Master your Craft: How much do artists make per CD sold?

By Andile Nkosi
In my line of business I meet plenty start-up artists whose sole wish are to get signed by a major record label. The hardworking few who eventually do get signed come to a shocking discovery: that it is the artist who gets the smallest peace of the pie when it comes to album sales revenue with most artists getting paid between 8% and 15% of the CD’s retail value. So who earns what when a consumer buys a CD at a record store e.g. Musica, Look And Listen, Reliable Warehouse, Jet Music etc. To illustrate this dissection let’s assume your record labels sells each CD for R120. 

Record store - First to take their piece of the pie is record store that inflates the CD price. So a R100 can be sold for R120 so that the record store can pocket the R20. This is because they pay for rent in Malls and Shopping Centers, they pay electricity and also have to pay the in-store staff who unpacks, shelf, merchandise and sell the your CD. You have R100 left.
Distributors – Distributors usually keep about 25% of a products retail price. This is because the distributor ensures that the CD is moved from the warehouse to the retail store shelves. Examples of popular CD distributors in South Africa are Universal, Iris, Electromode, Gallo, Independent and Music Distributors. You have R76 left.
The Record Label – Record Label signs, develops, records, promotes, publicizes and sell the artist’s music. All these things require huge financial investments and mostly take place before the album even gets into the store. For this reason, the Record Label keeps the biggest slice of the cake, about 63%. Examples of major labels in South Africa are Gallo, Sony, EMI and BMG records while local indie labels include Kalawa Jazzmee Records, 999 Music, Soul Candi, David Gresham Records and TS Records. You have R13 left.
The Band – You are a band. Yes, even when you are a solo artist you still are looked at as a band. The band consists of the singer/vocalist; the instrumentation player (bass, drums, guitars, beat programmers); the producer; the business manager; and the personal manager. All these entities share on the remaining 13 left. This is internally split as follows:
§  Vocalist = R2.34
§  Instrumentation Players = R7.02
§  Producer = R0.39
§  Personal Manager = R1.95
§  Business Manager (aka Accounts Man) = R0.65
§  Lawyer = R1.95
Another complex deduction that takes place under the Band’s slice is the songwriter deduction which is around 9 cents for every copy of the song sold. I will unpack this in detail in future articles.   Below is a graphic representation of how much musicians ideally make per CD sold.


In essence, an average musician who doesn’t make or own his beats makes only R2.34 per CD sold. This picture quickly disperses the myth that obtaining a Gold or Platinum CD sales status will make you rich.  It is for this precise reason that I personally advocate for the releasing of albums independently.
But not all is doom and gloom as there are areas of the entertainment industry which favor the vocalist financially. A good example of this is income from live performances as well as brand endorsements. That is a topic for another day though.
Adapted from The Root

4 comments:

  1. joh! daylight robery

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  2. Panorama Promotions & EventsOctober 26, 2013 at 6:07 AM

    An eye opening information!!!

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  3. Anonymous - It's only robbery if you were not told before you signed the contract. Besides, you'd do the same if you were investing your money on the project. So to get out of the trap, executive produce your own records.

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  4. a lot of people are attracted to the industry but forget that every industry has its fees and really nothing is for free unless you get free beats and do performances so u can get paid. the music industry is too deep.

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