The Flywire

Industry Math 1+1=Zero Typically, a new artist is to receive what's commonly referred to as a 10-point deal. In other words, the artist is to receive 10% of the list retail price of net sales of full price albums sold in the United States. Ten percent of the retail list price isn't bad! Right? After all, today's list price averages about $17.98, per CD. Do the math.The artist believes (because they usually speak English, and not legalese) they will be paid about $1.80 for every CD sold. Sell a million records, become a millionaire. Right? Wrong (your best bet is to hire an entertainment attorney immediately!). That one sentence giveth . . . but the next 50 pages taketh away to such a point that the artist will never actually receive anything close to $1.80 per record. To start with, the producer gets a third of that. The label only pays on 90% of sales, and deducts an additional 25% for the wrappers. But, all of those numbers are reduced further once the discounts necessary to actually induce the buyers are put into effect. Furthermore, as if there were not enough reductions, recording, production and marketing costs come to the artist in the form of advances against your net royalties. Thus, you will be paying the label all of the costs associated with putting your record together and getting the public to care about it. After all those aforementioned deductions, your actual royalty rate will probably be less than 50 cents per unit. Look at it this way. If you are advanced $100,000 from your label, you will likely have to sell more than 200,000 CD's before you ever get a single penny from your work. But, at 200,000 of YOUR CD's sold, about $3,000,000 has moved through the system. Retail and distribution companies have made about $2 million, and your label has made up to $1 million. However, in Artist Royalties, you have not made one dime. Perhaps you ought to get an attorney to negotiate all of this.

• Cover