I'd like to argue with that chart.

Quote:
36.7%: Retail Markup
19.7%: Company overhead, distribution, and shipping
12.7%: Marketing and promotion
11.7%: Royalties to artist and songwriter
6.4%: Signing act and producing record
5%: Co-op advertising and discounts to retailers
4.4%: Pressing album and printing booklet
3.5%: Profit to label

While I'm sure these numbers are reasonably accurate on average, do you think they spend as much money promoting the new Sparta release as they did the new Britney Spears release? I'd say that the vast majority of promotion goes to a few big acts.

"Signing act and producing record": How are these two things related? For one, in most cases, you've probably got one underpaid A&R guy competing with no one in order to sign a lot of bands. As opposed to teams of them courting Britney Spears. And how is producing a record related in any way to signing the band? IMO, the money they pay to producers and engineers should almost be lumped in under royalties; after all, I've purchased albums based solely on those guys. Of course, that's not to say that recording studio time isn't expensive. Of course, as pointed out before, it's taken back out of the band's royalties. I think they may be why they're lumped together -- so you can't figure out what the band's real profit is. If you subtract the $1.08 from the $1.99, that leaves $0.91 in profits, not taking interest into account. Of course, this is still on average, and the massive royalties made by those top artists are likely to significantly skew the statistic.

"Discounts to retailers": What? How does discounting cost money? Sure, it could eat into profits, but it's not like it costs anything, and they list profits separately. Of course, this is just their way to hide the fact that they're dumping to WalMart and BestBuy for reasons that escape me. Maybe they don't like independent retailers for some reason.

"Profit to label": This is here to make you think how little money the label gets. But this is money free and clear that they get to put in the bank. All the huge salaries of the record execs are bound to be in the euphemistic "Company Overhead" category. I wonder why that section is so big? And all the other employees seem to be covered in other sections. This is pure profit.

"Distribution and shipping": This is here as if the retailers aren't paying for shipments. I'm sure that all the distributors and labels are happy to eat the costs of shipping. Right. And pigs have wings.

"Royalties to artist and songwriter": I wonder if this includes the money from public performances? If so, none of this money gets to anyone but the top charted songs. It's not as if when The Mars Volta gets played publically, they see money from it. No. The money gets remitted to the royalties organizations who redistribute it based on chart positions, which means, yet again, Britney gets all the money and none gets to small acts.

Lies, Damn Lies, and Statistics.
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Bitt Faulk