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Message: <blockquote data-quote="Dannyalcatraz" data-source="post: 2891316" data-attributes="member: 19675">A typical rookie band has a royalty rate of ¢12-15 per album sold, but there's more to it than that.Lets assume a typical rookie band sold 100K of their debut album at $12 average price.  That's  $1.2M in sales, but not every dollar counts for calculating royalties.  Knock $100k off of that to recoup the company's expenses for fronting the recording of the album, agent fees, and certain other fees (and there are lots of them) that reduce the amount of sales that count.After all the fees have been deducted, their share of the royalties from those sales would be about $100,000 for the band, which must be divided up between the various band members.  If that is a typical 5 piece band, that's $20K per band member...before taxes.  There's a reason why so many guys in glam rock bands out of LA used to live with groupie girlfriends.(For the record, someone like Janice Ian who started out 30 or so years ago would have had even worse contracts to deal with- things have gotten better.)If they have a good tour on that album, each bandmember might take home between $60-100K (before taxes) from gate receipts and merchandizing.Big established bands change those equations a great deal.  A megastar might get 10x the contractual royalties a new musician would, and their merchandizing and gate receipts will be HUGE (there are some who can push their percentages of those income streams as high as 40%).(Because of numbers like this, a big tour with several small bands is more profitable for venues and vendors than a tour with a megastar, even if both tours sell the same amount of tickets.)There is a hidden aspect to these contracts that people don't realize- those megastars make it possible for the labels to go out and find the new blood.  If someone's album goes platinum, its good news all around- everyone gets paid.  However, there's a certain amount of that money that the label is going to shovel back into finding new artists or giving out advances to record albums (remember that $100k the rookies above got?) by the artists they've signed (some of which is never recovered).  At some labels, that may be as much as 80% of the gross profits.Realize also that only about 10% of a typical label's annual releases actually show a profit (major labels average a little higher, but not much- maybe 15%)- those releases basically subsidize everything else.</blockquote>

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