Very nice job by a swarm of geeks and Janis:
- 1) How much?
What percentage do you make of the sticker-price of your CDs?
As the artist/singer, that’s a tough one, because it depends on the contract, and also the sticker price. For instance, contractually I make a smaller amount on records that are priced “mid-line”, cut-outs, singles, cassettes, compilations? well, you get the idea! It also depends on the era; my first contract, with Verve (now Polygram) had a royalty rate of 2%. Current royalty rates are 12-20%. Generally, figure that if I was completely paid back, there were no new charges for shipping/ distribution/ advertising/ travel/ phones/ faxes/ artwork/ publicity/ promotion/ manufacturing etc etc, I would make around $1-$2 on a list price of $17.98. Alas, that never happens, because records get high list price only when there’s a lot of promotion behind them. On mid-line (you buy it for $12.98), my take drops to around 85 cents, and on down the line.
As the songwriter, I make less if I write the songs – then the record company invokes a 75% clause, where they only pay the songwriter/recording artist 75% of the Congressionally set statutory rate for writing/publishing the song. Their original argument, around 10 years ago, was that artists who insisted on recording their own songs cut the chances of a hit record, because the record company couldn’t recommend potential hit songs for them to record.
Also, if you know, how much of that price is going to pay for advertising, studio time, et al., and how much is pure profit for the record companies?
Almost impossible to determine; you’d have to know the advertising budget, studio budget etc. On my CD Breaking Silence, which is owned by Morgan Creek throughout most of the world, I paid for the entire record myself, so there were no recording costs. We’ve sold about 100,000 of them worldwide. I haven’t seen royalties.
Do you not find it strange that a 2-hour DVD, with commentary, subtitles, and extra scenes, can be sold for less than $10, while few audio CDs are that low priced?
I don’t find it strange, I find it reprehensible.
2) Radio Station consolidation
When you entered the music business, radio stations were diverse. In the last few years, this diversity has disappeared. Do you have any comments on this?
Maybe it’s all part of a great international conspiracy to deprive us of choice while driving us crazy with limited playlists of bad music? Maybe the conspiracy includes not just record companies (who benefit because it’s much cheaper to sell a million copies of 1 CD by 1 artist than to sell a million CD’s by a million artists to a million different people), but also radio stations (who may need that new refrigerator/trip to Cancun to meet a new artist/free lunch/widescreen TV for the office much more than you or I need good, varied music), and drug companies who are using the incredible psychoses derived from hearing a Backstreet Boys single three thousand times to push their drugs on us?
Seriously, diversity is something record companies can’t afford anymore – not the majors, at any rate. I’d go to this article, posted at Linux Journal, which quotes a Newsweet article (July 15,2002) by Steven Levy saying “So why are the record labels taking such a hard line? My guess is that it’s all about protecting their Internet-challenged business model. Their profit comes from blockbuster artists. If the industry moved to a more varied ecology, independent labels and artists would thrive–to the detriment of the labels, which would have trouble rustling up the rubes to root for the next Britney. The smoking gun comes from testimony of an RIAA-backed economist who told the government fee panel that a dramatic shakeout in Webcasting is “inevitable and desirable because it will bring about market consolidation.” That’s really it in a nutshell. “Market consolidation” means the less artists they have to promote, the less ultimate dollars they’ll spend. The smaller the playlist, the greater the chance that audiences will buy something from that playlist alone – because that’s all you’ll be able to find out there.
3) Indentured Servitude
In one of your interviews, you mentioned that contracts with the music industry should be likened to indentured servitude (must produce X albums, but the label has the final say on if what you produce was acceptable). Why do you think so many artists willingly accept these terms? What can be done to promote contracts that are more fair?
Ah, you’re into a two-fold problem here. Fold one is that the record companies hold all the cards; if you want to be famous, you have to go the mainstream route. If you want huge success, you have to go the mainstream route. If you want worldwide success, you have to go the mainstream route. And until we see our first Internet & Live Shows Only artist sell a million CD’s without a label deal, the major labels will be the only mainstream route available. Don’t quote Grateful Dead statistics to me – they’re the exception, not the rule.
Fold two is that everybody wants to be famous these days, and enough is never enough. Let me use an example: in their mid-20’s, my grandparents were thrilled to have a small refrigerator (without freezer) and gas stove with a tiny oven. The house had one TV. My parents assumed they were due a bigger fridge with freezer, four burner stove and three-rack oven, dishwasher, toaster, mixmaster etc. The house had two TV’s. My generation went for all that, plus microwave, automatic coffee maker, food processor, and a TV for living room, bedroom, and kitchen. The next generation assumes they’re due all of that, plus espresso machine, bread maker, etc. And there’s a TV in pretty much every room.
It’s the same with being famous. In my grandparent’s day, you got famous if you were a criminal or a politician. Artists whose fame went beyond regional were really rare; worldwide fame, even for classical artists, was almost non-existent. Nowadays, with television and magazines making it seem like there are more famous people than not, every artist figures they, too, can get really, really famous. And they want the whole hog.
I think (musing on a personal note here) that’s one of the benefits of my not being twenty any more, or even thirty. I’m painfully aware that I will never have another hit record; no label’s going to invest that kind of money in me. (As an aside, the big Carlos Santana album cost $750,000 to make, and $1,500,000 to promote. That’s a lot of money, and it wouldn’t have happened if Clive Davis hadn’t needed to prove a point after initially being “retired from active duty”.)
Believe me, it took me years to get comfortable with that conclusion. But once I was comfortable, I could look around at my life and be pretty happy. Ten years ago I was still chasing the brass ring, waiting for my 16th platinum record to happen. Now, I’m thrilled that I can gig whenever I want, record what I want, and make a living doing what I love. I know it sounds disgustingly Pollyanna-ish, but there it is….
Much more – check it out.