Disclaimer: This blog is not about a particular person. It's stories that have been collected and consolidated. The sole purpose of this blog is to educate the industry.
Let's start with a hypothetical scenario.
•One song on iTunes costs $1.29.
•Most songs are written by at least two writers.
•The $1.29 is immediately cut in half. Well, someone gets $.64 and someone gets $.65. (Let's say you get $.65.)
•Let's say Apple takes 30% of your $.65.
•Now you have $.46.
•If you have a publisher, they get 50% of your half ... So now you're down to $.23.
So now you have twenty three cents to work with. WAIT: Uncle Sam wants 39%, self-employment tax.
•Now you're down to about $.09 (nine cents).
•Your business manager commissions 5% on everything you earn.
•Your personal manager commissions 20% on everything you earn.
•Your booking agent commissions 15% on any show that you perform and get paid for.
Let's say they all decide to waive their commissions on your music income via iTunes etc., which is very unlikely, but you may get as lucky as I am, and get an amazing business manager who goes out of their way to work with each artist, but guess who is not waving anything? The record label.
Within the record label you have many departments: Marketing, PR, Promotions, A&R, Creative, Digital, etc. Let's say each of these department heads earns $100,000 annually. Let's say the record label has four artists. This means you only have to pay $25,000 per label department head.
Now that the record label has already spent, let's say $30,000 to record your album — and this does not include the artwork which comprises photo sessions, liner notes, graphic design etc. — the record label sends you on a three-day out-of-state radio tour to test singles.
(My first radio tour was 10 months long.)
A promo person, or "regional," will go with you. "Regionals" talk to the radio station decision makers on your behalf. Let's say they make $100,000 per year. If you don't play an instrument, a guitar player will have to go with you. Let's say their fee is $150 per day — if you're lucky.
Three airline tickets, one rental vehicle, three hotel rooms amounts to a minimum of $2,100 per day. $6,300 for the three day trip. This does not include the regional, guitar player or your meals — or the nice dinners the regionals takes radio decision makers to.
These dinners can cost a minimum of $250.
Let's say the radio station likes your song and would like to add it to their playlist in "light rotation." They would also like for you to come back on another date and perform a free concert. This is another flight, hotel, rental car and that guitar player.
Note: Since most venues have a radius clause in their contracts, you will not be booked in their area for at least six months.
In other words, you performed a free show for the radio station and now you can't play for the local theater or bar, due to a radius clause. Please keep in mind it is very important to play for the radio stations: NEVER EVER SAY NO.
Now this is just a start. But, remember that nine cents you earned from your song on iTunes, etc? Imagine how many of the songs you have to sell in order to pay for just one year's worth of record label. Imagine if you didn't write the song. Imagine the debt you would be in.
Hopefully your song becomes a hit. If it does not, you will have to start over with a new radio single. If it does become a hit, then concert promoters will start booking you for their venues.
The starting rate for most new artist
is $7,500 per show. This is when your managers and agents start commissioning for sure.
•Business manager commissions 5%. Personal manager commissions 20%. Booking agent commissions 15%. Uncle Sam commissions 39%. You are left with 16% net or $1,200
With that $1,200 you will have to pay for the lease on the bus which is about $350 per day, the fuel for the bus Which is about $1,000 to fill it up. You will have to pay for the driver. You will have to pay each band member Approximately $300 per day, the road manager approximately $400 per day, the sound guy approximately $375 per day and a monitor tech which is minimum $250 per day. You will have to pay insurance and perdiem's which is an extra $25 per bandmember.
As of 2009 record labels are getting a cut of your touring income. This includes merchandise sales such as T-shirts, hats, keychains, photos etc. I heard that some record labels are requesting 50% minimum Of everything you earn on tour.
I'm going to stop here but I'll pick back up later. We'll talk about what happens when you go on tour with a major artist as an opening act.