Well, well, well, so you’re feeling brave, like a maverick. Congratulations. You have finally come to your senses. You have finally figured out that you will make more money as an artist selling 50,000 records on your own record label, than selling 500,000 units as an artist signed to a major record label. As stated in “Recording Royalties”, an artist will receive between 12 percent and 14 percent of the suggested retail prices of CD’s and about 10 percent of the royalty rate on CD’s as compensation for their efforts of recording and album after all expenses have been met. In the LOVE opinion, these percentages are too low and you should explore the possibility of signing with an independent label.
Record companies blame low royalty rates on the non-success of nine out of every ten records released. That’s their percent success rate, one that would be poor performance by any standard in any other industry. Take General Motors, for instance. If they designed and manufactured ten new cars, and only one out of those ten new designs sold and was profitable, they would be out of business.
Record companies these days take Artists at basically no risk. Yet it seems only fair to them that they enjoy the lion’s share of the profits. The operative word here is seems. If the artist’s time, energy and emotions mattered to labels, they wouldn’t feel that they were the only ones taking risks. But in all fairness, the record company, by signing an artist, is in a sense giving the artist an unsecured loan, or are they? These days, for the most part, Artists are coming to labels with completed product. Both artist and record labels devote their time, energy and resources to record, promote, market, and sell music. The label has money as their most valuable resource, the artist brings talent and creativity, and in today’s world a finished product as a most valuable contribution. Which is more valuable? We say artist, because artist can exist without record companies, but record companies need something to sell. that something is the artist’s product. So by the old standards who needs a label?
Most record deals are negotiated so that the artist gets 12 to 14 percent of the profits and the record company gets the remaining 88 percent. The 12 percent an artist receives is just not representative of the amount of effort an artist puts into recording an album. It becomes blatantly apparent when compared to the 88 percent of sales the record company gets to keep. This is all the more reason to sign with an independent, small label. We think it’s safe to assume that most of us feel we have the same one in ten chance of success as a major record label working on our own and receiving all the money.
While money is major concern when putting together an album, it is not the be all end all. Money problems can be overcome. It use to be, the only thing a major label had over an independent is if a record is a hit, they can sell more because of their distribution network. The flip side of that is even if that same record were released on a major label sold more you should still make less if your released in on an independent label. With all things being equal, you’ll make more money from the sales of your record released on an independent label than you would if that shame record were to be released on a label other than yours. That is, of course unless your record is a flop. And in that case, no one make any money.
With the tools available today there are many new avenues to market your own CD. Where it use to take distribution to make anything happen today the Artist is finding success on the Internet in the area of distribution. At Love Label records we assist artists in doing just that.
Helping you make “The Ultimate Statement”.