The image has left from the early 90s that musicians that get signed on to major record companies always live the luxury life. Perhaps, today there are still many artists out there believing that this is the true way the music business works. Numerous tales about performers going bankrupt after signing on to major record company that have surfaced within the last years didn’t touch them. Unfortunately, this is what happens to the vast majority of artists, because being signed on to a major record label doesn’t mean the performer will follow the road paved with gold.
If you are wondering where the money you pay for a CD actually goes, the following statistics might be interesting for you. The numbers revealed below are not a point of view of a single entity, but it rather has been confirmed by the independent researches of CIPPIC (Canadian Internet Policy and Public Interest Clinic) and American artist Courtney Love.
It seems like the issue of paying musicians is not what the labels are so willing to talk about. In fact, they only talk about it on anti-piracy campaigns. Moreover, the case of 2008 when the record companies came to court demanding to reduce musicians’ royalties they had to pay out may be just one reason to make a conclusion that the labels only want to pay the performers as little as possible.
Let’s see how the money gets distributed from the album sales. Almost two thirds (63%) go straight to the record label. Around a quarter (24%) is received by distributors. Only after it whatever has left (about 13%) gets split between the band management, lawyers, producers, performers, personal managers, etc.
Although this only describes a picture of physical album sales, the situation for digital sales is most likely similar. The only question is why then the reason for artists not getting paid is believed to be illegal file-sharing, but not the labels’ reluctance to pay performers their hard earned cash.
The last thing that is worth noting is that the scheme above is only adopted by major record labels, while the smaller ones usually treat artists more honestly.
