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 an 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.
Their Rationale:
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.
Our Rational
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?