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, etc. To illustrate this dissection let’s assume your CD sells for R100. 

Record store - First to take their piece of the pie is the record store that inflates the CD price by 50%. So a R50 CD is sold for R100 so that the record store can pocket the R50. 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 R50 left.

Manufacturing – The CD has to be replicated, and sleeves printed. Today this is around R14 per CD when printing a thousand CDs. You have R36 left.

Distributors – Distributors usually keep about 24% 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 Red Revolution, MASH, Revolver, Nyce, and Music Central Africa. If the distributor takes R8, you have R28 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 Universal records while local indie labels include Kalawa Jazzmee Records, 999 Music, Soul Candi, Ambitioz and Afrotainment. You have R4 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 are paid from your R4 share. This is split as follows:

Another complex deduction that takes place under the Band’s slice is the songwriter deduction which is on 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 makes less than R4 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.

Graphic taken from The Root