[Community_studios] some interesting economics on independent labels
tompoe at ableweb.net
Fri May 2 23:55:57 EDT 2003
What record industry slump? Independent labels say business has never
By Lynne Margolis | Special to The Christian Science Monitor
- - - At a major label, most artists are unlikely to earn anything
unless they sell at least 1 million albums, and even then, they could
wind up in debt. Everything from studio time to limo rides are charged
against their royalties, which might be only $1 per disc sold. That
compares with an indie artist, who can sell a disc for $15 at a concert.
If they make $5 profit a disc on 5,000 discs, they pocket $25,000.
"That's the difference between us and them," Mr. Strang says. "Artists
on our label who sell 200,000 copies make a very good living."
Independents also pay profits only after recouping expenses, but they
keep those down by curbing marketing and overhead costs. They also have
more equitable arrangements with artists, often sharing profits 50-50.
But perhaps the biggest difference is that they let artists keep the
rights to their work. Michael Hausman, who manages Mann, says once the
large labels get those rights, they may choose not to release a note of
music but won't let the artist work for anyone else - essentially
bringing career momentum to a halt.
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