Tangurena wrote:You should look up "mechanical royalties." Mechanical royalties are the moneys that artists get for recordings. They used to get $1 to $1.50 per LP or cassette sold. Along comes some new technology that the recording companies want to promote. So they convince the artists to help subsidize the new technology and cut the mechanical royalties to 10cents per album sold. That new technology? Compact Discs. Artists still get 10 to 15 cents per album now, and record companies have discontinued making LPs, not because CDs are better audio, but because CDs give about 50x the profit margins of LPs: medium quantities of CDs can be made for 20 cents each, sell for 2x the price of LPs and have 1/10th the royalty payments.
Oh, and one last thing about those mechanical royalties. Back in the 1920s and 1930s, when albums were very brittle, some would break in shipping, so the standard recording contract only pays on 90% of the albums shipped, because back in the 20s and 30s, about 10% of the albums would break shipping them from the pressing plant to the stores. You have to work pretty hard to break a compact disc, but the record companies still take that 10% shipping loss deduction for all albums shipped.
At least the recording companies have eased up a little bit.
A standard recording contract for a first-time band in the late 70s early 80s would be as follows:
10-15% royalty (based on a per record cost of around $5).
10% breakage fee
25% packaging fee
and then the recoups:
Half of tour costs
half of video shoot costs
all of studio time, any advances etc etc etc.
and then an agent's fee, which might very well be 20%.
A band selling 2 million copies of an album could easily end up with a final tally of roughly $100,000 paid out to the band in its entirety - $20k per member, before taxes.
If you read some of the more interesting tell-all biographies of 1970s-1980s rock bands you'll find that the bands often ended up paying for the drug habits of everyone on the tour - from drivers and roadies through tour managers and VIP guests. All of it completely recoupable by the studio under the contract terms. The amount of successful bands that ended up deeply in debt to their record labels - basically slaves to the company for the duration of their contract (often 5-8 years or for 6-8 albums, meaning that if the label decided not to release anything new the bands couldn't work as musicians elsewhere) is staggering.
Disgusting, and though it's generall better now, it isn't *much* better. As far as I understand, artists don't get royalties from having their songs played on the radio / MTV etc in the US, do they? That's actually one of their major incomes here.
