Meet The New Boss, Worse Than The Old Boss? -Full Post | The Trichordist
With regards to online sales, labels (old boss) involvement in modern recording, piracy and digital distribution in general (new boss) and how screwed bands are, now Vs before.
That's actually a much better read than I expected. These two charts tell an interesting story:
...and from further down:
Edit - I like this guy.
That's actually a great metaphor.This is what people do not understand. When they look at the royalties that the record labels paid artists it doesn’t seem like a lot. It seems unfair. Until you consider the guaranteed advances. Let’s say the artist was to be paid a lowly 12% royalty by contract. That compares unfavorably to the 61% of revenue that the independent artist gets from iTunes. But the artist is always given an advance and usually the advance assumes moderate success. But 9 of those 10 bands did not achieve great success even moderate success. It was never expected that all 10 would be successful. So the result was that the record label artist actually received a lot more than that contractual 12%. The unsuccessful artist may have received an advance that was equal to 90% of the gross revenue generated by that recording. And most artists were unsuccessful. So your average record label artist was actually receiving way more than 12%. The artist royalty rate is actually the floor. It’s the minimum share of revenue the artist will receive.
(I know this is probably really confusing to you civilians. Am I really saying it’s better to be un-recouped as an artist? Yes it is. Quantitative finance geeks will see this as selling a series of juicy “covered calls”. Being un-recouped means you took in more money than you were due by contract. You took in more money than your sales warranted. And there was a sweet spot, being un-recouped but not too un-recouped. For instance I estimate that over my 15 year career at Virgin/EMi we took in advances and royalties equivalent to about 40% of our gross sales. In other words we had an effective royalty rate of 40%, despite the fact that by contract our rate was much lower).