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1. DEAD MUSIC ARTIST THAT STILL OWE RECORD COMPANY MONEYMONEY HOW TO
2. DEAD MUSIC ARTIST THAT STILL OWE RECORD COMPANY MONEYMONEY FREE

Even more insane? Apparently the standard “container charge” is an additional 30% off the revenue. Also, the fact that all of these expenses get deducted from the artists’ share? That also seems wrong. Again, the fact that digital music doesn’t have such expenses is pretty much ignored. Next up, there are “container charges.” That’s for things like the jewel cases and inserts for CDs. The fact that you could just email the mp3 to those folks yourself? Well, pay no attention to that newfangled technology. That money comes straight out of the gross that the royalty is calculated on. Basically the labels deduct the “cost” of providing reviewers/radio stations/etc. But here it’s used in a different manner.

DEAD MUSIC ARTIST THAT STILL OWE RECORD COMPANY MONEYMONEY FREE

Next up? “Free goods.” Now, we talk about the importance of free goods all the time. The way it’s described here, that’s often just a set number, rather than based on any actual, documented cases of uncollected fees. Then there are “uncollected account” withholdings, on the basis that some retailers go bankrupt and don’t pay for the stock they had. The labels still try to get a super high breakage rate that they get to deduct. That CDs don’t break so much and that digital files don’t break at all, doesn’t matter. But there’s plenty of cash that makes its way into the label’s bank account, when an album sells $20 million.Īs for what kinds of tricks the labels use, well, Frascogna notes “breakage fees” of 20%, which are based on breakage rates for vinyl from half a century ago. Obviously, some of that is covering costs and expenses. The “recouping” only comes from the 10% royalty rates, which are really much, much lower (in this example, the “real” royalty rate is more like 2.5% due to the clauses in the contract). Using those points, he breaks down how a band might think it’s getting royalties on $20 million worth of sales but then find out that, thanks to some of these fun tricks, the basis for calculating the royalty takes that number all the way down to $4.9 million (and then with a 10% royalty, the official take is $490,000 - but if the advance is $1 million… the band still technically “owes” $500,000).Īnd, as we noted in the post last year, don’t think that because a band goes “unrecouped” that the label loses money on them. It definitely covers a lot of the same ground (in fact, his advance numbers and sales numbers match up exactly with the numbers we quoted last time from Courtney Love), but it also delves into some of the sneakier aspects of record label contracts with musicians - things that many musicians simply won’t know about or understand when they sign their contract.

DEAD MUSIC ARTIST THAT STILL OWE RECORD COMPANY MONEYMONEY HOW TO

Bas points us to an excellent 14 minute video from lawyer Martin Frascogna, entitled How To Sell 1 Million Albums and Owe $500,000: Last year, we had a post on RIAA accounting, detailing how labels screw over many musicians, even some of the best selling ones, such that they never actually make a dime in royalties.