RIAA Accounting: Why Even Major Label Musicians Rarely Make Money From Album Sales


Thu, Jul 15th, 2010 20:40 by capnasty NEWS

The RIAA will have you believe you the reason most musicians, even those that reach a multi-platinum level, barely make any money is due to piracy; the reality, however, as this article from Techdirt shows, is that through clever accounting of the music industry a musician is left out to hang. From the article:

"These record label deals are basically out and out scams. In a traditional loan, you invest the money and pay back out of your proceeds. But a record label deal is nothing like that at all. They make you a "loan" and then take the first 63% of any dollar you make, get to automatically increase the size of the "loan" by simply adding in all sorts of crazy expenses (did the exec bring in pizza at the recording session? that gets added on), and then tries to get the loan repaid out of what meagre pittance they've left for you. Oh, and after all of that, the record label still owns the copyrights. That's one of the most lopsided business deals ever."

The musician earns an average of $23.40 for every $1,000 sold. That money has to go back towards "recouping" the advance, even though the label is still straight up cashing 63% of every sale, which does not go towards making up the advance.



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