EMPOWERING THE RECORDING ARTIST

Did you know? The recording artist who sells one million records has an average of $1,150,000 in expenses making a net total of $145,038 at $1.33 per record? After paying the business manager (5%), manager (20%) and taxes (33%) out of the $145,038, the artist takes home $60,915.96? The artist waits approximately 4 years from the date the contract is signed to get paid from U.S. record royalties? (liquidated reserves) The record company gross $3,934,600 before expenses and profits $1,250,000 after expenses when a million records is sold at $4.12 per record? You might be surprised by what you find below!

1. When do I get paid?

Artist signs contract

2. What do I owe the label (Recoupables)

3. How many albums did I sell?

Total albums sold 1,000,000 units Promotional albums -3,000 Returns (5%) -42,000 Net albums sold 955,000 units Artist royalty base x $1.33 Gross sales $1,270,150.00 Artist sells a net 955,000 units EMPOWERING THE RECORING ARTIST is an example of record royalty calculations and related estimations with the intent to give the new and aspiring recording artist an eye-opening view of the music industry.

2/4/2001 Artist Advance $60,000.00 1 year Attorney Fees $15,000.00 Album completed 2/4/2002 Recording $240,000.00 3 months Radio Promotions $200,000.00 Album released 5/4/2002 Advertising $90,000.00 3 years Tour Support $50,000.00 Artist is fully recouped and 4/1/2005 Independent Promotions (50%) $85,000.00 gets first royalty check from reserves Independent Publicity $40,000.00 Artist waits approximately 4 years from Independent Marketing $50,000.00 date contract is signed to receive Merchandising $20,000.00 records royalty payments Video (50%) $300,000.00 Total Recoupables $1,150,000.00 You will have to pay back $1,150,000 to the label

4. How much did I make per record?

CD Suggested Retail List Price $18.98 Packaging costs (25%) -$4.75 Royalty base $14.23 85% of Royalty base (SRLP) $12.10 Artist royalty rate (15% all-in) x 11% Artist royalty base $1.33 Artist makes $1.33 per record sold
2012 MKWR

5. How much did the label make per record?

CD Suggested Retail List Price Retailer Distributor CD Wholesale price Net artist royalty base Producer royalty (average) Songwriter royalties (average) Pressing & Printing AFM (SPF/MPT) $18.98 -$6.38 -$4.10 $8.50 -$1.33 -$0.49 -$0.92 -$1.60 -$0.045

6. How much did I get paid?

Gross sales Total Reserves (30%) Recoupables Balance Royalty Statement 10/1/03 Royalty Statement 4/1/04 Royalty Statement 10/1//04 Royalty Statement 4/1/05 $1,270,150.00 -$381,045.00 $889,105.00 -$1,150,000.00 -$260,895.00 -$165,633.75 -$70,372.50 $24,888.75 $120,150.00