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Here is the math that will explain just how screwed they are:
These figures are representative of amounts that appear in record contracts daily. There's no need to skew the figures to make the scenario look bad, since real-life examples more than abound. Income is underlined, expenses are not.
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 CD's, shipping tapes, misc. expences : 2,000 Video budget: 30,000
Cameras : 8,000 Crew : 5,000 Processing and transfers : 3,000 Offline : 2,000
Online 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 amps : 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 : 7,500 Lawyer's fee : 1,000
Publishing advance : 20,000 Manager's cut : 3,000 Lawyer's fee : 1,000
Record sales : 250,000 @ = 3,000,000 gross retail revenue Royalty ( 13% of 90% of revenue ) : 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 incpme***
Record wholesale price .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 : 550,000
Gross profit : 710,000
The Balance Sheet : This is how much each was paid at the end of the game.....
Record Company : 710,000
Producer : 90,000
Manager : 51,000
Studio : 52,000
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 millon dollars richer, but is in the hole ,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month.
The next album will be about the same, except that the record company will insist they spend more time and money on it. Since the previous one never "recouped," the band will have no leverage, and will oblige.
The next tour will be about the same, except the merchandising advance will have already been paid, and the band, strangely enough, won't have earned any royalties from their t-shirts yet. Maybe the t-shirt guys have figured out how to count money like record company guys.
Some of your friends are probably already this screwed.
