Independent Artist: Is it really worth it?

Most artists today don't really care for a major record deal much like they did years ago. Mainly because they are afraid, and assume that labels will try to take advantage of them, which in most cases is true. Most artists only see a small royalty rate which is typically as little as 3% and usually contains a cap of 15% (For major selling artists).

If I were to put myself in an independent artist shoes (again, because I've been there before), I would be furious if a label only offered me 3% of my albums sales etc. This means, in numbers, that if an album sales 100,000 copies at $10/each I would only receive $30,000 (way lower than the average American income of $46,326. <http://www.mybudget360.com/how-much-does-the-average-american-make-breaking-down-the-us-household-income-numbers/> This as well as mainstream media, are the main reason most artists today want to do it themselves, and quite frankly, I don't blame them. Lets crunch some numbers here (These are slightly higher than the previous numbers and based on a major artist)

500,000 (albums) x $10 (each)= $5,000,000

Recoupment (Meaning what it cost the label to make your album, they always ensure they get it back):

Album cost (Average for majors): $500,000 (This includes hiring producers, band players, back up vocalists, mastering fees, studio time, promotion, distribution fees, artwork fees, and so forth.)

That leaves only $4,500,000 for the artist (Sounds nice don't it but wait more costs.......)

Now we have to cut out tour support average ($500,000) and then also manager commission (20%) of artist royalties ($)

Leaving: $3,900,970

Radio Promotion: $200,000

manager: $164,232

Lawyer: $200,000

Business Manager: $164,232

Manufacturing Costs: $250,000

Leaving: $3,330,776

Publishing Royalties: $750,000 (Money paid to those who wrote an artists songs)

Leaving: $2,580,776

marketing: 2 Million

Leaving: $821,164 (before manager pay) $492,700 after  for the artist.

All numbers based on <http://www.techdirt.com/articles/20100712/23482610186.shtml>

Artist (solo) royalty (let's do one for the low and high 3% and 15%)

Solo Low: $14,781 (with this kind of royalty you might as well be working at McDonalds (14,874-18,840) <http://www.payscale.com/research/US/Job=Fast_Food_Worker/Hourly_Rate>

Solo Artist high: $123,274

For more information on artist royalty rates, statistics, recoupment costs, and so forth. Be sure to check out, or purchase a book entitled All You Need To Know About The Music Business by Donald S. Passman, I myself have read this book, and know that it gives you information on every subject about the music business from a lawyer's point of view. I hope you all enjoyed this post, and I look forward to   doing even more.

Thank You,

William Dodd