December 19, 2009 - Music Business Past Vs. Present

In the past, the music business was controlled by the major record labels.  The record labels controlled everything in an artist’s career from start to finish.  The record label would control and artist image, airplay, access to audits, likeness, royalty rate, success and everything in between while under the record label contract.  When the artist career was over, the artist often didn’t have anything to show for their hard work and creativity.

Back in the day, the record label would finance artist’s project up front in the form of an advance.  The advance usually amounted to a loan which the artist had to repay.  The record label would finance the recording, distribution and promotion of the artist project and then “recoup” the money after the project started selling.  Although it seems fair on the surface, the record label would charge the artist for much more than what the record label provided.  The record label would not only bill the artist for the things mentioned above, but they would deduct artist royalties for damaged goods, record club discounts  and a wealth of other  expenses.  In addition the record label would take these deductions from the artists’ gross earnings.

Although the record label would allow an artist to audit the record company’s books, many artists didn’t conduct any audits.  Artists were generally afraid of angering the record labels by asking the record labels to show the expenses and deductions in writing.  This justifiable fear kept artist’s in their place – under the record labels’ control.

Today with digital technology, the power is shifting into the hands of the artist

There’s a new trend in the music business that has record labels sweating in the boardroom. This new trend is called “Do It Yourself” (D.I.Y.).  With Digital Technology anyone can start a record label and have a personal studio on their computer.  There are a number of free or (very inexpensive) studio recording software applications that allow an artist to record and distribute their own material without the help or control of any other record label.

An artist can easily promote and sell their CD’s and MP3’s online at thousands of internet sites.  In addition there are many new web hosting services that allow an artist to have a website dedicated to promoting their and selling their music to the growing online community.

There are hundreds of artists making a living selling their music online.  Think about it, if you sold 20,000 CD’s online at $10, you’d earn $200,000.  If you sold 20,000 for a record label you’d be in debt and you’d face the risk of being dropped from the record label. 

By recording, distributing, promoting and selling your music yourself, you control your destiny.  Today an artist can control their expenses, track their deductions and not live in fear of any record company.

Today the power is in the artist hand of the artist’s.

This is what New Wave Promotion is about... Please go to our site and look at it and see if this is the answer for the music business of tomorrow.
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December 11, 2009 - Understanding The Music Industry - From Past to Present -- Part 2

Written by Brad

I'm going to give you a little crash course on the industry and its evolution, so you can start to see where the different parts fit in.

The Record Deal:

The term "record deal" is quite an embellished phrase these days. Back in the old days (50's) artists and songwriters were just as broke as they are today. Studio equipment was not affordable to really anyone at a consumer level and in order for these guys to get their songs down on tape, they needed to impress a rich dude who owned a recording studio. (Think "Walk The Line" or rent it if you haven't seen it yet).

Where a lot of the songwriters got screwed is they would sell the rights to their songs to the guy that owned the studio (if the songs were hit material). The guy at the studio would give them money and allow them to record for free. In Elvis' case, Sam Philips who owned a small recording studio in Memphis called Sun Studio, purchased some songs from various songwriters and gave them to Elvis to sing and record. This was essentially how the first "record deals" were done.

So continuing with Elvis as an example, he had a record which he recorded with a backing band in Sun Studio and Sam Philips owned the rights to that record. Once you had a record cut back in those days you could give the master tapes to various promoters and booking agents and try and get live gigs. So that was the essence of the recording contract at its most primal level - To record some tunes.

The Record Label:

Then the idea of selling recordings became a very lucrative idea. So you have your master tape, but what good is that without pressing and distribution?

Next financial hurdle: Someone had to come up with the cash to have the masters transferred en masse into small grooves on vinyl polymer - A record. So in Elvis' case, Sam Philips said, OK I think we can make some money here, and paid out of his studio revenue for Elvis' recording to be cut to vinyl (only a few copies).

When he distributed the vinyl records, he put a small round piece of paper in the middle of each disc with a drawing of a sun and a rooster on it. This "label" became Sun Records. Now you have a what we commonly call a record label.

By this time Sam was going broke as all the muso's using his studio were broke ass leechers who couldn't afford to pay the electricity bills (very similar situation to many studios across the world today are experiencing). So Sam decided to sell Elvis' masters and recording contract to another recording label called RCA Victor Records. He made $35,000 on the deal.

RCA Victor Records had a lot more money than Sam, and now they owned some pretty cool songs, One particular little money making gem was a track called "Hound Dog".

So RCA was able to then spend money making more copies of Elvis' record, have his photo printed up on the sleeve on each one of them and even pay for big trucks to deliver boxes of the records to small music shops, They shipped a few to the radio stations too. This was called "Pressing and Distribution", or P&D as we call it in the biz these days. (Most small indie labels today will do a P&D deal with their acts, allowing them to retain their own copyrights, but requiring them to chip in 30-50% of pressing costs).

The Artist:

So what about Elvis? How much money did he have to spend on his career? None. Elvis' job was to sway his hips back and forward and make your mothers babysitter at the time wet her pants. Elvis was paid quite handsomely for this and RCA Victor also paid for his food, booze and sleeping pills.

So now the function of a "Label" had become quite expansive. More than just putting their sticker on some vinyl. They were paying artists to record in a studio, they were paying for the vinyl to be pressed, they were paying trucks to deliver the records to shops, they were paying "breakage" for records that were damaged by sloppy tradies unloading the trucks (FYI - when you shipped enough records to factor in a breakage percent, you must have been doing quite well, hence the term "breaking an artist"). They were paying dudes like Elvis, Johnny Cash and Roy Orbison money so they wouldn't have to become plumbers or truck drivers, and eventually they were paying radio stations to play their records (Payola anyone?).

All these functions of a recording label, or imprint (the niche labels who had their own logo but were owned by a bigger company) became the standard practice of recording companies right up until 2009.

So as you can see there is a lot more than just having a master recording in your hot little hand.

Marketing:

Eventually the general public decided they really liked this music thing and probably many people on this forum will remember sleeping next to their radio's waiting for that one awesome song to come on and saving all their pocket money up to buy that shiny black piece of vinyl.

So the record labels started to market towards this young demographic and eventually purchased other cool things like magazines, and merchandise to sell to the kids. This all became part of getting a "recording contract".

The labels grew so big that the marketing spend they had could not be rivaled and eventually, landing a major record deal was the only way to have your face on billboards, your own doll created, a favorable review in rags like Rolling Stone and Hit Parader, and of course, your songs put on rotation at major radio networks.

Publishing / Synchronization:

So along comes TV and creates popular shows like Greys Anatomy and Friends. To be hip to the kids, the TV producers decide they would like some cool music featured on these shows. So they go and talk to their buddies at a big label and say, "Hey can we get that totally hip yet tragically annoying song about letting the dogs out and put it on our TV show?" The record label says, "Yeah of course! Just pay us a couple bucks every time it plays on the show!" But what about Jimmy? Who the fuck's Jimmy? Jimmy is a pimple faced keyboard nerd that sits at home writing trashy songs all day and was lucky enough to have his sister sleep with a guy at a publishing company. With the help of his slutty sister, Jimmy was able to sell a song to record label, who funked it up and gave it to their 'cool ass' new breakout band to sing, who eventually got heard by the TV producers. You still with me?

So Jimmy owns the "mechanical rights" to this song, and he brokered a deal with his sisters boyfriend at the publishing company. Now, whenever that shitty TV show features that shitty song, now sung by that shitty band, Jimmy gets paid!

Now that was a very round about explanation of a publishing deal. This from Wiki:

The term (publishing) originally referred to publishers of sheet music. In the late 19th century sheet music was the primary commercial use of musical compositions. Today, the two businesses have diverged the large companies known as "music publishers" are not typically in the business of producing printed music.

The copyrights owned and administered by publishing companies are one of the most important forms of intellectual property in the music industry. (The other is the copyright on a master recording which is typically owned by a record company.) Publishing companies play a central role in managing this vital asset.

Now, a publishing deal will screw you in the ass pretty hard too, and are generally part of the greater recording contract. Essentially you assign the management of your original songs (not recordings) to a company who makes sure you get paid when they're used in a tampon ad on TV or given to an acapella homosexual nudist colony to record at their bi-annual meet up.

Modern Deals:

This post is getting long now so I'll cut things short. Now days a record label will lock you into what's called a 360 degree contract. This is because they now suck at marketing and distribution (Thanks internet!) and still want a ton of money to pay for hookers for their execs.

A 360 deal gives the record label exclusive rights to your recordings, your publishing, your brand/image, your T-shirts, dolls, lunch boxes, synchronization and now even a vast percentage of your takings when you play Wembly Arena. You'll most likely be signed on for a certain number of albums (3-4 being the norm) or one album with "options". (Options means if your first record does OK, the record company reserves the right to force you into making another one, but if it tanks they can drop you). Labels know statistically that the chances of your record going "big" are next to zilch, so why would they sign you up for 4 records??? Because if your girlfriend dumps you 2 years down the track and you sit down and write the greatest love song ever written, they still own it and can give it to Miley Cyrus to sing.

The reality in 2009/2010:

So here's how things are in 2009. Unlike Elvis, most people can now afford a pretty decent home setup to record their stuff. Sounds like you've already put a lot of cash into this part Julian, so all good there.

These days most record stores are closing down (Tower being a big one) and most people don't really give a toss about buying CD's at Walmart (Just look at their music section now days). So paying for vast numbers of pressings is not essential, but you may want to track down a small label who can give you access to their vinyl pressers to get some limited editions pressed up for your hardcore fans.

Trucks and breakage is no longer an issue and that used to be a big sucker of your advance at a major (still factored in today of course, greedy bastards).

Shopping for a publishing deal shouldn't be a big priority at the moment. You can easily register your tunes with BMI, ASCAP or SESAC (google them) and they will track your broadcast and performance so you get paid.

Your best bet is to spend your time making a decent website and getting your songs onto iTunes/Amazon. Google this, it's quite easy. If you're looking for synch opportunities you can buy a list of production manager's phone numbers at media companies and try to solicit them directly. A better bet would be putting some money into a decent entertainment lawyer who will have contacts in film and television houses. A good attorney will be able to shop your stuff to these guys and negotiate a decent publishing percentage for your tracks. Beware of online services that offer synchronization soliciting services, they are basically music industry black hatters and will take your money to throw your tracks in the recycle bin - Shift-Delete!
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December 11, 2009 - Understanding The Music Industry - From Past to Present -- Part 1

Written by Brad

There's a lot of guys out there making 'a living' playing in bands signed to small indie labels etc. but here's the kicker. Unfortunately the majors abused the general public for too long throughout the course of modern music and now the general public has either A) culturally moved on (ie. music not being the ubiquitous phenomenon it once was, therefore demand has curtailed) or B) revolted at the idea of paying $20 for a disc with only 1-2 good tracks on it (ie. stealing the shit for free off torrents etc.)

Case in point: A breakout pop/rock act could quite foreseeably move $2-$4m units on a debut album in 1997 (The industries biggest year ever) and in 2009 you are considered a raging success if you can move 700k as an established act (Think U2).

So an industry which was once a huge cash cow, which was basically allowed for by the technology at the time (how much harder was it to steal an album with a 56k modem in 1998?) has now been turned on its ass and is busy downsizing and selling off huge chunks to venture capitalists while reporting large and steady losses for the last 7-8 years.

To quote industry commentator Bob Lefsetz:

"In 2000, most people were on dialup, if they were online at all. There was no YouTube, no MySpace, Google was not a household word. We were all positively old school. In a hangover of the nineties. When the market raged and there was money for all. You spent willy-nilly, you felt like a winner, a world-beater. Boy are those days through.

The record business' clients were MTV, radio and retail, in that order. MTV isn't even about music anymore, radio is a shadow of its former self and it's hard to even find the album you want in a physical format. The indie stores have died and the big boxes keep lowering their number of SKUs."

So you can appreciate that "all the money" in music is just an old fallacy glorified by the debaucherous days of the 80's and 90's when rock stars owned private jets and did blow off hookers tits in their brand new Ferrari's. I'm surprised the general public still holds this view in a day in age when the average 'rock star' couldn't afford a deposit on a fairly average house and can be unfollowed on Twitter at the click of a button.

So basically here are your options for those wanting to make bank from music:

1) Sign a major label deal and enjoy your 6 months - 1 year of fun. Know you will never pay that advance back but who cares, it's not exactly a bank loan and you can always quit the biz after your 15 minutes are up - Look back on your success at age 25 and say "geez it was awesome making an expensive record and fucking a bunch of 18yr old slags in the back of the van for 6 months."
Then go and do your apprentiship as an electrician or something cos you're still locked into your contract and releasing any more music won't make you a cent (it's not yours anymore).

2) Fuck off the majors. Go for an independent deal or just play your originals at your local clubs. Hope the young indie crowd digs your shit and you might earn a very small amount of money to live a very modest life. Build a following and hope to sustain it for a few years. You're doing what you love and getting paid for it. $300 a night split between 5 band members aint so bad, plus you can always not declare that income and get unemployment benefit as well.

3) Get really good at playing covers and form/join a covers band. Sing the old hits from yore to the baby boom crowd at weddings/casino's etc. and earn 3 times what you would playing originals. Sure your not gonna have much fame or adoration, but there's drunk girls at weddings and the perks are still there to a certain degree. You can still pretend you're Mick Jagger when you take the bridesmaid out to the carpark at the end of your set. You're doing what you love and earning enough money to at least make the mortgage payments.

4) Get a very decent collection of mp3 B-sides and rarities from the most popular acts of all time. Get a job interning at a publishing company or label and steal as many of these masters as you can. If you wanna stay white hat, buy the rights (they're going super cheat these days) to some rare live soundboard recordings of popular 70's bands etc. (I own a few myself). Create a website with a perceived sense of underground cred and keep these gems locked in "the vault". Lock your content and iframe a CPA survey or zip submit offer and drive a ton of traffic to the site using whatever BHW technique you want. Upscale, rinse and repeat.
Record your own songs in your $500,000 home studio and throw house parties for your friends.
Release your music online and drive traffic using your acquired BH marketing skills
Give your shit away for free because you don't really need the money.

I think that basically sums up making money off music in 2009!
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December 10, 2009 - Music Future

If you are music lover then its sure that you too shall be interested to know about the upcoming future music trend. Music since years has been crucial in making you free of your daily stress and provides you with fun and enjoyment. In the recent times pop music culture has overtaken other forms of music but in future it might happen that any other music hits the charts.

Even if you are an upcoming music recording artist you should be aware of the trends in the future of the music industry. For all this internet shall be a great resource where you can find all kinds of downloadable music. This has paved the way for consumers to get more music but at the same time affected the quality of music by providing various music sharing files which in turn lead to piracy of music. This is indeed a great threat to the future music industry.

Upcoming music releases also show that there is advancement in the kind of quality of the music by use of different musical and electronic instruments and at the same time new innovations in the rhythm and music tunes. As more volume of albums are releasing in the market now consumers have a wider variety to choose from. Now consumer is not restricted to a specific kind of music, be it jazz, pop, rock or classical.

The future of the music business is indeed good but the piracy of music is sure a matter of concern which can cut down the costs of music production and bring down the revenue of the music business. Music business shall grow aggressively if music laws implemented are followed and there is no piracy or illegal acts performed.
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December 7, 2009 - This is about what I want to change by doing business with independent bands.

Music is an art, however, when it comes to the music industry, Music is about money!

If anyone or any company feels that your music will not make them money, there will be absolutely no interest in your music. That’s it in the nut shell. Remember, to always remember this. The Music Industry is about Money!

There are a few sources of money to be made in the music industry. They include but are not limited to:


· Record sales

· Songs played on the radio

· In movies and television

· Concerts

· Song writing

· Producing

· Merchandising

· Advertising

· CD-ROMs/DVDs

If you are an artist and want to get into the music business, you need 3 very important very good people in your corner batting for you on a daily basis. They include:

· Personal Manager – The most of important of the three. They should have contacts in the music industry, keep on eye on all your affairs, advise you on things to do, help promote your music, producers to hire, who to sign with when to go on tour, etc. The personal manager will receive 15% and 20% of an artists gross earnings and have good contacts with record companies A&R, Marketing / Sales, and Promotion departments.

· Music Attorney – A good attorney specializing in the music will know how to properly negotiate and structure the deals an artist makes. They should have good contacts and be trust worthy. Expect to pay between 100 and 200 per hour for a good music attorney. If an attorney thinks you will get signed, they forego a set fee and charge a percentage of artist’s earnings. In bigger cities, you’ll pay more than in smaller cities.

· Music Agent – Book concerts and special appearances. A Personal Manager will help the artist with selecting a good agent.

If you blow up and start generating the big money, then a good Manager / Accountant will be needed to handle your tax situation, review royalty statements, financing tours, offer invest advice and how to manage your money.

Getting recognized by mailing your demo to record labels isn’t impossible, however, 99.9% of the time your material will not get listened to. Even if you have the best song on the planet, it will not be listened to. Record labels want to limit their liability, so they do not listen to unsolicited music. Record labels don’t want to listen to numerous songs and then be held liable if someone claims their material was copied.

If you do decide to mail your CD to record label, send the “solicited” material. First get a contact, preferably an individual in the Artists & Repertoire (A&R) department. Call and first speak to someone. After sending your CD follow up to determine if the targeted individual received your material and another follow up call to determine if it was listened to. Submit 3 to 6 songs and send a bio and picture of yourself. Again this isn’t the preferred way to submit your material to major record labels.

Until you have music business advisors in your corner trying to promote you and there is a “buzz” going around about you, your demo will not reach the decision makers at the record labels. Record companies on a daily basis receive thousands of unsolicited CDs. Most likely your CD will be tossed into a bin located in a remote room filled with overflowing bins of CDs.

Record labels like to deal with artists who have a history of record sales. These are artist that may have produced and sold their own CDs locally or regionally. Record labels like to deal with artists who have performed their material and there is this “buzz” going on about them. MC Hammer, before he became famous, performed his own materials and sold his own records until a major record label signed him. MC Hammer had a lot of leverage in negotiating a good contract because he already proved on a local basis he could sell records.

Record companies want to limit their liability. If you are signed, you are considered an investment that will require some money and they want to see a premium return on their money invested in you. The more you can prove that you can sell record, the better chance you can get signed.

If you get signed to a record company, you the artist will go into the studio and record songs for the record company. The record company makes copies of the master recording and ships it to a distributor. The distributor is a wholesaler who then sells the CDs to retail outlets like Best Buy, Sam Goody and Tower Records. The record company then pumps money into marketing by advertising and promoting your music with hopes of selling records, thus making you a superstar and becoming rich!

It is not as easy as it sounds. It takes a lot of hard work by a talented group of people. Everyone has to work together to make this happen. There are usually many people behind the scenes working to make an artist a superstar.

Record companies often categorized into 4 groups: · Major label record companies - have the recording and operating resources to complete all function to sell records. Major label record companies are integrated in that they can handle the promotion, sales, marketing, and distribution to sell music. Major label record companies are Arista, Atlantic, Capital, and Sony.

· Major label affiliate labels – have special agreements with the major label record companies, where the major label may fund the smaller labels recording and operating expenses in exchange for a portion of the smaller label profits.

· Independent labels - distributes records through major labels. Independent labels have few employees. They tend to find talent, sign the talent, sees to it the music is recorded and contracts with major record labels to perform the promotion, marketing, and other functions.

· True independent labels – Has no association with a major label and distribute their music through independent distributors.

The A&R (Artists & Repertoire) Department

The A&R department is the talent scout. They are in charge of finding new talents. They are the eyes and ears of the record company. However, not because you get signed to a record label because an A&R representative likes you it doesn’t mean your CD will ever get produced and released. Executives higher in the company could cancel your deal if they feel your CD will not sell. A record company will have to invest several hundred thousands of dollars to release your CD, so they will be extremely cautious on whom they release.

The Marketing and Sales Department

This department is responsible for getting the public excited about your music and first selling to retail stores the idea of carrying your CD. They are responsible for promotional merchandise, advertising your CD, in store displays, publicity, your CD cover, etc.

The Promotions Department

This department is responsible for getting your music played on the radio. The individuals in this department will visit the various radio stations to convince them to play your material. If your material doesn’t get played, no one will now how you are. People will look at your CD in the retail store and wonder who you are. There is also a direct correlation with CD sales vs. how many times a song for that CD gets played on the radio. More air time on the radio equals more CD sales for the record companies.

Remember music is art, but to the record companies, it’s about money. Keep in mind that it’s a business. Keep in mind everyone is out to make money. The minute people believe that you will not make money for them, you will be dropped and these same people will turn to seek other new artists that they believe will make them money. Unfortunately, the record business doesn’t believe in grooming people. If your first CD isn’t a success, you are out. There are rarely second chances. There are always other talented people behind you who what their shot at fame.

Distribution

Most major retailers such as Tower records will not carry a CD unless the record has a distributor. A strong distributor ensures that your CD will be available in enough places so your CD will sell to ultimately make money. Major labels use large distributors who are better able to get record stores stocked. After years of consolidation, there are only 5 major national wholesale distributors in the US who are owned by conglomerates who also own major record labels. They are:

· BMG (distributes Arista, BMG and RCA)

· EMI (distributes Capital and Virg.)

· Sony Music (distributes Columbia, Epic and Sony)

· Universal Music Group (distributes Interscope, Island/Def Jam, and MCA)

· WEA (distributes Atlantic, Elektra and Warner Bros.)

Distribution via the Internet Record labels and artists are increasingly using the web to distribute their music. Unknown artists can also use sites like this mZeus.com, http://www.mZeus.com, to generate buzz about their music. However, unknown artists will still have to work hard to get the buzz going about their music. Ultimately, signing a contract with a major record label is the way to go. The major record labels have the financial muscle and people to give you a good shot at becoming famous.

Let’s face it. It’s all about money! Yes, the entertainment industry seems fun and exciting, but people are in it to make money. As an artist the most important contract in the music industry is the record contract. The royalty is a portion of money from record sales paid to the artist for his/her music. The record contract which is a negotiated legal agreement between the record label and artist will state how much royalty an artist is entitled to among other things.

An artist should have a good understanding of how royalties are calculated. A good music attorney will help with this process by making sure the artist is paid what he/she deserves. A 13% royalty for one artist may be a lot of money, however a 13% royalty for another maybe “chump change”.

So this is how the numbers work. An artist successfully signs a record contract. The artist goes to the studio and work diligently to create a CD that the record company fully supports. The record company via its distributor sells the CD with a suggested retail list price (SRLP) of $17.99 to a retailer for about $10.99. The distributor will take 10% - 14% of the $10.99. Therefore the record company will get about ½ the SRLP of $17.99. Independent record companies may receive less than ½ the SRLP. Major record companies will pay artist royalty as a percentage of SRLP.

Rates will vary of each artist depending on how successful their record sells. For a new artist who never had a record deal or has sold less than 100,000 albums will get a typical royalty rate of 12% to 14% of the SRLP. For an independent record label it maybe 10% to 14% of the SRLP. For established artists who have a track record of selling 200,000 to 500,000 albums the royalty rate maybe 14% to 16%. For artists who have sold over 750,000 albums the royalty rates maybe 16% to 18%. As you can see, the more successful the artist is, the higher the royalty. Additionally, royalty maybe based on how well the record sells. For instance, the record contract may state that an artist will get 12% for the first 100,000 units sold, 14% for 100,001 to 300,000 units sold, and 16% for over 300,000 units sold.

But hold your horses. If you sell 500,000 albums and have a royalty rate of 12% doesn’t mean you will get 12% of 500,000 at a SRLP of $17.98 which would equal $1,078,800. This is because as specified in the record contract, there are deductions (expenses) that have to be deducted.

To start off the bat, the record company will deduct a “packaging charge” from the SRLP which is typically 20% for cassettes and 25% for CDs.

Second, more often the artist is responsible for paying the record producer a portion of his/her royalties. Typically a producer will receive 3% to 4% of the SRLP.

Third, in the record business, the contract may state that the artist’s only generates royalties on 85% of the unit sales. For every 100 albums sold, 15 albums sold, the artist gets no royalty.

Forth, the record company will hold a portion of the royalty money because the distributor typically has an agreement with the retail outlets to take back and credit the retail stores money from unsold units. This is very important, because a good portion of your album could be returned to the record company if the album doesn’t sell! The money that’s held back is called a reserve. Reserves maybe held for 2 years before it’s paid to the artist. Typically a major record label will hold a reserve of 25% to 40% of the royalties.

Fifth, advances paid from the record company to the artist are deducted from the artist’s royalty. Advances include but are not limited to the:

· Recording studio expenses (new artists to an independent my get an advancement of $0 to $80,000, new artist to a major record label $150,000 to $400,000

· Hiring independent promoters to help sell the albums

· Cost of making a music video (promotions and an inexpensive music video can cost $150,000 to $200,000.

When money is made for the record sales, these costs are deducted from the artist’s royalties. This is called re-coupment. Therefore, if the artist’s record isn’t successful, the artist may never see a dime. If the royalties are less than the deductions, they artists may well owe the record company money by being in the red! This negative cost maybe carried over to the next album release. A good record contract will not allow a negative cost from one album to be carried over to another album (cross collateralization). If there isn’t another album the record company generally eats the loss.

There are many other costs that the record company will not charge the artists. This includes marketing and in-house promotions (free CD give away, etc.).

So how much does an artist make for a gold album (500,000 albums sold).

Check out the math:

CD (suggested retail list price SRLP) = $ 17.99 Less CD Packaging of 20% = $ -4.50 NET = $ 13.49 Times: Net artist royalty rate (12% - 3% to producer) = X 9% Gross royalty per CD (9% of $13.48) = $ 1.21 Times 500,000 albums = $ 500,000 SUB TOTAL = $ 605,00 Times: Royalty bearing % (15% o = no royalty) = X 85% Gross Royalty = $ 514,250 Less advances: Recording, promo, music video, tour = $ -350,000 TOTAL ROYALTY TO ARTIST = $ 164,250 - Reserves (35%) returned by retailer) = $ -57,487.50 (1) ACTUAL ROYALTY PAID TO ARTIST = $ 106,762.50

(1)Reserves will be paid to artist in 2 years if no CDs returned by retailer

Remember the artist still has to pay TAXES! Don’t forget Uncle Sam has to get his cut! Also, don’t forget the Personal Manger, the Attorney, the Accountant, the Agent and other numerous expenses.

However, there are many other royalties that an artist can acquire. They include, Record Clubs, Compilation CDs, Samplers (low-priced albums in which a few artists are featured), Premiums (albums sold with other products, such as cereal), Film Soundtrack Album, Music Video Sales, Greatest Hit’s Album, Foreign Royalties (song played in some foreign country radio stations pay royalties, unlike the US), Master Use License (music used in a movie, television, commercial, the Internet, CD-ROM and DVD), etc.

Of course because of the Internet, the rules royalties are changing. Many people now buy their music via the Internet. Just think, no packaging required and no distribution to traditional retail stores needed. Some websites allow customers to buy individual songs as oppose to an album. Changes are currently taking place on how royalties are calculated because of the Internet. Many attorneys are pushing to have royalties be based on each song sold as oppose to each album sold.

So stay tuned! These are the things that I am trying to change with my website. With everyone's help, both fans and musicians alike, we will be able to make the changes in the industry where more of the money goes to the artist who created it.
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December 6, 2009 - Site is up and going

Hello everyone, sorry that we have neglected everyone recently but we finally put it all together, www.newwavepromotion.com, and we even have a music player for bands to submit their music for free. All bands have to do is send their MP3s to bandinfo@newwavepromotion.com.

We have all of our packages priced and ready to sell! Plus we want just regular fans to come and listen to the music that we already have playing on our site.

We just think its easier to find independent music, the unheards, if we put them on our site, than having to search through tons of websites to find the artists that YOU like as well as introduce you to bands that you may not have heard.

Also, if you have any opinions on what our site needs or any comments on minor tweeks, you can post them on http://judgespot.com/review/newwavepromotion.com.

Thanks and have a great day,

Jason and Amanda Knight
New Wave Promotion
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July 16, 2009 - Hello everybody

We are starting a new website, www.newwavepromotion.com. It is still under construction, which you will notice if you go to the site itself. We are a marketing, promotion, and distribution company. We provide clients with the services they need to successfully advertise their business, regardless if it is online or storefront. If you are interested in putting a banner up on our site, please email us at webmaster@newwavepromotion.com with your offer. Thank you very much for your time and hope to hear from you soon.

Jason and Amanda Knight
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About Me

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