, it's live touring that really generates the dough for bands... which is probably why you see most reasonably successful bands doing 200+ date world tours. I'd the only way they get fed.

[Mike Caffrey]

Originally Posted by bunnerabb

I never knew that they owned their own venues, merch stands and food vendors in every stadium ever built.

Wait. They do not.

Mea culpa.

If you try and tell me that I beat my brains out to manufacture a 12 song disc and it's nothing but an ad for my tour, because, you know.. "P2P, man", I will happily kick your ass around your shoulder blades.

Stop stealing IP.

I know of artists who get a piece of all of that.

I'm not jsut saying that it's nothing but an ad for a tour, I'm saying that that's what it's been for the past 30-40 years from the artist's perspective.

Making enough money to live of as an artis, solely through record sales is an extreme exception. In fact maybe none actually have. Even Steely Dan eventually played live gigs.

[matt thomas]

Many artists don't get a cent from their record company, even mulit platinum selling ones, I know, I'm one of them

check out this from an article article by steve albini for an idea of how things work (not my band)

Here is the math that will explain just how ****ed they are:

These figures are representative of amounts that appear in record contracts daily. There's no need to skew the figures to make the scenario look bad, since real-life examples more than abound. Income is underlined, expenses are not.


Advance: $ 250,000
Manager's cut: $ 37,500
Legal fees: $ 10,000

Recording Budget: $ 155,500
Producer's advance: $ 50,000
Studio fee: $ 52,500
Drum, Amp, Mic and Phase "Doctors": $ 3,000
Recording tape: $ 8,000
Equipment rental: $ 5,000
Cartage and Transportation: $ 5,000
Lodging while in studio: $ 10,000
Catering: $ 3,000
Mastering: $ 10,000
Tape copies, reference CDs, shipping tapes, misc. expenses: $ 2,000
Album Artwork: $ 5,000
Promotional photo shoot and duplication: $ 2,000

Video budget: $ 31,000
Cameras: $ 8,000
Crew: $ 5,000
Processing and transfers: $ 3,000
Off-line: $ 2,000
On-line editing: $ 3,000
Catering: $ 1,000
Stage and construction: $ 3,000
Copies, couriers, transportation: $ 2,000
Director's fee: $ 4,000

Band fund: $ 15,000
New fancy professional drum kit: $ 5,000
New fancy professional guitars [2]: $ 3,000
New fancy professional guitar amp rigs [2]: $ 4,000
New fancy potato-shaped bass guitar: $ 1,000
New fancy bass amp: $ 1,000
Rehearsal space rental: $ 500
Big blowout party for their friends: $ 500

Tour expense [5 weeks]: $ 50,875
Bus: $ 25,000
Crew [3]: $ 7,500
Food and per diems: $ 7,875
Fuel: $ 3,000
Consumable supplies: $ 3,500
Wardrobe: $ 1,000
Promotion: $ 3,000

Tour gross income: $ 50,000
Booking Agent's cut: $ 7,500
Manager's cut: $ 7,500

Merchandising advance: $ 20,000
Manager's cut: $ 3,000
Lawyer's fee: $ 1,000

Publishing advance: $ 20,000
Manager's cut: $ 3,000
Lawyer's fee: $ 1,000

Record sales: 250,000 @ $12: $ 3,000,000
Gross retail revenue Royalty [13% of 90% of retail]: 250,000 @ $12: $ 351,000
Less advance: $ 250,000
Producer's points [3% less $50,000 advance]: $ 40,000
Promotional budget: $ 25,000
Recoupable buyout from previous label: $ 50,000
Net royalty: $ -14,000



Now, on the other hand, let's look at the Record company income:

Record wholesale price $6.50 x 250,000 $ 1,625,000 gross income
Artist Royalties: $ 351,000
Deficit from royalties: $ 14,000
Costs of manufacturing, packaging and distribution @ $2.20 per record: $ 550,000
Label's gross profit: $ 7l0,000



The Balance Sheet: This is how much each player got paid at the end of the game:


Record company: $ 710,000
Producer: $ 90,000
Manager: $ 51,000
Studio: $ 52,500
Previous label: $ 50,000
Booking Agent: $ 7,500
Lawyer: $ 12,000
Band member net income each: $ 781.25



The band is now 1/4 of the way through its contract, has made the music industry more than 3 million dollars richer, but is in the hole $14,000 on royalties. The band members have each earned about 1/20 as much as they would working at a 7-11, but they got to ride in a tour bus for a month.

copied from

Mercenary Audio - The Problem With Music by Steve Albini



narco

[ramona]

Originally Posted by Mike Caffrey

They took a year off at their peak. I doub much of what they do is motivated primarily by money.

This album will make it on to 10 million ipods at least, maybe far more.


I think it would be pretty easy to make a lot of money from those people who've been listening to that album over an over. Obviously not by selling it, but can you sell somethign for $10 to each of those fans in a year? Or, could you sell something for $100, like a concert ticket to 10% of them? Either way that's $100 million bucks.

How about a $100 ticket, a $35 t-shirt, a $6 beer, a $4 pretzel, $30 for parking at the venue, a $30 DVD of a show form the tour, maybe a prorgam, a t-shirt for a friend who didn't go, a little publishing money, a little sync money and they're well over $250 million for the year.

It's interesting how "devaluaing" music by giving it away can certianly generate a lot of income.

What do you think their first advance was? $500k? Probably less, but let's call it $1 million when you add in the video and the tour suppor and the radio promtions for ther first album - Pablo Honey, which got how much airplay, none?

How about another $1 million for The Bends and let's imagine that the label didn't need to spend any money for OK Computer.

So now the label put up $2 million and made a bunch of those albums. None were diamond, so fewer than 30 million copies were sold, probably fewer than 10 million - that's three albums. Lets say the label took 100%. That's still less income over the course of three albums than Radiohead can make in a year giving their music away (which is practically what a record deal is). So if we estimate that the sales of the first three albums totaled 25 million at $10, Radiohead can make, per album the give away, the same that a label can make in the cumulative sales of three albums.

Why can Radiohead make that much money giving away their albums? Becuase they're a great band with great songs, but why is it taht we've ever heard of them in the first place? It's because of that initial $2 million. Who's gettign screwed by these absurd deals? It's the label not the artist?

Certainly the deals screw al ot of artist, but there are a ton who go dropped and didn't get a cahnce to make another album becuase they fell a little short. They would have been profitable for the label if the label had taken 50% of everything rather than 90% of the smallest revenue stream.

Both sides have always gotten screwed by the bad structure of the traditional record deal.

Those are some crazy figures- where did you get those numbers?

I've never heard of any artists who got a piece of the food sales or parking at a venue. I could be wrong, of course. Which artists have you heard of that made that deal?

Where would the Rolling Stones be today were it not for those nachos? How much richer would they be were it not for those damned handicapped spots?

[beyarecords]

Originally Posted by ramona

I've never heard of any artists who got a piece of the food sales or parking at a venue. I could be wrong, of course.....Where would the Rolling Stones be today were it not for those nachos?

....Sweet Lord!!

[Jim@SSL]

I'm sure that Radiohead makes piles of money....












but does it make them happy?

[Tibbon]

Narco- that Steve Albini thing means well, but many of the numbers aren't realistic for today. Who spends 8K on tape for a session today? I see people more trying to get the entire record done for 8K. 10K on mastering? Not most new bands I've checked.

I like said, it's good as intent goes, but it has its flaws and makes some assumptions.

[narcoman]

absolutely - the Steve Albini article does indeed mean well but it does not or never really has reflected the true status and transfers of money.

For music sales alone (and music sales are only part of the income story) any artist is paid on his contract according to PPD. Dealer price to you and I. If the shop price is $14 the delaer price (ie the money the label gets from the sale) is gonna be about $6.50. Tax, shop markup, distribution cost (generally a third party company) make up the excess (the retail point is gonna AT LEAST put 20% on it).

Average artist deal is about 12% on PPD - thats what the point thing is all about - it's wrog of people to go pointing the money grabbing gun at labels - sure, they may be sharks but they're just one shark in a sea of 'em, and some artists and their management are members of that genus.

The writer (and today that is generally thgeartist ) will get publshing amounting to 8.5% on PPD. So on the deal above the artist (recording and pub royalty) will get about $1.30 per CD. You get more in the UK but thats because the dealer price is higher. There are other deductions but only a numpty will still be paying shellac and breakages (i'm on my fourth deal now and i've negotiated that away on every deal. Even with Sony/BMG).

Of course you must recoup first on the 12% to the label, and probably on the 8.5 to the publisher but once you have, the moneys yours regardless of profit. If the label spends a million on marketing (and you werent stupid enough to incorporate marketing as your advance were ya?!!!! ) then you can be earing even though the label may not be in profit. EMI have never made a profit from me (they gave me a good advance which recouped BUT they ptu a lot into marketing - silly willies) but i have made a profit from the moderately selling records i made in the late 90's.

Albinis points in the article mention stuff out side of the strict recording part of the venture but the picture translates across the board. I bought half my house through licensing monies alone - which favour me pretty well with the publisher!!!

so there we go.... thumbsup

oh and Radioheads initial deal was around the £30,000 mark and have now just shy of 30 million sales.

[nynofi]

Originally Posted by allencollins

Merchandise is big$$$$ for many bands. Most Metal bands do well since every 15 year old on earth has a slayer or metallica shirt. Think about it, 12000 people at a show. Say even 10% buy a $25 shirt at $20 profit thats $24000 1 show.

Metal bands do extremely well in that department. Can't illegally download that off the internet!

[nynofi]

Originally Posted by Jim@SSL

I'm sure that Radiohead makes piles of money....


but does it make them happy?

Probably not, but luckily for us, it enables them to keep making amazing records!

[ssaudio]

Radiohead broke even (in all respects) halfway through their second album and have been in profit ever since

All concerned are very happy

and rich

[Sid Viscous]

Radiohead has been giving it's records away for years. I suspect their label isn't all that depressed that they are gone. I do hope someone will liscense the CD and put it out, because I'm not going to pay more than about $5 for some MP3s. I suspect that will be far more than they would have gotten from a label, though.

[ssaudio]

EMI hope to resign them

but obviously enough, everyone else wants them too

[plexisys]

According to an entertainment attorney on CNN less than 5% of the artist that release albums/cd ever cover their initial production costs.

Additionally, of the artist that make a "living" it's all comes from touring and merchandising.

My favorite part of the interview was when he said, "I only know of a very, very small handful of artist that could survive just on record sales no matter how many they sell."