[krig]

The key issue is that the advance from the label is neither a gift nor an investment; it's a straight up loan (most likely with interest) that is expected to be paid back, but the loan terms are horrendous. I get the feeling you think that the band receives a $1M investment that the label will recover at a certain rate from the generated profit, but that's not the case. After selling for $1M, the artists are still at $0, and they still owe the record company $1M. If the record company brings in $1M in profit from an album, they have covered their expenses. That $1M wouldn't even begin to repay the loan the artist have, though, so now the label is UP $1M - the artist still owes them most of the advance.

At least, that's how I understood the situation, correct me if I'm wrong.

[gallerytungsten]

The general outlook I hear from people who are signed to deals that pay advances is this: get as large an advance as you can, because you won't be getting anything else. Sure, if you go double platinum it might be worthwhile to audit the label and squeeze some more money out.

Although recoupment provisions make it technically a loan, just like a VC, the label won't come after you forever if you don't recoup. At a certain point, they'll write it off and let it go; they won't be after you forever like a collection agency.

As to how bands can earn a living, the answer is of course touring, merch (t-shirts, etc.) and for those with music with mass appeal, licensing to films, tv, and commercials. If you can self-produce, you can also do a licensing deal (P&D - pressing and distribution) for the record as well.

The way to stay in control, of course, is to bootstrap it and form your own record company.

Anyone curious about how these deals work in more detail should check out "Confessions of a Record Producer" by Moses Avalon (a pseudonym).

[lawnchair_larry]

Worth noting - non-RIAA bands actually lose money touring. Smaller bands signed to RIAA labels still do not do very well with touring.

In many smaller scenes, a successful tour is one that breaks even. They sleep on promoters floors, eat shitty food, and play in bars. I hear a lot of "fans" that download all of their music and think that they support the artist by going to their show. This is not the case.

The one way to really make money as I understand it - which is noted in the book you mention (though it is kind of dated now) - is royalties. If you are fortunate enough to have your song featured in ads and get into heavy rotation on the radio, you get paid outside of your recoupment costs (which they pull from record sales).

[brown9-2]

I hear a lot of "fans" that download all of their music and think that they support the artist by going to their show. This is not the case.

Well, it's not like their ticket purchases are for naught - it still offsets the cost of touring for the artist. The artists would be worse off doing the same tour with less fans attending.

What better choice do the fans have anyway? Buying the records supports the record label, not the artist.

[klbarry]

And the record label supports the artist, or else why would artist's join them?

[muhfuhkuh]

Larger exposure for the inevitable tour that, if GP is accurate, doesn't make money.

Why people don't go the route of Jonathan Coulton or Pomplamoose, and just scratch it out on their own talents, is beyond me. Hell, I think even those "hide your kids, hide your wife" news parody musicians apparently make more money than major label star. The math just doesn't seem to be adding up anywhere being on a label, is what I'm trying to say.

I guess you have to be a blindingly white-hot ultra-mega-super-duperstar to make a penny from labels and touring, and everyone else should just pack it in or go indie?

Seems like it sucks worse to be a musician than to be a struggling actor or indie mobile app developer.

[lhnz]

Can I ask you your source? I'd like to be able to quote you with some feeling of authenticity the next time I discuss this with somebody.

[paul9290]

That would mean you as the artist either wrote or co-wrote the song. As you would then be getting songwriting royalties from your music publishing company, but not royalties off the sound recording. Those recordings belong to the labels and all artists with little to no bargaining power never get a piece of those royalties.

[pyre]

There are bands that are still able to maintain the copyright on their stuff, though they are probably few and far between.

[kragen]

Really? How do you lose money touring if you're sleeping on promoters' floors and eating shitty food? How does the RIAA change the equation?

[MostAwesomeDude]

As a professional musician, I can corroborate this, but I can also say that this is why most musicians have day jobs. We go into the business knowing that it will never pay our bills, and usually involves investments which will never pay themselves back. (Orchestral and studio musicians are the exception, but those jobs are few and far between and reserved for the best of the best.)

Being signed, though, indentures you to a label. If I'm going to be playing music for love, and not for money, than I'm certainly not gonna put on shackles and let somebody else make money off of my music.