The Music Industry's Funny Money
Still think a music career is an easy path to a blinged-out life? Don't believe the hype. A whole lot of folks have to get paid before the musician does. The Root traces the money trail.
Distributor: Music distributors are entities designed to promote and distribute records. The major labels maintain in-house distributors, while most all indie labels use private distribution companies. For smaller bands' records, the distributor can take as much as a 24 percent cut of the SLRP; bigger bands might only be charged 14.2 percent.
Songwriter/publisher: If an artist doesn't write his or her own music, someone else has to. And someone who writes a song must first go through a music publisher, whose job it is to place that song with a recording artist who will agree to perform it. If an artist buys the song, the writer and publisher then receive 9.1 cents for every copy of the song sold, a sum they must then split.
Personal manager: This manager guides the career of the artist and gets about 15 percent of the artist's gross earnings.
Business manager: This manager is the artist's money man, making sure the musician repays his debts and invests his earnings wisely. A business manager charges 5 percent of an artist's gross.
Lawyer: While it's not always the case-many charge hourly-some artist's lawyers charge 5 percent.
AFTRA and AFM: These are the musicians unions. Singers join AFTRA (the American Federation of Television and Radio Artists), while players join AFM (the American Federation of Musicians). If an artist cuts an album, he has to join a union, which will then take $63.90 in base dues plus 0.743 percent of the artist's first $100,000.
Record advance: Unlike touring fees, of which the record company can only recoup half, record advances are 100 percent recoupable. That means that if the label fronts an artist $75,000 to pay for whatever he or she needs to record an album--studio time, new instruments, etc. -- the artist then owes the label that initial $75,000, regardless of whether the record is a success or not.
The Root thanks Don Passman, author of All You Need to Know About the Music Business.
Still want to get the band back together? Crunch the numbers and see for yourself just how much you'd make as a musician.