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Show Me the Money

Show Me the Money

We all want to make money, right? Yes, you love making music, but very few artists are doing it for love alone. We all have to eat. So, what kind of money can you expect to make? Hold onto your hats here, it’s a bumpy ride!

 

Royalties

 There are a lot of variables here, so be aware that the following information is a guideline only. The kind of deal you do depends on many things – how big you are, your potential, your manager’s ability to strike a good deal etc. It also depends which country you do your deal in. As a new artist in the US you can expect to earn 13%-16% of sales (that’s the list price), if you are midlevel (you’ve already sold around 150,000 records) that goes up to 15%-17%, and if you are a superstar (you’ve sold over 1 million records) you’re looking at 18% to 20%. In the UK it’s slightly different. Here a new artist is getting 16%-20%, midlevel is 18%-24% and superstars are on 24%-30%. So basically, the more records you sell, the more your percentage goes up. If the differences per country seem unfair, the US holds lots more record buying people, so much greater potential for sales. 

 

Advances

Times have changed. Advances used to be a set amount of money that was paid to an artist upfront of sales, regardless of recording costs etc. However, as recording costs would often escalate, labels realised they were out of pocket. So now it’s slightly different. Now there is a fund set up from the start which everything must be paid out of, including advances. If you keep your recording costs down you’ll get more of the pie, but you only get what’s left over once those recording costs are paid from the fund, so spend too long making your record and your advance shrinks. If you sign with an independent there may be no advance at all, or only a small one. As budgets are tighter for small labels, the cost of recording the record could take up all of the fund.

 

Rights

It’s increasingly normal for artists to be asked to sign a 360 deal. You need to know about this, as though labels love these deals, you might not. A 360 deal is where the label takes a share from everything you earn, rather than just sales. So, merchandising, touring, song writing rights - whatever you make the label gets a slice. You might not like this, but the fact is labels are struggling to survive from record sales alone, and they need a way to keep ticking over. Most 360 deals see the label taking 10%-30% of non record sales income, depending on the factors discussed above. Be aware as well, that this is a percentage of your gross income, so before you’ve deducted expenses.

Being an artist and understanding how the money side works can be a challenge, but it’s vital you get to grips with how much you can expect, what your deal might entail, and what your choices are.

 

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