For those of you who's only dream is to get a record deal I highly suggest you read this article. It's from the 90's, but the story is practically the same today.
Thanks to the folks over at Negativland.com for sharing it with us. They wrote "This oft-referenced article is from the early '90s, and originally appeared in Maximum Rock 'n' Roll magazine. While some of the information and figures listed here are dated, it is still a useful and informative article. And no, we don't know how to reach Steve Albini."
The Problem With Music
by Steve Albini
Steve Albini is not happy wdsith record companies.
Whenever I talk to a band who are about to sign with a major label, I always end up thinking of them in a particular context. I imagine a trench, about four feet wide and five feet deep, maybe sixty yards long, filled with runny, decaying shit. I imagine these people, some of them good friends, some of them barely acquaintances, at one end of this trench. I also imagine a faceless industry lackey at the other end holding a fountain pen and a contract waiting to be signed. Nobody can see what's printed on the contract. It's too far away, and besides, the shit stench is making everybody's eyes water. The lackey shouts to everybody that the first one to swim the trench gets to sign the contract. Everybody dives in the trench and they struggle furiously to get to the other end. Two people arrive simultaneously and begin wrestling furiously, clawing each other and dunking each other under the shit. Eventually, one of them capitulates, and there's only one contestant left. He reaches for the pen, but the Lackey says "Actually, I think you need a little more development. Swim again, please. Backstroke". And he does of course.
Every major label involved in the hunt for new bands now has on staff a high-profile point man, an "A & R" rep who can present a comfortable face to any prospective band. The initials stand for "Artist and Repertoire." because historically, the A & R staff would select artists to record music that they had also selected, out of an available pool of each. This is still the case, though not openly. These guys are universally young [about the same age as the bands being wooed], and nowadays they always have some obvious underground rock credibility flag they can wave.
This is a very long and interesting article so I'm going to cut to the chase. A band got a deal and found money being thrown at them and taken from them at an astounding rate with many people taking a cut. In the end, per Albini, "the band members have each earned about 1/3 as much as they would working at a 7-11..."
| Advance: |
$ 250,000 |
| Manager's cut: |
$ 37,500 |
| Legal fees: |
$ 10,000 |
| Recording Budget: |
$ 150,000 |
| 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 |
| Lodgings while in studio: |
$ 10,000 |
| Catering: |
$ 3,000 |
| Mastering: |
$ 10,000 |
| Tape copies, reference CDs, shipping tapes, misc. expenses: |
$ 2,000 |
| Video budget: |
$ 30,000 |
| 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: |
$ 3,000 |
| Album Artwork: |
$ 5,000 |
| Promotional photo shoot and duplication: |
$ 2,000 |
| 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 rack of lights 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 |
| 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]:
$ 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 |
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 |
| Manufacturing, packaging and distribution: |
@ $2.20 per record: $ 550,000 |
| 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 |
| Agent: |
$ 7,500 |
| Lawyer: |
$ 12,000 |
| Band member net income each: |
$ 4,031.25 |
"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 1/3 as much as they would working at a 7-11..."
You can read everything that happened in between here, The Problem With Music.
