Ham_authority95 said:
People say that they don't pirate because they "want to support the artist."
My question is, how much money from record sales ACTUALLY goes to the artist, instead of the record label?
That's a really good question. It varies wildly from case to case.
Firstly, does the artist owe the record label money? When big artists get signed they often get a big chunk of money to record their album. However that money is not a gift, it's a
loan, which then needs to be paid back through album sales. The band typically sees
no money at all until the debt is repaid. Let's take the example of a pop band who had a couple of huge and I mean
huge singles that they released off their own bat, a record label picks them up and likes them so much that they give then $100,000 to record their album. The band goes "fuck yeah $100,000 thanks a bunch", records their album, and spends the change on cars, clothes, hookers, drugs, whatever. Their album does
okay, they do end up selling a few thousand copies of their album, enough to repay the loan, but they still never see any money. Why not? Because every time the label does things to promote that artist, that money gets added to the existing debt. More sales fuel more promotion and it just goes around and around, the band never gets in the black. A few years later, the band goes cold in the marketplace as music fashion changes, their albums stop selling, and they're in debt up to their eyeballs, they eventually go "fuck this" and pack it in. Ever wonder what happens to those bands that were huge for a few years and then suddenly dropped off the radar, now you know...
So, let's assume that the band were clever, and were offered $100,000 and said "actually, no - we'll record our album for $5000, and by the way we'll have our lawyer look over the contract and make sure that you can't do any promotion and charge our debt without our collective authorisation" so the label gives them the $5000, they record their album, it does reasonably well, the label doesn't go crazy with stupid advertising, and they're in the black in a few months. So how much money are they getting?
Well, did they write their own songs? If not - uh oh. Cover songs - the original songwriters are the ones who collect the royalties. A band I'm friends with (who shall remain nameless) had a massive national hit a few years ago - with a cover song. I took the singer to lunch one day and said "so how much money have you seen?" - the answer - "we get a wage from the label, which is about enough money for pizza and cigarettes, but we don't see any CD sales money at all, we owe them too much money. The only other money we see is from merch sales". If you're selling a single that's a cover song and it becomes a big hit, you'd better at least hope that you wrote track 2.
If the band did write their own material, well it varies depending on what's in the contract. The lowest royalty rate you'll see on a major label is about 5%, and the highest might be 25%. Obviously a band who is hot in the marketplace or has a significant track record of sales weilds more negotiating power and can demand better treatment here. Independent labels sometimes offer better deals than this, sometimes not. Really small labels will often go 50/50 with artists once expenses are covered as a matter of principle, but then getting a big monster hit on one of these small labels is unlikely because they might not be able to give you the promotional push a larger label with more money can. Of course if you release completely independently, then you get all the money, but then you're also paying your own production, promotional and logistic costs, the stuff a label would normally take care of for you.
This is a wild oversimplification, I haven't talked about "reserves", "overruns" or what happens when you sell music on the internet (where royalties are less due to legal technicalities) but that'll give you some general idea. The short answer to your question is "probably not much - but as a general rule, the bigger the label, the more potential sales you can make, but the less money you see per unit".
