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johnson67th

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  • Mar 8th, 2010 @ 12:05pm

    Unrecouped bands

    The quote about bands not making money reminds me of this post from gizmodo.

    Gizmodo: Major labels cook the books

    Basically it goes on to say that the labels aren't losing money on bands. This was really an eye opener for me on how the record companies work.

    From the Link:

    "A word here about that unrecouped balance, for those uninitiated in the complex mechanics of major label accounting. While our royalty statement shows Too Much Joy in the red with Warner Bros. (now by only $US395,214.71 after that $US62.47 digital windfall), this doesn’t mean Warner “lost” nearly $US400,000 on the band. That’s how much they spent on us, and we don’t see any royalty checks until it’s paid back, but it doesn’t get paid back out of the full price of every album sold. It gets paid back out of the band’s share of every album sold, which is roughly 10% of the retail price. So, using round numbers to make the math as easy as possible to understand, let’s say Warner Bros. spent something like $US450,000 total on TMJ. If Warner sold 15,000 copies of each of the three TMJ records they released at a wholesale price of $US10 each, they would have earned back the $US450,000. But if those records were retailing for $US15, TMJ would have only paid back $US67,500, and our statement would show an unrecouped balance of $US382,500. I do not share this information out of a Steve Albini-esque desire to rail against the major label system (he already wrote the definitive rant, which you can find here if you want even more figures, and enjoy having those figures bracketed with cursing and insults). I’m simply explaining why I’m not embarrassed that I “owe” Warner Bros. almost $US400,000. They didn’t make a lot of money off of Too Much Joy. But they didn’t lose any, either. So whenever you hear some label flak claiming 98% of the bands they sign lose money for the company, substitute the phrase “just don’t earn enough” for the word “lose.”"