Posted on - May 22, 2007 [at] 1:13 pm by Brad
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An ask Metafilter question that caught my eye: Will my money get to the musician, or all end up with the record label?
Interesting question to me, but maybe not for the reasons the asker intended. While I recognize that fans want the artist to get paid, when a label is involved it’s more complicated:
- The artist entered into an agreement with the record label. Even if it’s a shitty deal, why are you second guessing a decision that the artist made? Are we assuming that every artist on every label has been tricked?
- The record label likely put up a lot of money to get the record made (which is a loan) — this is why most of the money goes to the label. Why do they not deserve to make their money back? The record might not exist without them.
- The artist may actually enjoy the support they get from their label. Recording advances, promotion and tour organization are some of the more common benefits. The label’s only solid metric for determining the success of an album is sales through their distribution channels. If you take away those sales the label will likely decide the artist is a bad investment and drop them.
Independent artist money breakdown
For independent artists it’s simpler of course as we have no record label loans to pay back, but there’s still a lot of mystery. I’m asked often where I get the most money from awesome people who want to make sure their dollars go to me. Today in the interest of science and like… money… I did up some charts:
Net amount received by me per album sale. That’s the amount that actually goes into my pocket, so bank fees, postage, digital distribution fees, manufacturing and other charges along the way are factored in. The album price per service is listed next to the service name.
Percentage received by me per album sale, based on the same data above.
Neither of these graphs take into account any signup or yearly fees. Amazon is $30 a year and CD Baby (who handles all the other digital distribution for me) is a $35 one-time fee. I’m also not 100% sure I got the iTunes UK album price right and Magnatune lets buyers decide the price from $5-$18 so I used an average of $8 which I think I read somewhere.
Analysis
No big surprise, buying direct from me is the best (for me). Direct digital sales (using my free open source digital store, natch) is the best in profit and percentage as I only pay Paypal fees and a negligible Amazon S3 amount. I make more per sale on CD Baby and iTunes UK than direct CDs from me, but that’s only because the unit price is three or four dollars more.
It’s interesting how low Magnatune ranks in both charts. Magnatune is a non-exclusive record label that I’m on (and enjoy being on), but unlike other label agreements I referred to in the beginning of this post, I have no debt with them. It’s their decision to split the income and bank fees 50% with the artist, which means significantly less money for the artists than most other services.
Conclusion
It’s pretty simple. The less middlemen, the more money gets to the artist. The best would be to pirate the album and personally hand the artist a ten dollar bill. That would be as close to 100% as you’re going to get.
Comments are closed on this post.
21 Comments on this post
Padraic on Where your music money goes
May 22, 2007 at 4:35 pm
Great post! I’ve always been curious about this kind of thing.
Cheez on Where your music money goes
May 23, 2007 at 12:12 pm
Someone please digg this. I think a lot of people would like to see these graphs. Thanks for posting this Brad.
Marco Raaphorst on Where your music money goes
May 23, 2007 at 12:29 pm
What about the amount of sales Brad?
Are you also selling the most CD’s and download through your own website? If so: super great!
Brad on Where your music money goes
May 23, 2007 at 2:51 pm
Marco: I don’t have sales data in a decent format so it’s pretty hard to do up charts for that.
iTunes, Magnatune and my site seem to be the best.
gurdonark on Where your music money goes
May 24, 2007 at 1:59 am
I’ve seen this type of thing often in the usual cautionary “this is your brain on a major label contract”, but it’s good to see it
for “here are a selection of indie and DIY distribution options”.
As in many ways these are not so much “competing” channels of distribution as “alternatives for distribution”, I imagine that it is not so important whether magnatune nets you 4 and cdbaby nets you 13. I think it’s instead important that the combination of outlets nets you a stream of payments.
I would be intrigued, too, as your career develops, to see if the buyer who found you through, say, Rhapsody, is more apt to buy from your site the second time around.
Moses de los Santos on Where your music money goes
May 24, 2007 at 3:20 pm
Have you considered bathtubmusic.com?
– FREE UNLIMITED ALBUM UPLOADS!!
(we retain $.30 per song
– $9.95 Per CD (to store, wherehouse and manage orders)
(We reatin $3. per Physical CD sold.
Thats not so bad…is it?
So what are you waiting for?? GET IN THE TUB!
Thanks for allowing me to comment.
Best regards,
Moses de los Santos
President/CEO
Bathtubmusic.com
“Where the MUSIC makes a Splash!”
myspace.com/bathtubmusic
Brad on Where your music money goes
May 24, 2007 at 4:27 pm
gurdonark: definitely they’re not really competing, it’s all good for me. Most music buyers don’t really care or think about how much goes to the artist, they go by what’s most convenient for them, which is understandable. So if Amazon.com works for them, then that’s cool with me.
I don’t know how many people come back from those services. I don’t get access to names or email addresses or anything on most statements, so it’s all mysterious.
Brad on Where your music money goes
May 24, 2007 at 4:28 pm
Moses: it’s not a bad cut, but I’d have to think I’m missing out on a decent number of potential sales to go through the effort of uploading my music to a new service.
I pretty much leave it up to CD Baby to put my record into any hot new digital download services and so far they haven’t let me down.
Plat on Where your music money goes
May 25, 2007 at 2:51 am
What’s the emusic.com payback like? (Or is that grouped into the CD Baby earnings?)
I always wondered how that was determined, especially when they were all-you-can-eat.
Brad on Where your music money goes
May 25, 2007 at 7:35 am
Plat: eMusic’s a little weird, I’m not sure how it works. It looks like I get $0.172 for a single song, but if one song is bought multiple times, it’s $0.278 each.
They’re all listed as purchases instead of listens so I don’t know why it’d be different.
Harei Edom on Where your music money goes
June 6, 2007 at 2:06 pm
It’s hard to read your timely wisdom on the new reality of direct music sales by the new generation of online independent artists, and not mention one website that is committed to helping such unsigned artists in a big way.
The site is called CDs-FROM-THE-ARTIST dot com, or CFTA for short, found at:
http://www.cdsfromtheartist.com
It’s a site created and maintained by indie artists for indie artists, completely free to indie artists and music lovers. Please spread the word about this site among unsigned artists. The “I am an Indie Artist” link from their options bar is very informative.
Regards,
Harei
cheez on Where your music money goes
June 12, 2007 at 3:22 pm
I can’t get over how great this post is. I’ve referred to it several times already.
Orwell's Ghost on Where your music money goes
November 7, 2007 at 5:06 pm
What are your thoughts on the media blasting Radiohead saying they flopped with their publicity stunt?
It was reported they got 1.2 million downlaods, and that was in mid October, and they made nearly 6-10 million dollars on the average price spent of being 5 bucks, but reports now varies from between 2 bucks to 8 bucks.
And I can only guess they did roughly another million downloads, so based on those figures…
do you think they still made roughly the same amount they would have if they released the album with a label?
Brad on Where your music money goes
November 7, 2007 at 5:15 pm
It’s pretty hard to compare Radiohead’s career and anybody else’s. Certainly they kept the costs way lower than they would have with a label. And this doesn’t rule out a label release, so it’s all gravy.
If we assume the record was going to leak anyway, they’ve managed to make a couple million dollars off of doing that themselves. I can’t see how that could not be considered a huge win.
There are a lot of dimensions to the consumer mindset though. Some people are more willing to give their money to Radiohead, some are less willing. Ultimately I think most consumers are pretty sure that Radiohead really doesn’t _need_ their money — that Radiohead are set for life millionaires. How does that impact where people decide to throw their music money?
Seamus Anthony on Where your music money goes
October 6, 2008 at 7:49 pm
This shit is rockin’ my world dude – as is your music. Good work old bean :-)
jbcat99 on Where your music money goes
August 2, 2010 at 4:13 pm
I see this is quite an old post. Wonder where I could access similar info that is up-to-date. Also would like to know a cite I could link to my from my facebook group encouraging consumers to purchase direct that might considered more creditable than a blog. Thanks much for any help. FB group: “Pay musicians, not middlemen”
L on Where your music money goes
August 11, 2010 at 10:49 pm
Bathtub is a rip off. Sorry I’m like 3 years late, but “Moses” is full of it. Total phony and BS.
Just got more spam from him 5 years after our first encounter. Now “he’s” selling vacations.